Marvin’s Best Weekly Reads September 1st, 2024
“Often the best way to relax is just to go back to work”–Steve McQueen
"One advantage of including a solo GP on your cap table is their ability to make investment decisions quickly. Unlike traditional VCs, who need to consult with their fellow partners for approval, solo GPs can typically decide within a few days.
Additionally, solo GPs often specialise in a particular stage or, more interestingly, a specific sector. Those focusing on a single sector are usually former operators with deep industry expertise and strong connections."
https://neweconomies.substack.com/p/the-solo-gp-landscape
2. This is a good state of VC panel. Lots of good perspective here on the tactics and strategy of the business.
https://www.youtube.com/watch?v=NVceHUqEoF0
3. "Intel’s other recent big bet has been its foundry business — three facilities in the US and three overseas to manufacture semiconductor chips, with other facilities in Asia and Latin America for testing and assembly. But that’s gotten a bumpy start; for instance, Intel declined to invest in cost-effective extreme ultraviolet machines for its manufacturing facilities, then had to outsource 30 percent of the manufacturing to a rival company, TSMC.
“Historically, Intel has been the company that was pushing the leading edge,” Newman said. But in the lead-up to Gelsinger’s tenure, the company “missed the AI transition,” he said — and companies like Nvidia, AMD, and TSMC, which are manufacturing semiconductor chips that can be used to accelerate AI technology, filled the market."
https://www.vox.com/technology/364745/intel-nvidia-ai-silicon-valley-layoffs-stock-semiconductor
4. "When the commercial internet started to take hold in the late 1990s, it felt as meaningful of a shift to me as AI does today. Many people (including me) staked their careers on the belief that the internet would be a transformative force that would remake many parts of society. That belief was well placed, and those of us who have worked on the internet for 20+ years have seen changes that were hard to imagine 20 years ago.
That being said, AI in 2024 feels like where the commercial internet was in 1999 or 2000. You could feel things were changing. You could imagine a future where the internet was deeply woven into everything from commerce to community to communications.
The only problem is that we were collectively wildly off in how quickly those changes would occur. In some cases, the core issue was a technology limitation. In many other cases, the issue was the inability of businesses to adopt new technology and change business processes. We needed that optimism to take some big bets and try new things, but it ultimately took way longer than most of us thought to come to pass.
Maybe it's just me, but it feels like we are on the cusp of a new era where startups and investors will deeply appreciate the time scale required to rewire businesses to utilize the power and promise of AI."
https://chudson.substack.com/p/todays-era-of-ai-investing-reminds
5. Learning from the best: how to build a long lasting venture firm. Lux Capital is tops in frontier tech.
https://www.youtube.com/watch?v=s9PT97uaCKY&t=1s
6. "What matters most is not the price tag, but the cost per mission — how many missions can it be expected to fly before it is jammed or shot out of the sky? A $2,000 drone which flies one kamikaze mission effectively costs the same as a $20,000 drone which can be expected to survive 10 missions. Second is capability — can the drone support high-resolution sensor payloads? Can it deliver munitions? Does it have obstacle avoidance? As drones are deployed in a wider variety of applications, different size/cost/capability combinations own different use cases.
Eliminating CCP-sponsored drones from American skies is essential for our national security. But we will not accomplish a DJI ban by forcing American operators to use subpar systems. Pilots won’t stand for the ban until they have a viable alternative. That can only follow the development of a robust American drone manufacturing base. So how do we win? As the war in Ukraine has gruesomely illustrated, attritable systems are a key capability on the modern battlefield, and the United States should absolutely build up its own Group 1 companies. But the truth that inspired Made in China 2025 still holds — China is far better at making cheap products. We will likely not beat DJI purely on labor and component cost.
America has the advantage in advanced capabilities. The United States drone industry has succeeded in fostering a collaborative ecosystem of open-source software and hardware developers; companies like Aerodome, who builds drone-as-first responder software on top of off-the-shelf drones; and DroneDeploy, which supports reality capture. By acting as a platform and not competing with their customers, American drone companies can achieve the scale needed to drive down costs and compete with DJI. In the age of AI, a single low-cost drone with high-resolution sensors and a GPU can run a variety of software applications that can make it significantly more capable than a comparable Chinese system.
