Marvin’s Best Weekly Reads August 30th, 2020
“At the end of hardship comes happiness” — Korean saying
This is an Amazing tweetstorm. Josh Waitzkin is one of the most brilliant individuals around. Here are some of his mental models.
https://mobile.twitter.com/george__mack/status/1292206014746558471
2. Talk about a rags to riches story. Love reading these kinds of immigration stories.
“In the local real estate rags, Lo is a misfit in a sea of manicured headshots.
He sports a jet black, Elvis-like pompadour, ostentatious spectacles, and bespoke pinstripe suits. He poses in outrageous positions. He plasters his full-page ads with slogans like “I caught a fish!” and “Wild and scary good!”
But if you take a look at the sales records of all those mansions, you’re likely to see his name.
Over the past 4 decades, Lo has sold nearly $6B worth of houses in the San Francisco Bay Area. Last year alone, his sales volume topped $347m — good enough to rank him in the top 5 broker-owned firms nationwide. In the process, he’s helped reshape the demographics of some of America’s priciest neighborhoods.
Who is this guy? And how did he rise to the top of one of the most competitive real estate markets in the world?”
Silicon Valley’s eccentric real estate king
3. This shows how broken the programmatic ad world aka adtech is. And at the expense of the advertisers and news publishers too.
https://www.wired.com/story/she-helped-wreck-the-news-business-heres-her-plan-to-fix-it/
4. The Toy company no one knows about. MGA. Amazing.
“In 2001, MGA encountered their first massive success with the launch of Bratz Dolls. In 2006, they acquired Little Tikes (makers of this thing). And in 2016, they launched the one-and-only L.O.L Surprise! dolls.
I’m guessing MGA has been doing $5–6 billion in revenue per year for the last few years, driven almost entirely by LOL dolls. Given that the US toy industry is relatively small (~$27 billion), it’s insane that MGA has captured such a big percentage of market share.”
“Today, there is more IP that exists in a transmedia way. Some obvious examples include Marvel and Pokémon. Less obvious examples include the Kardashians, the Hype House, Sesame Street, hit Roblox games, and Miquela. The characters we know and love can live on many platforms concurrently.
We familiarize ourselves with these worlds, and we watch narratives play out, to some degree, with our own time and space. Increasingly, we are also able to interact with them on “metaverse” platforms such as Roblox, Fortnite, and Niantic [games].”
“Insane Companies No One Talks About” Episode 2: MGA Entertainment
5. Robinhood doing very well. Interesting business model that does not totally fit its name.
“The pandemic forced millions of future Robinhood customers home to shelter in place, free from diversions like sports and armed with fast internet connections and free money from the government.
The result was unprecedented growth for the upstart brokerage. Robinhood now has more than 13 million registered customer accounts, nearly as many as venerable Charles Schwab, which after 49 years has 14 million funded accounts, and more than twice as many as E-Trade, with 6 million accounts.
“The secret sauce of Robinhood’s success is something its founders are loath to publicize: From the beginning, Robinhood staked its profitability on something known as “payment for order flow,” or PFOF.
Instead of taking fees on the front end in the form of commissions, Tenev and Bhatt would make money behind the scenes, selling their trades to so-called market makers — large, sophisticated quantitative-trading firms like Citadel Securities, Two Sigma Securities, Susquehanna International Group and Virtu Financial. The big firms would feed Robinhood customer orders into their algorithms and seek to profit executing the trades by shaving small fractions off bid and offer prices.”
6. “We’re no longer dealing with a world of scarcity, where exchange economies are the default way we assign and trade value. This is an environment of abundance. There’s no material scarcity or friction at work here, but there’s still a lot of work to do. And so a new value model emerges: gift culture. And with it, a really good metaphor for how we develop and share knowledge on Twitter: “Homesteading.”
“Abundant environments may surprise you: even though they’re lacking in material scarcity or literal friction, there’s still plenty of work to do. It’s just a different kind of work: the work of dealing with complexity, clarity, curation, and especially synthesis. The effort and value being traded here lend themselves far more naturally to a gift culture economy, which is still very much an economy. It’s just not a transactional one.
The other obvious kind of work to do in an abundant environment, of course, is achieve and maintain positional scarcity. Status is clearly scarce, and in a gift culture like the free software community — or on Finance Twitter — the way you earn status is by putting in real effort, and then giving away the fruits of that effort.”
https://alexdanco.com/2020/08/21/homesteading-the-twittersphere/
7.“At YouTube, Pappas was, in part, responsible for scaling massive, worldwide growth, but at TikTok she is tasked with the opposite: Take a Chinese-owned product and tailor it to U.S. consumers, which, regardless of TikTok’s current quagmire, she’s unquestionably done. In November 2018, the month Pappas started, TikTok reportedly had 20 million U.S. users, according to Wallaroo Media; today, that number is 100 million. In the six months from October 2019 to March 2020, monthly users nearly doubled.
She might not be an influencer or a creator, but Pappas is influencing and creating. The future of technology. The future of social media. The future of how Americans connect…or don’t. The future, period — no matter where that might lead her or where she might lead it.”
https://www.marieclaire.com/career-advice/a33485889/tiktok-vanessa-pappas-interview/
8. Culture is the most important thing in companies. Organizational Leaders should be aware of this & actively shape it.
“It has been said that “culture eats strategy” and often when companies decay (Wells Fargo) or resurrect ( Microsoft) or have distinctly different outcomes in the same industry ( Southwest versus United Airlines) a key determinant is the culture. What it is like, how it is improving or how it is getting worse.
Once I read that the culture of an organization is revealed in how people behave when no one is looking or monitoring their behavior.
I do believe that this is right in the fact that culture is about people. Yes it requires leaders to set, correct and support the culture but it is how they treat people and how people feel about themselves, their company and their colleagues that is the fabric of culture.”
https://rishad.substack.com/p/leadership-culture-and-libraries
9. Great thread on an unknown but super impressive investor.
https://twitter.com/APompliano/status/1297666709944512514
10. “The role that eCommerce has played in consumer habits over the last six months doesn’t really validate anyone’s eCommerce ambitions but instead creates opportunities for more customers to be exposed to janky, half-baked online selling solutions because of a pandemic. (Shopify, AGAIN, is there to make sure these experiences are not bad!)
The chances for a business to lose customers online has never been higher. And while the TAM for many businesses has expanded on paper, never have physical-turned-online sellers had so many unhappy and desperate customers sent their way.
So as the economy normalizes, we’re going to see millions of consumers faced with a simple question: do I want to go back to my old habits or keep my new ones?
The answer to this question is the biggest threat online sellers have faced.”
11. Good discussion on the tech press in America & the lingering after effects from dominance of the big platforms.
“I think there are three algorithms that have reshaped the American press in ways that we are just now starting to confront. You have Google and Facebook, which can serve up this incredible fire hose of traffic to publishers so long as they cater to the ever-shifting whims of that algorithm.
And that has just resulted in a lot of really cheap-to-produce content like “what time is the Super Bowl” and “John Oliver destroyed this industry last night. Here’s the clip.” And all of that stuff is mostly harmless, but it has robbed publications of their individual identities. So, every website is just a version of every other website, and I think that has kind of undermined trust in the press generally because there’s just kind of a sameness to it.
Then, the third algorithm is the Twitter algorithm, where in a world that is full of calamity, only the sort of noisiest, most scandalous, most outrageous stories break through. And because that’s where reporters are hanging out all day, and where they’re flogging their stories, I do think that that has led all of us to underline the elements of scandal and outrage in everything. And that has a wearying effect.”
12. Some big changes happening in the media space.
“A new class of content creators has emerged that is writing, recording, filming, and producing incredibly unique and compelling media and then connecting directly to audiences to showcase and sell their creative products. I call them Digitally Native Vertical Creators or DNVCs. And just like their retail DNVB counterparts, DNVCs are also building off a new wave of technology platforms that have democratized access to capabilities across the entire media product lifecycle for this new breed of content creators.
To run a creative business today, Digitally Native Vertical Creators (or DNVCs) have to manage far fewer things than traditional media creators of yesteryear because they can turn to a variety of enabling platforms to do those things for them.”
New media platforms are enabling a new creator type: Digitally Native Vertical Creators
13. Exciting times.
“The rise of the micro LP should result in the need for more GPs. And more GPs should mean more funding for entrepreneurs. It will create a virtuous cycle of sorts.
It will take awareness and education before serious dollars flow to venture but I suspect in 2030 the number of accredited investors with an allocation to venture will be far higher than 3%.
The next decade is sure to be an eventful one for founders, solo GPs, and micro LPs.”
https://thecuriousinvestor.substack.com/p/rolling-funds-and-the-rise-of-the
14. “Overall I don’t think the underlying desire to become financially independent is going anywhere. In fact, I think people may become even more interested in taking control of their money and time after living through this difficult situation.
While I don’t think FIRE is going away, I do think it will change.
Short-term it’ll be harder to FIRE given the market and overall economy. But long-term my guess is that we’ll see some positives come from these hard times. I could see things changing in a few ways which all are positive:
Financial plans get dusted off: Most people roll their eyes when they think about creating and maintaining a financial plan. I suspect even many FIRE people have let their plan sit idle for a while. The downturn will push more people to create a financial plan and get back to basics when it comes to money.
Making money online will boom: The combo of job losses and everyone being cooped up at home will lead to a lot of lucrative new online businesses being created. More people will realize that creating a life changing business online is within reach.”
15. “While many companies get ahead of themselves, often targeting partners based on name or site traffic, they do not agree on broader standards to evaluate the opportunities that exist in market on a fully loaded cost basis (hint: cost does not just mean money). This is classic measure twice/saw once.
Agreeing on standards ahead of time and socializing this evaluation will save you downstream headaches and conversations, both internally (“why did we partner w/ X when it only yielded Y”) and externally (“why is this not performing like you told us it would”).”
https://medium.com/@hoff/how-to-do-bd-right-cc7b31664513
16. “In my view, however, the business of influencer bundling has only just begun. Curators are the new creators, and as consumers, we’re going to be willing to pay someone with good taste to help us sort through the ever-growing mass of information at our fingertips……..looking at the current information overload we all face on a day-to-day basis, I think there’s room for a new market of creators as curators.”
https://femstreet.substack.com/p/curators-are-the-new-creators
17. I am always impressed by what I see in the tech ecosystems of Nordic and Baltic regions. Maximum bullish here.
Diving into the Nordic and Baltic 2020 Venture Capital Landscape
“Moskovitz, 36, who is worth $14.2 billion, is best known as cofounder of Facebook with Mark Zuckerberg. He was the world’s youngest billionaire for a few years starting in 2011. But for the past dozen years since he left the high-flying social network, Moskovitz and his Asana cofounder, Justin Rosenstein, 37, have been lying low, quietly toiling behind the scenes to solve an age-old problem: how much effort we waste in the meta-work around work.
“We were just kind of shocked and frustrated at how much of our collective time was going toward trying to establish clarity and getting everyone on the same page,” Moskovitz says in a recent video call.
Today Asana’s software is used by employees at more than 75,000 companies including AT&T, Google and NASA to help them take back control of their days by managing everything from writing a memo to planning an event. (Soon its AI-powered app will even set agendas and suggest ways to make workdays more efficient.)”
18. I really like this. It’s hard not to feel like you are stagnating when you are stuck at home for months on end.
https://www.linkedin.com/feed/news/how-to-stay-forever-employable-4194585/
19. “I was interested, I said, in his life, which was marked in equal parts by tragedy and luck, populated by a gallery of figures — Richard Feynman, Philip Glass, Joseph Campbell, Forest Whitaker, Steven Spielberg — too numerous and random to fully list.
I was interested in his work too — as a creator (of video games, VR, facial-recognition software, medical-training devices), as a thinker, and as an author of four acclaimed books in the past decade about the promise and perils of technology, books that suggested he might be the last moral man in Silicon Valley.
At a moment when our tech overlords seemed bent on consolidating power and taking over whatever parts of our lives they hadn’t already taken over, Lanier — a tech insider who has been part of the industry for nearly as long as the industry has existed — had chosen instead to speak out against his peers and to suggest a different, more human logic for how they might treat the rest of us.”
https://www.gq.com/story/jaron-lanier-tech-oracle-profile
20. “Is San Francisco as a tech capital over?
There are clear short-term headwinds. Pre-Covid real estate costs in California, and San Francisco, were very clearly acting as an increasingly dissuasive force for either tech companies expanding in the region or new companies located there. All the major Bay Area tech companies had either relatively shifted hiring outside the Bay Area, or, in some cases, ceased net hiring in the Bay Area, and most of the expansion was happening elsewhere.
Overall, however, my expectation is it will return to the trend
where the Bay Area is a major locus. Human capital network effects and the benefits of agglomeration are just so strong.
At the same time, the longer-term outcome is less clear.
San Francisco has somewhat analogous long-term headwinds [with] its version of the local challenges from property prices, and then somewhat similar dynamics and international competition as other people just get good at building technology companies. But I think that’s going to be a multiyear, multi decade story. My expectation is that in 2022 to 2023, its relative position is not really that different. You don’t get many retweets for that, I know.”
21. “If you want to improve your productivity, everything should be focused on earning more. You shouldn’t focus on “learning” as you will end up going down the rabbit hole of meaningless factoids that are not applicable. The way to focus on earning is by aligning everything you do to either 1) building a reputation or 2) generating a profit. Most people ignore the first step & just want to make money “now now now”. Well, in order for people to trust you… Value needs to be added & a reputation needs to be built. The “freemium” model is one of the best ones to follow if you’re a newbie.”
“If all of the above seems mean or intense, you’re probably not going to make it in life. We’re not here to lie to people. If you cannot keep yourself accountable it just means you’re not interested in improving.
Successful people don’t day dream about scenarios that are unlikely. They don’t need hand holding to get started. They don’t ask questions that they can answer themselves in a few minutes. They don’t burn tons of time with entertainment. When you’re set for life you can increase the amount of entertainment (since you are no longer in the accumulation stage of life). Until then, best to focus on productivity.”
https://wallstreetplayboys.com/significantly-improving-personal-productivity
The “Rise” & The “Grind”
I remember coming into the office every day to an electric environment. So much energy, surrounded by super smart people. Everyone was excited. Crazy busy but excited. Hours felt like minutes. The feeling of tremendous growth and momentum. The promise of a bright future.
