Why UX & Design Matter
UX=User Experience or Usability is one of the most important factors in technology adoption.
So many technologists focus on early adopters who are strongly technical so they tend to care less about the design or usability.
This is the edge for startups whether consumer or B2B SMB/Enterprise. It’s something I don't think founders think or care about enough. If you look at older established software companies ie. Salesforce, Oracle, SAP. Awful, godawful UX. The more established a company, the harder it is to change the product. They are completely locked in.
And it’s almost impossible to fix as:
1) they have an established customer base used to this and there is risk of destabilizing their business
2) They have to do a complete rework of systems/ back end technology infrastructure etc. which is really hard for big company that is publicly traded (or about to go Public as Who wants to take the risk)
3) Plain politics & complacency internally (why change what is working?).
If you look at Crypto, one of the biggest issues of adoption is that it is just not easy to use. Muggles like me just find it hard. While Crypto purists will hate on Coinbase & Robinhood, I would argue these two players are driving most of the new mainstream consumer adoption and growing like crazy as a consequence. The main reason these companies have done well is because they make it so damn easy to use. Kind of like what eTrade did for buying and trading stocks online 20 years ago.
So startup founders, anytime you are looking at why your tech is not being adopted. Pay close attention to your UX and fix it. Yes, I might be over simplifying things here but this is a trap many strong technical founders fall into. And it is so common that I am continually surprised that more people do not talk about this.
Listen to this Newsletter: https://listencat.com/the-hard-fork-by-marvin-liao-podcast/
Entering the Post Covid 19 World: Get to “Pole Position”
It’s been a challenging 2020 to say the least. In California, we have been in lockdown since March. We have had mass protests, mass unemployment and mass bankruptcies of main street businesses. Yet housing sales, the stock market and ecommerce have skyrocketed.
All of this points to the K-Shaped recovery. Some folks are doing very well, while others have seen their lives and lifestyle decline precipitously. It’s a really strange and painful time.
But like all things in life, every situation can be seen positively and negatively. The question is what stance will you take and then what action you take.
While we can all lament about the lockdown, the devastation, and i can safely say, we all have done so. It’s important to mourn and move on from here as quickly as possible. I found my life getting much better once I just started doing small things to improve myself. These consisted of the “Write of Passage” class I took, the masterminds I joined, the hours of self education via reading & listening to some top podcasts like the Pomp Podcast, Tim Ferriss Show, Invest Like the Best, the 20 Minute VC.
It was the meditation, the walks around the neighbourhood, the exercise regime in the morning. The key is building your health and building your internal skills that help hone your craft whatever it is.
Surviving is thriving in this present environment. But once we are through this, the world is going to be ripe with a multitude of business and investment opportunities. There is a major economic and cultural boom coming.
“Stay Safe and Stay Positioned.”
Listen to this Newsletter: https://listencat.com/the-hard-fork-by-marvin-liao-podcast/
Marvin’s Best Weekly Reads November 22nd, 2020
Once You Choose Hope, Anything’s Possible -- Christopher Reeves
I have major issues personally with uncertainty. Something I need to work on.
"Humans abhor uncertainty, and will do just about anything to avoid it, even choosing a known bad outcome over an unknown but possibly good one."
"Life is ephemeral. Everything we know and love will one day cease to exist, ourselves included. That is life’s one certainty. The cherry blossom is lovely not despite its transience but because of it. This has always been the case.
The pandemic has driven home our own transience. And while it may be too much to ask to celebrate this truth under such dire circumstances, we can learn to tolerate the unknown, and perhaps even catch glimpses of the beauty underlying life’s uncertainties."
https://www.theatlantic.com/family/archive/2020/08/how-embrace-uncertainty-pandemic-times/615634
2. "When I hear founders talk about “getting back to product,” it’s hard not to think that long-term they are a product manager, rather than a CEO."
https://medium.com/upside-partnership/fundraising-commandments-f00275b4d038
3. "If a business is a marketplace, it is selling incremental demand to customers as its primary value proposition. A business is SaaS or SaaS-like if it sells anything else software-related. If a business starts as a marketplace, it usually means demand is the most important problem customers need to solve.
If a business starts out SaaS or SaaS-like, it usually means its customers have ways of driving demand and have other important problems software can better help them with. It could also mean the marketplace dynamics needed to drive demand are very hard."
https://caseyaccidental.com/marketplace-types
4. Good basics of raising your Series A.
https://www.linkedin.com/pulse/raising-startup-round-how-when-share-fundraising-updates-amit-garg/
5. Exciting and scary implications. But this is the future.
"A new field of science called “synthetic biology” aims to do just this by digitizing genetic manipulation. Sequences are loaded into software tools—like a word processor, but for DNA code—and are eventually printed using something akin to a 3D printer. Rather than editing genetic material in or out of DNA, synthetic biology gives scientists the ability to write entirely new organisms that have never existed."
"THE AMOUNT OF attention and resources being paid to synthetic biology has only grown in the face of the pandemic, making it more likely that this research will impact our health in the near future."
https://www.wired.com/story/synthetic-biology-plan/
6. Yup! Different & interesting perspectives on post covid world.
"travel will explode after the pandemic. People like (safe) novelty and changes of scenery. We have all been locked down with the monotony of the same rooms, same walking routine, inability to see new things. When it is safe to travel, people will go, go, go."
“trends in combination have boosted the appeal of investment migration and citizenship programs, whether for ‘digital nomad’, those looking to acquire second passports or those changing nationality altogether. Connected hubs offering hassle-free entrepreneur visas such as the UAE, Singapore and Thailand are likely to benefit. Every country for itself is also becoming every person for himself.”
7. Very impressive & overlooked historical figure.
"He called himself the “Black Thomas Edison,” but we should all know his true name: Garrett Augustus Morgan.
Throughout the first half of the 20th century, Morgan pioneered a wide range of technological advancements — predecessors to the gas mask, sewing-machine advancements, hair products, and the first 3-color traffic light — that continue to impact daily life decades later.
It’s the story of an insatiably curious soul who overcame tremendous social barriers and devoted his life to making the world a safer place.
And it began in a shack on a rural Kentucky farm."
https://thehustle.co/garrett-morgan-inventor-traffic-light/
8. A very big fan of Stripe Press. Lots of really great books being published there.
"Like other independent publishers, Stripe has identified a niche and clear position around advancing authors in a certain part of the market; the quality of the authors it works with speak volumes. Stripe Press is refined in its taste, and offers unique services to its growing, tech-savvy community of writers.
In 2018 when Stripe Press debuted, Axios wrote, the bottom line: “This is the latest example of how tech companies use content marketing to build their brands and connect with customers (and would-be customers) beyond the products they sell… Stripe’s mission is to grow the GDP of the internet… by sharing previously hard-to-acquire knowledge and expertise about starting and running companies.”
https://morgmah.substack.com/p/the-promise-of-stripe-press
9. This is why it’s still early days in the Cloud computing space. Plenty of head room and opportunities for startups.
https://www.protocol.com/datadog-ceo-interview-cloud
10. I love the concept of digital nomad-ing but this write up sure makes these people seem....naive, privileged or entitled?
When so many people are suffering, not folks should be bragging about their escape or employment. Stealth or modesty seems like a better strategy.
Also shows nothing is like the dream being shown on Instagram or other social media.
"for those who were unencumbered, with steady jobs that were doable from anywhere, it was a moment to grab destiny and bend employment to their favor.
Their logic was as enviable as it was unattainable for everyone else: If you’re going to work from home indefinitely, why not make a new home in an exotic place? This tiny cohort gathered their MacBooks, passports and N95 masks and became digital nomads.
They Instagrammed their workdays from empty beach resorts in Bali and took Zoom meetings from tricked-out camper vans. They made balcony offices at cheap Tulum Airbnbs and booked state park campsites with Wi-Fi. They were the kind of people who actually applied to those remote worker visa programs heavily advertised by Caribbean countries. And occasionally they were deflated."
“It turns out there are drawbacks the trend stories and Instagram posts didn’t share. Tax things. Red-tape things. Wi-Fi rage things. Closed border things. The kinds of things one might gloss over when making an emotional, quarantine-addled decision to pack up an apartment and book a one-way ticket to Panama or Montreal or Kathmandu.”
https://www.nytimes.com/2020/11/08/business/digital-nomads-regret.html
11. Some tips for emerging venture managers from one of the best in the business.
"a clear approach to money management, bet sizing, ownership and follow on strategy, will also play a part in how LPs perceive you. Being wishy washy on any of these dimensions will be damning and likely relegate you to a bunch of polite responses but little follow through."
https://blog.usejournal.com/building-a-seed-stage-venture-firm-c432816ce45e
12. “Technology means we can now choose where we live and work.”
