Marvin’s Best Weekly Reads September 8th, 2024
“Opportunity does not knock, it presents itself when you beat down the door.”--Kyle Chandler
"The first study in self-improvement, therefore, is understanding our own psychology: how we think, learn, form habits and break bad ones; our unique strengths and weaknesses that enable us to succeed in some situations and not others.
Only if we can close that gap do we have any hope of closing the others."
https://www.scotthyoung.com/blog/2024/08/06/the-three-gaps/
2. Older article but important space in this scary new world. Asia's defense industry.
https://www.asiancenturystocks.com/p/mapping-asias-defense-industry
3. Some pretty glaring issues on what the CCP has been doing to us. The China threat, they are masters of the hybrid war.
https://www.youtube.com/watch?v=l7_7wmAyy4g&t=22s
4. "I fear that Taiwan has a bad case of “main character syndrome” — see in the world as a narrative of good vs evil where good will ultimately triumph in the end. Instead it should give at least equal weight to the world as a chessboard and learn to count the pieces on either side.
When you are vulnerable and live in a bad neighborhood, stupidity is a sin. Taiwan is sinning even as it bathes itself in imaginary glory. Getting together with you buddies to talk about how awful your opponent is isn’t diplomacy, it’s brunch. Diplomacy I define as sitting down with entities you don’t necessarily like to maximize the benefits to your interests."
https://taipology.substack.com/p/on-the-real-vs-imaginary-defense
5. "But if China could climb up the value chain, then so can Vietnam, Indonesia, Morocco, and Egypt. Over time, the companies in these countries that do assembly for China will learn enough of the tricks of the trade that they’re able to make more and more of the harder, more valuable stuff.
The U.S. and other tariff countries can help accelerate that process. By putting tariffs on Chinese components, but not on Chinese brands, they can incentivize Chinese companies to move more of their high-value work to poorer countries in Asia, the Middle East, and Latin America. Companies like BYD will then be able to circumvent tariffs, but only if they transfer their technology to developing countries.
In other words, tariffs by the U.S., Europe, and others might help usher in the next phase of globalization. They’re a costly inefficient policy that sometimes backfires, but that might be an acceptable price to pay for smashing the unsustainable, toxic pattern of China-centric globalization that prevailed in the 2000s and 2010s."
https://www.noahpinion.blog/p/how-tariffs-on-china-could-help-the
6. This was a spectacular interview. Zuck has really come into his own on the image front.
He was always brilliant but now just on the front edge of cool (and lot less robotic).
https://www.youtube.com/watch?v=02fBBoZa9l4
7. "Humans are built to seek connection, but we often forget that our body language and tone convey more than the things we say. The next time you interact with someone, reflect on what you’re communicating without words. Are your shoulders slouched? Are you turned toward them? Are you making eye contact? Do you nod along to what they’re saying? Are your arms crossed? Do you keep checking your phone? We perform so many of these small gestures every day, without even thinking, and each one sends a message.
What message are you sending?"
https://debliu.substack.com/p/the-hidden-message-youre-communicating
8. "Stripped to core components, an investor is a machine in which information goes in one end and capital allocation decisions come out the other. Venture capitalists who do not take care of their inputs place themselves at a disadvantage when it comes to their outputs.
The best investors focus on feeding themselves a regular diet of differentiated, high-quality information. Books and other sources of thoughtfully crafted writing are essential. Podcasts, YouTube, and social media posts can all hold valuable information. But there is a reason, beyond age alone, that so many of the world’s best thinkers are bibliophiles.
Listen to Reid Hoffman, Warren Buffett, Charlie Munger, Peter Thiel, Vinod Khosla, Josh Wolfe, Michael Moritz, or Marc Andreessen speak, and you will hear someone extraordinarily well-read, with wide-ranging tastes spanning fiction, philosophy, economics, history, anthropology, media theory, linguistics, mathematics, zoology, and beyond."
https://thegeneralist.substack.com/p/how-to-spot-a-supertrend
9. Mike is the best. There are so many deep insights on the art of venture investing and building world changing startups. This is worth watching twice.
https://www.youtube.com/watch?v=lV313WfYNdg
10. "Defense tech upstart Anduril Industries raised $1.5 billion in new venture capital funding at a $14 billion valuation, with some proceeds to be used for building autonomous weapon manufacturing facilities."
https://www.axios.com/2024/08/08/anduril-14-billion-autonomous-weapons
11. One of the best shows on the tech business and Silicon Valley. Latest episode.
https://www.youtube.com/watch?v=5LYZCoDysLs
12. “If the U.S. Army found itself at war, American manufacturers would struggle to produce the large number of high-quality small drones that the service would likely need—unless the Pentagon increases its support for drone producers, and soon.