Contrast this with the “Grind”, where growth and momentum has disappeared. And regaining momentum is VERY hard. Just ask any startup or big company where this has happened. Turning this around is brutal. You are coming into the office where everyone is tired or worn out. You are in survival mode. People you respect are leaving for other places. You dread coming into work because you know there is probably more bad news. Or that you have to fix so much stuff that’s broken due to “startup debt.” This is the cultural, the organizational and technical issues that were overlooked during growth.
I was very fortunate to experience both in my career multiple times. The “Rise” at Alibris from May 1999 to September 2000 where we went from 18 people to 150 people. The “Grind” from September 2000 to February 2001, when we went to 110 people with the first lay off due to the Dotcom Bubble popping. I did not survive the 2nd culling which happened at the end of January 2001 where the company went down to like 75-80 people. Lesson learned, first things that get cut are marketing and customer service roles.
I experienced the “Rise” at Yahoo! Inc from 2001-2008 at the company overall and for my specific business group and region from 2008-2011. Unfortunately, what I learned here was that even if your P&L (Profit & Loss) of your Business group was great, it did not matter when the rest of the organization was in free fall. Yahoo!s nadir really started around 2009 with the loss of a tremendous amount of top talent at all levels and groups. It’s really tough when so many smart friends you have worked in the trenches with end up leaving. Looking back in retrospect, the end of Yahoo! was clear back in 2009. I remember the loss of momentum, and painfully low level of energy vividly whenever I was in our HQ in Sunnyvale. This was a MASSIVE contrast from my first 7-8 years there.
3rd times the charm right? I joined 500 Startups when we were ~30 people and saw this place boom to 150 people by mid 2017. This corresponded with a crazy amount of startup investment activity. Incredible time. All the learning, excitement, growth, surrounded by smart mission driven folks. Well, then mid-2017 hit and we were in survival mode. Those “Grind” years were really tough & stressful. I admit that. I am still processing this even after 9 months being out of the place. (This is why “Fallow Time” is important)
Both of these kinds of experiences are important to your career. You learn so much when a company scales quickly (and usually poorly). Most people are not lucky enough to see such crazy fast growth in their career. It’s like drinking from a firehouse. And it’s why you see people jump around to different companies and chase this growth throughout their careers. It’s not just about monetary rewards, although that is a very possible outcome. It’s about the excitement, the learning and fun from working with the tailwinds behind you.
But i would argue you probably learn as much from the “Grind” too. Maybe even more. You learn what you are made of. You learn what your values are and “What” matters to you. And as an executive you see all the things broken that were ignored during the high growth years and then you have to fix them. I don’t respect people who don’t stick around during the tough times to try to make things work. It shows a lack of commitment.
On the other hand, don’t do what I do and stick around much longer than you should. Loyalty only goes so far and you don’t want to go down with the ship. From a career perspective, you risk having your brand tarnished by staying at a sinking company too long.
This is where the “Goldilocks principle” comes into place: the “just about right” point in time to leave. This is something I have gotten wrong several times. And this is not a dig at any of these companies. Sometimes you just are not a fit anymore for where the company is going, or you are just too tired or burned out. And other times the company is also clearly toast and you see the writing on the wall. So take action accordingly and move on.
Startups, Do the Foundational Work: Taking Shortcuts Cut You Short
What drives me crazy is all the crappy advice and articles out there sharing hacks for startup growth. Growth is great but it needs to be built on strong foundations. Speed and a sense of urgency is definitely important.
Yet to really make this work you need to be systematic at the same time. There is a ton of homework to do. This includes Insight development, doing customer development and building. And it takes a long time. Every founder talks about Product Market Fit. But in my experience I've never seen a startup hit this Product Market Fit point faster than 2 years. It takes a LONG time to get here.
I can’t tell you how many startups I’ve met who have grown to $100k or $150k in MRR but yet still have no idea who the “Ideal Customer Profile” is, have not set up analytics or which channels work best for them. It’s like driving a car with a blacked out window and without a steering wheel. No surprise this is when the business eventually stops growing and stalls out. Or worse, goes in reverse as customers churn. There is little they can do because these founders have no idea what the drivers of their business are.
I liken building successful startups to that of building Skyscrapers. We had a lot of them being built in Vancouver where I grew up. It would be a year or more while the sand and concrete foundation was being compacted into the ground. But lo and behold, once the sand was removed and the foundation was set, the metal frames went up. Within that next year, an entire 5-10 story building was built and completed.
This is exactly the same process that my best founders go through.
They are systematic.
They do the groundwork of development insights and deep knowledge about their customer and their market.
They learn the main drivers of their business.
Sustainable growth is the consequence.
PLEASE BE THIS KIND OF FOUNDER!
The Master Plan of Gary Vaynerchuk
Whether you love him or hate him Gary Vaynerschuk is an impressive business man. He is best known, admired (and equally reviled) for being the icon of the “Hustle Porn” & Inspiring the Wantrepreneur.His image, videos and quotes can be found all over social media. He literally is a Media Company of One.
Myself, being a San Francisco-based tech guy, it has been eye-opening watching his rise in New York, then globally over the last decade and half. I’ve read all his books, impressed by his insights in where the media world is going and how to build a business on top of it. His emergence as a big business “influencer” (yes, I hate that term too) is not just emblematic of the tech driven economy. But I strongly believe his path holds great career and business lessons for all of us.
His Backstory
I think everyone knows the story of Gary Vee as he is known to his followers. He took his dad’s offline wine store, Wine Library, online and using social media grew it from $3M to 60M in revenue. But people forget he had an email list even back in 1997. So Gary was at the very beginning of the internet and the growing community online.
He wrote a book in 2009 called “Crushing it” detailing how he and others leveraged social media to build some very successful businesses and lifestyles. This was the first of 5 New York Times best selling books over the last decade.
He parlayed this into angel investing, investing in Facebook, Twitter, Tumblr, Uber, Snap & Venmo. He also leveraged some of the consulting he did for big Fortune 500 clients into building a new media focused ad agency called VaynerMedia. An agency now estimated to be billing 200M usd annually.
He has built some adjacent companies in the conference business, a new VC fund called VaynerRSE and a personality-driven media brand around himself. He does a lot of public speaking around the world either on digital media strategy or entrepreneurial motivation where he charges $120k usd per talk (+ expenses).
He is the master of building a personal brand online, with more than 12M combined followers across Instagram, Youtube, Facebook, Snap, Twitter, Linkedin & Spotify. He is so omnipresent, I doubt anyone on these channels have not run across him.
Why Gary Vee is the ultimate example of a Practitioner Preacher.
So what are the things we can learn from Gary Vee.
He leverages every single facet of his business as inputs into something larger. By leveraging his knowledge in social media marketing, he built a business from public speaking and then from his first book.
Two very clear examples:
1) Personally consulting large fortune 500 brands to building the Vayner Media agency to serve them
2) Angel investing personally to building a VC Fund
Here’s what Gary Vaynerchuck is really up to with that new $25M fund (exclusive)
Once he had structure, he built out a media company around him. With the infrastructure of his team and personally practicing live, he is on the literal edge of where the media is going. He is able to notice new channels or best practices which he pushes out to clients or his followers. This back and forth of doing, learning, sharing & feedback and doing, learning, sharing & feedback is an amazing flywheel. Concepts - The Flywheel Effect
There are very few people in the world today that have his deep insights in how to leverage social media to build a massive business. Ie. Network effects & his organization has built a bastardized version of the “Expertise Network Effect” popularized by renowned VC fund NFX (Source: The 14th Network Effect: Expertise)
“The two key distinctions of expertise nfx from other types of nfx is that a) they arise from the know-how required of a person to use a particular tool and b) the value transfer mechanism takes place through labor markets.
The results speak for themselves here which shows a full rundown of his very impressive net worth & assets.
Gary Vaynerchuk Net Worth and How He Built His Fortune
Some insights he shared in this recent video interview illustrate this perspective. These quotes below are just some nuggets of insight for those trying to keep on top of the every changing media landscape.
Source: Why Gary Vaynerchuk is 'winning' the marketing game
“Understand where People are paying attention:, I am unemotional about platform, but emotional about where consumers have attention”
“It’s the Message, not the medium”
“I’m a Day trader of where communication is, not a mutual fund of where performance was”
“Completely Platform agnostic”--really critical in fast moving media & consumer behavior changes.
“All i do is pay attention to what people are doing”
Key Lessons here:
Be Prepared to Hustle BUT ….make sure it’s something you have passion in or deep personal interest in. Basically, work hard to win but make sure it’s a game you actually want to win.
Own a Niche & Build Deep Expertise: The more narrow the better. With billions of people there will be an audience and sometimes all you need is 1000 raving fans as per Kevin Kelly. The Technium: 1,000 True Fans
Practice and then Preach: Nuff said. This is the only way you can develop the expertise and credibility.
Be a Strong Personal Brands matter. Okay to be Divisive: it attracts & repels at the same time.
Leverage Platforms but be agnostic: You should always be Audience first. Pay attention to what people are doing and where consumer attention is.
Step Ladder your initiatives from micro to macro and unify them for your own Flywheel: Think of yourself like a business (literally) and see how the different initiatives tie together and build on one another.
Build Equity.
Equity=True Wealth. “You must own equity — a piece of a business — to gain your financial freedom.” —Naval
What are Gary Vee’s Future Plans:
He is taking his platform even further. He has often publicly expressed his end goal of buying the New York Jets. An NFL team these days costs at least a cool $1 Billion usd.
As wealthy as Gary is with his stakes in VC fund & VaynerX he still has to supersize his fortune to get to the Billions (or even multi-hundreds of millions).
I believe his playbook to do this is by entering the Consumer Product Goods (CPG) game. He can leverage the massive audience platforms he has built already.
Step One:
Testing this via the shoe deal he did with K-Swiss.
Serial Entrepreneur Gary Vaynerchuk Just Landed a Sneaker Deal. Here's Why That Matters
Why Gary Vaynerchuk Is Putting His Name on a K-Swiss Sneaker
Step Two:
As K-Swiss deal clearly shows he has an audience to successfully sell into. Next up, taking equity stakes in emerging Consumer brands or starting a fully owned Consumer Packaged Good (CPG) business. He wins big when they exit in an acquisition that many of the big traditionally CPG companies are now pursuing as their growth is lagging. Mergers and Acquisitions have been very hot in the CPG space in the last half decade. Gary recently sold his “Empathy” Wine brand to Constellation Brands.
Constellation Brands acquires Gary Vaynerchuk's Empathy Wines
Step Three:
Scale up and buy a bunch of BIG and old CPG Brands. VaynerX is going to be his media platform to grow the Brand and audience, thus increasing the value of the company (and his stake).
“Vaynerchuk says building an agency was never meant to be anything but a means to an end, facilitating the necessary learnings and expertise to reach the real goal: owning brands. "I’m building a communications holding company for the sake of buying businesses and using it as a disproportionate leverage for the reboot of nostalgic brands during the next downturn of the economy.”
“For a long time, he thought he’d buy an old CPG brand, the sort of food brand you remember lovingly from childhood but that now sits gathering dust on supermarket shelves. Now he’s more interested in apparel. He’s had some success with niche sneaker brand K-Swiss, which collaborated with GaryVee on a range. And he’d love to get his hands on a brand like Lacoste.
“So when I do go and buy something – in three years or six years – I’m not going to shut down VaynerMedia. I haven’t bought any brands because I don’t want to buy them at the prices they are now. But that’s still the plan. It’s not part of the plan, it’s the plan.”
The GaryVee Content Strategy: How to Grow and Distribute Your Brand's Social Media Content
Is Gary Vaynerchuk 'wrong, wrong, wrong, wrong, wrong' about media?
We all have much to learn from Gary Vee’s career so far, which provides valuable lessons for building a business. This is relevant whether you want to build a multi-billion dollar business or a small one person business that gives you a very comfortable living.
Like most things in life, all the steps seem simple, but not easy to do. It’s now just a matter of motivation and taking action. So with these steps and a clear playbook available, the big question that Gary Vee would ask you, “How Badly Do you Want it?”
Marvin’s Best Weekly Reads August 23rd, 2020
“They muddy the water, to make it seem deep.” --Frederiche Nietzsche
1. “Zoom is the pandemic’s success story. As lockdowns around the world closed offices and made working from home compulsory for vast sections of the working population, businesses and individuals grasped for a way to carry on at a distance. If it felt like everyone was suddenly using Zoom, that’s because they were: in April, Zoom peaked at over 300 million daily meeting participants – up from ten million in December 2019. Its measurement of “annualised meeting minutes” jumped 20-fold, from 100 billion at the end of January to over two trillion in April. For the quarter ending April 30 2020, Zoom reported total revenue of $328.2 million, a 169 per cent increase from the same period last year.
Covid-19 forced the world of work to adapt. But is this a glimpse of the future of the workplace, or will our love affair with video technology dissolve as soon as the virus recedes, the office re-opens and Zoom fatigue sets in? Given a real choice, will we continue to do business via webcam – or will we leave our microphones permanently on mute?”
Zoom took over the world. This is what will happen next
2. Love this thread on the future of remote work. Or maybe it’s just work. Some provocative ideas.
https://threadreaderapp.com/thread/1294590291761037312.html
3. "As the data above reveals, in our experience investing across approximately 180 partnerships, emerging managers have outperformed relative to their established counterparts. We attribute this to a number of factors.
First, attractive emerging firms, especially “spin-outs,” are, in many cases, comprised of a small group of partners with strong track records. Rather than deploying a percentage of a larger fund, these partners are now deploying all of a smaller fund. From an investor’s perspective, this can mean more concentrated exposure to the outperforming partners.
The second reason is a simple one. Most emerging firms raise smaller funds than their established counterparts. In venture capital, smaller funds generally outperform, as a single outlier has the potential to generate strong fund-level performance, even if the fund is only able to garner modest ownership.
Finally, most emerging firms do not have to deal with generational planning in the near or medium term. Given the fact that these firms themselves are new ventures, most partners fully expect to invest for a long period of time."
https://blog.greenspringassociates.com/venturecapitalsaccessmyth?