This quote is true but it will be countered by growing government & societal push for control.
"Everything will be in the firing line — the cushy “golden passport” programs, aggressive international tax planning by tech companies such as Amazon. com Inc. and Google parent Alphabet Inc. and the digital nomads themselves. A recent proposal to tax remote workers to pay to rebuild the economy speaks to that frustration.
While indiscriminately squeezing work-from-homers who are trying to make ends meet is unfair and would encounter resistance, turning the screw on tech companies and international tax evasion is popular and would make the nomadic life harder. As big government gets bigger, post-Covid Leviathans will be in no mood to let free riders take advantage of internet and mobile infrastructure without giving back."
13. Easier said than done but this is right.
"In VC, it’s our job to imagine a world that might be different from the world we live in. This means being open to ideas that are hard to fit into our world, as we know it, right now. After all, we’re always looking for the non-obvious idea, the “contrarian but right” idea that only looks viable from certain offbeat points of view. Part of the job is appreciating ideas that are strange enough to provoke a reaction of skepticism."
https://medium.com/speroventures/contrarian-investing-101-94f14f074ccf
14. Hope he is right.
The creator of the Pfizer-BioNTech vaccine says life could return to normal by next winter
15. "Broadly, there are five buckets that talented people should start companies around: energy, education, housing, healthcare, and transportation. That’s because the western world has stagnated on all five fronts. For every sector except energy and sometimes housing, costs are rising faster than the rate of inflation."
"Paradoxically, ambitious and differentiated goals are sometimes easier to achieve than mundane ones. Ambitious people attract other ambitious people. In positive-sum areas, they find ways to work together and help each other. That's why inspiring goals make it easier to hire, raise money, and meet the kinds of people who can move the world with a single phone call."
https://www.perell.com/blog/what-should-you-work-on
16. This is pretty great as a tip for keeping your brain focused and not distracted. Reducing cognitive load and keeping your mind sharp.
"Your sources of information have enormous influence on what you think, how deeply you think, and how you solve problems. Be deliberate about how you choose them. Avoid free sources information, companies that give away free clients, and large media organizations.
Read twenty good books per year, read Twitter through Feedbin and Reeder, subscribe to niche communities, mute low quality signal from high quality sources, subscribe to Superhuman for email."
https://www.spakhm.com/p/signal-curation
17. People make mistakes, at least he is trying to fix it and was very generous & charitable with the $$ he made. More than we can say for many billionaires (or millionaires for that matter) out there.
"These two sides of Smith — the impressive generosity on one and the admitted tax evasion on the other — may be hard to reconcile."
"Thomas believes Smith agreed to Brockman’s offer because, while it gave Brockman more control over his offshore assets than Smith might have wanted, it made his financial dreams a reality.
"This was 20 years ago and a 36-year-old brown man running around Wall Street trying to get people to invest in a very big idea. Not a lot of takers. Then he gets a billion-dollar investment. That’s how he built an empire that made him a billion dollars.”
https://www.washingtonpost.com/business/2020/11/09/smith-brockman-tax-evasion/
18. Bullish on Crypto. For me it’s Bitcoin all the way.
"We are starting to see sectors of the economy decentralize using blockchain technology, starting with the finance sector, naturally. This is a ten to twenty year trend that is just getting started. And owning crypto assets is the way to play that trend. Starting, but not ending, with Bitcoin."
https://avc.com/2020/11/bitcoin-the-gateway-drug/
19. This is fascinating.
20. Also contrary to popular belief, I am not a Permabear. If I was I would not have been a VC. :) Nomad Capitalist said it best and it’s a lesson I've learned the hard way in 2020.
"I do realize that there are problems, but I also know I can fix them and protect myself as much as possible, and then I can move forward and focus on the positive. I want to look for the opportunities and go where I’m treated best rather than stay mired in negativity."
"But just because something is going wrong for you does not mean the country is collapsing.
Yes, taxes are going to go up. Yes, the dollar may drop. But the dollar won’t become worthless in one day or even one month.
If your mindset is focused on the world ending, it’s going to be harder for you to succeed.
So, the first step to being prepared and being okay no matter what happens in your country is to stop overdramatizing.
Once you stop focusing on all the near to impossible what if’s, you can come up with a realistic plan to be prepared and protect yourself, your family, and your assets."
https://nomadcapitalist.com/2020/11/13/doom-and-gloom-permabear/
21. What an interesting career.
"the United States Investing Championship seems like a straightforward investment contest.
Traders pay a fee to join and spend a year trying to juice their portfolios for the highest investment return before one competitor is crowned the victor in December.
But the story behind the competition’s founder, Norman Zadeh, who revived it in 2019 after a more than 20-year hiatus, isn’t that of a storied investor.
Zadeh is both a shapeshifter and a name-dropper. He goes by Zadeh, or Zada, depending on the day. He’s a poker king, a porn magazine magnate, Joan Rivers’ former “boy toy,” an intellectual property warrior, a wealthy man who lost a lot of money."
22. "I’m of the belief that “Come for the Content, Stay for the Community” will be one of the dominating themes for media this decade. As more creators break away from companies to go subscription indie, they’ll find it to be an effective and rewarding strategy to think of ways to build ‘whole is greater than the sum of its parts’ experiences and even perhaps subscription tiers based on access to these events, community spaces and chats.
A slew of platforms and apps are letting creators do this without large event staffs, logistics or the costs typically associated with physical gatherings (although getting your fans together IRL will still be a thing post-COVID).
So it’s not a question of “how many newsletters can one person pay for?” it’s “how many communities does someone want to be a part of?”
23. This is what I got out of it. Kevin O'Leary is a financier, but not an operator (but he sold it at top).
"SoftKey renamed itself The Learning Company to take advantage of its strong reputation, continuing to gobble up industry powerhouses including MECC, in 1995, and Brøderbund, in 1998. All told, SoftKey bought more than 20 entities, becoming the world’s second largest consumer software company after Microsoft in the process.
“O’Leary basically saw software companies as commodities,” said Buckleitner. “He was the soulless businessperson who just came in and bought a bunch of companies and scaled them back and laid off all the good people.” At its peak in 1998, O’Leary sold TLC to Mattel for an astounding $3.5 billion — 4.5 times The Learning Company’s annual revenue."
"“[TLC] killed the educational software industry,” Bernard Stolar, a leader in the world of video games who was brought in by Mattel to try and save TLC, told Canada’s National Observer in 2016. “It killed it because there was so much product out there and all of the product was crap.”
24. "This new reality has profound implications for the go-to-market strategy of any infrastructure software company. Why? Because the last thing developers want to do is talk to salespeople. The classic RFP process has been replaced by developers finding their own answers on developer forums. Vendor-controlled POCs have been replaced by self-service trials."
25. The internal civil war at NY Times. Institutionalists versus Insurrectionists. Sadly, feels like their overall credibility has gone down like that of most of mainstream media.
"It is difficult to think of many businesses that have benefited more from Donald Trump’s presidency — aside from the Trump-family empire — than the Times. After Trump’s election, in 2016, subscriptions grew at ten times their usual rate, and they have never looked back. The Times has gone from just over three million subscribers at the beginning of the Trump presidency to its record of more than 7 million last month.
It has hired hundreds of journalists to staff a newsroom that is now 1,700 people strong — bigger than ever. Its stock has risen fourfold since Trump took office........and the company has been able to weather the pandemic in part because it now has more cash on hand—$800 million—than at any point in its history. It has become the news-media organization to rule them all."
https://nymag.com/intelligencer/2020/11/inside-the-new-york-times-heated-reckoning-with-itself.html
26. This is a master class in growth for startups. Must read.
"In our experience, founders are often surprised to learn that there are very few routes to scalable new customer acquisition. For consumer companies, there are only three growth “lanes” that comprise the majority of new customer acquisition:
1. Performance marketing (e.g. Facebook and Google ads)
2. Virality (e.g. word-of-mouth, referrals, invites)
3. Content (e.g. SEO, YouTube)
"The biggest customer acquisition mistake we see companies make is underestimating the time and effort it takes to make a lane really work, and spreading their efforts too thin as a result."
27. A real American icon and story.
"Although Nelson is now one of the most beloved and iconic figures in American music—the bandanna, the braids, the ever-present haze of marijuana smoke—he didn’t find real success until he was in his late thirties. “I’d been struggling like the dickens to make some money at the music game and failed miserably,” he writes. Part of what makes Nelson’s music so resonant across generations is his deep and visceral connection to failure—he understands, on a cellular level, what it feels like to lose a partner, your house, all your money, those big dreams.
Before he moved to Nashville, in 1960, he worked as a radio d.j., pumped gas, did heavy stitching at a saddle factory, worked at a grain elevator, and had a brief gig as a laborer for a carpet-removal service. He eventually discovered that he had an uncanny aptitude for hocking encyclopedias door to door."
