Marvin’s Best Weekly Reads May 28th, 2023
"For the great doesn't happen through impulse alone, and is a succession of little things that are brought together."--Vincent Van Gogh
These are some smart guys. Every young and old man needs to watch this. I wish I learned some of this much earlier in my life.
https://www.youtube.com/watch?v=Lx83bNO00R8
2. "Since 2016, the average monthly burn rate difference between successful and unsuccessful companies has been fairly small: $59,333 for successful graduates vs. $47,365 for companies that failed to graduate.
This suggests that the more important thing is how the money is spent and what it produces than how much is spent overall. The job of a pre-seed founder is to turn investor dollars into insights that get the company closer to finding product-market fit."
https://chudson.substack.com/p/finding-the-right-burn-rate-for-pre
3. This looks good. Bit dystopian but good Sci-Fi.
https://www.youtube.com/watch?v=kXiFamc5bYI
4. "Hype is good for innovation: it attracts capital, draws talent, and raises awareness from prospective customers. But inevitably expectations get out of touch with reality and the hype bursts. What happens next depends on user adoption or, put differently, the technology finding product market fit.
For early stage investors, success isn't about predicting the future of how technology evolves. Rather it’s about finding signs of a clear market need (that may appear nascent or even solved by existing players) and backing teams who can capitalize on these needs. In short, when it comes to returns, product-market-fit eats hype for lunch."
https://1984.substack.com/p/hype-the-enemy-of-early-stage-returns
5. "U.S. intelligence agencies have long tracked Beijing’s clandestine attempts at political influence inside the United States.
And they don’t like what they see. One former CIA analyst put it bluntly: Beijing’s agents in this country aim “to turn Americans against their own government’s interests and their society’s interests.”
https://www.thedailybeast.com/how-china-built-an-army-of-influence-agents-in-the-us
6. "Bottom line: The discussion we should be having in the United States and among our allies is about the imperative to rebuild our capacity. Simply reallocating assets from one theater to the other solves nothing. It fails to address the structural vulnerability that remains. The expansion of our defense-industrial base is the answer for another reason: During the last 20 years of operations in Afghanistan and in the Middle East, our logistical supply lines were secure.
But in the environment of actual and potential great-power conflict that we inhabit today, we must assume that our logistical chains will be threatened, making systemic redundancies for weapons stocks and ammunition imperative.
Today we have a non-NATO force grinding down Russian land forces on non-NATO territory — all Ukraine needs is weapons and money to buy us more time to rearm. In the process, the Ukrainian military is in effect dismantling the two-frontier crisis, while Beijing watches carefully whether we have the political will to complete the job.
The starting point for any grand strategy in our era of great-power competition is an acknowledgement that the European and Asian theaters are connected, and that Ukraine and Taiwan are not an either/or proposition."
https://www.19fortyfive.com/2023/05/ukraine-vs-taiwan-americas-defeatist-pointless-debate/
7. "With Nuclear weapons your can destroy cities from the comfort of your own home. Russia and the United States have thousands of them. In WW1 If you were a not obligated by treaty to join the war you could be incentivized by land gains. If you participate in WW3 in a meaningful way, the only thing you’re going to gain is an extra ICBM.
The potential to get nuked will disincentivize all countries that are not bound by treaty from joining in. Some countries would even hugely benefit from not participating and watching the involved parties destroy each other (what the US did in WW1 lol)."
https://bowtiedhitman.substack.com/p/ww3-will-not-happen
8. Valuable conversation here. Pretty agree with many of these thoughts here. Worth listening to if you are a startup founder or investor.
https://www.youtube.com/watch?v=oc5tHbEK0IQ
9. I wish the so-called Realists actually understood how NATO actually works. This is a good counter to the BS that NATO caused Russia to invade Ukraine. Russian propaganda and the Vatnik enablers like Sachs, Sacks, & Mearsheimer among others.
https://www.youtube.com/watch?v=Rh4QU7hxKVg
10. Maximum bullish on Japan. Macro outlook is very good.
"All said, the ability and willingness of Japan’s private sector -households and corporations- to take risks is going up, and public policy remains steadfast in its commitment to promote it; and -in contrast to fellow G7 leaders- PM Kishida and BoJ Governor Ueda are more worried about tightening pre-maturely than about needing to be conservative.