4. Dolly Parton is not just a great entertainer but an impressive business person. And always has been. This is a great profile.
"This is Dolly Parton, Businesswoman, in a nutshell: Her sweetness and toughness coexist, never masking or diminishing the other. “[In meetings], she’s tactful in her approach, but she also will lay down what she will and won’t do,” says Nozell. “You’ll know immediately in a room that one thing you won’t be doing is taking advantage of Dolly Parton.......
Parton questions why more entertainers haven’t similarly broadened their holdings. She has always known what the pandemic has forced many in the industry to realize: that diversifying your income streams is one of the smartest things an artist can do. “I often wonder why more artists don’t do more things like that to have something to fall back on if things don’t work out the way they’d hoped — or just to have something more,” she says. “I feel like even if I wasn’t popular anymore, I could always sing at Dollywood.”
Dolly Parton Steers Her Empire Through the Pandemic — and Keeps It Growing
5. This is hilarious.
"On Benedetto’s self-described “wall of unnecessary,” you’ll find a world of whimsy: Pants with transparent pockets that are designed to hold slices of pizza; a mini-bed for an iPhone; a solar-powered t-shirt; gloves fashioned to look like Crocs.
Any serious entrepreneur knows that you shouldn’t create solutions to problems that don’t exist. But Benedetto has made a full-time living out of doing just that.
Benedetto’s inventions are partly a critique of modern capitalism. But they’re also a call to action — a reminder that we should all put our ideas out into the world, no matter how zany they may be.
“When people see my stuff pop up in their Instagram feeds, they often think they’re ads for real products,” he says. “But what I’m really doing is making fun of all the stupid products that actually exist — the type of stuff you see for sale on Wish. com and wonder, ‘Who pays money for this crap?’”
But Benedetto also hopes that Unnecessary Inventions can serve as a call to action for gun-shy entrepreneurs.
“None of this would’ve happened if I didn’t just put it out there,” he says. “Just start something and share it with the world. Trust me: Nothing is too stupid.”
The man who has created 100+ pointless inventions
6. I like and prefer this narrative for New York. But it will be darker before dawn.
"When companies go through this situation and their stock prices get clobbered, you have to ask yourself if the company is going to go out of business or not. If the answer is no, then the question becomes what price is the right entry price.
NYC is not going out of business. It will need a turnaround. It will need new leadership, which it will get. The pandemic will end. Restaurants, museums, broadway, nightclubs, etc, etc, etc will re-open.
It won’t be the same NYC that existed pre-pandemic. But that is a good thing. NYC has sucked for the last decade or more.
Many people who can will leave forever. Rents will be lower (maybe a lot lower). Artists will be able to live in NYC again.
We have the opportunity to reimagine what NYC is. We can reimagine transportation, schools, policing, housing, construction. We can create an environmentally sustainable NYC. We can create an affordable NYC. We can create a better NYC."
7. "Building in public allows founders to build teams, drive widespread support, attract investors, and foster a community of users and early adopters. Currently, some of the most well-known leaders of the “building in public” phenomenon are Austen Allred, Founder & CEO of Lambda School, Domm, Founder & CEO of Fast, and Suhail, Founder & CEO of Mighty."
https://medium.com/@gabygoldberg/the-building-in-public-how-to-guide-219d417f00c1
8. Great observations here. Worth a read. Lucky for me I am not a smart person.
"The smart person often finds it harder to be a good decision-maker, because they are so trapped untangling the logic traps all around them. All the issues they can find, that are fixable. They get so stuck fixing all the problems they forget that the main problem of them all is picking which issues to fix."
https://medium.com/@alibhamed/whats-the-point-59a17272774
9. Good perspective on Rolling VC Funds from my buddy Carlos of Diaspora Ventures. Recommended read.
https://carlosdiaz.substack.com/p/how-rolling-funds-work-from-the-inside
10. "As a seed-stage investor, we evaluate frontier tech by:
a) the intellectual property and the expertise the leadership team holds.
b) the technology’s potential impact on the market.
With investing in (a) a bright team with a deep, unique understanding of the domain and some early feeling for the commercial strategy being the by far superior variable.
There is no real way to measure frontier tech traction in the early seed stages. However, we can interpret external trends and market movements as either working in favor of or against a particular frontier tech company."
How Do VCs Measure Traction in Deep Tech? | by Dominik Lambersy | Speedinvest | Aug, 2020
11. "As I’m wrapping up the last 25 years and extracting learnings and insights, I’ve also started to reflect on the next 25 years and how I’d like to spend my most precious resource – time – to live an intentional, mindful and experience-rich life. The learnings are already there from previous generations: be true to yourself and your own dreams, work less, express your feelings, stay in contact with friends, and allow yourself to be happy.
Of course, these are very general regrets, famously delivered by nurse Bronnie Ware through her work with people on their deathbeds. But I think the perspective is valuable, to fast-forward yourself into the future and then look back to reflect on who you want to become, as we are all becoming, either if we want it or not, intentionally or by chance. To move back and forth, from the big picture to the daily practise, and from the future to the present moment is a very valuable skill. It separates what matters from matters less."
https://mailchi.mp/f2451203f6c9/fewer-better-things-no-9364492?e=f5dfcce6c6
12. Great discussion on Venture Portfolio Construction. Must read for all emerging VC fund managers.
“Venture is a really hard game. The unfortunate reality is that the vast majority of funds will fail to achieve venture-like returns and many will fail to outperform even the public markets given the headwinds of a “2 and 20” structure. However, LPs continue to invest in the asset class because it has the potential to produce outsized returns. LPs investing in your fund need to believe your portfolio construction has that potential.”
https://ckthoms.substack.com/p/no-1-understanding-portfolio-construction
13. "Scott is too sly to say it outright, but it was also the presentation of a vision: a tour through the trippy fantasyland he's curated in his mind as one of the more potent culture movers of his generation. His woozy, digitally distorted sound has already shaped an era of hip-hop, but his influence has extended beyond music and into art and fashion.
He exists as a kind of strange unicorn in the culture, someone who's fluent in the language of the youth (mostly young men who spend a lot of money on clothes and want to turn up) but who talks very little about himself. He's regarded as both omnipresent and a bit elusive, on a wavelength that resists a lot of the contemporary notions of celebrity.
Though he shares a daughter, Stormi, with a Kardashian-Jenner, for instance, he's withholding and private and refuses to talk about their relationship. To Scott, mystery is a powerful form of currency. You could say he's almost shy, obscuring his face in photos, the opposite of most modern “influencers”—and yet he's quietly one of the most influential people on the planet."
https://www.gq.com/story/travis-scott-september-2020-cover-profile
14. An old one but it’s so good.
"If you want an average successful life, it doesn’t take much planning. Just stay out of trouble, go to school, and apply for jobs you might like. But if you want something extraordinary, you have two paths:
1. Become the best at one specific thing.
2. Become very good (top 25%) at two or more things.
The first strategy is difficult to the point of near impossibility.
Few people will ever play in the NBA or make a platinum album. I don’t recommend anyone even try.
The second strategy is fairly easy. Everyone has at least a few areas in which they could be in the top 25% with some effort. In my case, I can draw better than most people, but I’m hardly an artist. And I’m not any funnier than the average standup comedian who never makes it big, but I’m funnier than most people. The magic is that few people can draw well and write jokes. It’s the combination of the two that makes what I do so rare. And when you add in my business background, suddenly I had a topic that few cartoonists could hope to understand without living it."
15. If you are as interested in the Gaming space as I am. This is a good overview.
"Gaming no longer solely refers to specific hardware, games or gameplay. Increasingly, the lines between entertainment, e-commerce, social media and gaming are being blurred. New areas within the gaming value chain are rapidly expanding and enabling new tech integration and business models. VCs with limited experience in the space are waking up to the fact that early-stage opportunities now extend beyond developers and publishers."
Mapping The Gaming and Esports VC Landscape | by White Star Capital | Venture Beyond | Jul, 2020
16. This really explains the growth of the BS "Woke" movement & awful Cancel culture in the USA well. A very uniquely American movement I should add.
"If you go through the list, they are exactly what radicals are objecting to now: bigotry, the ignorance of the uneducated, power, corruption, militarism and oppression. It lines up so perfectly with today’s agitation.....What we’re seeing now is an amplification of what I wrote about five years ago: an intense spiritual hunger that has no outlet."
"Cancel culture is just the latest and most virulent form of the religious notion of shunning, in which people are chased into further appreciation of their guiltiness.
At the very least, one of the effects of the shunning is to frighten everyone into silence. Its purpose is to get people fired, to put people beyond the pale, to get them out of our sight. This is for a couple reasons. First, it is to ensure we are not infected by this sinfulness. And second, it is a public declaration of our power. It says, look how powerful we are, that we can do this to people.
The Twittermob is really an astonishing phenomenon."
https://www.spiked-online.com/2020/08/14/wokeness-old-religion-in-new-bottle/
17. Life longevity is before us. Exciting times.
"Past generations used to say that even though we cannot postpone natural death, we can control how we live. They also believed that there is “nothing new under the sun.” Both statements are inaccurate from our current perspective. With advances in bioscience and technology, one can imagine a post-COVID-19 future when most diseases are cured and our life span will increase substantially.
If that happens, how would our goals change, and how would this shape our lives? Given the luxury of pursuing longer-term plans, we could accomplish more ambitious tasks. We could decide to care more about our planetary environment and interpersonal cooperation, since pollution or hostilities carry long-term dangers. An extended life experience could make us wiser and more risk-averse since there is much more at stake. It would make little sense to send young soldiers to wars, or initiate wars in the first place."
18. The great reset for Startupland. And why it’s a good thing in the long run.
https://davidcummings.org/2020/08/22/the-great-reset-for-startupland/
19. Food for thought here. It's been a rough 2020. But we will get thru this.
"I didn’t think of San Francisco as Home at that point, but fast forward to today, unbeknown to me, it is home. This past week, three of my favorite neighbors have moved out. Another close friend has packed up and moved out of San Francisco. Slowly, I am starting to lose people and places that gave life some context. Life is the context friends, and places provide us.
Many of my favorite places are shutting down. Reality has a porous quality to it now. And like the ash falling from the sky, it is sprinkling a sense of loss. I wonder how many others feel this social disruption that is happening around us.
We have a framework of vanishing relationships. These relationships give context to who we are, what we do, and where we live. The coffeeshop we sat down for meetings and conversations are now being replaced by two-dimensional take-it-to-go experiences that lack the dimensionalities of human experience. How can you lend emotional payload to picking a cup of coffee from a barista behind a glass wall and a mask?"
https://om.co/2020/08/21/home-alone/
20. The Telegram revolution in Belarus. I hope it ends peacefully with the people in charge and with Lukashenka OUT.
"So-called “colour revolutions”, in former Soviet states like Armenia and Ukraine, used similar parallel channels to oust autocrats. But something different is happening in Belarus. In lieu of physical leadership, its uprising is channeled almost entirely through a single app. And right now, it looks as if it might just succeed.
If Europe’s last dictator does fall, Franak Viacorka has no doubt where Belarus’ future will be decided. “Telegram seems to be the most organised, most coordinated group in Belarus opposition right now,” he says. “The political parties cannot choose a leader. Tikhanovskaya is afraid to take responsibility. And what will happen next, if the politicians will not choose their temporary government? Telegram groups will choose this for them. I can say for sure that this revolution can be called the Telegram Revolution. Never before in history has one technology decided so much the political fate of a country.”
Startups Founders: Get an Executive Coach!
I’ve recently had numerous conversations with several non-US portfolio companies founders who had raised series A’s (or had big Series Seeds). They were having many personal issues with scaling the team, leadership & growth issues. No surprise that these founders were facing challenges as they now had to deal with a board, growing a staff and management team. A very big difference from the earlier pre-seed stage.
As we talked through these issues, I’d always ask, “don’t you have an executive coach?”
Of course the answer was almost always a resounding “No”. And i’m always surprised but not surprised at the same time.
For most of my top Silicon Valley companies, the minute they finished raising their A, (or even a sizable Seed round) they usually went out and hired an executive coach. In fact, it was usually their lead investor who recommended or pushed them to do so.
In fact, I think it’s become very commonplace here in Silicon Valley or standard now. If you have never run a fast growing organization, or have and want to get better, I think it’s incumbent on you to figure out to get better FAST. Becoming a leader and good manager is just a completely different skill set. It’s okay to get help here as it’s not a skill that you learn in school or something you can pick up from a book. It’s also important for your own mental health.
You need someone who is an outsider who will question your assumptions, to push you and help you see things that are smack dab in front of your face. These coaches should be paid by session/hour in cash, not equity as you do not want them incentivized from your business growth. You want them incentivized for YOUR personal growth. And I can testify I have seen dramatic changes in many founder’s performance and leadership/management ability after getting an executive coach.
Some amazing folks I can recommend are Jerry Colonna & his Reboot team (https://www.reboot.io). Also Steve Schlafman High Output (https://highoutput.co) who is on the east coast (don’t know Steve but he has a good rep). And no, you do not need to be an ex-VC to be a good executive coach (even though both these guys are). I’ve also heard very good things about the platform Valor Performance (https://www.valorperform.com) too.
I think executive coaches for entrepreneurs are a very specific role and like all industries it’s full of unqualified charlatans. So do reference checks here and talk to many different coaches before you pick one. Something I hope you would also be doing when picking a lead investor or lawyer, it’s just as important.
This executive coach trend for startup founders is not that common outside of the tech ecosystem in the USA. But it is coming. And it’s a very good thing.
The “Launchpad” Business Concept: Everyone Should Build One!
“Before thinking of building a Amazon or Apple, you have to think of your business as a 'launchpad' first. That's because even if you have a rocket, you can't go to space without a launchpad.”
What a launchpad business is (from @awilkinson):
- A biz that gives you freedom
- Makes $100-200k a year in personal income to build your bedrock
- Allows you to try new things
- Examples: Consulting, services business, digital business, courses, etc.
(Source: https://twitter.com/ericosiu/status/1277989583871864833?lang=en)
Absolutely right on. I love this concept.