“I had to get up off my ass and, like everyone else in this cold world, keep on trying to figure out how to make a living.”
https://www.newyorker.com/culture/the-new-yorker-interview/willie-nelson-understands
28. "big tech companies are thriving despite blood being out on the streets because they are anti-fragile. In other words, they thrive in uncertainty, unlike fragile and robust companies that are going belly up now. Thus, we are entering a new type of economy where the gap between big tech and others will likely keep getting bigger in the near future."
"its likely big tech will emerge stronger than ever before post-pandemic. This is mostly because big tech owns virtually all of the digital distribution we rely on. As a result, they could play a bigger role in the dissemination and control of information related to the coronavirus and other (disastrous) events in the future."
https://medium.com/@ddrk/big-tech-vs-the-world-part-1-439572238c50
29. These rules work regardless of whether you have money or not. Basically how to live a better and more interesting life focusing on what really matters.
"Taking a diverse approach to covering your needs is an important part of the Nomad Capitalist lifestyle, as is determining what your real needs are. As a mentor once coached me, confusing wants as needs is among the fastest paths to unhappiness."
https://nomadcapitalist.com/2018/04/14/life-hacks-for-wealthy-digital-nomads/
30. "While democratizing access is perhaps an overused phrase in today’s technology ecosystem, I think it will continue to be a theme in some of the most important companies of tomorrow.
There are three types of companies that democratize access to a product or service:
those that make something that was previously paid now free.
those that make something expensive cheaper.
those that make something hard to use much more convenient."
https://nbt.substack.com/p/democratizing-access
31. What a charmed life. I am a fan of Mr Clooney.
"Now, at 59, Clooney tends to the myth of himself, built and burnished over the years, and to his actual domestic life, which used to be lived between film sets and plummy talk show appearances and now is what makes him happiest. There are those who retire or otherwise disappear, and those who hang on tighter than they should, past when they should, but there are vanishingly few like Clooney, who is still here, albeit on his own exact terms, giving us something to agree on long beyond the time of us agreeing on anything."
"And this is a story about a charmed life, of course, but it's also a story about a guy who is doing his best to keep it that way, to liven up the days, to give himself more stories to tell before his time is up."
https://www.gq.com/story/george-clooney-icon-of-the-year-2020
32. "Perception is reality to the entire population. If someone thinks you’re a smart guy, it doesn’t matter if you have no experience related to something, they will likely listen. Seriously. People take health advice from overweight guys simply because they have degrees (no real life experience). Similarly, if someone thinks you’re an idiot they will happily bet against anything you have to say. In that scenario, you know who to go to for your wagers =)
We don’t live in a world where results matter for 99% of society. We live in a world where perception matters. Industries have been created where *prestige* must be present… which means they don’t require any real skill. If an industry required real skill, it wouldn’t matter if your degree said “Harvard” or “University of Nebraska”… The only thing that would matter is your performance/product."
https://wallstreetplayboys.com/some-interesting-notes-on-the-last-couple-of-weeks/
33. I really like what these folks are doing. Mushrooms for a more sustainable fashion future.
34. Go Georgia. I am maximum bullish on this country.
https://www.sovereignman.com/trends/how-i-paid-just-1-in-taxes-legally-29348/
35. The exodus continues. This is a significant one. Mr Rabois is a long time SF Bay Area guy too. Miami is a heck of a nice city for sure (low state taxes sure help).
“I think San Francisco is just so massively improperly run and managed that it’s impossible to stay here,” Rabois said. He believes he is not alone in giving up on the Bay Area, a place he has called home for two decades. He cited anecdotal evidence about many people in his social circles leaving, and noted, “COVID sort of masks this stuff. It’s not quite as obvious where people are moving to and if they’ve actually moved since everybody’s working remotely.”
Silicon Valley loses another tech investor icon as Keith Rabois is leaving the Bay Area
36. This is an absolute must read. Exciting times.
"We live in the age of infinite leverage – an era where anyone with a laptop can choose to build and scale without permission. Follow your intellectual curiosity more than whatever is the current shiny flashy thing.
If your curiosity ever leads you to a place where society eventually wants to go, you’ll get paid extremely well."
https://www.value.app/feed/the-age-of-infinite-leverage
37. A good basic guide for those in SaaS. Worth a read.
https://medium.com/point-nine-news/why-your-ltv-might-be-higher-or-lower-than-you-think-f35539291701
38. Talk about the comeback kid. Still not a fan of the Vision Fund & cash cannon strategy but boy is this guy resilient. All cashed up now too.
39. Real validation that the European startup ecosystem has arrived (I personally think it arrived 5 years ago).
"With just three staff announced so far, Sequoia’s London office is small. But its symbolism goes beyond its headcount, both for the firm and Europe’s broader tech ecosystem. Firm leader Doug Leone notes that through the 1980s, Sequoia was known for a rule established by its first partners: if we can’t ride a bicycle to it, we won’t invest. That position worked in finding Apple. It’s increasingly likely it won’t for finding the next. “We’re not interested at Sequoia in partnering with a company that does a $1 billion IPO and over 20 years grows to $2 billion,” Leone says. “The interest is to find important market leaders. And more and more, we’re starting to see them come out of Europe.”
Investors and entrepreneurs in Europe’s tech hubs have seen Sequoia investors on the ground to visit startups more in recent years, part of a wider trend of U.S.-based firms pursuing deals more aggressively on the continent and in the U.K."
40. Lessons from Lebanese Central Banking. This gross mismanagement is frightening. This Ponzi scheme can happen in any country in the world by the way. (probably is happening actually)
https://thomassemaan10.medium.com/cryptolira-tyranny-or-another-ponzi-4965d4020594
41. I'm always a bit wary of these very early but highly funded startups done by Celebrity CEOs. A 20M seed round??? Have any of these very worked out?
Serious question here. Outside of Square, I don't recall any of top of my head so want to know.
42. I miss Anthony Bourdain. Still makes me sad but what a life lived.
https://thoughtnova.com/restaurant-owner-reveals-how-anthony-bourdain-changed-his-life/
43. Congrats Ham Serunjogi & Chipper Cash team. Crazy good news and you clearly do have product market fit here. Batch 24!
44. Timely write up. Really helpful for many of us here in 2020 trying to figure out our lives.
"Transitioning from VC to coach and creator has forced me out of my comfort zone. I’ve had to adopt new mindsets/perspectives and also shed old ones that were no longer relevant and useful. I’ve also had to acquire new knowledge and skills to support my business and the founders I serve. I’ve had to stretch in more ways than I expected."
"There’s a big difference between having a job, a career and a calling."
What I've Learned In My First Year as a Solopreneur
45. Pizza is beating salad in the pandemic.
"We are a nation in the throes of an unprecedented eight-month pizza binge that shows no signs of abating. Multiple pizzerias in Los Angeles reported a 250% rise in sales on Election Day, and on Thursday, Papa John’s reported quarterly same-store sales growth of 23.8%.
For months now, the underlying forces for the sustained pizza craze have been as hotly debated within the restaurant industry as the election results have been parsed by professional pollsters. Stress eating is a major cause; quarantine-induced failure of imagination and the return of three major-league sports within weeks of one another over the summer certainly didn’t hurt."
"But the actual reason that doesn’t get nearly enough notice is that pizza is one of the few genres of food that is actually more profitable than — and almost as addictive as — booze."
https://marker.medium.com/the-death-of-the-15-salad-96f920ec4dfd
The Jungle, The Dirt Road & The Freeway: Different Stages of a Company
I have spent a lot of time thinking about this topic.
Why do superstars do so well in one company but flame out in another. I’ve watched this and even experienced this personally in my 21 year career in tech. Having been an early employee (17 or 18) in a startup that scaled to 150 people in a year and then the reverse during the dotcom bubble bursting in 2000. Joining Yahoo! when it was less than 3000 people worldwide, then growing to over 15,000 employees. Also joining 500 Startups when it was sub 30 people and watching it grow to over 150 people in two years. I’ve also seen this in the multitude of portfolio companies which have scaled.
I think much of this can be explained by phase of where a company is at. I used the analogy of Jungle, Dirt Road and the Freeway. I think a better analogy would be Commandos, Infantry & Policemen.
In the earliest phase, you need commandos who will break all the rules to take the beach. These folks are self starters, highly entrepreneurial and do not follow any processes, nor do they need much guidance.
Then you need infantrymen to come in and establish the beach head. And for all intents and purposes expand and scale. These folks are the ones to start putting in processes and some level of structure to grow. They set up the initial playbooks for scaling.