When you look at Ukraine, now, they are building insane capacities to build drones,” he said. After the Russian-Ukraine war ends, “there will be a production capacity that will in return address the European and maybe even North American market,” he said."
13. "The trend is still the same from 3 years ago. The Upper Middle class is being pushed into the middle class. This means the true “Upper Middle Class”, is going to become small business owners. The only difference between upper middle and upper class will be the successes at scaling, inheritance and some odd ball incredible investors.
Considering that the vast majority of Wealth Management clients are all small business owners, the answer is in front of you (statistically).
Fade at Your Own Risk: You have all the numbers in front of you. We don’t sell dreams of “guaranteed riches”. We only provide the highest *probability* way to make it big. That’s the best you can do: play the odds.
Besides, even if you mess up, Thailand and Poland are always there."
https://bowtiedbull.io/p/upper-middle-class-collapse-optimizing
14. "In a global economy, every point of connection is an axis of attack. Hybrid warfare is a conflict cocktail that blends conventional military operations, cyber, disinformation, guerilla tactics, lawfare, diplomacy, regime change, and economic warfare. Vladimir Putin is a seventh-level hybrid warfare wizard. He has covertly poured state resources into high- and low-tech means to pit Americans and Europeans against each other. Just as Big Tech realized the greatest ROI was misinformation from likable executives — “We’re proud of the progress we’ve made” — propaganda continues to be how nations punch above their kinetic weight class.
Investments affecting national security, energy, and infrastructure also face scrutiny. It’s a dumb idea to give your adversaries the ability to control your weapons systems, turn off the power grid, or close your ports. And it’s plain stupid to let them implant a neural jack into the wet matter of our youth. (See above: TikTok.)
American universities, however, are undefended — they are open for business.
In 2019 fewer than 3% of 3,700 higher education institutions complied with a law requiring them to report foreign gifts or contracts exceeding $250,000. The following year an Education Department report concluded, “U.S. institutions are technological treasure troves where leading and internationally competitive fields, such as nanoscience, are booming.
For too long, these institutions have provided an unprecedented level of access to foreign governments and their instrumentalities in an environment lacking transparency and oversight.” A subsequent crackdown has called into question foreign money at Harvard, Yale, MIT, and other schools."
https://www.profgalloway.com/weapons-of-war-higher-ed/
15. "The drone operates on an electronic battlefield. To defend against a reconnaissance drone, the adversary must jam the radio frequency connecting the aircraft to its ground station controller, so it can no longer receive manual commands, or jam the frequency connecting the drone to GPS satellites, so it can no longer navigate. Introducing AI to the drone allows it to use computer vision to navigate like a human would by looking at a map, without the need for any satellites, and make decisions about where to fly without constant input from a human operator. “You cannot jam such a drone, because there is nothing to jam,” one Ukrainian drone pilot from the 92nd Brigade told Reuters in March.
Electronic warfare and counter-drone systems are rapidly growing more sophisticated. To achieve decisive superiority on the battlefield of the future, drones will need to be capable of operating, processing data, and making decisions independently of a human operator. Against a technologically capable adversary such as the U.S. might face in China, new capabilities such as recognizing objects and obstacles and autonomous action will very quickly become necessary. The next generation of unmanned aerial systems will not be achieved with attritable systems alone. The winner of the next great power conflict will be the one that invests in intelligence at the edge.