With all the new low code/no code tools, it is very much easier than ever. Add on top of that, all the available online classes/blogs/podcasts about online marketing and copywriting. There is literally nothing stopping a motivated individual to build this kind of business.
For most people in the world, I think this is the better path if you are a founder. Or at least a good first step to your next big thing.
Even if you have a full time job that you love, it is probably a good idea to build a launchpad business on the side. Diverse revenue streams are good in case something happens. If you are like the 80% of people in the world who have a full time job you hate, you ABSOLUTELY need to build one.
Having a strong financial foundation allows you to do whatever you want life-wise. It makes you “UnCancellable.” You can travel the world. You can start a Rolling Venture Capital Fund or Angel Invest on the side. You can even go on to build another business that could be a VC-swing for the fences type of business. Basically a “Launchpad” business gives you a lot of options.
If i was a young 20-something, this is exactly what i would do. Heck, I need to go build a launchpad business for myself right now.
The Slow & Steady Unbundling (aka Democratization) of Venture Capital: From Syndicates to Angellist Spearhead, Operator-Angel Funds, Rolling Venture Capital Funds & Solo Capitalists
“Investing is a sell-side product” (Phin) Barnes (of First Round Capital). “Capital is a commodity, especially in this market. What you’re saying with a term sheet is that you think the founder’s equity is worth more than your dollars.” That means investors have to close the value gap with sweat.”
Venture Capital has been awash with money in the last half decade. We’ve seen the rise of huge multi-stage Venture Capital funds in the Growth and Later stage side of Technology investing. These range from $400 Million dollar funds to $4-5 Billion dollar funds. And I have to mention the monstrosity of the $100B Softbank Vision Fund.
That’s one side of the “Barbell effect.” On the other side of the barbell, we’ve seen the rise of several hundred (estimated 800+) new Pre-seed and Seed stage Fund managers & investors. But if you look much deeper into the early stage, there are super interesting undercurrents emerging that underpin much of this.
I’m going to highlight what are some of the more interesting developments in the last half decade.
Angellist as Platform: basically Amazon Web Services for Angels and VCs:
“Shopify exists to basically arm the rebels. We want a lot of people to go out and compete against Amazon.” --Tobi Lütke, founder and CEO, Shopify
Similar to Shopify’s call, Angellist is doing the same thing for early stage venture capital. This is a continuation of the “bottoms up” unbundling of traditional Venture Capital Funds.
Angellist first did this with building the backend infrastructure. This enabled top angel investors to raise money from high networth individuals in “single deal VC funds” to invest in a specific startup ie. Syndicates. We saw folks like Zach Coelius, Gil Penchina of Flight.vc and Jason Calacanis really supercharge their investing activity through this.
Then Angellist started the Spearhead program in 2018 “with a mandate to identify promising startup founders and give them cash to invest in startups autonomously…..the program identifies promising startup founders and provides them with $200,000 of investable capital, and potentially $1 million. It also sets them up with the right legal entities to invest.”
Angellist is a big enabler of the bottoms up explosion of new investors. And the logical next development is that of the Operator Angel Funds.
Operator Angel Funds:
Fact is most founders would prefer to take $$ from other founders or people who have good relevant operator experience.
These operators are also just closer to the market. They are able to see things that are working much faster. This is particularly on the B2B side. They’ve had to use & implement things like Stripe ,Twilio or whatever product before anyone else for their own business. They end up with deeper and more insights than VCs who are far removed from this.
Many folks running the Operator Angel Funds are CEOs or execs running significant businesses as their full time job. But the biggest advantage of their roles? They see and meet lots of startup founders and companies. This results in incredible access and deal flow.
When Ryan Hoover first started his Weekend Fund in 2017, it just made sense. He is the guy who started Producthunt and has first look at the cutting edge of startups. Why not help and invest in some of these up and coming founders while doing so. Additionally because he has a full time gig already, he doesn’t need to live off management fees. So having a small fund on the side is a great side hustle and very complementary to his day job.
From a founder’s perspective, there are many good reasons to take money from these operator investors. I agree that in many cases, they are replacing the “Friends, Family and Fools” round for some of the best founders out there.
Brianne Kimmel states that they do this “ to de-risk technical dependencies, accelerate time to launch and build momentum for the next round.”
Some other great examples besides Ryan Hoover’s Weekend Fund that come to mind are the Todd & Rahul Fund, Sri Krishnan’s Kearny Jackson are representative of Part-time initiatives.
Jeff Morris Jr’s Chapter One & Brianne Kimmel’s Work Life Ventures are representatives of the full time funds here.
Rolling Funds:
The other more recent development is the “Rolling VC Funds” concept introduced by Angellist. Exemplifying the previous trend with superstar founder Sahil Lavingia or superstar investor Cindy Bi (shout out to my friends at www.diaspora.vc too). It’s probably one of the most recently talked about developments in VC.
Starting a traditional VC fund is not just hard but also just plain expensive from a legal perspective. This is on top of the brutal fundraising process of raising the money from LPs. This has been a major barrier to entry for folks who aren’t rich to begin with or who are not Silicon Valley insiders.
Rolling Funds are basically a subscription service for LPs wanting to invest on a quarterly basis in the next generation of Operator Investors. It’s also a great way to involve Operator LPs, people who are now financially aligned with you, can help you with deal flow and build out your network further. Many people in Silicon Valley are both curious and excited about this.
The implication of rolling funds is that it is an open ended fund. With this platform and ability to market with 506c (ie. Solicit), talented individuals from different geographies or backgrounds can now potentially become new VCs. We can potentially expect a flowering of new, diverse investors (culturally & geographically). They will bring much needed new perspectives in investing, focusing on new overlooked sectors, founders or business models.
For all those interested in more detail on what this Rolling Fund thing is, here is an overview: Rolling Fund FAQ: What Is A Rolling Fund?
And of course as this is a new thing, there are some questions and concerns.
This write up covers it well here.
https://medium.com/@alibhamed/some-thoughts-on-rolling-funds-c56513c4ec84
I’m a believer that competition is a good thing for the market. But in many ways, they will also be great co-investors, even upstream investors for institutional VCs versus being direct competitors in my view.
In fact, I view these developments as a good springboard or training wheels for emerging VCs. If they do well, they can choose to continue with rolling funds or Syndicates. Or they “graduate” (i use this term loosely) to doing a traditional Venture Capital Fund similar to what my friend Zach Coelius has done (he is an awesome investor & good dude btw). And as their reputation and networks further expand, maybe they end up going the Solo Capitalist route.
Solo Capitalists:
I’m fascinated by the phenomenon of the Solo Capitalist here in Silicon Valley. It’s like the “Passion Economy” has come to VC. And I see this as the ultimate evolution of Operator Investor Funds but supersized by their brand name, good reputation with founders, audience and network that they’ve established over a decade plus in Silicon Valley.
Names like Elad Gil, Oren Zeev, Lachy Groom, Shana Fisher, Ray Tonsing and Josh Buckley. All of them folks who were either very accomplished founders or investors before they started doing this. Nikhil Trivedi highlights this well.
“over the last couple of years, there's been an increase in individuals investing not just at the earliest stages of companies, but at the Series A and beyond.
These individuals aren't just investing their own capital. They’re raising dedicated funds and special purpose vehicles (SPVs) from traditional limited partners (LPs).
And they aren't just participating in financings alongside venture firms. These individuals are often competing against venture firms for the right to lead rounds, and signing term sheets before the companies get to pitch the traditional venture partnerships. Most importantly, founders are choosing to work with them, in some cases in lieu of partnering with firms.”
In some ways this shows the unbundling trend of traditional and commoditized Venture Capital funds. Nikhil continues:
“The importance of an individual's brand has been steadily increasing in venture capital for quite some time. Founders are more often than not picking an individual partner who they want to work in a financing round, based on the relationship built with them, and based on their brand and expertise, instead of the firm's.
So it's a logical next step that the firm is the individual, and the brand is the individual, which is the case with the solo capitalists.”
Summing Up:
I am personally very excited by all of these developments. If you are a startup founder or investor you should be too! This brings more diversity into the investing ecosystem and are new funding sources. Great news for founders and the tech ecosystem overall. I can’t wait to see these developments happen outside of Silicon Valley as well.
As an infamous & monstrous historical giant once said, “Let a thousand flowers bloom, let a hundred schools of thought contend.”
Marvin’s Best Weekly Reads August 16th, 2020
“In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.”--Confucius
1. Rolling Funds. Will be watching this closely. Very interesting development in VC.
https://twitter.com/shl/status/1291760138571849728
2. Implications of increasing remote work in the long run are Wages will go down. Just Supply and demand.
"With sufficiently advanced remote work capabilities, each worker in a large region could compete for any job in that region, without having to move their home. So whole big regions, continents or even the whole planet could function like single huge cities, with matching levels of work specialization, at least for tasks that can be done remotely. As a result, tasks that workers do remotely in such regions could become very specialized, in part via larger more complicated firms and work task coordination. Many small fragmented labor markets would merge into a few large integrated labor markets.
Of course, we are a long way away from this situation now, and the path to get there is harder than futurists anticipated decades ago. But this pandemic has given us a big push, and in thirty years I think we will have gone far enough that at least one quarter of human work will be done remotely."
3. I know it looks bad now but people ignore the rejuvenative power of the USA. But yes, it's pretty bad now in America and will continue to be for the near future.
"COVID-19 didn’t lay America low; it simply revealed what had long been forsaken. As the crisis unfolded, with another American dying every minute of every day, a country that once turned out fighter planes by the hour could not manage to produce the paper masks or cotton swabs essential for tracking the disease. The nation that defeated smallpox and polio, and led the world for generations in medical innovation and discovery, was reduced to a laughing stock as a buffoon of a president advocated the use of household disinfectants as a treatment for a disease that intellectually he could not begin to understand."
4. I was actually in the middle of a write up on this same podcast episode. But David Cummings does a far better job summarizing it than me. The 3 generations of SaaS.
5. Professor Galloway is the best. He is angry, he is funny, insightful and prescient at the same time.
"In 2020, the mantle of “business guru for people who aren’t interested in business” arguably belongs to Scott Galloway, a professor of marketing at New York University’s Stern School Of Business, tech startup veteran, brand consultant and bestselling author. A graduate of UCLA and UC Berkeley HAAS School Of Business, Galloway has been at the forefront of the digital economy since its earliest days."
Meet Professor Scott Galloway: the tech guru who terrifies Silicon Valley
6. "When I see goals, and talk to entrepreneurs about their goals, I try to tease apart if the goal is within his or her control. If it isn’t, I work at helping reshape the goal to something that is more controllable, and share the idea about systems.
Control what you can control.
Start thinking in systems."
Start Thinking in Systems, Stop Thinking in Goals – David Cummings on Startups
7. "The automation industry will see a steeper growth than previously anticipated and this pandemic is possibly the largest boost to the mainstream adoption of a new system of employment.
Why? Because this crisis has revealed many things that aren't working properly (anymore) and by paying attention to these inefficiencies you can innovate to overcome and profit from them. The simplest and surest way to create wealth in the coming decade will be the ability to see things others don't and bring creative solutions to the table that add value & fix what isn't working properly. All those times your manager told you the job could not be done remotely, all those university courses that couldn't be taught online, and every time the government had no budget for X, all lies. This crisis has exposed things that were already common sense to many."
COVID19's influence on business & innovation in the near future.
8. This thread is really interesting. "Hedging in 2020."
https://twitter.com/vgr/status/1292869575059451905
9. This makes me mad. The incompetence and corruption. Don't read this if u don't want to get angry. It's appalling how PPE and Gov't grifters are. #BIFD
The Grifters, Chapter 2 - N95 Masks
10. This is really good stuff for startup founders trying to raise $$ in the new Zoom environment.
How VCs Judge Your Startup (on Zoom): 15+ Tactics Behind Successful Fundraises
11. I’m actually a big fan of Angellist’s Rolling VC Funds. Great move to democratize VC Startup investing. But there are considerations. Nothing is perfect. Biggest concern would be below. But overall I am positive on this development.
“These rolling funds can be great solutions for individual investors who can’t hit normal fund minimums. On top of that, it seems like the way they are being set up allows for general solicitation, which is a way more open and transparent process for providing fund returns.”
“Trying to deploy X/time period is really hard. Accelerators do it, and I’ve never understood how. I’ve written about this before, but for me — deals often come in waves. Some quarters we do 3–5, others we do none.”
https://medium.com/@alibhamed/some-thoughts-on-rolling-funds-c56513c4ec84
12."The Lebanese are too fixated on corruption. It is bad, it causes a loss of social trust, it brings unfairness. But corruption does not necessarily slow down economic activity — red tape and patronage do. Just consider how many places thrived (Rome, Renaissance Italy, the Industrial Revolution, etc.) in the presence of a high level of corruption. Furthermore, localism tends to reduce corruption."
"So the worst thing you can do to a country is give it oil or some valuable resource, and not just because of the so-called Dutch disease (resources wreck the rest of the economy)...Similarly, today, Singapore and Hong Kong are the most successful economies, while devoid of resources — Singapore needs to import water. The same applies to similar historical successes: the Dutch Republic, Venice, Genoa, Carthage. Consider the postwar bounces by Germany, Japan, Soviet Russia, etc."
Lebanon: from Ponzi to Antifragility | by Nassim Nicholas Taleb | Jul, 2020
13. "As far as I can see, cancel culture is mercy’s antithesis. Political correctness has grown to become the unhappiest religion in the world. Its once honourable attempt to reimagine our society in a more equitable way now embodies all the worst aspects that religion has to offer (and none of the beauty) — moral certainty and self-righteousness shorn even of the capacity for redemption. It has become quite literally, bad religion run amuck.
Cancel culture’s refusal to engage with uncomfortable ideas has an asphyxiating effect on the creative soul of a society. Compassion is the primary experience — the heart event — out of which emerges the genius and generosity of the imagination. Creativity is an act of love that can knock up against our most foundational beliefs, and in doing so brings forth fresh ways of seeing the world. This is both the function and glory of art and ideas. A force that finds its meaning in the cancellation of these difficult ideas hampers the creative spirit of a society and strikes at the complex and diverse nature of its culture."
Nick Cave - The Red Hand Files - Issue #109 - What is mercy for you?