Then finally you have the policemen. These are the folks who come in to fine-tune the playbooks and make sure people follow them to a tee. You could even call them Bureaucrats.
Having experienced all these stages of a company, I've personally found that I tend to do well in the late commando stage. I have also thrived in the infantry phase. But have little interest & inclination and little effectiveness in the policeman phase.
In an interview with Charlie Songhurst he distils it down to even more distinct phases.
Pre-Seed to Seed: Team coming together and being effective
Seed to Series A: Getting to Product Market Fit
Series A: scaling where you need formal management. You need to carefully manage Output of Productivity as you grow. More people is not always more productivity.
Series B onwards is Institution Building. Repeating a process at scale.
For publicly traded businesses that are usually 9-10 years in. You need a policeman with tight micromanagement & who can thrive in an environment of crazy amount of politics. In a bad company, executives spend 50% of time playing politics. In very good ones, executives only spend 25% of time playing politics.
When you apply this lens to your own career or other peoples career it starts to make so much more sense. I also think that this is a useful lens for hiring. It helps you identify exactly what you are looking for and whether this person is a cultural fit stage wise.
One of the biggest mistakes i’ve seen startups who have recently raised a series A or Series B or C round, is they hire an executive directly from Google, Oracle or Salesforce without considering whether they fit the phase/stage of their company. Google, Oracle & Salesforce are very established companies and while the executive might be highly effective at a big company, they may not be able to adjust to the still grungy infantry phase. You want someone who has gone through this phase before.
Thankfully this is something that is becoming much better understood in high growth companies in Silicon Valley.
The Sovereign Individual & The Idea of the Global Citizen Sandwich
Being a long time prepper, one of my favorite books has been Neil Strauss’ “Emergency” which came out in 2009. It is a story of how he goes down the rabbit hole of the prepper movement. Neil literally becomes “Batman” as I tell most of my friends when I recommend it to them. I re-read this book every year, it’s that much fun. The real point of this is it’s a guide for how someone to truly become independent and free.
It’s a guide to the power of Diversification & being Un-Cancellable. Of not being dependent on one country and having all your eggs in one basket. This is something that many of us who grew up in the very prosperous western world of the United States, Canada and Western Europe do not really understand because we have had a long period of prosperity and stability for the last 5 decades. But for those folks who grew up in China, Argentina, Zimbabwe, Russia, Cyprus or South Africa for example , or the ethnic Chinese in Indonesia, all understand or have experienced how things can quickly fall apart.
One of the concepts Strauss learned from the mysterious “Sovereign Society” is the 5 Flag Strategy. Literally having your bank, residence, business entity, citizenship and businesses in 5 completely different countries or jurisdictions. For me, it would not be about evading taxes and just being more diversified & prudent. As an American citizen, you have to pay the federal tax wherever you live. But in general the tax treaties they have with most countries are for the most part reasonable. I’m dead serious here. Pay your rightful taxes, the scariest arm of any government are the tax authorities, people you do not want to mess with. It’s REALLY not worth the trouble however much you think you will save. The goal is to have an interesting life, not a complicated one. Plus the US has a very long arm in the world of Pax Americana.
There is another concept I love from “Nomad Capitalist” Andrew Hendersen called the Global Citizen Sandwich which is detailed here.
https://nomadcapitalist.com/2019/06/06/global-citizen-sandwich-bank-live-invest-abroad/
In sum, a very similar concept. The bread at the top is where you bank. So for example, a safe, trusted international jurisdiction like Singapore, Switzerland, Austria or Uruguay if you are in Latin America. Haven’t figured out what makes sense for me here.
The meat is where you spend most of your time, relatively low local taxes, safe, low cost, high quality & pleasant place to live. For Andrew it's Malaysia. For me personally, it would be Taiwan, Portugal, Ukraine, Mexico or Japan.
The bottom of the sandwich is an emerging market that is growing quickly & where there are crazy good business opportunities. At the same time they have a lower quality of life as it is emerging. A place for example, like Cambodia where there is a fast growing middle class, lots of Chinese money and tourists flowing in, all leading to great investment opportunities. Yet not necessarily a nice place to live. YET. Ironically, I've come to include both the United States & my beloved Central & Eastern Europe region as whole ie. former Soviet Bloc countries in this category. The quality of life in the USA has declined precipitously in the last 21 years i’ve lived here sadly, yet it is still the best place in the world for my industry of technology.
Being stuck in the Plague States of America these last 8+ months due to the gross mishandling of the Covid, I have had a lot of time to think about these concepts more.
A point of consideration, the US passport went from being one of the most valued visa less door openers to most countries in the world to less than 49 countries as of October 27th. Americans are literally not welcome in the UK, the European Union, Canada, Japan & Thailand among many other popular destinations.
I think anyone who lives in the United States these days should think very carefully about this. I would never bet against the USA and am literally putting my money where my mouth is. But it is prudent to diversify a little. A good business person should always consider both the upside and the downside. This will help you prepare and take action in either scenario that happens.
“Forewarned is Forearmed” is apt here.
Listen to this Newsletter: https://listencat.com/the-hard-fork-by-marvin-liao-podcast/
Marvin’s Best Weekly Reads November 15th, 2020
Never Lose Hope, Storms Make People Stronger and Never Last Forever-- Roy T. Bennett
I really want to read this book now.
"Blockchain Chicken Farm: And Other Stories of Tech in China’s Countryside: a deep dive into how technology is transforming rural life in China, particularly for young people.
A new generation of China’s young people are moving from cities back to the countryside where they grew up, bringing with them new technologies, and a drive to unsettle the old ways.Travelling to remote parts of China, Wang documents the way that communities that are usually left out of Silicon Valley narratives are challenging what it means to live in a tech-dominated world."
https://www.huckmag.com/art-and-culture/the-young-everyday-hackers-transforming-rural-china/
2. "Hims Inc. is a 3-year-old telehealth company in San Francisco. This year, as the pandemic created a surge of demand for online medical care, the startup began providing Covid-19 tests as well as primary care and mental health services. Mostly, though, it’s known for offering generic prescription drugs to treat erectile dysfunction and hair loss.
In Hims ads and on the company’s website, the products’ relevant medical information is scattered among hyperphallic cacti, eggplant emojis, and a cartoon Snoop Dogg. As with other breakout mail-order brands of the past decade, such as Casper and Warby Parker—which sell mattresses and eyeglasses, respectively—the packaging is central to the sales pitch.
In an interview conducted pre-Covid, Chief Executive Officer Andrew Dudum says his goal was to build a health-care delivery system with the inviting gloss of Instagram. “When you use it, endorphins are rushing through your body,” Dudum says of the photo-sharing site. “That currently doesn’t happen in the health system, which is a big problem. It’s an ugly experience.”
3. Arrogance & Ignorance Kills. Literally.
"Japan, Taiwan, China, Hong Kong, Singapore, South Korea, New Zealand, Australia, Mongolia, Thailand or Vietnam all followed different variants of the Hammer (heavy lockdowns when there’s an uncontrolled outbreak and they don’t know what to do) and the Dance (a series of intelligent measures to keep infections low), yet all have been successful.
This list includes all types of countries: democratic, authoritarian, continental, islandic, freedom-loving, Anglo-Saxon, developing, developed… They prove any country can succeed. And they’re not the only ones: From the Caribbean to Uruguay, Canada’s Atlantic Provinces or several African countries, many countries controlled the epidemic.
Meanwhile, most Western countries didn’t pay attention, suffered massive outbreaks, applied heavy Hammers to stop them, but never learned how to dance. When the summer recess ended, they were not prepared for the back to school season and its new wave of cases. As the winter progresses, it will only get worse."
https://tomaspueyo.medium.com/coronavirus-the-swiss-cheese-strategy-d6332b5939de
4. "Saltarrelli has built his career within the gallery system, elevating his profile most recently with an exhibition of collaborative paintings with Danish wunderkind Farshad Farzankia at Turn Gallery in New York. His paintings sell for many thousands of dollars.
But he discovered a newfound freedom in the direct-to-consumer model. His art was able to reach people for whom the gallery world is inaccessible, bypassing the elitism and exclusiveness and creating a more accessible path. “Over the years I’ve had people contact me through email or Instagram to ask if they could buy something, and I would just refer them to the galleries I work with. But a lot of the people that reach out don’t necessarily have the funds to buy something through the gallery,”
https://www.gq.com/story/the-big-pivot-mason-saltarrelli
5. "As the person that defines a company’s culture and values, you need to set clear boundaries from the beginning and determine what type of intolerance you won’t tolerate — if you don’t, you risk your hard work being undermined.
Tolerance doesn’t work without intolerance, but this paradoxical thinking applies to so many other aspects of growing a company.