Clear-speak: after more than thirty years, a positive break-out above the historic “Bubble Peak” of 40,000 on the NIKKEI stock index is finally becoming a realistic prospect over the next 15-18 months."
https://japanoptimist.substack.com/p/were-all-bullish-japan-now
11. "Bringing all these factors together results in higher churn rates and reduced consumption revenue that is worse than anticipated. Record high downgrades and cancellations translates into even lower growth rates. Premature increased customer growth plus premature downgrades and cancellations paint an incorrect picture.
Startups would do well to take their historical gross and net renewal rates applied to their core business and project out potential scenarios. Core growth plus traditional renewal rates will likely result in reaccelerating growth in the near future.
The good news: once this painful series of adjustments works its way through the system and we’re at the new normal, growth rates will improve. Many startups have strong business models delivering tremendous value to their customers. The lack of growth is masked by remnants of one-time extra growth and one-time extra churn. Higher, renewed growth is on the horizon."
https://davidcummings.org/2023/05/20/many-startups-will-reaccelerate-growth
12. "Russia was and is too weak to have ever conquered even half of Ukraine, let alone achieve the kind of maximalist goals that Putin possessed, and we see now that the Russian economy cannot even produce the kinds of weaponry needed to hold on to 18% of the country. It was why I thought if Putin had any idea of the situation he was in, he would have tried to back out back at the start."
https://phillipspobrien.substack.com/p/weekend-update-29
13. Love Packy's newsletter. This was a good, optimistic and interesting interview.
https://www.youtube.com/watch?v=sOfWnBcBdPY
14. Always better to assume incompetence not malevolence. China's Belt & Road Initiative is a mess. I ascribe to this view.
https://twitter.com/nils_gilman/status/1659892961801564160
15. "In speaking with many startups and people on the buy side of technology, it feels like things are changing. More customers seem to want fewer things - fewer vendors, less complexity, and better ROI for their software spend. I think internal cost-cutting initiatives are driving some of this desire to revisit the benefits of best-of-breed products versus bundles.
In addition to the cost-cutting pressure, the complexity of managing multiple best-of-breed products is starting to create challenges for customers, many of whom have smaller teams due to layoffs or hiring freezes. In some cases, I’m seeing the pendulum swing back toward having a single system or vendor where everything works over assembling one’s own collection of individual tools.
I am curious to see how this transition plays out. As someone who invests primarily in companies that do not yet have product-market fit, the un-bundled software world has been a great place to invest. You can build an MVP for a product of limited scope with a modest budget. Buyers were very willing to purchase point solutions from new vendors if those products could address the buyer’s pain points.
Moving back toward a world where buyers have a strong preference for do-it-all bundled products could upend all of this."
https://chudson.substack.com/p/the-rebundling-cycle-has-begun-in
16. "As with near-every technological innovation, AI will inspire job losses in the short run and then, over the long term, net job creation. Automation destroyed jobs on the factory floor, but at first we didn’t see the jobs that heated seats and car stereos would create.
There will be a plethora of new service providers in the streaming business that leverage AI. In addition, there is usually a “winner takes most” effect. A decent writer gets culled, a great writer earns more. In sum, AI won’t take your job, but someone who understands AI will.
Pro tip: While you’re on strike, let your Netflix queue grow and play with Notion AI."
https://www.profgalloway.com/struck/
17. I don't expect this to last but a recession could be pushed back a bit longer.
"As we’ve discussed repeatedly, consumer finances have been in remarkably good shape despite what weak sentiment may suggest. And robust demand for labor continues to fuel job creation. All of this represents massive tailwinds powering spending, which has been bolstering economic growth for months.