14. "Apps and themes are Shopify's fastest growing revenue segment today, contributing 14% of Shopify’s total revenue, and many of these apps are growing faster than the Shopify platform itself. This segment works similar to Apple’s App Store or Salesforce’s AppExchange, where the platform (Shopify) has a 20% take rate on all software through the app store and the developer gets 80%. Today, Shopify has over 4,600 apps and 30K+ agencies and web designers serving merchants in its ecosystem.
Certain standout products like Attentive and Klaviyo were among the earliest and fastest moving third party apps. Both companies leveraged the Shopify ecosystem as a unique distribution channel to help grow their businesses quickly beyond the $100M revenue threshold. Today, there are many more fast-growing apps following this trajectory. For all its success as an open ecosystem, it seems these businesses that comprise the Shopify ecosystem are rarely discussed in the venture world—so let’s dig into why this is the case and why more VCs should be spending time looking at companies growing on Shopify. "
https://base10.substack.com/p/faster-than-fast-smb-retailers-move
15. Good advice. It’s gonna get ugly.
"So what can you do moving forward?
First, this has been an incredible learning opportunity for many people. You must do the hard, disciplined things during the good times, so that you can drastically reduce the likelihood of economic ruin in bad times. Spend less than you make. Invest your capital intelligently. Let compound interest work for you. Hold assets that protect you against inflation. These timeless personal finance rules are as true today as they have ever been.
Second, you can prepare yourself for what is likely to transpire over the coming months and years. There have been trillions of dollars printed, with more probably on the way, so it is a common belief that inflation will naturally rise. As this happens, those caught holding cash will get their purchasing power destroyed, while those holding real assets will see their wealth artificially inflated. Building wealth is a game and that game has rules. You have to understand these rules in order to successfully play the game."
https://pomp.substack.com/p/a-recap-of-the-pandemic-related-economic
16. "What happens when 6 months of effort meets 6 months of laziness? A wide separation in skills.The picture is not pretty for people who sat on their hands.
While average people focus on the inability to go out and “rage with their friends”… You can’t really change the laws. So instead of complaining about the laws it’s time to take action and focus on the positives. You now have time to read, write, work on a project you’ve been neglecting, eat healthier, kick out bad habits and improve all intangible skills that were unimportant pre-pandemic. If none of these items apply to someone, what they are really saying is they don’t want to improve their lives.
So think about it simplistically, if you try to look at the positive of any situation, you will naturally move in the correct direction. If we remain locked down, you can focus on reading, fitness, copywriting and other indoor activities that are productive. If the world partially opens up a little and say restaurants are “good to go” then you can say “great, i can now skip out on cooking X days out of the week and free up time for project Y”. The key is to look at the positive productive angle based on the environment. Productivity will drive your long-term individual value to society."
https://wallstreetplayboys.com/people-suffer-from-a-lack-of-prioritization/
17. "Modern semiconductor manufacturing is at least as important to the economy as oil was in the 1970s — at least in the case of oil, it was available all over the world albeit at higher prices than in the Middle East. If the overwhelming majority of leading edge semiconductor manufacturing is concentrated in Taiwan with the rest in South Korea, then the geopolitical implications are significant as there is no cost curve with leading edge semiconductor manufacturing — either you can do it or you cannot.
It would be as if the Middle East was the only place in the world with oil rather than simply the region with the lowest costs. And it is strange that that the Chairman, CEO and CFO of Intel have zero technical expertise in semiconductor design or manufacturing at arguably the most critical time in the history of Intel."
Investing Mistakes, Chapter 1001. Investing is a difficult, humbling… | by Gavin Baker | Aug, 2020
18. The always perceptive Mr. Danco. I love his keen observations.
"In that sense, and here’s the twist conclusion – these rolling funds reinforce the social contract, if anything. They’re a way to successfully extend the social subsidy of angel investing into individual trendy managers, increasing the total number of brand-name startups that any individual can get social exposure to, without costing anything along the way except for carry.
Remember, the social returns to angel investing (and now, rolling fund investing) don’t respond to dilution the same way that financial returns do: follow-on investments don’t dilute your stake, they augment your cred. So unlike with “real” venture capital, where it’s not about your number or % of winners (it’s all about your percentage of dollars in the winners), here it just strictly becomes “how do I get into a many companies as possible, even if it’s a tiny amount that’ll get diluted into insignificance?”
Rolling funds: maybe not so aligned with actual return on investment, but totally aligned on what really counts – empowering the maximum number of people to get to say they’re an investor in whoever next year’s version of Roam is. Or better yet, getting to say something like “Oh, I’m in Roam, I got in as an LP” or something eye-rolling like that. Just wait, people will start saying this."
Rollin' (ARR-paid vehicle) – alexdanco.com
19. This is a very good idea. Hallway Values test. Most companies would fail this.
https://davidcummings.org/2020/08/15/the-hallway-zoombomb-values-test/
20. This is really useful.
"In order to better understand how a business is running (i.e. diagnostic metrics) and then help it improve (i.e. operating metrics), you need to thin slice the ARR into its fundamental components.
Those fundamental components are:
New ARR: additional ARR from newly signed customers
Churned ARR: lost ARR from customers who have churned
Upsell/Expansion ARR: additional ARR from customers who are paying more than they did before
Downsell/Contraction: lost ARR from customers who are paying less than they did before"
https://alexoppenheimer.substack.com/p/thin-slicing-arr
21. This makes me sad. I love New York City. I hope he is wrong but this is a very strong bear case against recovery.
The Importance of “Fallow Time” aka Sabbaticals and Extended Breaks
I took my first major break in early 2012 after a 10 and half year stint at Yahoo! I was exhausted & needed to rest & recover. (As a data point, I was doing 180,000-200,000 miles of travel a year at least).
I was also lucky to be pretty flush at that time, as I had saved some $$ from my quarterly bonuses, RSUs and stock options. So I did not have to work for a few years. (Although looking back, I grossly mis-managed all this after. But story for another day).
I spent a lot of time with my 2 year old daughter at that time and read a lot (50+ books). I took the family to Asia for the summer and traveled through Japan and Taiwan. I also spent time in Europe traveling by myself. I attended close to 54 conferences in media, tech, startups, investing and even random things like programming, architecture and whatever struck my interest in 2012. I even got to do exotic grand tour by visiting Georgia (the country), Iran and Belarus, & Azerbaijan as well as revisiting Russia, Ukraine, Japan and the Baltic states of Lithuania, Latvia and Estonia.
Additionally, in my ongoing quest to become the Asian “Jason Bourne”, I took classes (thank you Groupon and Livingsocial) to rewire my brain. Classes ranged from wilderness survival, cooking, copywriting, bartending, archery, shooting, sailing, Russian language studies etc. It was good if not expensive fun. Also a great topic for cocktail party conversations. :)
I vividly remember heading down to Los Angeles for an Agriculture conference in the latter part of 2012. I met up with a couple of old friends of mine for an amazing dinner. As I was recounting what I was doing that year, my friend said, “oh, you are doing a fallow year.”
She was spot on and I've used this term since then. In farming, fallow land is left to rest and regenerate. A fallow field is taken out of crop rotation for a specific period of time. There is a lesson here for all people in business or whatever creative field you are in.
I never understood friends who jumped right into a new job or role the next day or week without taking some break. Breaks like this are important to rest and reflect on your experience. It helps you make sense of what happened and you can draw out valuable lessons for your life and work. It is also a critical step to help you to prepare for your next big work adventure, whatever it is.
Looking back, I can honestly say that the 2 year break I took was one of the best things I've done personally and professionally. It’s key to long term performance. This is also why I am taking another “Fallow year” in 2020. “Resting ethic” is just as important as “Work Ethic.”
Superman (or Superwoman) Syndrome:
I remember this scene in the old movie “Addicted to Love” starring Meg Ryan and Matthew Broderick. The French antagonist talks about being a nobody in France. Everyone there has a good salad & sauce and are considered good chefs. But in America, because most folks aren’t great chefs, he is different and special. He is Superman.
What does this have to do with tech or Silicon Valley? Everything.
It’s really funny when founders or investors in the San Francisco Bay Area travel to another region or country (Canada, Europe, Asia). We get the halo effect of being from Silicon Valley. We are seen as experts just because we are from here. But the reality is we probably don’t know that much more than you do. Or it could just be that we are the one eyed person in the kingdom of the blind. We are seen as insiders to Silicon Valley.
BUT in my view, you are not a true Silicon Valley insider unless
You sold your company for $100M+
Took it public (The ASX or TSX does not count, sorry),
Have invested in some $ Billion USD + startups
Part of the Paypal mafia (or “AirbnB”, “Square,” “Stripe”, “Insert Great startup name here” mafia)
Founded a real Venture Capital (VC) fund or a General Partner at a top tier VC fund
This is probably .001% of the people in Silicon Valley.
I can legitimately say, most of us are NOT insiders and should openly claim that. (I certainly am not nor do I feel like one either). Anyone who brags about being an Insider or expert is probably not. They are posers! (ahem, Plug & Play & way too many individuals to name).
The way you should judge someone is by what they do. Are they helpful? Do they give good advice that makes sense? Have they worked at any place credible or done anything interesting or relevant?
Actually you should use this to evaluate anyone who tries to give you startup advice. Or gives advice in general.
Also use the network. Do reference checks and ask around. You will find out quickly who is really a player or legit by doing this. Trust me here. If u do this, you will find out that 80% of the people from here are frauds.
Founders, word to the wise.
Marvin’s Best Weekly Reads August 9th, 2020
Hanlon’s Razor: "Never attribute to malice that which is adequately explained by stupidity"
1. "The Covid-19 pandemic crushed vast swaths of the economy, slashing consumer demand, closing businesses, and vaporizing millions of jobs. But it’s been good to the nascent sliver of the digital economy that helps people channel their existing skills into sellable services and products.
Such products range from ebooks and meal plan templates to online classes, podcasts, membership clubs, newsletters, and porn. They proliferate on platforms including Patreon, Twitch, Substack, Etsy, Teachable, Knowable, Podia, Thinkific, Supercast, Lulu, Smashwords, Outschool, OnlyFans, and Gumroad.
These platforms generally take a cut of each sale made, ranging from 5% to 50%, or charge a recurring fee to sellers for accessing their market. Tech investors have dubbed this the “passion economy,” a place where anyone can profit doing what she loves. But because that term risks both exaggerating the payoffs of this work and obscuring its ties to the gig economy, the last great labor “disruption,” we might better call it the “hustle economy:” an online labor market in which platform-dependent workers create and monetize their own digital products.”
The Gig Economy Is Failing. Say Hello to the Hustle Economy.
2. "She meant, only focus on large margin investments and turn inventory quickly. It’s also using sales and profits to prepare valuations, to further increase capital or funding.
The mantra "think in multiples" has become a consistent reminder to me as an entrepreneur as to how to approach business and financial decisions. It’s what those entrepreneurs who earn 300% of their invested dollars understand. This approach will change the way you address business planning, but it takes some understanding of the mentality in order to make it work for you."
https://wlth.ca/blog/why-entrepreneurs-think-in-multiples/
3. “Amazon is about a seven-year view,” he says. “Most public companies, it’s a one- to two-year view. And, as it turns out, they’re very risk-averse. Jeff and Amazon are willing to make a long-term bet and are very willing to be misunderstood for a long time while they’re building toward that.”
The former analyst speaks from firsthand knowledge of the short-term mind frame on Wall Street — a mind frame he rejected in the creation of Business Insider.
Now 13 years old, Business Insider — which, like Amazon, had a plethora of doubters along the way — was still in its relative infancy when Bezos came on board. But in 2015, the startup was sold to Axel Springer, one of Germany’s biggest media companies, which was keen to build a digital media presence in the U.S. With that backing, and Blodget at its helm, Business Insider has ramped up to be one of the most vibrant — and popular — media companies in the world: By December 2018, it had more than 98 million monthly unique visitors in the U.S., ranking second behind CNN in the Comscore general-news category, according to Business Insider. That year, Business Insider hit $100 million in annual revenues and turned a profit, Axel Springer reported."
Henry Blodget Was Banned From the Financial Industry. So He Built a Financial Media Empire.
4. "Despite ample warning, the U.S. squandered every possible opportunity to control the coronavirus. And despite its considerable advantages—immense resources, biomedical might, scientific expertise—it floundered. While countries as different as South Korea, Thailand, Iceland, Slovakia, and Australia acted decisively to bend the curve of infections downward, the U.S. achieved merely a plateau in the spring, which changed to an appalling upward slope in the summer. “The U.S. fundamentally failed in ways that were worse than I ever could have imagined,” Julia Marcus, an infectious-disease epidemiologist at Harvard Medical School, told me."
"But the COVID‑19 debacle has also touched—and implicated—nearly every other facet of American society: its shortsighted leadership, its disregard for expertise, its racial inequities, its social-media culture, and its fealty to a dangerous strain of individualism."
5. Space Force!
"But for all the ways that civilians and the military rely on it, America’s network of roughly 1,000 satellites is virtually unprotected. And just as lightly defended access to deep-water ports or natural resources was a source of war in the past, leaders and strategists worry that America’s vulnerable satellite network is an invitation to conflict in our times. Raymond tells TIME that Russia executed a previous, unreported projectile launch in February 2017. China has started training specialized units with weapons that can blast apart objects in orbit. Both countries have deployed ground-based laser and communications–jamming equipment that can disable satellites.
In short, an arms race for space has begun. This is the story of America’s effort to keep ahead."
"The mission of protecting America’s vulnerable orbital networks falls to U.S. Space Command and Space Force, which since December has the same status as the Army, Navy, Air Force and Marines."
https://time.com/5869987/spaceforce/
6. This is spot on.The Future of Silicon Valley Tweetstorm. Agree that it’s a good thing that the capital and expertise gets exported from Silicon Valley to the rest of the world.
https://twitter.com/KyleTibbitts/status/1290449927861149696
7. This is a really deep take on the media world and its effect on us.
"IN THE 19TH AND 20TH CENTURIES, innovations like the telegraph, time zones, radio, and television led to new patterns of mass connectivity and synchronization. Time was made visual and divided into smaller and smaller units that allowed us to achieve unprecedented levels of coordination. But in our own century, digital media is fracturing our collective experience of clock time."