History can take the same lesson from the successes of Ryan Aeronautical in Vietnam, of Abraham Karem in his garage, and of the grassroots drone industry in Ukraine. Key breakthroughs in unmanned systems are made when startups are able to receive tight feedback from performance on the battlefield, rapidly iterating in conjunction with the warfighter. As the Department of Defense seeks to reshore America’s drone fleet, it should prioritize the startup companies that create war-winning innovations."
https://www.palladiummag.com/2024/08/09/the-past-and-future-of-military-drones/
16. Adopters and non-adopters. The Future of Work.
https://www.youtube.com/watch?v=ps2asYuD5js
17. "There's a whole nerdy ocean of debate about Marvel vs. DC, and how they each built their respective cinematic universes. I've contributed plenty to that conversation in my life. But I'm willing to concede that even Marvel, despite a glorious run of a golden age from 2008 to 2019, fell victim to the same fallacy as DC after Endgame. The pursuit of big came at the sacrifice of good.
In the venture world I often see the same danger. People willing to sacrifice good in pursuit of the big.
Bigger funds, bigger brands, bigger teams, bigger swings, bigger outcomes, bigger capital requirements.
Does a bigger fund mean not as good of returns? Yes.
Does a bigger brand usually mean you're not as good for a specific industry or subset of founders? Probably.
Does a bigger team mean not all of them are as good of investors? Usually.
Often my sense is the people pursuing the big believe that it is mutually exclusive with the good. They're satisfied with the "good enough." But I think that's wrong. I think thats as wrong in moviemaking as it is in company building.
You can build outcomes that are just as big while also focusing on what is good. Whether thats a good movie, in terms of quality, or a good business in terms of profitability, externalities, and overall outcomes."
https://investing1012dot0.substack.com/p/the-hits-business
18. Good discussion on the present geopolitics.
https://www.youtube.com/watch?v=_x7bXllrB-s
19. Lyn Alden is one of the best global macro observers in the world.
https://www.youtube.com/watch?v=I8JzsnZVylY
20. This is an enlightening conversation on tax laws for self employed entrepreneurs. America is set up specifically for entrepreneurs and businesses.
https://www.youtube.com/watch?v=Qjx70-vqZmQ
21. "Basically, I think the end of the pandemic and the rise in interest rates were triggers for investors to wake up and realize something they should have realized a while back: the internet is a mature industry now.
But because internet companies aren’t very capital-intensive, they don’t require huge fixed costs to set up — all you need to do these days is to hire a few software engineers and pay some cloud computing bills. Even back in the day when startups had to own their own computing hardware, it wasn’t that expensive. Together with network effects, low startup costs meant that software investors could take a huge number of bets, many of which offered the chance of gigantic returns.
The new industries that the tech sector is interested in mostly don’t offer both of these features at once.
Deeptech is obviously incredibly useful — the world needs newfangled semiconductors, spiffy drones, better batteries, new cancer drugs, and so on. In many ways this is a return to form for the VC industry — before software took over, in the 1970s and early 1980s, VC was mostly about funding hardware companies. The high fixed costs of hardware are a source of increasing returns, and therefore a source of market power, which means hardware startups offer the possibility of big rewards.
The problem is that hardware, unlike software, has incredibly big startup costs. To scale up a manufacturing company, you have to build big factories, like Anduril is doing now with its “Arsenal” factory. Biotech companies have to pay the huge fixed costs of drug research, testing, and approval. This makes hardware a tougher investment in three ways.
First, it means fewer investors can participate in the market past the seed round — you just need to have a lot of cash to pay a meaningful percentage of those fixed costs. Second, it tends to put a cap on the rate of return — there are some extremely valuable hardware companies out there, like Tesla, but they generally require more investment capital than a Facebook or an Amazon. Third, and perhaps most importantly, it stops investors from diversifying, which increases risk. If you have enough money to invest in 100 software startups, but only 10 hardware startups, it means you have a better chance of catching the next Facebook than the next Tesla.
