Marvin’s Best Weekly Reads March 24th, 2024
"This is no time for ease and comfort. It is time to dare and endure." – Winston Churchill
"The future looks grim for the overworked fleet. Like the rest of the U.S. military, the Navy is facing an unprecedented recruiting crisis, fueled in part by fatigue from time away from home during extended deployments. In an all-volunteer force, sailors will vote with their feet. A shrinking fleet is the likely outcome, regardless of how many warships America has.
The most immediate danger of overstretch, though, is munitions not manpower. The opening Jan. 12 strike on the Houthis expended 80 Tomahawk Land Attack Missiles, more than half the missile’s annual production. In the near term, expending hundreds of these missiles in a tertiary operation like Prosperity Guardian could have major impacts in a far more important theater in the Pacific.
Precision strike missiles like the Tomahawk are vital to the U.S. military’s ability to deter, and if necessary, defeat a Chinese attack in the Pacific—a contingency where the Navy will be carrying most of the fight, unlike in America’s Middle East wars. The U.S. may already lack sufficient precision munitions for a shooting war with China. The Navy’s newest Middle East operation adds further risk to the service’s most essential mission."
https://time.com/6693320/us-navy-yemen-middle-east/
2. "Hawks have been saying for decades that we are living in an incredibly dangerous world. That was an exaggeration twenty years ago but now is actually true. In such a context, our nation needs hawks to follow their convictions where they lead: That hard power is central, that we face scarcity, that it will take years at best to redress, that we can’t “walk and chew gum,” and that the most dangerous threat we face is the one with the most hard power—China.
In such a context, it is wildly imprudent to cut it close against our most important threat, banking on a single theory of victory. Hawks must now match their commendable rhetoric on China with real action—and above all, a willingness to prioritize confronting this, our greatest threat."
https://time.com/6696552/u-s-hawks-china-threat-essay/
3. Luke Belmar is the man.
https://www.youtube.com/watch?v=b-ZTbDExs4I
4. "All I’m saying is that as an asset class, venture capital is way better than it gets credit for. There’s no other asset class that’s been as positive-sum or cooked more free lunches over the past half century.
I’d argue that even if venture capital underperformed other asset classes, generated 0% returns or something, it would be a net benefit to society to have a pool of capital that funds crazy experimentation. But this is capitalism, and returns are what keeps the machine humming. So the fact that VC has generated such strong returns over a long time horizon is key.
The question is: will venture continue to deliver returns?
I think the answer is undoubtedly, unquestionably yes.
Tech is Going to Get Much Bigger as tech’s total addressable market expands to include large existing industries that have been relatively untouched by technology, including industrials and agriculture. Cheaper energy, intelligence, and dexterity, in the words of Valar Atomics’ Isaiah Taylor, will mean new opportunities to attack old industries with cheaper, better products. Higher margins in large industries will make for very valuable companies. And things that were previously impossible are becoming possible at an accelerated rate.
Venture was created for times like this, when big shifts in underlying technologies create opportunities for crazy geniuses to build products that might change the world."
https://www.notboring.co/p/venture-capital-and-free-lunch
5. This is a fun discussion on business ideas. Good and intriguing ideas. Learned a bunch.
https://www.youtube.com/watch?v=Z6yt891IBhI
6. Lots of interesting insights from one of the top Growth stage VCs in the world. IVP.
https://www.youtube.com/watch?v=Hr6A1qYzlds
7. "The problem now is that the losses in the property sector are so severe that there is no money for people to buy anything except whatever is essential. The property losses are killing all other consumer-led sectors in the economy.
The Belt and Road Initiative should have brought in debt repayments and commercial revenues, but it isn’t. More and more nations can’t and won’t pay China back fast enough, thanks to devaluation, inflation, and their over-indebtedness. Few are enchanted with whatever infrastructure China has already provided, thanks to shoddy construction and cut corners, and are unlikely to buy more. Chinese nationals are now fleeing the country. Money is running away, too. Against that backdrop, the US is about to begin hitting China with sanctions for supporting Russia. But what if China breaks? Really breaks?
When the Soviet Union ceased to exist, it was every man for himself. China is bigger. It has more people. Despite best efforts to shut it out, it is more deeply integrated into the world economy. It’s not that China doesn’t deserve to be sanctioned for helping Russia disrupt the world. It’s that hitting China with sanctions now might work all too well and smash an already fragile situation.