"In the digital age, everything from the evening news to the 9 – 5 workday has been freed from the cage of industrial era timekeeping. As long as you have an internet connection, you can march to the beat of your own second hand.
This shift has been disorienting for the people who lived through it."
"As a rule, twentieth century time was imposed on people from the top-down. Twenty-first century time is a bottom-up choose your own adventure story that allows people to make their own time machines and live anywhen."
The garden of forking memes: how digital media distorts our sense of time – AZL
8. ”It wasn’t just that the U.S. had strong incumbents, or that the Chinese tech companies were still in their infancy. My default hypothesis was that what I call the veil of cultural ignorance was too impenetrable a barrier. That companies from non-WEIRDcountries (Joseph Henrich shorthand for Western, Educated, Industrialized, Rich, and Democratic) would struggle to ship into WEIRD cultures. I was even skeptical of the reverse, of U.S. companies competing in China or India. The further the cultural distance between two countries, the more challenging it would be for companies in one to compete in the other. The path towards overcoming that seemed to lie in hiring a local leadership team, or sending someone over from the U.S. who understood the culture of that country inside-out.
For the most part, that has held true. China has struggled, for the most part, to make real inroads in the U.S. WeChat tried to make inroads in the U.S. but only really managed to capture Chinese-Americans who used the app to communicate with friends, family, and business colleagues in China.
In the other direction, the U.S. hasn’t made a huge dent in China. Obviously, the Great Firewall played a huge role in keeping a lot of U.S. companies out of the Chinese market, but in the few cases where a U.S. company got a crack at the Chinese market, like Uber China, the results were mixed.”
“How did an app designed by two guys in Shanghai managed to run circles around U.S. video apps from YouTube to Facebook to Instagram to Snapchat, becoming the most fertile source for meme origination, mutation, and dissemination in a culture so different from the one in which it was built?”
TikTok and the Sorting Hat — Remains of the Day
9. “While this go-to-market strategy dates back to the early days of software, it is becoming the predominant method of going to market in many verticals, even in categories in which conventional wisdom might say it would never work. Think GitHub, Zoom, Qualtrics, Slack, Atlassian, PagerDuty, Yubico, Stripe, Plaid – all of these started with a product-led, bottom-up motion, followed later with top-down sales.
Growth+sales changes nearly everything about building an enterprise startup. It changes the way startups build products and the teams behind them, and how they structure sales and marketing. It changes how we as investors evaluate companies, particularly in the early rounds. And it changes how new companies compete with incumbent vendors, most of which are on their heels trying to figure out how to respond.
The most exciting consequence of this shift is that in nearly every category of enterprise technology, it puts the advantage squarely with the startups. When the initial route to market is focused on how much a product sells itself, the winners are the product visionaries, not veteran sales leaders pushing outdated software.”
Growth+Sales: The New Era of Enterprise Go-to-Market
10. These guys are prescient. Pay attention. Below is a snapshot.
"you’re going to see a lot of pain and suffering for people in their 20s. They will be forced to live at home due to the current circumstances. This is going to stunt the growth of many young men so you can expect that in 2030 or so, a lot of the 30 year olds will have the mindset/thinking patterns of a person in his mid 20s.
From an investing perspective you only need to know that the money supply is going to go up. That means you’re simply going to own bitcoin/other crypto you believe in, gold and tech stocks. That has been the trade for quite some time. If you force us to choose we’re going to say the same thing we said when it hit $4,800, likely the best performing “asset” for the next 2-3 years will be bitcoin/crypto in general."
Crystal Clear Structural Changes After COVID
11. More on the Headspin mess.
"it also reveals rot in the Silicon Valley ecosystem that is far worse than this one company. It also shows that some folks know how to exploit Silicon Valley’s one real Achilles heel — Fear of missing out or FOMO. Here what we have is a scenario that occurs all too often.
The FOMO leads to looser diligence and bending of rationality. More often than not, the deal gets done by capitalizing on the vanity of the founders. These days Silicon Valley has been afflicted by lunacy, affectionately named after a fictitious being, unicorn. A unicorn in Silicon Valley parlance is a company valued at over a billion dollars. No matter how rational, smart, or intelligent, every founder wants to be the head of a unicorn. Never mind that unicorns are mythical and non-existent in real life."
12. Very interesting.
"Hobson notes that the man/meat link isn’t rooted in biological need. “There is a propensity for men to be drawn to meaty food,” he notes. “But that’s not because their bodies are craving it. It’s cultural.”
Men and women do require different nutrients, says Hobson, but they’re not necessarily the ones you’d think. “Women need about twice as much iron in their diet as men, because they lose blood every month,” he says. “For men, zinc is a much greater nutrient of need. It’s much more closely linked to reproductive health.” Iron is found in greatest quantities in liver, meat, pulses and dark-green vegetables. You’ll find the most zinc in shellfish, followed by meat, dairy and bread. But no one thinks of liver as female and mussels as male."
We Need to Get Over the Idea of "Man Food"
13. "It’s overwhelming to try to fathom the pain, despair, and loneliness tens of millions of households are struggling with right now. And we didn’t need to be here. America is about generosity, grit, innovation, and a willingness to sacrifice for one another and future generations. There’s nothing wrong with America that can’t be fixed with what’s right with America. However, at this moment, our nation has never been less American."
https://www.profgalloway.com/the-great-distancing
14. “Market and human psychology show that LPs are more comfortable with battle-tested managers in times of uncertainty.
The gross majority of funds that have raised year-to-date have established brand names, market positions, LP bases, maturing track records, and in many cases realized returns, as well as critical experience in weathering downturns. Crisis or no crisis, these are all signals that LPs value. In an uncertain market like the one we face today; these attributes can be even more attractive.”
What you need to know about fundraising this year
15. “The notion of the “organization man”—a term popularized by William H. Whyte’s seminal 1956 book that describes the subsuming of individual agency in service of a large corporation—is giving way to the rise of “micro-entrepreneurs,” or free agents, creators, freelancers, and independent workers who utilize digital platforms to make a living by leveraging skills and knowledge in the absence of a traditional employer-employee relationship.
Accelerated by digital platforms that help surface job opportunities, facilitate customer connections, and aid in setting up and operating a business, workers are empowered to go independent and to earn a livelihood outside the confines of a traditional company.
This trend spans the gamut from individuals who convert their passions into professions—think of YouTubers, podcasters, and gaming livestreamers who’ve monetized digitally-native hobbies—as well as those whom we don’t traditionally think of as “creators,” but who are also similarly shifting to digitally-mediated self-employment, including teachers, salespeople, farmers, chefs, and personal shoppers.
Unbundling Work from Employment
16. The West should be very worried.
"Xi has said that he wants China, by year’s end, to be competitive with the world’s AI leaders, a benchmark the country has arguably already reached. And he wants China to achieve AI supremacy by 2030.
Xi’s pronouncements on AI have a sinister edge. Artificial intelligence has applications in nearly every human domain, from the instant translation of spoken language to early viral-outbreak detection. But Xi also wants to use AI’s awesome analytical powers to push China to the cutting edge of surveillance. He wants to build an all-seeing digital system of social control, patrolled by precog algorithms that identify potential dissenters in real time."
"The emergence of an AI-powered authoritarian bloc led by China could warp the geopolitics of this century. It could prevent billions of people, across large swaths of the globe, from ever securing any measure of political freedom. And whatever the pretensions of American policy makers, only China’s citizens can stop it."
China's Artificial Intelligence Surveillance State Goes Global
17. "You don’t need to figure out if it’s possible to scale it yet. Focus on product love.
What you might see here is that this is essentially the same question that Rahul is after in the Superhuman story — he’s segmenting and drilling down his user base to find that specific group of people who really need and love Superhuman and would be disappointed if they could no longer use it.
The difference is, as a “stage 0” founder, you’re starting from scratch to find your very first version of a product that might attract enough users to begin measuring."
A Method to Find “Product Market Fit” Before You Have A Product
18. Please support my friends in Beirut. The Lebanese people are amazing. Let's help them where we can.
Beirut explosion: how you can help victims in Lebanon
19. "Want to identify the sources of content that you should consume? Ask yourself two questions — is this person writing an unbiased piece that contains facts and commentary from an array of experts? If yes, then that is a good source. If no, then ask yourself, “Does this person have skin in the game for what they are saying?” If yes, then that is a good source.
Unfortunately, if you answer no to both of those questions, you will be better off moving on. Remember, you focus on your food diet. What you put in your body ends up determining how physically healthy you are. Your content diet is not much different. What you put into your head ends up determining how mentally healthy and financially wealthy you are. Proceed accordingly."
20. This is what Venture Capital is about. Taking the big swings. If you are investing with a mindset of limiting downside, you probably should not be in VC.
"more focus on limiting the downside can be inverted as more focus on limiting the upside. The highest alphas in venture don’t come from limiting the downside, they come from the positive outliers — the power law of distributions.
In a recent venture deck I saw a famous Warren Buffet quote as the only content on a slide:
Rule #1: Never lose money.
Rule #2: Never forget Rule #1.
Seeing this was an immediate turn off. It’s much more interesting, and intellectually stimulating, to attempt something with a 1 in 50 chance of succeeding as opposed to something with a 9 in 10 chance of succeeding, assuming the upside is correspondingly larger. Yes, we want to control our own destiny, but we also want to take big risks that have the opportunity for big impact."
Ask Investors How They Think About Zeroes
21. Plenty to learn from the giants of the Chinese consumer internet market. This is a long write up on Pingduoduo. Extremely insightful.
"Pinduoduo’s rise has been nothing short of impressive. It represents a case study of an excellent team quickly building and scaling a transformational business. Like Amazon used books, PDD used fruit as a wedge to build what became one of the world’s largest ecommerce companies in five years. It went a step further than Tencent building games, or Facebook selling ads, and created an asset-light vertically integrated social gaming company. It built farmers, and eventually manufacturers, a business-in-a-box solution for operating their companies. And it entertained consumers while giving them low prices on products they buy everyday.
Why Startups have the edge over most Big Company competitors
One question that it seems almost every VC or investor asks a startup founder: what happens if random FAANGS (Facebook, Amazon, Apple, Netflix, Google, Salesforce + Microsoft) will come into this space?
I understand why this question is asked: FAANGS have a brand, money and a lot of resources/power. And in the case of Amazon & Facebook, incredibly ruthless & competitive leaders.
But I would hazard that it's not as much of an issue as investors or founders think it is. And as someone who has worked in Startups, Big Tech Co & was an investor i can say this with a good level of confidence.
Big Companies just operate on completely different & SLOOOOOWER time-scale. They are established and have running business already so they also have a limited sense of urgency. Additionally, they are locked into specific product road maps and usually very inflexible, with staff already allocated to these projects.
Or more likely have feature bloat due to building more and more things into the product as they go after different markets. This is to the point that the complexity is chokes themselves out.
I remember having a conversation with a friend who was a senior exec at a public traded tech company in the USA. He told me that 80+% of their engineers were working on KTL ie. Keep the Lights on. So most of the staff were focused on maintaining and making sure their present infrastructure did not die. Which means only a small amount of people were working on new innovations.
This reminded me of what happened at Yahoo!, we stalled out in 2010 because almost all of our engineers were put into redoing our entire back end infrastructure. We literally lost a full year where there were almost NO new products released on the consumer side.
On top of this, in a Big established company, the organization is quite large and complex, it requires very high level executive managers and specialists. These are the people who help you scale. Unfortunately these folks tend to be very risk-averse. If you were entrepreneurial would you join a big company or would you even last long?. But also tend to be very political creatures who are trained to fight for resources or prioritization of their business group/product line versus other executives. I recall the investor Charlie Songhurst saying in an interview, “that the best run Big companies are ones where the executives spend ONLY 25% of their time politicking” :). Sounds about right to me.
Contrast all of this with a startup, where you can be nimble, focused & where politics is at minimum because you are pretty much almost in crisis or near death of all the time. This situation tends to tamp down on stupid politics and focuses the mind. You have zero legacy and when something is not working, you have the flexibility to change your product, your customer or Go to Market. To be successful you have NO choice but to do this. But this is also how you get major breakthroughs in the market.
This is why most innovations come from startups, not big companies. And it’s why you as a startup founder may have more of an edge than you think. So keep on pushing.
The Simplest Sales Framework Ever for Startups: The W3 Method
I was reading Amos Schwartzfarb’s book: “Sell More Faster”. Amos is the Managing Director of Techstars Austin. https://www.sellmorefasterbook.com
I think this is such a great & simple way to think about sales (mainly for B2B of course).
He created the W3 Method framework: the Who, What & Why?
Who is the Customer: the more specific and narrow as possible. The Total Addressable Market can be small at this stage. It’s okay, the point is once you dominate this, you can expand to adjacencies after.
What is your customer buying? (not what you are selling). This is specific, you are selling benefits & results. What is the job to be done by the customer.
Why does this matter for the individual or business? Why do they care?
Also in the beginning, the focus is all about learning & customer development. The point is to learn as much as you can. This will all be helpful as you build out your sales process.
Very simple (although not easy) but it’s a good start. Buy the book, seriously. Especially if you are a technical founder or even a business minded founder. It’s that good and helpful.
And it goes without saying, that if you are a founder you should learn everything you can about sales. Any founder who thinks all you need to do is build an awesome product, well you are half right. You need a great product and sales!
Any founder who thinks sales is grubby, beneath them or that they can outsource this to someone else in the early days is an ignorant IDIOT. Period. Fullstop.
Meet the New King, Same as the Old King: Why the United States, Not China Will Lead the New World Order (No, this is not a Jingoistic Rant :)
“When China Rules the World” has dominated the global news and media and popular sentiment for a while.
Several articles to be found of similar vein across books and major publications illustrate this.
How America will collapse (by 2025)
The Decline of the West: Why America Must Prepare for the End of Dominance
The coronavirus could mark the end of America's global leadership.
Odds were very good that China would eventually overtake the United States as the most powerful country based on the established global economy that began after World War 2.