The United States must leverage its strengths in advanced software and open-source development to enhance the capabilities of affordable drones. Building a robust domestic manufacturing base — in military as well as commercial systems — is crucial for maintaining national security and technological superiority."
https://www.noahpinion.blog/p/why-america-fell-behind-in-drones
7. "I've talked to people like these and others who, after being away from their previous firm for a while, will catch up with former bosses and colleagues and have them say, "Wow! I had no idea what you were capable." Most often, that's because they were too caught up being anchored to Erik in 2019 or Grace in 2017, and didn't do a good enough job establishing a new anchor for that person.
That isn't always the case. Plenty of people have built long careers at one firm without needing to switch. My belief is that this is either because of (1) lucky circumstances of finding a mentor, specialty, and firm that coalesce around enabling that person to succeed / progress, or (2) the firm they're at has built a deliberate engine for enabling that kind of progression. Though very few firms have.
The little sister syndrome is a textbook example of an inaccurate anchor. This isn't just true of how VCs build their careers, though its particularly egregious in venture. It's true of how people judge talent across the board. The incorrect anchor on someone can ensure one thing: the person making the incorrect judgement will not be along for the ride when that person skyrockets.
That's why you hear so many stories of successful people who were terrible students, yet would go on to exceptional success. Structured learning, like grades and tests, were tied to the wrong anchor for that person. The correct anchor was something else entirely. Like the obsessive efforts to rebuild car engines or ham radios from scratch.
Judging the quality of a person is as much about finding the right anchor by which to estimate that person's capability as it is observing the person. Without understanding that nuance, you're doomed to lose your best people to the little sister syndrome."
https://investing1012dot0.substack.com/p/little-sister-syndrome
8. "In economic language, the transaction replaced the relationship—not just on Wall Street but in American business generally. And the same can be said of the elite as a whole. WASPs once made for a fairly coherent upper class: concentrated in big cities and their suburbs in the Northeast, products of the same prep schools and colleges, likely to choose from a small pool of marriage partners, guaranteed of a decent inheritance and, for men, a sinecure at a respectable firm. Social ties were stable and for the ages. That has all given way to rule by money. Now you have to pay a consultant half a mil to get your kids into U.S.C. instead of relying on your bloodline to get them into Harvard.
When George Herbert Walker Bush died, a standard feature of the memorials was to celebrate his Waspy virtues of modesty, considerateness, and public spiritedness, in sharp contrast to the bombastic fool who occupies the Oval Office today. Ross Douthat opined that we miss those things because they signified a “ruling class that was widely . . . deemed legitimate.” It’s a thought I’d had before.
Honestly, it is a little tempting to get sentimental about the old order. Next to the reigning crassness of our day, that sort of reticence has a seductive allure. But it’s distressing to find yourself agreeing with Douthat, even in passing. How valid is the sentiment? And how well can our system live with an elite as rotten as the one we have?"
https://harpers.org/archive/2019/11/to-serve-is-to-rule-wasps-doug-henwood/
9. "So, in the eyes of the EU, what better time to set up a database that logs the assets of its half-billion citizens?
We’re only one crisis, conflict, or simple law change from your government being able to take everything you’ve ever worked for. And just like in bygone ages, they'll take it by force if you refuse to hand over your wealth willingly.
You should be paying attention if you’re European or an inhabitant of anywhere else in the West.
But more importantly, you should be taking action. Like ensuring you have assets scattered in multiple locales worldwide, so they’re not at the mercy of a single government body.
The simple truth is this: What’s yours is only yours while your government allows it.
And your government is broke."
https://anticitizen.com/p/not-your-property-eu-database
10. Sometimes you may need a patent strategy.
https://kellblog.com/2024/08/04/does-your-startup-need-a-patent-strategy/
11. "It was the start of Operation Intering — a never-before-reported massive, multiyear, transcontinental effort. Along the way, the FBI and the Austrian would seed faulty tech to Moscow and its allies; drain the Soviet Bloc’s coffers; expose its intelligence officers and secret American conspirators; and reveal to American counterspies exactly what tech the Soviets were after.