The whole world may have to pick up the pieces. Luckily, Global grain production just surpassed the global record. There is enough to go around, but policymakers will have to completely change how they think about China. Sometimes, superpowers need help. The US bailed the Soviet Union out of a famine in 1973. They might have to lead a humanitarian food bailout of China in 2025. It’s unimaginable now. But, it is possible if the unimaginable happens in China."
https://drpippa.substack.com/p/broken-chinapaper-tiger-capital-flight
8. Timely conversation on Russia, Ukraine and Poland.
https://www.youtube.com/watch?v=-_KfVGiav8U
9. "All in all, the pace of regulation in the last 50 years is unprecedented in history. Regulators are motivated to write new regulations, and unmotivated to eliminate old ones; lawmakers and courts are too deferential to bureaucrats; the largest industrial giants (not to mention hospitals and universities) tacitly support costly regulations because they are even more costly to startup competitors. And those same companies can pass the regulatory burden onto consumers — shown in the famous AEI “Chart of the Century” of sector-based inflation. The more regulation, the more inflation."
https://blog.joelonsdale.com/p/time-to-take-out-the-regulatory-trash
10. "Dubai reopened aggressively during the pandemic with extensive testing and vaccination programs. It has since outpaced its primary competitor, Singapore, as the key destination for the wealthy seeking sunshine, lifestyle, and lower taxes. Dubai now stands alone in the Eastern hemisphere as the nexus point for the wealthy of the Middle East, Asia, Russia, and many Europeans.
Similarly, Miami became a top destination for the wealthy through the pandemic and has now emerged as the Dubai of the Western hemisphere. Already considered the “capital of Latin America,” Miami has become the nexus point for the wealthy of the U.S., Canada, and Europe for the same reasons as Dubai: sunshine, lifestyle, and lower taxes.
Very much like Dubai, the culture of Miami encourages emigration, success, capitalism, and wealth. The city government, led by Mayor Francis Suarez, actively seeks to expand the city and attract new business."
https://refreshmiami.com/miami-the-dubai-of-the-western-hemisphere/
11. IMHO Hadrian is one of the most important startups in America right now.
https://www.youtube.com/watch?v=-hElCTgO9e0
12. Awesome discussion on how creator brands will be built in the future.
https://www.youtube.com/watch?v=Tl5UsFTO9iY
13. It’s not over yet but this is why I don't trust any politicians. The West sold out Ukraine & I am disgusted as all of us should be.
"It has always been clear that in a one-on-one fight Russia would eventually win this, and only strong and ongoing support from the West could sustain Ukraine holding the lines. It never has been made clear exactly what sort of support was required to roll-back Russia back to internationally recognized borders.
And that is the theory that has been gaining currency over the past few weeks: the West never was interested in a decisive Ukrainian win and ensured that weapon deliveries matched that goal. A stalemate would be the best possible outcome as it would keep Putin in his seat and avoid a nuclear escalation. No, that does not mean Putin is a good old pal, but a humiliating Russian defeat could potentially spur the emergence of elements far more radical than the current leader.
So we have an outsourced war where the dial is not moved one way or the other, at least for now. That also serves the political goal of keeping the conflict out of the headlines: this is a war in which most Americans, Canadians and Europeans aren’t terribly interested in in the first place. It is state of the art ‘realpolitik’ the price of which is paid for in rivers of blood by both Ukrainians and Russians.
It is a cynical view for sure, but if you consider all the facts two years into this adventure, then it is hard to see it in a fundamentally different way."
https://pieterdorsman.substack.com/p/ukraines-struggle
14. "When investing in a story/trend you believe will go from “never” to “maybe” happening, the importance of a project’s traction is low. The market doesn’t expect much because the market believes this token is attached to a trend that is unlikely to grow in the future. Therefore, even mediocre results are trumped as groundbreaking because the expectations are so low.
When investing in a story/trend you believe will go from “maybe” to “definitely” happening, the importance of a project’s traction is high. The market’s expectations are high because they believe in a bright future. What would be considered mind-blowing results in the previous phase are considered mediocre in this phase. Amazing results are not enough; in this phase, a project must be genuinely revolutionary in order to meet expectations."
https://cryptohayes.substack.com/p/chief-story-officer
15. "Brands and organizations decay slowly; it can be hard for outsiders to see the weakness until it’s readily apparent to all. But customers are smart, and all of Techstars’ customers eventually saw what was happening, and acted accordingly.
The first to spot the weakness were startup founders. Their ambition and acute realism made them sensitive to the clear shift in Techstars’ priorities, away from serving founders and toward the “corporate innovation” business.