I firmly believe you’re most creative when you have clear boundaries or you face seemingly narrow restrictions. NOT being allowed to do something, pushes you to find innovative solutions — something you might never have thought of if you hadn’t been forced to."
6. "Bartering relies on something called the coincidence of wants. In simple terms, this means that each kid must possess an item (or service) that the other kid desires.
As we age and start making money, item-for-item trades like this become less common.
But when we’re young, most of us didn’t think about the objective, monetary value of the items we were trading. We base our exchanges on subjective value, or what the items are worth to us."
https://thehustle.co/the-hidden-economy-of-schoolyard-trades/
7. This is really perceptive and important to understand. Read this! (I am anti-Trump for the record.)
"The common thread of the Trump appeal is that it is a complete and total counter-reaction to undifferentiation. Trumpism rejects the last couple decades of policy and rhetoric that have advanced, more or less, the agenda that “everybody is equal and the government is going to actively make sure that everyone is treated the same.” Trumpism is a rejection of the ideal that we are and ought to be undifferentiated."
"Trump is absolutely differentiated from everyone else, both in his metaphorical un-cancellability and in the literal wall he’s built around the White House. He is the perfect satirical caricature of an External Mediator. He flaunts every sacred taboo; his toilet is made of gold."
"He’s an outlet for all of our stored up anger and frustration, at ourselves and at everyone around us, wrapped up as an invitation to have fun, almost like a practical joke. Trump offers a rhetorical, even satirical, playground where you can shout nonsense slogans like “Obama is the Antichrist!”.......
If you don't understand what Trumpism is, like what it really is, it's going to stick around."
https://danco.substack.com/p/election-day-2020-rene-girard-part
8. "This week, the stock of both Pinterest ($40 billion market cap) and Snap ($67 billion market cap) reached an all-time high.
But there’s another reason they’re both seen as such strong players in the social media world, especially now — because they’re both focused on positivity.
Obviously, there’s no perfect place on the internet (and I should note both organizations had racism claims from ex-employees over the summer), but in terms of content, they are generally happier places than the alternatives."
https://ajasinger.substack.com/p/pinterest-and-snapchat-coming-back
9. This is a good list of basic metrics to track for every startup.
https://davidcummings.org/2020/11/06/critical-startup-metrics-by-department/
10. The only good thing Trump did was to start to act against China & treat them as the competitor/enemy that they are. I hope the Biden administration keeps this in mind.
"In Beijing the change will be very much welcome. If there is something Chinese strategists regret is the end of “bid your time,” the old understanding that what China needs is to be left alone, as it grows stronger both politically and economically, in preparation of the time when it can actively challenge America in each and every dimension of global power."
https://brunomacaes.substack.com/p/biden-your-time
11. I like his message.
"Dave Ramsey, America’s most influential personal finance guru, drives a pickup truck that, he says, will eat your electric car. He wears a .45 on his hip with a hollow-point in the chamber. He is an older white male, a self-described “capitalist pig”, and an evangelical Christian who almost always votes conservative. He hates government intervention in his life – and yours.
His mortal enemy, however, is personal debt, and he has spent the last three decades on a crusade against modern usury, in the form of credit card companies (scum), payday lenders (the scum of the earth), and debt collectors (“some good people”, but largely “complete scum”).
Ramsey believes that as long as you have one red cent of debt – credit card debt, student loans, car payments, mortgages, medical bills – you can never be free. The day you take scissors to your credit cards is the beginning of your financial salvation.
God help you if you’re waiting for the government to rescue you. It won’t, he says – and shouldn’t.
Your debt is on you."
https://www.theguardian.com/money/2020/oct/29/dave-ramsey-debt-financial-guru
12. Well, this would explain a lot in modern day life.
"So where are the rest of the psychos? The vast majority of them aren’t found in jail cells.
They’re found in positions of power.
If they have the desire to kill, they vault themselves into a place in society that lets them openly sate that desire. A wise psychopath, with a murderous and bloodthirsty will, skillfully works his or her way into a job that lets them kill in socially acceptable ways.
They might become a judge so they have the power of life and death over people every day. They might go into politics so they can use the law to dominate and control people. They might become corporate lawyers who relish destroying small business owners and leaving them with crushing debt that collapses their business.
The line between hero and psycho is thin as tissue.
Psychopaths excel at certain kinds of jobs, like surgery, law and corporate leadership, where their cold-blooded calm keeps them intensely focused when everyone else is cracking under the pressure."
13. This is amazing, laudable and just awesome! Go Rick Steves!
Rick Steves’ Travel Empire Is on Hold so He’s Paying His Employees to Serve Their Communities
14. Trump is a vile awful man, but the grievances of almost 50% of Americans he claimed to have spoke for are real. Let's not forget this & help fix America for them too.
"Trump will weigh on America’s consciousness for a long time. For some, these past four years will be a source of PTSD. They will constantly fear a resurgence of Trumpism and that’s not a bad thing. Hopefully, they will stop laughing at people whose worldview is shaped by Fox News and finally understand the nature of the struggle they are in. For the Republicans, by the time Trump has finished calling the election results into doubt, they will have yet another resentment that will never go away.
The power of Trump, whether you see him as leader or demon, is that he gave a human shape to a fact that predated him and will continue after he’s gone: America is perilously divided, with no sense that society will bind up its wounds soon."
15. "there is a far more urgent reason to transform our approach to work. Bearing in mind that at its most fundamental, work is an energy transaction, and that there is an absolute correspondence between how much work we collectively do and our energy footprint, there are good grounds to argue that working less — and consuming less — will not just be good for our souls but may also be essential to ensuring the sustainability of our habitat.
The economic trauma induced by the pandemic has provided us with an opportunity to reimagine our relationship with work and to re-evaluate what jobs we consider really important."
16. "Work may not be fun at first, but we can bring fun into the work as we learn. The more we learn, the better we do, the more we enjoy it. In other words, we discover work we love first learning to do it.
I’d go so far as to say that without learning a new skill, adding to our knowledge, or gaining new experiences, it’s impossible to find our fit. As the subtitle of Cal Newport’s So Good They Can’t Ignore You says, “Skills trump passion in the quest for work you love.”
What’s also obvious (and often unappreciated) is that the only way to get better at something is to spend time being bad at it. You make mistakes, improve, and repeat."
https://edlatimore.com/do-what-makes-you-happy/
17. This is one of the best reads in town if you are as interested in Fintech like I am.
https://sytaylor.substack.com/p/fintech-food-nov-8th-whatsapp-does
18. "We believe the press and investment community is telling the story about emerging consumer brands incorrectly. The difference between VC-backed DNVBs and the other group of equity value creating brands outlined above is two-fold: (1) DNVBs raised buckets of venture capital while the second group of brands were typically bootstrapped and/or funded by PE shops and (2) DNVBs all started online while the other group of brands launched in a more multi-channel fashion from the start.
The whole idea of a “digitally native brand” is outdated. Rather than digitally native, our belief is that today’s customers demand that brands reach them where they are — whether it is a hunter buying a Yeti cooler at Cabela’s, an Allbirds customer shopping at an outdoor mall, a Dolls Kill customer going to Coachella, or a college student buying Kylie Cosmetics on her phone between classes. We are starting to see even VC-backed brands go multi-channel right away: Kim Kardashian’s shapewear business SKIMS entered Nordstrom less than a year after launching online."
https://medium.com/@maveron/casper-aside-consumer-brands-are-thriving-eeb1fa3da86b
19. "The wheels and gears of democracy may have been rusty from disuse, but in the end it worked. That itself should be a huge shot of optimism heard among all the decent people around the world.
Yes, I know, the other half who didn’t vote for the winning guy. They’ll come along, what unites us is truly more than what divides us, we just forgot that in the bubbles we’ve created for ourselves. We have to win them over with competence of execution. And forgiveness and healing on all sides. Yes, those words we haven’t really meant in a long, long time."
"The shoots of innovation and optimism even in these locked-down febrile times for the travel industry has been a wonder to see for a realist like me, even in the depths of despair earlier this spring and summer. If we all knew where to look, the fecundity of innovation in travel wasn’t lying fallow, it was just waiting for that first day of sunshine to show through.
This morning of optimism will take us far, that much I sincerely believe. America can still do lots of good in the world if done by right leadership."
https://skift.com/2020/11/07/this-shot-of-optimism-heard-around-the-world/
20. Chamath has been on forefront of a lot of things. Believe he is Warren Buffett of this generation.
"Chamath Palihapitiya is an exceptional pitchman. He knows how to get you excited in four-minute bursts on CNBC about a tech company that flips houses or about a data-savvy Medicare insurance company. “He's willing to saddle up on CNBC and tell the story,” says venture capitalist Bill Gurley. “Chamath – he’s figured out the process for crushing it as a SPAC sponsor and I think a lot of the others are just sitting still and don't know what he knows.”