Because of Intering, the Soviet Bloc would unknowingly purchase millions of dollars’ worth of sabotaged U.S. goods. Communist spies, ignorant that they were being played, would be feted with a literal parade in a Warsaw Pact capital for their success in purchasing this forbidden technology from the West. But as the operation gained momentum, it would become increasingly risky — including to the life of the Austrian himself."
https://www.politico.com/news/magazine/2024/08/04/us-spies-soviet-technology-00164126
12. Especially true in Defense-tech.
"Hardware is riskier than software."
No longer true:
Development speed: 3D prints and PCB prototypes now available in 24 hours, rivalling software iteration speeds.
Moat strength: Apple's hardware-software ecosystem is far more defensible than most pure software plays.
Massive hardware exits:
ARM: Sold to SoftBank for $32B in 2016, now worth $140B+.
CSR (Cambridge Silicon Radio): Acquired by Qualcomm for $2.5B in 2015.
Dyson: While not an exit, it's valued at over £20B as of 2023.
The Arbitrage Play:
It isn't about costs. It's about ambition.
While software talent flows freely globally, ambitious UK hardware startups can exclusively tap into a world-class, locally-bound talent pool."
https://josef.cn/blog/uk-talent
13. This is an instructive interview for sales leaders and founders. I'm going to rewatch this a few times myself.
https://www.youtube.com/watch?v=rmOnNouM6fo
14. Quite a deep and valuable conversation on business and life as an entrepreneur.
https://www.youtube.com/watch?v=Dw8j7hghv1k&t=1862s
15. "Sometimes, a large social following or big brand can be accretive to a startup — especially consumer companies or ones that benefit from early buzz. However, I do want to put in a plug for the vanilla VC whose sole vocation is funding startups, helping them scale, and ultimately succeeding the same way you will.
No matter who you choose, make sure you can identify their incentives. Ask the tough questions — understand their fund dynamics, their personal ambitions, and how they spend their time. An educated consumer is the best customer :)"
https://medium.com/@foundercollective/the-many-incentives-of-vcs-80a089a947f0
16. "When faced with the choice between a long hiring process or the potential to fulfill the role with a software robot at 15-20% the cost of human labor, a hiring manager calculated risk to try AI may result in tremendous savings to the business."
https://tomtunguz.com/toil-and-labor-markets/
17. "But why is China now frantically stockpiling such an array of commodities? Is it a defensive measure as the government sees further economic weaknesses across the horizon and wants to wean itself off Western supplies - or one hinting at future aggression? Everyone probably needs to answer that question for themself.
What we know for sure is that there is evidence that China is taking further measures to distance itself from the US. While buying huge quantities of gold earlier this year, China has also been selling down its holdings of US government debt to protect it against dollar sanctions if it comes into a conflict with the West.
This move could be in reaction to sanctions placed on Russia after it invaded Ukraine, in which Western penalties quickly wiped out roughly $350 billion of Moscow’s foreign currency and was viewed as a highly controversial move by the US government as they basically weaponized the world reserve currency further."
https://commodityreport.substack.com/p/is-china-piling-up-commodities-for
18. "Knudsen is among Cold Hawaii's growing community of transplants, most of whom left skyscrapers and traffic to slow down and surf by the sea. Denmark's once sleepy north-west coast is now crawling with galleries and boutiques, organic bakeries and a co-working space – many of them opened by the newcomers from 20-some-odd countries.
Even more young South Africans, Brazilians, Australians and Germans moved here post-Covid to work remotely, some to raise their kids. There are doctors and lawyers, and a famous Danish artist who'd been living in Berlin, Jeppe Hein, who now volunteers in local schools teaching children how to paint their own breath.
"You're forced to slow down. There isn't a lot here, so if you want art, you make it yourself. If you want pancakes, you make them yourself," said Knudsen. "That part hasn't changed. It's still the mentality of the fishermen who've lived here the longest."
19. "We already wrote about people being on tilt or getting emotional in the comments. We’re going to do a short explainer here on how to tell if you’re under or overexposed.
Overexposed: You find yourself watching prices every day, you are going to suffer a lifestyle change if prices go down by 20-25% and you are using leverage. These three things will be clear tells for over-exposure.
Neutral - Good Exposure: You don’t really care about the big down days. You didn’t panic the last time we were here in July and this is a bit worse (about 10-12% worse). You’re not worried and considering adding a bit versus selling. If you’re at least considering it then you’re in good position. If you want to sell everything, its a sign of overexposure.