With dozens of programs scattered around the globe, often in partnership with second-tier brands, and in locations with little to no native startup ecosystem, it was hard to say exactly what the Techstars brand stood for anymore, but it clearly wasn’t “helping entrepreneurs succeed”. While Techstars wanted founders to see Techstars as a single thing, smart founders realized that their outcome and ROI depended entirely on the MD and specific program they participated in."
https://www.founderscoop.com/2024/what-went-wrong-at-techstars/
16. Always enlightening stuff on geopolitics.
https://www.youtube.com/watch?v=NJaLKS3JHcc
17. More geopolitics with Zeihan. America needs to make some hard decisions soon.
https://www.youtube.com/watch?v=tQksC-8fqpM
18. Latest NIA episode which is always an insightful convo on creative businesses.
https://www.youtube.com/watch?v=QeSzaB8v1M0
19. "But it’s his growing power off the pitch that is increasingly interesting. Perhaps more than any other athlete, Messi’s unique abilities and recent moves position him to build a level of wealth that far outstrips even other legends. In particular, his move to America in 2022 and the launch of the holding company Play Time have opened up new monetization opportunities that reveal much about contemporary stardom, technological shifts, and the incredible leverage of tech startups.
In a decade or two, we may look back on Jordan’s current wealth as a rounding error compared to modern athletes’ affluence. The rise of social media and software allows players to monetize directly, cut out intermediaries, and build extraordinary wealth. Rather than relying on executives like Sonny Vaccaro and Nike founder Phil Knight, today’s Air Jordan would run on Shopify, collect payments through Stripe, and advertise over Instagram and TikTok. Its titular star wouldn’t have just 5% royalties but 100% ownership.
More than any other athlete, Lionel Messi is best placed to capitalize on these changing dynamics. The greatest footballer of all time is a singular talent entering his second act in the richest country in the world. While Messi’s move to America’s Major League Soccer has attracted more attention, his holding company “Play Time” – which SEC filings suggest is raising $200 million in capital – may illustrate the true scale of his commercial aspirations. Through public statements and conversations between The Generalist and Play Time’s co-founder Razmig Hovaghimian, a clearer image emerges: Messi doesn’t want to simply sell sneakers – he wants to build and invest in the great software and media companies of the next generation. It’s an ambitious plan that, if successful, offers much higher upside. The business of being the GOAT looks more lucrative than ever before."
https://thegeneralist.substack.com/p/messi-inc
20. This is a must watch to learn about what’s happening in tech. It's arguably the best podcast tech show around now.
https://www.youtube.com/watch?v=-i9AGk3DJ90&t=3091s
21. "As promising as those developments may be, this is ultimately a war over territory that comes down to Ukraine’s ability to defend it.
Russia has its own supply issues, which forced it to recently begin purchasing mass quantities of ammunition from North Korea, and has also been reluctant to call a second mass mobilization to bring more troops to the front. But Russia’s ability to sustain heavy losses also shouldn’t be underestimated. A recent analysis from the International Institute for Strategic Studies estimated that even after losing around 8,800 fighting vehicles in the war so far, Russia will probably still be able to sustain its assault on Ukraine at current attrition rates for another two to three years.
It’s clear that this will be a much longer war and a contest of industrial capacity and political will as much as military maneuvers. But even getting to that marathon will require Ukraine getting past a very difficult period in the coming months.
Gady said a complete collapse of Ukraine’s defenses was not entirely out of the question, but still unlikely: “There are going to be a couple months where the situation is really dire for Ukraine, but I think they can hold.”
https://www.vox.com/2024/2/22/24079595/avdiivka-ukraine-russia-war-artillery
22. Clockspeed. Great concept.
https://sriramk.com/clock-speed/
23. "Still, there are some reasons to be optimistic about Japan’s economy in general. First, the country is finally taking its own defense seriously — defense spending surged from 5.4 trillion yen in 2022 to 7.95 trillion yen in 2024. That’s still only about 1.5% of GDP, but the rapid increase is pretty stunning. Defense spending will stimulate manufacturing, but will also give Japan the chance to build its own military-related tech industries. More fundamentally, it demonstrates that Japan’s leaders realize the magnitude of the threat China poses, and realize that they need economic growth in order to fund a more robust defense.
Second, Japan is bringing in large numbers of foreign workers to ease its labor shortage.
To sum up, I think that what Japan really needs in order for its economy to be fully “back” is to rediscover the zeal for industrial policy and cultural transformation that it had during its catch-up years in the 1960s and 1970s. The specific policies just need updates for the modern age. Instead of shutting out FDI, Japan now needs to draw it in.