The global economy which the United States helped build, revolved around efficiency and favored country specialization. For example, France & Italy specialized around agriculture & luxury products, Bangladesh around textiles, Taiwan around microelectronics, Brazil, Russia, Saudi Arabia, Australia, Canada around energy and natural resources. China became the manufacturing center for the world. The United States served as one of the major consumer markets and the final destination of finished goods. Think of the iPhone which openly states, “Designed in California, assembled in China.”
The interdependence that existed between the USA and China is now over. This breakdown of relations is punctuated by a Big Trade War. The Covid-19 pandemic has accelerated this as we enter a world where there will be two big trading blocs split between the United States and China.
The Economy: The USA is still the biggest economy in the world when comparing Nominal GDP, China’s economy at present is at 65% of the USA’s GDP although it is growing.
We see that the United States is a big Import economy with diversified trading partners and not as reliant on China as China is on the USA.
With the Pandemic, many western countries have come to the realization that they have outsourced too many things to China (PPE and Vaccines come to mind). We have seen many multinationals in critical industries beginning to reshore supply chains back home or to more friendly countries. 64% of manufacturers in the USA have reported they will be reshoring back to the USA or within NAFTA (North American Free Trade Agreement). We have seen the same with Korean companies like Samsung reshoring mobile phone manufacturing from China. The Japanese government has put in legislation pushing their corporations to do the same.(https://asia.nikkei.com/Economy/Japan-reveals-87-projects-eligible-for-China-exit-subsidies?fbclid=IwAR0p_vYewZ4rHACSe7CWHjSE7iZqtRNSnRf7kC6tqGKUrcYG06eYlGlTbNE)
This trend of Country resilience over efficiency will escalate over the next few years and bodes ill for China.
Source: 64% of manufacturers say reshoring is likely following pandemic: survey
China has a powerful manufacturing base of 2.8 million factories (vs. 250,000 factories in the USA). It is a double-edged sword for mass employment and competing in a global export economy. As supply chains get redeployed to other countries like Canada, Mexico, Vietnam, or are reshored back home, China will be left with a big manufacturing base making things that their internal economy cannot consume. This will lead to more unemployment and more economic issues, a death spiral. China’s impressive Belt & Road Initiative was designed for this eventuality to lock in future labor pools, export markets and trading partners. But the work is incomplete right now. (Source: Belt and Road Initiative).
The Chinese banking system is also very fragile due to a high percentage of Non Performing Loans despite China’s immense savings rate. Fitchratings estimated that it could actually be as high as 20% of total loans. This is compared to 5% in US Banks in 2009 during the peak of the Housing crisis which was already catastrophic. (Source: Bank Non-Performing Loans to Gross Loans for United States). China’s number is 4 times larger and their banking system will implode with a commensurate amount of pain.
The Greek poet Archilochus wrote, "the fox knows many things, but the hedgehog knows one big thing." In this case, China is the hedgehog, while the USA is the fox. In a fast changing, brand new environment, the fox aka the United States is better adapted to the new world. China is way more fragile and more brittle during these changes compared to the United States.
Demographics: There is a saying that “demographics is destiny” which is also closely tied to economic growth. You want many young productive and tax generating people. America wins hands down due to immigration despite being undercut by anti-immigration sentiment in the present White House). The United States is the only developed country that will not shrink in population over the next 20 years. The upcoming Gen Z cohort is almost as large as the Baby Boomers who powered the American and global economy the last 50 years.
China has a bigger population but it’s expected to peak in 2029 at 1.44 billion before slowly declining (China Academy of Social Sciences CASS). It will also be much older and in economist terms “Unproductive”. Another clear issue is the lop-sided male to female ratio in China, with 114 males to every 100 females due to infanticide and the one child policy. I see this as another source of potential civil stress.
With all the challenges and disadvantages that China has right now, Xi Jinping’s regime has become more autocratic. He has centralized even more power and taken out a wide swath of his political competition via “Anti-corruption campaigns”. There will be much more civic unrest beyond Tibet and Xinjiang as their economy implodes. Additionally if you look at the level of protests and civil disturbances happening, this only points to much tumult under the surface in China even right now.
70,000 incidents in 2018 as recorded by an activist before he was arrested. Obviously it is very hard to get real numbers due to this data being considered a state secret.
(Sources: Masses of incidents - Why protests are so common in China | China)
(Source 2: Protest and dissent in China)
Throughout all of its history, China has been through waves of being a unified centralized Han focused nation state to become splintered and distinct independent regional powers. These were times of chaos, civil disturbances & tragedy that we saw even as recently as 1911 to 1949. Nothing points to this not happening again.
My prediction is that the USA will muddle along for the next 4-5 years regardless of whether Trump wins or not. Possibly for even the next 10 years as our present “Pale, Male and Stale” leaders die off from old age over the decade. But it is inevitable that the USA will have new, younger and more worldly leadership that will be able to cross the Political divide we have at the moment. As the famous Newsroom scene states: “The first step in solving any problem is recognizing there is one.” (Why America is NOT the greatest country in the world, anymore).
The bigger point is dominance is relative. You can decline and win as long as your opponents are declining faster. China has done an amazing job marshaling their lesser resources as America was distracted in the Middle East the last 2 decades. But the timer on China’s opportunity to grow their internal domestic consumption market and lock in markets via their Belt & Road Initiative has ended. China may even fracture as a single country as civil disturbances rise and decentralized tendencies take hold.
America has a massive edge in assets and is better positioned demographically than China to adapt to the new emerging world order. The common trope of China taking over the world is glaring and wrong. When the United States fixes their glaring problems, it will still be the “Shining City on the Hill” and the dominant power in the world.
Marvin’s Best Weekly Reads August 2nd, 2020
"One would expect people to remember the past and to imagine the future. But in fact, when discoursing or writing about history, they imagine it in terms of their own experience, and when trying to gauge the future they cite supposed analogies from the past: till, by a double process of repetition, they imagine the past and remember the future.”--Lewis B. Namier
1. I love this term “Scenius.” The place & scene you are in matters.
“When it is all said and done, I believe that historians will look back at the Coronavirus pandemic as the greatest catalyst for progress and creativity in human history.
That is a big claim, so let me lay out my rationale clearly.
Historically, the scenia responsible for much of the world’s progress have been geographically constrained. The internet has the potential to break that constraint. With global connectivity comes the possibility of scenius that transcends physical place and unites the world’s greatest minds irrespective of distance or station in life.
Without catastrophe, there would be less progress. Without World War II, there would be no Silicon Valley.”
2. "Focus your efforts on iterating the product with a small number of users until you have that product/market fit, and then it will be a great time to push hard on distribution."
Starting Distribution. Sell before building BUT don't… | by Ash Rust | Jun, 2020
3. So much insight here.
"If you invest 100 hours in a rare skill, you’re likely to acquire it. If you could learn to sharpen a tool better than your peers, organize a high-performance database, see the nuances in some sector of cryptography, know how to build a pretty-good WordPress site or really understand the arc of a particular writer’s career, you’d have something of value. Something that anyone who was focused enough to invest 100 hours could have, but few will choose to commit to."
4. A great framework from my friend Ryan Deiss. Strongly recommended. I use this now to evaluate where companies and founders are at in their life cycle & mindset.
The Entrepreneurial Lifecycle and What I Learned From Nearly Bankrupting My First Company
5. Series B stage is an area I'm just not as familiar with. So this is helpful personally.
“But that first growth round (Series B) is becoming an increasingly difficult round for investors (and, consequently, for founders.) The company is perhaps somewhat de-risked from a PMF perspective but there are still substantial GTM and scaling questions that need to be answered. As such, Series B investors are forced to put fairly sizable checks to work ($20–$40M) without the ownership level of a Series A or the “certainty” of a later stage round. This becomes a bit more amplified in a post-covid world where there are even more unknowns.”
Let's Talk Series Bs. When I first landed in venture, it was… | by Allen Miller | Jul, 2020
6. Good summary of network effects and why marketplace business models are so strong when they win.
Layering Network Effects: How to Multiply Unfair Advantages
7. I’m biased but of course Startup. Mckinsey sucks. But good write up on pros and cons.
“These two options sit at opposing ends of the risk spectrum, and depending on where you sit on the spectrum, it’s difficult to empathize with the other end.
With McKinsey, there’s little-to-no risk. It’s pretty clear from the start, with a high degree of certainty, what you’re getting yourself into once you sign up, across all dimensions.
With a startup, there’s only risk. You have no idea, clue what’s going to happen. Even with the things you think you know or are “a given”, you don’t, and they aren’t.”
McKinsey or a startup? - Jonathan Woahn
8. I miss Japan and traveling. One of the first places I'm going to go to when this cursed pandemic is over.
9. Read your industry canonical books but also read the overlooked stuff too. That's your edge.
"How many players have read the NBA referees handbook? A tiny fraction. I love basketball and have studied the game extensively, but I had never even considered the idea that the referee’s handbook even existed.
By seeking out scarce information, Kobe exposed himself to rare ideas that few others had accessed.
Kobe thought to acquire the referee handbook. And then he slogged through it. Finally, he made the connection that understanding referees’ assignments could uncover unseen advantages."
10. "That’s what the Stoics meant when they said you don’t control what happens, you only control how you respond. That’s what they meant when they said the one thing people can always change is themselves. And that’s what they meant when they said we are what we repeatedly do—when or how we manage to squeeze them in is less important than our religious commitment to their continued existence.
Start today. Focus on your practices. In a world where everything and everyone else seems to be falling apart, you can make good use of this time and say, “You’re just what I was looking for.”
https://ryanholiday.net/practice/amp/?__twitter_impression=true
11. If you want to understand what a SPAC is, this is a really good summary.
“The catch to all of these things, of course, is that the SPAC will massively rip you off. First of all, if you look at the terms that the SPAC is offering and what their ownership targets are, they’re seeking a pretty substantial discount as they take you public relative to what you probably feel you’re worth. Second of all, the SPAC sponsor is taking that enormous 20% vig as a promotion fee. In theory, that fee is charged to the investors of the SPAC, not the target business. In practice, that fee gets passed back to the negotiated price with the target. The net result is that instead of going public and feeling ripped off by your investment bank for having sold them shares too cheaply, instead you just directly give the sponsor something like 1% of your business as a tribute offering and go straight to being public.
But then something cool happens. The business and the sponsor, who used to be on opposite sides of the table negotiating against each other, are now on the same team. This is very different than the dynamic with banks: it’s M&A, rather than consulting. Your negotiation is more brutal, but then once it’s done, you merge."
12. My friend Jason Lemkin is spot on. Prepare for the sad phase (ie. rest of 2020). Some good advice here. Forewarned is forearmed but We will get thru this.
"Now, we have to deal more with the Work Outside of the Cloud. The restaurants that will never reopen. The retail shops that will stay boarded up, probably for years to come. The airplanes, that without massive government support, will soon cease flying. The anger from the 33% of the country that doesn’t even have a job. The fact that we didn’t seem to really get anything in the U.S. from our shelter phase. That our schools aren’t working or reopening. That we haven’t really seen much of our families in so long, and won’t be.
And so I worry the next 90 days, even though we’ve stabilized our SaaS businesses, will be the saddest. The partial mental break we get by having restored a new normalcy at work may be eaten away by the non-Cloud world that is going to get even worse before it gets better."
Now We Start to Enter the Sad Phase. Take Care of Your Team.
13. As I said, this is so smart and inspiring. Thesis is really good here.
"The duo in question is 85-year-old Alan Patricof, an investor who has helped build hundreds of companies including Apple and AOL, and Abby Levy, a much younger executive who has occupied prominent roles at Soul Cycle and Arianna Huffington’s Thrive Global.
On Wednesday, the pair announced the launch of Primetime Partners, a new style of venture capital firm that will bet on innovation related to aging and seniors. In practice, this means making early stage investments of $250,000 to $1 million in startups that products for seniors, while also seeking out entrepreneurs in their 40s or 50s or older.
It’s an unusual strategy. The venture capital crowd lionizes founders in their 20s and 30s, and likes to invest in apps and enterprise software. Older people simply don’t register in this world, which makes Patricof and Levy’s new fund a gamble. But they see a huge untapped opportunity."
14. This is how progress happens.
"But too often, the status quo gets stuck. It reinforces injustice, persists in unfair or inefficient approaches and most likely, fails to create as much value as it could.
It’s in those moments that we need your ruckus.
The act of making things better by making better things.
The hard work of showing up with insight, assertions and kindness.
The opportunity to shine a light, open a door and lead.
We’re not often encouraged to do this. The educational-industrial complex is ten or twenty years of schooling built around compliance, adhesion and test-taking. It rarely asks us to come up with “better” and instead demands the right answer. Even if the right answer is no longer useful, at least it’s correct."
On making a ruckus. Not a disturbance, a racket or a… | by Seth Godin | Jul, 2020
Importance of Etiquette as a Savviness-Signal in Silicon Valley
I hear this criticism & complaint all the time. Mainly from people in media, or people new to or from outside of Silicon Valley. It’s so “unfair”, “it’s rigged”, this is an “insider’s game”...blah blah blah. While I do agree at a general level, my counterpoint is, most of us in Silicon Valley were outsiders once too. But we learned the rules, learned the culture and we hustled as well.
So let’s take the much criticized warm intro. Let me steal from Quora on why this is important.
Why are VCs so adamant about warm intros? (worth reading the whole thread)
“As an investor I was speaking to the other day on this point put it...
I want an entrepreneur to show some hustle. If you can't network your way to an intro, then how are you going to land that big contract when the time comes? Or find the right guy to speak to in that big potential client? Or convince an end consumer to hand over their hard-earned cash for your product?
In other words, hustling your way to a warm intro is a signal that you can go the extra mile to give yourself a better chance of success.”
This is why most investors and even prominent startups founders insist on warm intros. It’s a filter from the noise of all the poorly written cold emails, blatantly aggressive pitching at a conference, pings on Linkedin, Facebook, Twitter or whatever social media you can list. Also it’s a way to protect your network. If you are introducing someone, you are vouching for them. Your rep and name is on the line too.
So let’s say you do get a warm intro to me or some other investor. The worst thing you can do is try to hit me up for introductions. Especially when it’s the first time I’ve met you and are just getting to know you. I might offer an intro and that would be okay. But for the most part, even if I want to be helpful (I do), I also want to get to know people over some period of time. This is to make sure they are credible and aren’t sociopaths before I introduce them.