SPAC is the four-letter acronym on everyone’s lips in Silicon Valley right now. That’s special-purpose acquisition company. Many enterprising finance-types hope to make a killing in the next two years with their own SPACs. Anxious venture capitalists are more than happy to offload their private portfolios onto a euphoric public market. And cash-hungry companies see it as a speedy path to a becoming publicly traded stock.
There are lots of reasons to care about what happens in SPAC world. Some believe that the process (the mechanics of which I sketch out at the bottom of this post) could represent the future for small and mid-sized tech public listings."
https://www.newcomer.co/p/the-man-with-six-spacs
21. "Sustainable energy has become the new hot thing and it makes me laugh because I’ve been involved in energy for 30 years [including in government roles]. I wrote two books on the future of energy in the ‘80s, so I’ve been at this a bit.
Our thesis continues to be that there are revolutions occurring in smart energy, mobility and smart buildings, and they are being driven by renewable energy, which costs less than carbon-based fuels in virtually every part of the world today, from the U.S. to India to Africa. That’s not a political statement; it’s a fact.
Fully 70% of new energy coming online now is sustainable, so people are smart to pay attention to that. Because costs are going down and the cost of storage is going down precipitously — the cost of lithium ion batteries came down so much that we reached an inflection point in 2018, and the cost of a kilowatt per hour costs less than $150 now — everybody is going electric."
22. Very fair assessment for founders. Must read.
"When I first got going in the world of venture capital, I heard multiple times that the problem with European and Israeli entrepreneurs was that they sold out too early. Of course, I could identify with those founders because I myself had sold out too early on more than one occasion. Each time I felt I needed to — for a different reason.
Perhaps I just didn’t have sufficient belief — either in myself or in the company I was building.
Now I sit on the other side of the fence, I can see that a potentially world-beating company selling out too soon is potentially damaging to our funds. After all, world-beating businesses don’t come along that often and VC returns rely critically on the outliers. We also know that it generally takes at least 10 years to build a large, sustainable business which requires determination and stamina — and contrary to uninformed popular opinions about venture capital, we are patient investors."
23. I think Spearhead is a brilliant initiative. Democratizing startup investing.
Spearhead launches $100M fourth fund to transform founders into top-notch VC investors
24. One of most observant guys on politics and the mess in SF specifically.
"Today, the only thing anyone seems to agree on is America isn’t great. This is a stark departure from Hillary Clinton’s 2016 clapback to the rise of the MAGA hats: “America is already great,” she said, a now-inconceivable political phrase. That story has been shattered, and for the foreseeable future there’s no going back to that world.
Something is fundamentally off, and as much as I believe Biden is a decent man, he is not going to lull me back into some belief that everything is fine, or that our approach to government before Trump was, in even just some general sense, working. Our middle class is struggling. Our trade and labor policies have gutted our manufacturing capabilities, and much of American industry is stagnating. At every level of government, and from all of our “experts” in media and science, our response to COVID-19 was pathetic. China and Russia are, increasingly, a threat to the free world. Radicalism at home is on the rise."
https://solana.substack.com/p/no-more-clown-shit
25. Highly recommend this movie.
"Since it premiered on the streaming platform in September, the documentary has become a viral hit. Although Netflix does not release viewer data, it says it has been a global success, in the top 10 most watched in Israel, South Africa and Australia. Amy Schumer recommended it to her 10.2 million Instagram followers.
With the same introspective cadences of the film’s voiceover, Foster muses that in a time of growing separation from nature, the film has triggered a fundamental human longing to reconnect with our origins. “Just under the skin we’re still fully wild. And I think this touches on what it’s like to glimpse that.”
https://time.com/5909291/my-octopus-teacher-craig-foster-interview/
26. I'm happy for him! :)
"There’s just so much creativity that happens in the early phases of anything, whether that’s software or physical products or art or music. It’s the “anything goes” phase of creating that I get so much energy out of and that I haven’t really had in years.
I also realized that the same people who are good at starting companies aren’t always the same people who are good at growing or managing them. The company itself has so much more potential than I have the ability or interest in offering and on top of that, I just wasn’t enjoying myself anymore.
So, that’s why I sold it."
https://baremetrics.com/blog/i-sold-baremetrics
27. "Conventional wisdom says that attempting to move upmarket will be a struggle with never-ending product feature requests and excessive demands of customer support. As a result, the idea of moving upmarket is often associated with fighting an uphill battle or the even more futile struggle of paddling upstream.
But there are many SaaS product categories where the market leaders have emerged from the low end of the market by leveraging intuitive product experience and low-touch go-to-market strategy to undermine any ‘higher end’ competition.
These startups tap into product-led growth initiatives to gradually yet consistently move toward the enterprise to win larger customers, quarter after quarter, without ever forfeiting their command of the market’s longtail."
https://www.bvp.com/atlas/moving-upmarket-and-the-ascent-of-smb-saas
28. Well this is frightening.
"Make no mistake: The attempt to harness Trumpism—without Trump, but with calculated, refined, and smarter political talent—is coming. And it won’t be easy to make the next Trumpist a one-term president. He will not be so clumsy or vulnerable. He will get into office less by luck than by skill."
29. Immigrants to the rescue. Amazing story.
"On Monday, BioNTech and Pfizer announced that a vaccine for the coronavirus developed by Dr. Sahin and his team was more than 90 percent effective in preventing the disease among trial volunteers who had no evidence of having previously been infected. The stunning results vaulted BioNTech and Pfizer to the front of the race to find a cure for a disease that has killed more than 1.2 million people worldwide.
“It could be the beginning of the end of the Covid era,” Dr. Sahin said in an interview on Tuesday."
"Dr. Sahin and Dr. Türeci sold Ganymed for $1.4 billion in 2016. Last year, BioNTech sold shares to the public; in recent months, its market value has soared past $21 billion, making the couple among the richest in Germany.
The two billionaires live with their teenage daughter in a modest apartment near their office. They ride bicycles to work. They do not own a car.
“Ugur is a very, very unique individual,” Mr. Bourla, Pfizer’s chief executive, said in the interview last month. “He cares only about science. Discussing business is not his cup of tea. He doesn’t like it at all. He’s a scientist and a man of principles. I trust him 100 percent.”
https://www.nytimes.com/2020/11/10/business/biontech-covid-vaccine.html
30. This was one of biggest surprises coming out of the Pandemic in the USA. Pleasant surprise I might add.
https://www.linkedin.com/feed/news/americas-surprise-startup-boom-4259505/
31. Totally true in VC! The best pupils don't need you.
"There will always be the “star pupils” but the teacher’s job is to serve all of the students. The reward may be to watch the star pupils shine, but the job is not. The job is to serve all of the students equally, or possibly to help the students who are struggling more than the others.
That mindset has helped me navigate this challenging issue in the early stage venture capital business. The work is often in one place and the rewards in another."
https://avc.com/2020/11/the-star-pupils/
32. "Beyond this, if the Taiwanese marines manage to stage small-scale amphibious operations across the strait to infiltrate and neutralize attack key Chinese air defense facilities, Taiwan’s land attack missiles and air assets, manned and unmanned, will then come in play to enforce intra-conflict deterrence. One can imagine similar roles for the Taiwanese marines in disrupting PLA logistics and communications nodes.
Finally, of course there is the possibility of the U.S. Marine Raiders being deployed for similar cross-strait roles, especially in a scenario where the U.S. is hesitant to risk naval assets, including flattops, in face of China’s denial capabilities at the onset of the conflict. Whatever be the case, amphibious special forces have a major role in Taiwan’s asymmetrical defense strategy and allied support for it."
https://thediplomat.com/2020/11/us-marine-raiders-arrive-in-taiwan-to-train-taiwanese-marines
33. I agree with this perspective. All depends on type of startup and industry you are focusing on. Open your eyes. #AirplaneArbitrage
"Now, I don’t presume to tell every startup where they should be based, but I can tell you that there are so many places around the world right now that are trying to be the new tech hub.
They are becoming more developed tech hub alternatives to Silicon Valley. Other places like Yerevan, Armenia are pushing to join these new tech hubs.
There are already companies located in Yerevan, but it’s not enough to saturate the market. You have the chance to get in now while it’s a small & emerging market & see a profit in expected growth over the next few years.
While Silicon Valley may be number one right now, these other tech hubs are growing. So why not locate in the Silicon Valley of Mexico? Or the Silicon Valley of Eastern Europe? You can find better places where the laws are going to be in your favor & opportunities are expanding."
"There are opportunities outside of the United States.
New tech hubs are emerging all over the world.