Instead of building a corporate culture based on lifetime employment and seniority promotion, it needs to build one based on flexibility in hiring and in work hours. And instead of clinging to fading dominance in the industries of the 1970s, it needs to muscle in on the industries of the 2020s.
I believe Japan can do it. But it’s not going to be easy or quick."
https://www.noahpinion.blog/p/japan-isnt-quite-back-but-it-has
24. "The biggest concern at this point lies not so much with the political caste, but whether the social context, with very high inflation and rock-bottom salaries, will allow Milei to continue down this path.
If salary purchasing power is not restored in the coming weeks, the government could have serious social problems (read: more serious riots and revolts)."
https://www.bowtiedmara.io/p/feudal-fiat-warfare-and-power-struggles
25. "How does one compare the wars in Gaza and Ukraine with those in Ethiopia and Sudan, or for that matter the civil war in Myanmar or the regular fighting in the Democratic Republic of the Congo (which may be close to taking off again) and the multi-faceted violence in West Africa, with its Islamist insurgencies and recent series of coups?
It is no comfort to individuals caught up in any of these wars to know that somebody else’s war, measured by cumulative casualties, is even more vicious than your own. As we have seen with all these wars it is not good enough to deplore violence and wish for it to stop without some understanding of the political, social, and economic conditions that have caused and sustained these conflicts."
https://samf.substack.com/p/the-forgotten-wars
26. "Jobs are being lost, but augmentation will be the broader story. Rather than copywriter Mary losing her job, Mary’s firm will train her on an AI tool that generates first drafts, takes approved product copy and converts it for catalog, web, and social use, and streamlines other tasks. Accordingly, Mary’s manager will expect her to generate three times the copy in the same time.
Managers can take on new initiatives and domains without the headache of hiring more humans. It’s growth without calories. I’ve founded two strategy firms (Prophet and L2) and loved everything about them, except for the clients and the employees — every additional hire creates complexity and thus increases risk. The AI revolution will inspire a golden age of startups with lower infant mortality, as there will be fewer people (i.e., less risk) required to get to sustainability.
CEOs are being coy about this, at least in public, because there’s a sense of fear surrounding the brave new world of AI. The illusionist’s trick in the Valley right now is getting the media to look over there (trimming fat) while they’re stuffing the rabbit into the hat here (replacing it with AI). In the next several quarters, however, I believe CEOs will come out in earnings calls and put it bluntly: “We’re going to be a smaller company that does more business thanks to AI.”
Pundits will clutch their pearls for a hot minute until the stock explodes, and the secret hiding in plain sight will be visible to everyone. It’s corporate Ozempic. It’s not about less bread, but less craving for bread. Read: hiring people.
This will, correctly, raise concerns about a dystopia where nobody can find work. But AI will ultimately create jobs, as there will be new windows of attack against corporate titans. AI is currently a hormone therapy for mature companies looking to feel young again. Soon enough, though, a new generation of firms raised on the mother’s milk of AI will create an army of supersoldiers ready to attack bigger armies who are still fighting on horseback. I’m here for it."
https://www.profgalloway.com/corporate-ozempic/
27. Great episode this week. Good discussion on AI.
https://www.youtube.com/watch?v=z6vrKA_L5pk
28. The latest thoughts from Zeihan. Enlightening and frightening.
https://www.youtube.com/watch?v=VSC6sUAyf8U
29. "As an entrepreneur with limited resources and incredible challenges, finding great people, even if they have an existing job and keep that job, is one of the most important responsibilities. This is but one of many alternative ideas to recruiting talent and building a business."
30. "If you’re starting a new company, start selling immediately. If you can’t create a pithy message which gets them interested, work through the sales process to prove value, and complete transactions reliably for actual dollars, it does not matter what you have built. Working on your go-to-market motion early will impact in inextricable ways the product you are building. As a co-founder and CEO, your first priority is to ensure the company doesn’t run out of money, and priority number two is to be the head of go-to-market. Start now."
https://clintsharp.com/post/sell-the-product-before-it-exists/
31. More or Less this week. So many juicy nuggets in Silicon Valley.
https://www.youtube.com/watch?v=V_9u5IktrV8
32. Great thoughts around how to build a Personal Holding Co. I really believe this is the future of entrepreneurship.
https://www.youtube.com/watch?v=s_x5pN33Wzo
33. What a fascinating conversation on what's up in the venture market. So helpful.
https://www.youtube.com/watch?v=8OVTwA0vl2c&t=2372s
34. "The past eighteen months or so have been more than a little surreal for Butler. He began 2023 in a position that all actors dream of but few know firsthand, nominated for Best Actor by every awards body that matters. It was his portrayal of Elvis Presley in director Baz Luhrmann’s Elvis that landed him there, and the experience—junket into roundtable into podcast, photo shoot into red carpet into reception—was both euphoric and exhausting.