Deeptech is still great, and it’s what VCs used to do more of, but it’s going to be tougher going than internet software. One thing investors will try to do to mitigate these problems is to put their money in deeptech companies that only do design, not actual manufacturing — think of Apple and Nvidia here. But given U.S.-China decoupling and the inherent difficulty of retaining an edge in design without controlling the factories as well, there might not be so many design-only deeptech companies out there."
https://www.noahpinion.blog/p/some-thoughts-on-the-future-of-the
22. "The rotor-toting robots of the hand-held, camera-sporting, persuasion that play such a big role on the battlefields of Ukraine owe much to consumer electronics. Indeed, if I am not too badly mistaken, the companies that make drones get most of their components from the same companies that supply the manufacturers of computers, smart phones, and video game consoles. Likewise, I suspect that the people who make remotely piloted planes of the smaller sort, whether design engineers or assembly-line workers, learned their respective trades making iPads, iPhones, and other items of that ilk.
To put things another way, the relationship between drones and consumer electronics echoes the connection that once tied field artillery matériel to civilian steel industries."
https://tacticalnotebook.substack.com/p/who-will-make-the-drones
23. Great list of off the beaten track places in Europe.
https://sharpmagazine.com/2024/07/08/meaningful-travel-guide-klm-cyprus-estonia-austria/
24. "Therapy is not linear. Each stage is fluid and overlaps, like tides sloshing in a rock pool. But what finally broke me free of this push and pull between denial and intellectualization was simply time—time and repetition. The boring truth about therapy is that rather than a stream of profound epiphanies, it is mostly a case of revisiting the same analysis—rising from the same undesirable thoughts and patterns of behavior—over and over again. But each time, the truth of it penetrates a fraction deeper and starts to catalyze changes in how you react to things and feel about them.
For Balick, this is the power and beauty of being in it for the long haul. “Though you keep coming back to a lot of those same repetitions, you get to them quicker, you move through them faster and you take greater risks,” he says. “Your therapist knows you and what your limits are. If it's good, trust continues to grow, deeper things continue to be said. And it's a real exploration—for the therapist, too.”
People often dismiss therapy as self-indulgent, and this is somewhat true in the beginning. You go because there’s something you have to change, something making you miserable or anxious. Many people feel the immediate relief of catharsis—I’ve said it out loud! Finally!—and stop. Sticking with it over the long term, I’ve come to understand I’m not just there to invest in myself but other people, how I interact with the world. It's a space to practise saying things that used to terrify me in real life—“I am angry with you”, “I feel insecure about this”—and learn the world does not fall in as a result. The long grind of therapy has enabled me to have conversations—with my parents, with strangers, with all sorts of people in between—that would have been unthinkable before.
“Long-term therapy has the capacity to deepen and improve all your relationships in life,” says Balick. “You can hold space. You can listen better. You can understand your own defensive reactions and be less reactive to them. That’s a very different thing from feeling less anxious about giving a presentation at work, which is a totally valid reason to seek a short-term therapy. It's just a different offer.”
https://www.gq.com/story/in-defense-of-the-long-painful-grind-of-therapy
25. "If you need any evidence of where this kind of control goes, you only need to examine human history. Whenever a government has carried out mass censorship or had complete control of narratives, it’s never ended well for the people.
Or, to simplify, the simple truth is this:
At any time in human history, whenever a government tried to censor or suppress the free speech of its people, they were not the good guys.
Whenever a government in the past has alleged they have a monopoly on the truth, they were not the good guys.
If your government is doing the same thing now—exactly like what’s happening in Australia, the UK, Europe, and beyond—I can promise you they are not the good guys."
https://anticitizen.com/p/not-good-guys
26. "Companies outsource manufacturing to China, but then realize that the Chinese copy their designs (and even improve upon them) and release their own competing products. Sooner or later, they will beat the OGs in innovation as well.
When you outsource, you give up some amount of control to a third party. If the function you outsource is unimportant, you’ll be fine.
If what you are outsourcing is THE thing that makes you great and powerful, or allows the third party to learn or outclass you at the thing that makes you great and powerful – you are making a huge mistake.
The day will come when they will learn how to do it better than you, and they will already know your business and your abilities and often even your customers. You will fall due to your own folly and mistake.