Don’t stay in an area with more competition and less profit."
https://nomadcapitalist.com/2020/11/11/tech-companies-get-out-of-silicon-valley/
34. "The story of Trump’s rise is often told as a hostile takeover. In truth, it is something closer to a joint venture, in which members of America’s élite accepted the terms of Trumpism as the price of power. Long before anyone imagined that Trump might become President, a generation of unwitting patrons paved the way for him. From Greenwich and places like it, they launched a set of financial, philanthropic, and political projects that have changed American ideas about government, taxes, and the legitimacy of the liberal state."
https://www.newyorker.com/magazine/2020/05/11/how-greenwich-republicans-learned-to-love-trump
35. "From lockdowns to riots to the specter of major tax increases, the events of 2020 have proven to everyone that it makes sense to have a Plan B."
"And you actually don’t even have to be that rich– certainly not a billionaire– to be able to afford some of the world’s citizenship by investment programs."
36. The Dynamic Duo of Fintech! These are the guys to know when it comes to Fintech investing. Best in the biz.
37. "I'm a huge advocate of self-serve. With two caveats. One, in the long-run, it only works when it's paired with enterprise.I by no means hope to advocate self-serve at the exclusion of enterprise. It's essential that they go together, and that there are exceptions.
It's not for everybody. You can look at companies like Viva, which is one of the most successful and capital efficient startups in the past 10 years. They are not a bottoms up company but they're incredibly successful. It's not the only path. But for most companies, especially developer and infrastructure companies, it is the path."
https://www.heavybit.com/library/video/self-serve-go-to-market/
Remote is the New Silicon Valley
This meme has been going around Silicon Valley for the last 2 to 3 years. But this was crystalized to me in an interesting interview I heard between Balaji Srinivasan & Kyle Tibbitts.
Tech workers already spend 10 hours a day working online so going remote is very natural. Covid only sped up the process. Much of this move was exacerbated by a nutty closed-minded politically correctness (left wing in this case, btw I am also left wing but more centrist), a growing crazy expensive cost structure, rising taxes, local government mismanagement and never ending lockdowns & school closures in Northern California. This rapid decline of quality of life has led to these tech founders and workers moving somewhere else. One only needs to look at the long steady migration of Californians to Oregon, Colorado or Texas in recent years. Heck, a U-Haul costs like 5 times the price leaving California than that of one heading to California.
Think back to the 1600s when the Spanish/Portugese and English went to travel over the sea to explore and found the New World of the Americas accidentally. I think there is a natural pull of discovering the edges of the world. California used to represent the wide open West of the United States used to pull people here to chase their dreams in Hollywood (Entertainment) and Technology (Silicon Valley). Now that California is so saturated physically & mentally, maybe this is why Space and the Oceans hold so much more interest for people now as the next frontier.
Daniel Gross of Pioneer spoke about Frontier People vs. Normal People. Normal people chase Famous Brands. Frontier people are drawn to new things that are relatively unknown. The outsiders are more willing to try new things. Also outsiders are most likely to become outliers. I believe there is something in the psyche of people going to the frontier where anything is possible.
In many ways, as land becomes more scarce in the world, moving to the “Cloud” is natural. I see the talent of Silicon Valley now being widely distributed all across the world, almost like a hub and virtual spoke.
Watch this frontier of remote work as this is where all the interesting stuff will be happening in the next decade. This might be the most overlooked and underestimated impact of the pandemic.
Airplane Arbitrage is Moneyball for Venture Capital: Geographies/Regions of Personal Interest
I was re-watching the excellent movie “Moneyball” last week which was based on Michael Lewis’ also excellent book. The story of how the Oakland A’s in 2002 were able to win a record 20 games in a row despite having a budget that was a fraction of other Major baseball teams. They did this by finding & investing in overlooked players and playing them in different unorthodox ways. This was widely criticized and seen as heretical by most of baseball at that time. Yet it worked. Ironically this “moneyball” strategy has been now widely adopted by other teams after the Boston Red Sox won the World Series soon after using the exact same tactics.
What does this have to do with Venture Capital? I would posit this is exactly what emerging Venture capital investors must do. Invest in founders and geographies that are overlooked by top tier investors in the crowded ecosystems of Silicon Valley and New York.
I would definitely agree that there are so many excellent investors and founders and startups in a top tier ecosystems like the SF Bay Area. They will continue to be major centers of startup Unicorns (still hate this word) and talent. But this is also where the competition to invest in these amazing startup founders is the highest. Totally fine if you are Founders Fund, Sequoia or any of the top tier branded VCs who can get into most deals. If you are new or emerging, not sure you have much of a chance. Still it’s worth being there to compete and learn.
The real opportunity is going to other geographies or invest in overlooked vertical industry sectors (Gaming or Media come to mind) or founders/demographics. It’s astounding to me (STILL) that the venture capital industry has not invested more money into female founders. This has nothing to do with fairness or equality but just on the pure capitalistic investor view that they are just as good, if not, in many cases, better than guy founders. Some of my best portfolio cos were started & run by female founders. Yet VCs have underfunded them with only 20% of total VC money invested in female founded/co-founded startups. Seems really dumb to me on many fronts.
From the geographical side, this is exactly what Drive Capital and Steve Case’s Rise of the Rest Fund is doing in the mid-West & southern states of the USA.
Me personally, I've been super bullish on foreign & immigrant founders. Especially founders from Canada, Australia, Brazil, New Zealand and Europe. Also of note: usually B2B focused as well. Some of the best performing companies in my own portfolio that fit this criteria include ManyChat, AirCall, Pipefy, Shippo, BigFinite, Printify, Cube.js among others.
I’ve detailed the specific reasons in my previous post, “Playing against Rubes” https://hardfork.substack.com/p/play-against-rubes. These days (and last 3-4 years actually ) I'm particularly bullish on startups from Central & Eastern Europe. This is a region full of strong technical talent, super hungry founders who for most part think global from day one yet dramatically underserved by the local venture investment industry. I personally think this is the opportunity I'll be focusing on for the next few years.
That’s why I use the term “Airplane Arbitrage.” Despite being a long time Silicon Valley guy (21 years as i write this), i’ve always been willing to get on an airplane to fly to new geographies to search for and meet new awesome startups outside of Silicon Valley & the United States. I’m not alone here, as i’m starting to see top tier investors like Bedrock, Lightspeed, Union Square Ventures, Founders Fund and Kleiner Perkins do a lot more European, Australian & Kiwi (New Zealand) deals. The Covid Pandemic has really flattened the world and sped this trend up.
This is great news for founders in all the new emerging tech ecosystems around the world.
Marvin’s Best Weekly Reads November 8th, 2020
"It is the lot of man to suffer."--Disrael
I'm a big fan and really digging his new book too.
"To conclude that life is all about luck, he said, is to surrender to fatalism: “Quit letting yourself off the hook, McConaughey. If that’s true, then run every red light. You’ve got your hands on the wheel. You’re making choices. They matter.”
https://www.nytimes.com/2020/10/14/books/matthew-mcconaughey-memoir-greenlights.html
2. "But the Fed also owes much of its current success to the fact that it is led by Powell — who is not an economist, unlike his three immediate predecessors, but a bureaucratic operator skilled at making friends and forging consensus. In the popular imagination, the Fed is a nonpolitical entity, almost godlike in its distance from electoral pressures. But, as at the Supreme Court, that is just a cover for a slightly different, more personal form of politics.
At the same time the president was slamming him on Twitter, Powell was diligently building relationships in Congress, winning over skeptical stakeholders to his right and left, and building the political support he would need for an extraordinary crisis response when the pandemic hit."
https://nymag.com/intelligencer/article/jerome-powell-federal-reserve-profile.html
3. Happened in the Middle East and happening in the USA now. Word to the wise.
"Slowly, incrementally, much has been lost over the decades in the Middle East, and only today do people in the region grasp the magnitude of the change, as they look back to the 1960s and ’70s, and wonder how the past could be such a foreign country. In the beginning of this descent, what happened at the extremes was most evident to the naked eye.
But the more insidious, corrosive change came as a result of the reaction by society at large. Divisions deepened—within communities, friendships, families. Rage toward the other side grew. The middle ground evaporated, and we entered a new normal."
https://www.theatlantic.com/international/archive/2020/11/lessons-from-beirut-for-america/616941/
4. "1) stock up now ahead of election to reduce risk, 2) have “in-hand” net worth that is in excess of 6 months spending, 3) write down a serious plan B if things go south for your income streams, 4) look at alternative assets and 5) you need to optimize for growth… some argue this is a barbell strategy where you buy high-risk and extremely low risk only. "
"The final part is more obvious: 1) more remote work, 2) people moving to lower tax locations, 3) less conferences more zoom meetings, 4) reduction in air travel relative to the past, 5) reduction in cruise travel relative to the past, 6) massive increase in video games, at home entertainment, 7) increase in home remodeling, 8) decrease in commercial real estate prices due to reduction in footprint for major companies, 9) increased interest in healthcare investment and 10) another shift forward for technology companies.