When the film, a fever-dream retelling of Presley’s life, debuted to rave reviews and a strong box office in 2022, Butler became an overnight sensation. He was on the cover of national magazines and a fixture on the late-night TV circuit. Tabloids and online forums feverishly blogged about his dating life. Social media exploded with fans frothing at the mouth for the heartthrob.
But like most overnight sensations, Butler had been working for much of his life for a role like Elvis. A role that he could give himself over to completely. A role that would catapult him to the top of every casting director’s list.
Elvis would deliver all those things, plus earn him Golden Globe and BAFTA statuettes as well as an Oscar nomination, but Butler is not one to be idle. While Luhrmann’s film was in postproduction, the actor dove right into shooting a few major projects that are now finally getting released.
First up: Masters of the Air, a World War II miniseries from Tom Hanks and Steven Spielberg that debuted on Apple TV+ at the end of January. (Hanks costarred with Butler in Elvis as the singer’s infamous manager, Colonel Tom Parker, and recruited him during filming.) And in the biggest theatrical event of the spring—quite possibly the year—he’ll star opposite Timothée Chalamet in the second entry of director Denis Villeneuve’s cyberpunk Dune franchise."
35. I'm a big fan of Justin Waller. This is a great convo on getting strong and having grit.
https://www.youtube.com/watch?v=mf8Cs-QMKhg
36. "If the U.S. approves funding for Ukraine—the Senate passed $60 billion in aid last week but it faces steep hurdles in the House—it should be possible to get around 1.3 million rounds of ammunition to the country in 2024, which would allow Ukraine to hold the line. With European investment to expand production, significantly more can be provided in 2025, meeting a level that would enable Ukrainian offensive operations. But with Europe still expanding production capacity, Ukraine will face critical shortages in the next few months unless the U.S. steps in.
In spite of these advantages, Russia’s firepower dominance will potentially diminish over time. Although its shell production can increase, Russia has so far relied heavily on taking barrels from old Soviet systems it held in storage. By 2025, these stocks will be running low and Russia’s capacity to forge barrels is insufficient to meet its future needs.
The result is that through 2025 the accuracy of Russian guns, and the number that are available at any given time, may diminish. That may give Ukraine and its backers some hope in the longer run. But the critical question is whether the U.S. is willing to sustain the fight for the next year, before the tide begins to turn once again in Ukraine’s favor."
https://www.time.com/6694885/ukraine-russia-ammunition/
37. Fascinating & wide ranging conversation with a top hedge fund investor.
https://www.youtube.com/watch?v=PgGKhsWhUu8
38. "Despite the challenges, Ukraine has not succumbed to despair. Instead, it has embarked on a path of self-reliance, a journey marked by resilience and strategic innovation in the face of adversity. Ukrainian defence is transitioning from urgent procurement to boosting its own weapons production and forming strategic partnerships with foreign defence companies. This shift is meant to enhance Ukraine’s native defence capabilities in the long term.
The shift towards self-reliance and innovative strategies stands as a testament to Ukraine’s resilience. Support from its allies may be diminishing, but Ukraine’s determination to win this war and ensure a bright future for its citizens is not."
https://www.aljazeera.com/amp/opinions/2024/2/21/ukraine-is-switching-to-self-reliance-mode
39. "Ukrainians are doing everything and giving everything they have for this, and they will not stop. They are fighting for their future, and they will not give up on their future. They will not surrender to Russian capture and enslavement. They received a soft independence in 1991, which they turned into complete self-governance and independence in 2014 and now Russia has come to crush them.
Thanks to U.S. aid, the Ukrainians have not been crushed. Thanks to U.S. aid, they have taught the second largest military power in the world, that might doesn't make right. Where is the Russian cruiser Moskva? Thanks to U.S. aid, a new free nation is being born in the world. Ukraine is not giving up.
The U.S. and Ukraine’s goals and futures have suddenly collided toward the same ends, and we need only to give Ukrainians the tools they are asking for. Give Ukrainians the weapons they need, and they will succeed."
https://kyivindependent.com/opinion-from-an-american-in-avdiivka-what-is-congress-doing/