Just last week, San Francisco Fed researchers estimated consumers were still collectively sitting on $500 billion in excess savings — the extra cash consumers piled up since February 2020, thanks to a combination of government financial support and limited spending options during the pandemic."
https://www.tker.co/p/consumer-spending-resilient-finances-strong
18. WORD.
"No doubt Momoa misses his family, but he also recognizes this is the life he’s chosen. “I don’t get to see my kids right now for a very long time. I gotta share things with them,” he says, his rapid-fire speech pattern slowing way down.
“I’m doing everything that I want to do, everything that I’m designed to do. And you’ve got to do that. I want my children to know that and do that. I worked for a very long time when they were young doing shit I didn’t want to do to put food on the table.
And now? You should only work with the people you wanna work with. You should create with the people you wanna create with. And if you’re not, then you got one shot in this life—you gotta get the fuck out. Whatever situation you’re in, you gotta find your path, you know?”
https://www.menshealth.com/entertainment/a43530779/jason-momoa-fast-x-interview/
19. "If you could achieve whatever professional goals you’ve set out for yourself, but you couldn’t tell anyone that you’d achieved them, would you still want them? The question can help remove the noise of other’s opinions and center the desire that are uniquely your own.
The key to thick professional desires, in my mind, is to craft a personal definition of success that takes into account what you value and what the market values — in the words of theologian Frederick Buechner, to figure out “where your deep gladness and the world’s deep hunger meet.”
Some of that gladness may come from your working life. Some of it might come from what your job allows you to do when you’re not working. But getting clear on what you care about — independent of any particular job, title, or company — is a good place to start."
https://read.lukeburgis.com/p/how-to-craft-an-anti-mimetic-career
20. "The entitlements problem is all too real. But, there are ways out. First, people will simply work longer. They are already postponing retirement. Fidelity’s data shows that the percentage of its clients who have enough savings to cover their retirement expenses is down by five percentage points since before COVID, “to 78%”.
Not surprisingly, then, older people are returning to work or postponing retirement. Others are not retiring at all and instead creating a portfolio of cash and wealth-generating activities. Some will pay off; some won’t. But the trend is clear.
The over 55’s are now the fastest growing component of the labour force according to The Bureau of Labour Statistics. They write, “Among people age 75 years and older, the labor force is expected to grow by 96.5 percent over the next decade.” Employers are loving this for many reasons.
But, perhaps the single biggest reasons are 1.
These Boomers bring a much-desired old-fashioned work ethic into the workplace and 2. They bring a wealth of experience that money cannot otherwise buy. These older workers are not in it for just the money either.
They are seeking purpose, fulfilment and human connection. Employers find it easier to deliver on these requirements than it is to find more cash for higher wages."
https://drpippa.substack.com/p/why-druckenmiller-and-the-pessimists
21. "I am not sure if there is a real takeaway or “so what” from this blog post. It’s an observation that, like many other technologists I know (the amazing Gary Laudermade a similar assertion recently which truly resonated), I am rather good at predicting how the future of technology will play out. However, because I can easily imagine this future, I believe it will happen very soon, while culture and institutions move slowly, and things end up playing out over decades.
As a friend told me: “entrepreneurs confuse the present with the future. Their conception of it is so realistic that they often think they’re already there.” Perhaps as my thoughts on AI are highlighting, I am now correcting for that in my investing behavior, if not in my fundamental optimism."
https://fabricegrinda.com/timing-is-everything/
22. "Momentum is building for the Arabs to be a force in the new world order that is emerging. Many in the Arab world believe that now is a golden opportunity for the Arabs to make their presence felt in the world. The Arabs are strategically, demographically, and geographically well positioned to emerge as an autonomous pole of global influence in the coming decades.
The Arab world is a swing player in the great power rivalry. The Arabs’ decisions about their own future strategic direction will help determine how the great power competition plays out and contribute to shaping the international and regional systems.
What we are experiencing today is nothing short of global regime change. We have already seen so many changes in the current decade – and it has only just started. The next few years are set to be the most eventful, and perhaps the most dangerous, since World War II. The evolution of global multipolarity did not start recently as a result of the vacuum left by those losing relative power.