This happens all the time from overseas founders who ask that I start intro-ing them to investors or other relevant folks in my network on the first meeting or call. Talk about coming off as rubes. This act shows a lack of understanding and a very low base level EQ. And because it’s passive aggressive land in California, no one tells you either. (I will tell you but I am an anomaly. It’s probably also why people don’t like me here.)
Learning the rules & etiquette is an important signal that you have done your homework. It’s a signal you can learn and adapt. More crucially that you won’t embarrass us when we introduce you into our network.
As Alex Danco, wisely observed.
“If you’re too different, you won’t fit the pattern at all, so people will ignore you. (Did I mention tech has diversity issues?) And if you’ve been in tech too long, you’ll fit the pattern too well, so people will also ignore you. But if you’re a newcomer who speaks the language? Then you’re interesting. You have “Goldilocks novelty”: a valuable form of social capital, which you can cash in immediately. You’re different enough to have unique potential, but similar enough to fluently use all of the leverage that the tech ecosystem offers you.
Source: Social Capital in Silicon Valley – alexdanco.com (seriously read this)
All cultures have specific etiquette and if you don’t do this, bad things happen. It’s like showing up in Thailand and saying bad things about the King or in China, Japan, Korea or Taiwan when you keep your shoes on when walking into someone’s house (It’s something considered VERY rude). This is exactly the same when you want to become part of the Hollywood or Silicon Valley scene.
As I said before, some of my best performing startup founders were outsiders (male/ female/ American/Int’l & very diverse i should add too). But they learned and navigated their way through this. Most of them also ended up raising from top tier angels and VCs. And they are now considered insiders.
I believe that in our present Pandemic world, it is now easier than ever before to break into the Silicon Valley scene. Almost everyone in tech is Sheltered in Place and working from home or remotely. So the home field advantage of being able to meet live in-person has lessened for people in the San Francisco Bay Area. Now is the time if you want to become part of this world.
To further quote Mr Danco.
“The minute you acquire “in-group” status and establish a bit of social capital in Silicon Valley, everything about your career becomes easier. Introductions, advice, credibility and seed funding flow freely, hesitation and friction around new ideas goes away. It becomes easier to bootstrap something out of nothing, because you’re not starting with nothing anymore.”
Net net: Learn the frigging local etiquette and you will increase your chances of success here. This is a good place to start: Silicon Valley Etiquette. Manners Matter. | by Romain Serman
PS: there is a special place in hell for people who do NOT do Double-opt in Introductions
Lessons from the “Black Death” in the Middle Ages & Its’ Relevance for us in the Modern Post Covid World
“History does not repeat itself but it certainly does rhyme”--Mark Twain
I finished watching the 24 episode series of “The Black Death” and it was eye opening. A grim topic but relevant for all of us in the middle of the Covid-19 global pandemic. I came out grateful that as awful, tragic and scary as the Coronavirus is, it is NOT the Bubonic Plague (Thankfully).
Why? Similar to our times, in the decades preceding 1346, there was a major population and economic boom, where the European population doubled. But after 1346, plague hit like a bomb and Europe’s 150M population was gutted by the “Black Death” or “Great Mortality”. Globalization of Trade spread the pandemic like a scythe as the plague via fleas were carried by Italian traders fleeing the Middle East. Incidentally, the plague also started in Hubei. Yes that Hubei, ie. where Wuhan is.
An estimated 50% of the population in Europe died as the plague ravaged almost every part of Europe. Even worse, it recurred almost every decade till 1667. Because of the lack of understanding of what this was, you had an 80% chance of dying if you got it. Terrifying stuff. Many people then thought the whole world was ending as Entire villages and cities were wiped out. One region impacted disproportionately was England. It had been hit by months of rainstorms and bad crops prior to Bubonic Plague arriving, so the people there died at far higher rates due to deeper malnutrition.
The ineffectiveness of the Church during Plague led to growing dissatisfaction and disillusionment of the Catholic Church and organized religion in general. The mass deaths dislocated the Social order. Where in earlier times, the Church and Nobility were very rigid orders, they were forced to open up to the lower classes. Merchants and others in the social order were welcomed in and moved up. Society adapted because that’s what people do despite the awful experience.
Great wealth & opportunities came out of this. Laborers were now in high demand, and their purchasing power increased 40% between 1340-1380. Also there was mass movement to the city and urban areas. Populations began to cluster, leading to the rise of cities. Survivors inherited more wealth and land. Merchantmen survivors ended up with virtual monopolies of their trade. We saw the growth of merchant class & specialization, concentration and rise of Town Market Fairs for mass trade.
At a bigger macro level, we saw the rise of a global trading system that further connected Europe to Asia & the Middle East. The Serfdom system went into decline as social mobility increased. The Noble classes were negatively affected as their control and power were weakened. Things never went back to normal.
Massive decentralization happened on a geopolitical basis as there was no major kingdom that came out unscathed. The Great Protestant Reformation was a direct result of the decline of the Catholic Church. The Black Death ushered in a new era. At a macro societal level, historians believe that if the Black Death did not happen the glorious European Renaissance that came after would have been delayed several centuries & heralded Europe’s progress away from the Medieval times.
So what’s the point of all this? What’s the lesson here?
Even though most of us hunger to get back to normal, things have changed too much now for that to happen. In this modern day age, we’ve seen the USA & many other countries humbled. The public's trust in present leadership, government, business and media has eroded to the lowest levels ever.
Crisis exposes weaknesses that were hidden and ignored. The glaring ineptitude and leadership gaps. Structural market and organizational issues. Weak medical systems and infrastructure become VERY apparent. This was whether you are a Nation-State (USA, Brazil, Russia, UK etc.) or Business (many retail stores like Macy’s, Bloomingdales, JCPenney etc.) or NGOs (WHO, CDC).
When proper civic action, capable leadership and effective execution meets lucky circumstances and good geography, good things can happen. This occurred in Nuremberg, Iceland or Milan, all places that escaped relatively unscathed during the Black Death. In our modern Covid-19 times, we have seen that occur in Taiwan, Vietnam, Australia, Hong Kong, New Zealand, Finland, Czech Republic, the Baltic States, Greece and Iceland.
But some good comes for the survivors. “Chaos is a Ladder” as new opportunities appear. Trends like ecommerce, virtual education & medical care and digital transformation in corporations have occurred faster in 6 months period versus 5 years. Companies that did not have product market fit, now do as the consumer and enterprise market has changed dramatically.
Like the Spanish Flu in 1918 where an estimated 17 million up to 50 million+ people died (https://en.wikipedia.org/wiki/Spanish_flu), the “Roaring Twenties” happened soon after. The 1920s were a time of economic, cultural growth and hedonism as people tried to forget the horrors that preceded it. The 1920s were known for the rich cultural milieu, economic prosperity & dynamism in Berlin, Shanghai, Chicago and New York!
I expect something similar to happen post 2021. I am steeling myself for more economic, political & societal pain over the next year. But once we get through this, i am very confident we will enter into our own new technology-driven “Roaring Twenties.”
Marvin’s Best Weekly Reads July 26, 2020
Sometimes, we are so attached to our way of life that we turn down a wonderful opportunity, because we don't know what to do with it --Paul Coehlo
1. Awesome & old profile of DE Shaw: one of the first and best quant hedge funds. Also Jeff Bezos worked there and it’s where he came up with the idea.
DE Shaw, the First Great Quant Hedge Fund
2. Think China is going to be a dominant global player? Think again. Worth a read here as it’s contrary to the popular view out there.
3. “After attending and hosting virtual events, it’s clear to me they will continue to be an addition to the marketer’s quiver. And if you haven’t yet explored them at your startup, I think you should reconsider.”
The Unforeseen Benefits of Online Events by @ttunguz
4. This is a monster read by Ray Dalio but important to understand macroeconomics and where the US Dollar is going.
5. “Everyone is all in a tizzy about day traders and Robinhood and Dave Portnoy. “Ooooh, they’re going to have such a hangover when the bubble pops. Ooooh, they don’t understand how investing works.”
Pffft. They’ll be fine.
The investors facing a hangover are small family offices, plied with endless offerings of fee-heavy SPVs and SPACs by multi-billion dollar asset managers. They’re the ones overserved by Wall Street today."
https://www.epsilontheory.com/overserved/?utm_campaign=website
6. “When I ask people how their lives could be improved by removing difficulties, I am always struck by two things. One is, how many of these problems are actually people. The second amazing thing is that the list of monster problems is usually very short. Remove these frustrations, and life becomes a lot sweeter. Use the 80/20 principle to identify the few things that cause nearly all the problems. Then remove the problems."
"Be optimistic. This is where believing that life is difficult can lead you astray. Sure, life is difficult, but the difficulties can always be overcome. There is always a way. It’s just a question of locating it."
ARE LIFE & BUSINESS DIFFICULT?
7. “The presumption that America — once the dominant player in global technology — would have new competition building products of and for rising markets on their own terms was made clear in a rising China. And, of course, as millions of miles of travel since has shown me and anyone willing to look around them — mini “China’s” were rising everywhere. Ask Uber if merely showing up in a market meant they would win it as was once often the case for American tech companies, and their exit from South East Asia with an investment in the largest local competition says a lot.
Thus my one condition for giving such a speech is that it cannot talk about where the next Silicon Valley will come from. While I knew there were great lessons to be learned there —the behavior, mind sent and seeding environment of the Valley remains astounding — it was clear to me that new markets were going to rise on their own locally sensitive terms and those terms would, in fact, unleash a new global approach as billions of new consumers were holding the very means to transact for the first item."
8. "Of course, there’s a more directly competitive aspect to venture capital because it’s a zero-sum game. You have to win, and earn your place in a competitive opportunity. It’s collaborative too, though, and that’s what I love most. I love working with a range of people in the ecosystem. That’s part of the reason I founded High Output as an angel-investing/coaching firm, rather than a traditional fund. It allows me to do what I love, but I don’t have to fight against all these other seed funds out there to win a deal. I can work with them."
https://thegeneralist.substack.com/p/the-miss-steve-schlafman-on-snagging
9. Super insightful write up. I’m not normally a fan of the “velvet rope strategy” but when it works it really works.
The Value of a Velvet Rope: Effects of Hype and Exclusivity on Launch Strategies
10. I read anything with Tim Ferriss: a great interview here.
"The 4-Hour Work Week is—based on the title, understandably—often misunderstood. The objective was to provide a toolkit for maximizing per-hour output. It's not necessarily about working four hours a week. You could choose two hours a week, one hour a week, or 80 hours a week.
But the reason that book found such a toehold in Silicon Valley is because it was focused on evaluating different currencies—money, time, mobility—and how you can pull levers to change these variables to maximize per-hour output. That toolkit was very much time- and income-focused."
Because it doesn't matter how much money you have, doesn't matter how effective or efficient you are. It doesn't matter what types of fancy toys you collect. It doesn't matter how hot your significant other is, if your inner world—your internal monologue or dialogue—is that of anger or despair or frustration or sadness the majority of the time.
Almost none of these other things matter very much."
From Productivity to Psychedelics: Tim Ferriss Has Changed His Mind About Success
11. "Kirkland’s success defies our intuition and experience. Shouldn’t lower prices lead to lower quality products? How can they offer rock-bottom prices but still have some of the best products around?
The answer is this: they get the best manufacturers in the world — who already have products on Costco shelves — to make Kirkland products. Yeah, you read that right. While customers might not know it, Kirkland products are often made by the same manufacturers who make the branded products that sit next to them on the shelves.
And not only that, but according to a Reddit user who worked at a Costco supplier, Kirkland products have to be at least 1% better than the equivalent branded products (on some metric of their choosing). Costco forces manufacturers to compete with a better version of themselves.
But if Costco is pitting brands against themselves, why do the brands put up with it? The short answer is that they want to. Costco is one of the largest sales channels in the world and brands can still profitably sell their products under the Kirkland brand."
Why Most Celebrities (Hollywood, Professional Sports, Music Stars) Suck as Startup Investors
Clearly I am generalizing. The examples of Ashton Kutcher, Joe Montana, Troy Carter, Nas, Serena Williams & various folks from the Golden State Warriors are effective counterpoints. All are super savvy individuals who have also built ties and have incredible mentors from Silicon Valley. Each one is an exemplar in tech investing and probably have better portfolio companies than me. But I would argue these are the exceptions.
If you look at the majority of celebrity investors, due to the mindset of where they come from, it’s almost always short term & opportunistic (ahem Chainsmokers & Manny Pacquiao). This is contrary to the mindset needed for tech investing where the time horizon could be up to 10 years.
Not a surprise when they come from industries where fame & influence tends to be short. Perishable might be a better word. That’s why it’s common when you see stars hit the big time, they start to cash in on this. All of sudden you see them doing all these random sponsorship or licensing deals with all types of random products. This is called the “great cash grab” to monetize as much as you can while you can. Fame & Influence is fleeting in that world, so this is a very logical behavior. This is not a value judgement, but an observation. If I were in their shoes, I would do the exact same thing.
Additionally, a big driver for this movement into Tech is that it is (or was) very hot. Nothing motivates someone more than seeing their peers make money in something. Also its sign of coolness, so why not. Hence the dabbling.
For the record, it’s not a bad thing to take a celebrity’s money as a startup. It actually makes A TON of sense if you are running a Media startup, Direct to Consumer (DTC) or Consumer brand focussed biz or something related to Hollywood, Sports or Music. But outside of this, not sure they can add a lot of value to other sector startups.
So if you do take money from them, just make sure you manage expectations clearly with them. They are dabblers and may not understand how long it will take to get liquidity (if any).
Manage your own expectations as founder on what these celebrities will be able to contribute. They all have busy careers in other realms, so your startup is most likely not a priority. The famous poet Ehsan Sehgal said: “An opportunist runs away and disappears if it fails it’s targeted opportunity. ”
Just remember these folks are tourists, not settlers in our world here, so word to the wise :)
PS: Most Investors, Angels and VCs suck too. It’s called Pareto’s Law. But they underperform for a multitude of other reasons which go beyond a short blog post.