Underexposed: You’re buying every single day there is a -2-4% day and are rapidly buying any dip in general. This usually means you are trying to cost average down. In that case this is probably the last real chance to own major coins. Even if you lean bearish, really doubt they can survive without printing infinite money within the next few years."
https://bowtiedbull.io/p/people-feeling-the-panic-mbas-your
20. "As more money flows into the fossil market, public institutions are getting increasingly boxed out, leaving the study of ancient specimens in the hands of the billionaires who can afford to buy the bones.
As the prices of fossils get higher, so do the stakes — and the possibility they’ll be lost to the public. Apex’s auction has reignited a long-roiling debate at the bedrock of fossil discovery. On one side stand commercial hunters and ranchers who extoll the virtues of property ownership and the free market, and argue scientists disdain them because they don’t have PhDs like they do. On the other are academics who say that fossil hunters are in it for the money, and when a skeleton is sold, its contribution to science turns to dust.
Fossils like Apex are caught in the middle."
https://thehustle.co/originals/who-are-fossils-for
21. This is such a good discussion on AI and Compute power. Servers, Steel and Power. The Industrial Revolution continues.
https://www.youtube.com/watch?v=nAz2xL1tQfg
22. "“It is no longer the place I am familiar with; it has become a strange place. I have no choice but to get to know and adapt to it anew.
“The way of life and the social atmosphere that I once knew are already things of the past; they no longer exist.”
He said the city had lost a many of its young, Cantonese-speaking adults, “as if a whole social stratum has suddenly disappeared”.
“Yesterday’s Hong Kong is dead, and today’s Hong Kong is one of the cities in China,” he continued, questioning whether Hong Kong is still an international city.
He thinks Hong Kong will maintain to some degree its status as an international hub while losing much of what made it special over time, including the rule of law and judicial independence upon which it built that reputation.
He said: “Hong Kong will become increasingly enmeshed with mainland China, which is also a stated policy aim of increased integration with Shenzhen and the
rest of the greater Pearl Bay area.”
https://inews.co.uk/news/world/hong-kong-dead-residents-say-city-lost-identity-3181742
23. "This is now no longer a story about a horrifying triple murder and the misinformation spread about it. It’s a story about a serious failure of social cohesion, driven in large part by fears about immigration and the perceived failures of integration.
Some of these anxieties have real roots. While overall crime in the UK has steadily declined for the past two decades, knife crime—a major concern in a country in which gun homicides remain mercifully rare—has risen significantly in recent years.
Similarly, the number of refugees seeking asylum in the UK has soared in recent years and now matches a previous peak reached in 2002—something hammered home by the last Conservative government with their ceaseless calls to “Stop the Boats.” Finally, there are real problems with the integration of parts of the UK’s Muslim population, as emphasized last year in a damning report written by the government’s social cohesion tsar Dame Sara Khan."
https://www.persuasion.community/p/why-britain-is-rioting
24. "The upshot of all of this is that the Fed should probably start cutting rates now, like markets expect them to. Yes, the economic data are still fairly solid. But if the Fed keeps surprising the markets by being more hawkish than expected, it could cause continued deterioration in the labor market — and, eventually, an unnecessary recession. Yes, it was bad to be too dovish for too long in 2021, but it would also be bad to be too hawkish in 2024."
https://www.noahpinion.blog/p/the-us-economy-is-not-crashing
25. "You’ll read the above and quickly realize that boom time startups and gloom time startups really operate with different strategies. And it might be true that founders who excel at one end up being poor at the other. For folks who are building solid, foundational businesses, and want to grind hard over many years, starting a company during a recession ends up potentially working great.
Ultimately though, I hope many of you who are thinking of building a new startup are undeterred from the economic turbulence we’ve recently seen. There are huge benefits from building something new when things are a little slow. And they help create the opportunities for the next wave."
https://andrewchen.substack.com/p/boom-time-startups-vs-gloom-time
26. I always learn new stuff. Balaji is a smart guy but he can be bit cold blooded geopolitically, driven by libertarian views & anti-US Democrat (blue) views.