It began during and after the Second World War when peoples in different regions of the world broke the shackles of colonialism. Momentum for change only accelerated after the 2008 global financial crisis. The transformative shift gained further traction with the pandemic and the Ukraine crisis."
23. "So beyond policies in the developed democracies aimed at forcing decoupling, a lot is just going to happen on its own, due to a combination of China’s increasingly unfriendly business climate and the increasingly obvious risk of assets in China vaporizing in the event of a war. And if I’m right about that, it will represent not a clean or sudden break with the past, but a continuation of a decoupling trend that has been in evidence for about a decade, for those who cared to look.
But wherever the investment goes, the clear fact is that the old world where China was a push-button, no-brainer destination for corporate investment is being swept away."
https://www.noahpinion.blog/p/decoupling-is-just-going-to-happen
24. "These regulations have indeed left scars. Entrepreneurs in sectors that include ride-hailing, video games, and especially online tutoring were left shell-shocked. But pain set in for sectors that went beyond those directly targeted by the state. A common sentiment from an entrepreneur goes along the lines of: "I would like to focus on building a business and working on my product; instead I'm being forced to become a political scientist to understand the direction of policy."
The major question today is whether these scars will persist or fade over the next few years. It's undeniable that a lot of entrepreneurs were angry about the crackdown; and there are many anecdotal reports of wealthy Chinese who have decided to move to Singapore. Beijing has shifted its tone since the end of 2022, saying the most soothing words about how much it loves private businesses. But who can blame entrepreneurs for feeling skeptical, after many of their creations were strangled by the state?
I think that one of China's essential problem is one of state overcapacity. Since imperial times, state officials would rarely hesitate to entirely restructure a peasant's relationship to her land. The Communist Party has had even fewer scruples.
I think that China stands out because state officials are often mesmerized by some strain of utopianism; but it has the unique capacity to pursue these visions harder than other states. And because it doesn't know when to give up, the Chinese people suffer peculiar disasters."
https://www.noahpinion.blog/p/interview-dan-wang-china-specialist
25. "Confidence that China's economy can rebound from Covid restrictions is untethered to economic realities, Rockefeller International chair Ruchir Sharma wrote in the Financial Times.
"Something is rotten in the Chinese economy, but don't expect Wall Street analysts to tell you about it," he said, listing several indicators that point to underlying weakness.
https://finance.yahoo.com/news/chinas-economy-turned-rotten-reopening-232901546.html
26. Not sure what to think here. I'm biased & pro-USA & Ukraine here, so see nothing wrong with this (except for risking Nuclear war due to our clumsiness).
"Based on its actions, the US strategy in this war (see “America Needs Enemies” for more) is focused on regaining the global dominance it had after the end of the Cold War, with an understanding that it won’t be squandered on policing peripheral disputes (the Middle East, Afghanistan, terrorism, etc.). Instead, it will be focused on boxing in Russia, China, and any other emerging power that seeks to challenge US control."
https://johnrobb.substack.com/p/the-end-of-the-western-swarm
27. Big relevant topic. Is De-Dollarization happening? I think it's a long way off but inevitable the way we are running things.
https://www.youtube.com/watch?v=xTwwNoh0E6Q
28. Hmmm.....this explains alot of the weird geopolitical movement toward China that Saudi Arabia has made (besides MBS hating Biden personally)
https://www.youtube.com/watch?v=4V2s5-lOKAA&list=RDCMUCsy9I56PY3IngCf_VGjunMQ&index=1
29. "If you look at startup exits (liquidity events), they’ve been practically non-existent for the past six quarters. These startups exiting and returning capital to VCs and their investors (LPs) is typically what funds the majority of capital being invested into the venture capital asset class. But who can blame them?
Valuations are down significantly since 2021. It also means valuations are down in other asset classes, which institutional LPs will likely need to sell in to make new venture investments.
None of this bodes well for emerging managers. It’s the riskiest sub-asset class within venture capital, of which is one of the riskiest asset classes. This makes it very impacted during funding pullbacks."
https://www.thespl.it/p/emerging-managers-are-not-ok
30. This is a great episode this time. The guys are really good when it comes to talking about the tech industry.