This is the lesson from the Athenian allies who became a subject people because they outsourced the fighting to Athens."
https://lifemathmoney.com/how-athens-conquered-its-allies/
27. Kevin is an OG of Silicon Valley. One of the top investors and operators here.
Solid interview.
https://www.youtube.com/watch?v=BvvHojJrr-A
28. Good state of the startup funding world. Things are turning around.
https://www.youtube.com/watch?v=_wNAJMF4NYQ&t=24s
29. "I’ve honestly been grappling with where the key vectors of competition and competitive advantage are in an AI world. I’m not there yet but, I’m leaning towards the idea that AI will level the playing field for areas like operations and innovation. I keep coming back to the things AI can’t change, and I think, counterintuitively, those may be some of the best places to invest to make money off of AI.
The fixed capacity in the modern world is attention. It seems like commanding someone’s attention is the most valuable thing to have or be. That generally cements incumbent positions, except in cases of extreme novelty. Maybe the AI people are right, and attention is all you need."
https://investinginai.substack.com/p/would-you-use-an-outside-ai-program
30. "Two of our major themes this year are “The CPG Commerce Ecosystem” and “The Transactability of Wholesale” (see 2024 Equal POV on Investing in Retail) because the pain points that CPGs, especially emerging brands, encounter are distinctly unique from other retail categories, given how heavily reliant they are on traditional offline channels.
Getting into, and succeeding, in retail is a whole other ballgame, particularly given how offline and antiquated wholesale processes remain. CPGs also have to manage a more challenging supply chain that’s regulated and / or perishable, all the while managing cash flow constraints when working with procurement and payment cycles of large retailers.
We view CPG as one of the most exciting and underserved segments in the retail segment today and will be sharing more of our thoughts on the category over the next few months."
https://medium.com/@EqualVentures/the-cpg-dilemma-and-opportunity-77a942976f89
31. "The source cautions against comparing the Kursk incursion to Ukraine’s successful swift recapture of much of Kharkiv province in late 2022. The Russian army is taking the war more seriously now, he says: “The danger is we’ll fall into a trap, and Russia will grind our teeth down.” On Sunday Russia’s defence ministry claimed, albeit not for the first time, that it had “thwarted” attempts by Ukrainian forces to break deeper into Russia.
The mathematics of war have never favoured Ukraine, which must husband its limited resources, and an assault deep inside undefended Russian territory risks making the situation worse. But the operation has already improved the one crucial intangible—morale—that has allowed Ukraine to cheat the odds for nearly three years now. Whether in government offices in Kyiv, or in front-line hospitals treating the wounded, the nation believes it has uncovered a vulnerability in Vladimir Putin’s armour.
Tired, dirty and exhausted, the soldiers say they regret no part of the risky operation that has already killed scores of their comrades: They would rejoin it in a heartbeat. “For the first time in a long time we have movement,” says Angol. “I felt like a tiger.”
32. This interview with Sahil Bloom is such a great roadmap on how to build a business as a creator.
Lots of great insights and learnings here for building a personal brand.
https://www.youtube.com/watch?v=c0yIT4GENRk
33. "Conventional wisdom would say that any window for Zuckerberg to come off as cool has closed now that he’s a 40-year-old father of three. So he’s decided that if people are going to laugh at him, he’s going to laugh right along with them. “I think as I’ve gotten older, I’ve just, like—all right, whatever. It doesn’t matter,” Zuckerberg says. “Just kind of try to be myself as much as I feel comfortable being.”
It’s the latest shift in Zuckerberg’s public persona, which he periodically reboots. He’s grown out his hair, started wearing a gold chain and oversize T-shirts, been spotted wearing a barbecue-themed hat with the motto “Smoke meat every day” and, earlier this year, participated in a “jacket swap” with Nvidia Corp. CEO Jensen Huang. On the Fourth of July, Zuckerberg posted a video of himself wakesurfing in a tuxedo while holding an American flag as Bruce Springsteen’s Born in the U.S.A. played in the background.
If Zuckerberg just did sales at a tech company instead of run one, this might seem like a standard midlife crisis. But his personal makeover corresponds with an attempt to do the same for a $1.3 trillion social media giant attempting to adapt to what he and other tech power brokers see as a fundamental shift in the industry. Advertising revenue from Meta’s social networks drives his business today, but Zuckerberg expects artificial intelligence to overhaul that formula soon."
https://archive.ph/lK89x#selection-1673.0-1693.479
34. "I have an idea for a new type of software company. It is radically different from anything that exists today, and if you read this article closely, you might be able to make millions of dollars.