Yet he is right on many things, India is on the rise, USA is a poor ally, a bad exemplar of rules based order and sadly in decline due to bad policy and leadership.
https://www.youtube.com/watch?v=XW9mMcE7I7A
27. Solid discussion on how to build a business (or businesses) on content platforms.
https://www.youtube.com/watch?v=Sz-0OojF08Y
28. Kevin Hartz is the man.
https://www.youtube.com/watch?v=39O-_Tj6Swo
29. Another disturbing but important geopolitical discussion. Taiwan is the key.
https://www.youtube.com/watch?v=23f971HpNcY
30. An insight-dense conversation on the concept of the Network State.
https://www.youtube.com/watch?v=R4dcTvoFHZM
31. This is a must listen to for all founders. Gold. How to use numbers and what numbers to track for your business.
https://www.youtube.com/watch?v=oePi8tg_T6U
32. "If so many VCs are willing to invest in hard tech startups, why does raising pre-seed capital still feel so hard? It starts with a simple fact: the vast majority of VCs that invest in hard tech startups aren’t actually hard tech VCs. They’re generalists. And generalist investors often come to the table with stereotypes and preconceived notions that can get in the way of making an investment."
https://chrisneumann.com/archives/how-to-pitch-hard-tech-to-a-generalist-vc
33. This is one of the best business recaps of the week.
https://www.youtube.com/watch?v=KzR4GMvAz_M&t=1725s
34. This is an excellent and timely discussion for founders. It's ugly out there so this is just valuable advice.
https://www.youtube.com/watch?v=GCIDROdUUSE
35. "The Airport is evolving with this new demand. For decades, airport used to resemble a train station. A few chairs and seats for people to wait until their flight. Simple and efficient.
Now the airport is a luxury mall. You can spend an entire day at the Singapore airport and feel like you are at a resort. But this is just the beginning. The airport is most likely going to evolve from a luxury mall to something else. Some say a mini-city but others say an entire Artificial Intelligence and robot enabled space station. Layovers won’t be seen as nightmares anymore but maybe as part of the vacation itself."
https://lindynewsletter.beehiiv.com/p/airport-new-third-place
36. These are both very instructive discussions on the business of investing.
https://www.youtube.com/watch?v=4YXMZhsVClI&t=177s
37. "The New Battle of Kursk Continues…For Now
Time will tell whether using these Ukrainian brigades to attack into Russia rather than defending eastern Ukraine has been the most strategically effective use of their forces. At a time when Ukrainian defenders in the east are being pushed back on several axes, the use of highly capable Ukrainian combat forces in Kursk is either a brilliant countermove to shift the initiative in the war, or a strategic error which compounds the challenges in Ukraine’s eastern Ukraine defensive operations.
There is no way yet to make this assessment, however. As with all war, there is an abundance of uncertainty at the early stage of another Ukrainian offensive. Not only are we unsure about just how far deep the Ukrainians have penetrated, but we are also unsure of the strategic and political objectives of this operation.
While success or failure in this Ukrainian cross-border attack may not win or lose the war, it will have an important bearing on Ukrainian morale and western support. But ultimately, the success or otherwise of the coming offensives will be determined on the ground. Good leadership at all levels, flexible execution, determined close combat, good logistics, surprise and adapting to opportunity will all be crucial to tactical and operational success. And this must be applied with sound strategic reasons.
This all might end up being just a larger scale raid than the previous 2023 and 2024 incursions into Russia. We will know in time."
https://mickryan.substack.com/p/the-battle-of-kursk-2024
38. "Let’s focus back on Harris’ dilemma of what to do about a developing global financial crisis sparked by the unwinding of Japan Inc.'s monster yen carry trade. She could let the chips fall as they may, allow the free market to destroy overleveraged businesses, and permit wealthy baby boomer financial asset holders to experience some real pain. Or, she could instruct US Treasury Secretary Bad Gurl Yellen to fix it with printed money.
Like any politician, regardless of party affiliation or economic beliefs, Harris will instruct Yellen to use the monetary tools available to her to avert a financial crisis. Of course, that means the money printer will go brrr in some way, shape, or form. Harris will not want Yellen to wait – she’ll want Yellen to act forcefully and immediately. Therefore, if you share my view that this yen carry trade unwind could collapse the entire global financial system, you must also believe that Yellen will swing into action no later than the opening of Asian trading next Monday, August 12th."