The pitch goes like this:
Software is the greatest business man has ever invented. It is God’s gift to capitalists. The margins? High. The technical difficulty? Surprisingly low. If you follow the strategy proven by hundreds of startups, you can scale a software business to tens of millions of dollars of revenue in less than five years. It’s simple, cash-efficient, and has been the bedrock of tech’s might for decades.
The entire foundation of this mountain of moolah rests on three simple things:
A back end that has a table of data,
Logic that performs a set of actions based on that data, and
A front end that lets a user interact with the results of those actions.
The three together create a virtuous cycle: The user inputs new data or takes some action with the data on the front end, which gets sent to the back end, starting it all over again.
Annnnd that’s kinda it.
The multi-trillion-dollar world of software applications is all based on those three things. The technology is so simple that the majority of value over the last two decades has come not from sci-fi innovations in technology, but from innovations in how we distribute it. But I think that is about to change with a new model of design I call ambient software.
Ambient software, whoever controls the backend controls the AI. It works best when the startup has all of the data centralized in one location. This is challenging because most software incumbents have already realized the problems that AI represents and have started doing all they can to lock up data. Getting ambient software live with a customer would require a large migration process—and a number of cultural changes. Convincing employees to allow every phone call, keystroke, and conversation to be recorded will be challenging to say the least.
Most glaringly, models aren’t yet good enough to do this at scale. The big bet of ambient software is that you are hoping the models will improve. That is far from a sure thing! LLM progress has felt relatively slow compared to the gains that came in the year between the GPT-3 and GPT-4 release.
I actually find the model problem encouraging. The differentiation doesn’t come from model strength—something most startups can’t compete on because it’s expensive—but from implementation and understanding customer problems which is where startups excel. This means that there is an actual startup to be built!"
https://every.to/napkin-math/a-million-dollar-software-idea
35. "Packy McCormick’s job is to find, articulate, and invest in the next big idea. I spent an hour with him to understand how he’s baked AI into his process.
Packy writes Not Boring, a newsletter that analyzes technology and startups for 200,000 subscribers every week. He also invests through his fund, Not Boring Capital, which backs early-stage companies that combine sci-fi ideas with viable business models. And he’s an advisor at a16z crypto."
https://every.to/chain-of-thought/how-packy-mccormick-finds-his-next-big-idea
36. "Andriy Zagorodnyuk, a former Ukrainian defense minister who now leads the Center for Defense Strategies, a Ukraine-based think tank, described five potential motivations for the new offensive: diverting Russian forces from other fronts, particularly near Kharkiv; discouraging further Russian cross-border attacks into Ukraine by showing that Russia’s own borders are unprotected; showing the rest of the world that, despite its size, the Russian army is weaker than it appears; testing out new military tactics; and taking the initiative away from the Russian side. The larger question is how far the Ukrainians want to expand their current offensive."
https://www.theatlantic.com/international/archive/2024/08/ukraine-russia-kursk-invasion/679420/
37. "The CIA’s veil of secrecy often submerges individuals’ stories, over time, into a compartmented void. But within some agency circles, this operative’s feats were the stuff of hushed renown. He was a “freaking legend,” says a former colleague. A “hero,” says another. “Exceptionally ballsy and committed,” says a third.
But some within the agency questioned the tangible intelligence value of this operative’s work, and the broader efficacy of the CIA’s post-9/11 push to seed more deep-cover officers abroad, including into terrorist circles. For two powerful kingdoms within the CIA, locked in the eternal governmental battle over resources and prestige, his case became emblematic of deep disagreements about the agency’s role in the War on Terror.
His story serves as a requiem for the CIA’s War on Terror, mirroring its successes as well as institutional and moral disfigurements. And his case speaks to fundamental questions about the viability of the CIA’s human-focused spying mission in the 21st century — quandaries that, if anything, have only become more acute in the years after his death.
“What he did — at the time, we thought it was amazing,” says a former CIA official. But “time and distance” have revised this person’s assessment. “Did he just give his life for nothing? All the risk and danger, so what? What really was accomplished? What was really done?” asks the former agency official."