A good way to think about the future is to simply bet on innovation. Trying to bet on people, companies or processes that worked in the past is not a recipe for success. You want to look for things that will make life cheaper, more effective, more efficient and easy to use."
https://wallstreetplayboys.com/anticipating-defaults-and-bankruptcies-a-short-term-outlook/
5. "The Keith Rabois framework for evaluating roles is to ask whether the role is value creating or value preserving? Value creating roles are exactly what they sound like; you create and capture value with the products/services you build. A value preserving role is less creative and more tactical; you’re already doing well, and you want to make sure nothing gets screwed up.
Your rule of thumb should be as follows:
Value protecting role? Hire for slope
Value creating roles? Hire for experience"
https://eriktorenberg.substack.com/p/frameworks-for-hiring
6. Border control is critical to controlling pandemic spread. EU is facing some major policy issues. Worth a read.
"Portugal is in a different boat. It has fought to crush the coronavirus. But it still has 40 cases per 100,000 inhabitants, five times higher than the EU average (outside of Portugal, Sweden and UK). One of the reasons might well be that, all this time, it has allowed travelers from Brazil and the US (among others).
Countries like Italy, Spain or France have fought the pandemic hard, suffering a massive death and economic toll. If I were a politician from these countries, how could I justify to my voters that citizens from other countries will put these hard-won victories at risk, just because their countries didn’t want to suffer the same costs?
Especially since, once the borders open within the EU, there’s a loophole: US and Brazilian travelers can simply land in Portugal and travel from there to anywhere else in the continent."
Coronavirus: How to Reopen Travel Safely | by Tomas Pueyo
7. "In the fall, about 1 of every 7 craft beer purchases is a pumpkin beer or a related fall seasonal drink.
In the beer world, pumpkin is a divisive ingredient. Earlier this month, Saturday Night Live featured a sketch of Bostonians trying the Sam Adams Jack-O Pumpkin Ale — a beverage that prompted the comedian Bill Burr to yell out, “The fuck is that?!”
But 40 years ago pumpkin products were not a joke. They were not oversaturated. They were obscure, as hipster as cauliflower.
And their rise as a flavoring in food, drink, and everything else may never have happened without Bill Owens, a Guggenheim Fellow turned failure turned craft beer rebel.
His experiment from the 1980s launched pumpkin beer — and ushered in America’s pumpkin-flavored industry."
https://thehustle.co/the-forgotten-father-of-pumpkin-beer/
8. Fun medley of thoughts and insights.
https://jasonshen.substack.com/p/mc026-its-a-fine-line
9. "resilience can be seen as three interrelated skills rather than as a fixed trait or capacity. The first skill of resilience, responding pragmatically, involves facing difficult situations directly and taking decisive action to prevent further harm or decline.
While seemingly obvious, one of the most difficult things to do during a period of adverse change and hardship is to confront reality. To seek out the truth, stare it in the face, and make decisions based on facts, not wishful thinking."
10. "In a pandemic where the virus is spread by extended close contact with other people, experiences don’t work. At least physical ones.[2]
And so we’ve seen a reversion by consumers to the form I learned to scorn as a kid and young adult: the American stuff havers.
Last week, economists at Wells Fargo predicted the 2020 holiday season would be a record because gifts are typically things, not experiences.
And in a world where a pandemic puts a freeze on all the experiences that attracted our dollars and attention, goods win."
https://mylesudland.substack.com/p/the-stuff-economy
11. Mexico is in my plans for 2021......
"So you’re thinking about leaving… whether due to strict lockdowns, peaceful protests, inevitably higher taxes, or simply to retire in peace, Mexico might be worth considering."
12. Fast (and Hopin and others) are really promising companies. But have investors and founders not learned anything about the cash cannon strategy. I get it. If the money is there at good valuation take it, but many startups die of indigestion too.
"While the coronavirus pandemic and the subsequent halt in business activity devastated some startups, it has acted as an adrenaline boost for others, particularly if their technology supports virtual activities. Hopin, which powers virtual events, is in talks to raise capital at a $2 billion valuation only months after having raised a $40 million Series A, for example."
"Fast, a two-year-old startup whose technology enables quick checkouts online, is in discussions with investors about a new round of financing between $50 million and $200 million. The deal could value the startup at as much as $1 billion, according to two people familiar with the talks."
13. Incredibly observant. This is my sense of 2020 (as it is for so many others).
"William Gibson develops the striking new concept of the Jackpot. Ironically named, it expresses the moment when everything suddenly goes wrong at the same time."
"In the original description, the Jackpot is obviously about climate change, but the concept can be extended to a more generalized sense of environmental exhaustion."
"Suddenly a pandemic threatens to uproot all normal life. How do you fight the pandemic? At first glance by slowing down social and economic activity, but then the pressure on the economic conditions of the middle class may quickly become unbearable. Protests follow, but protests threaten to destroy what little remains of trust in the political system and without trust it is no longer possible to respond to economic inequality or technological decay or the dispossession of the middle class or climate change or even the pandemic, where we started. In one word: Jackpot."
https://brunomacaes.substack.com/p/jackpot
14. "For your market, the two key things to understand are (a) how many potential customers are there and (b) how much will each of them be worth to you if everything goes right. The better you really understand those details and can go deep on them, the more successful both your pitch and your business will be."
https://medium.com/sequoia-capital/the-market-curve-44097b626f6d
15. "investors are definitely prepared for high levels of volatility over the coming months. Each person is positioning themselves to deal with the volatility differently, but they are all anticipating it. Some people are considering holding more cash in the short term. Others want to play the VIX. And others are acknowledging the higher probability for volatility, but claim that it won’t change their investment strategy over the medium to long-term."
"I reminded one of the more bearish investors that we live in the safest, most prosperous time in human history. His response was “Yes, that is definitely not a trend that I see changing any time soon.”
https://pomp.substack.com/p/how-investors-are-preparing-for-election
16. "But in the midst of all this drama is a central theme that’s almost always lost.
People tend to forget that WE have a much bigger impact on our own lives than any politicians or government.
Elections deceive us into pinning all the hopes and dreams for our future on some political candidate, like he or she is going to walk across the water and sprinkle prosperity everywhere.
But this is an absurd fantasy.
What we do matters far more– the plans we make, the actions we take, the things we do to improve our own lives.
This is like voting for yourself. And we have the opportunity to do this every single day."
https://www.sovereignman.com/trends/dont-forget-to-vote-for-yourself-29211
17. "Fast-forward a few years, and Discord is at the center of the gaming universe. It has more than 100 million monthly active users, in millions of communities for every game and player imaginable. Its largest servers have millions of members.
Discord's slowly building a business around all that popularity, too, and is now undergoing a big pivot: It's pushing to turn the platform into a communication tool not just for gamers, but for everyone from study groups to sneakerheads to gardening enthusiasts. Five years in, Discord's just now realizing it may have stumbled into something like the future of the internet. Almost by accident."
https://www.protocol.com/discord
18. "The only fair comparisons you can make are with who you were last year. See to it that you’re moving in the right direction and moving at a decent pace.
Once you have that figured out, you don’t have much to worry about. You need to give it time.
The only thing you can do is never stray from the way and give it time. As long as you are in the right direction and make progress (to the best of your ability) every day, you will get there.
(And even if you don’t, you tried your best, and that’s all you can ever do. So there’s no point feeling down about it.)
Remember, my friend, consistency is key. Rome was not built in a day, and neither will your life be built in a day."
https://lifemathmoney.com/consistency-is-key-not-where-you-want-to-be-this-is-for-you/
19. Any American or really any citizen of any country not thinking about this in 2020 is a blind moron.
"The more of these Plan B items you check off your list, the more secure you will feel. And all you have to do is start. Just take the first step.
If you’re in line for citizenship through ancestry, make an appointment at the nearest consulate. That’s a vote for
yourself.
Buy a few ounces of gold or silver, and there’s another vote. Begin your compost pile, plant a fruit tree, or start to learn a second language.
Each of those is a vote for yourself.
You may be shocked to find that the next election won’t worry you in the least because you’ve already achieved a landslide victory for yourself.
You’ve created a rock solid Plan B, taken your power back, and are prepared for whatever comes your way. All it takes is one vote at a time."
https://www.sovereignman.com/trends/talk-about-a-landslide-29217/
20. "I don’t think it takes a genius to figure out why distrust is so prevalent today. The story-tellers – public officials, the media, scientists: the elites – live in an entirely different information universe from the rest of us. They behave as if we were still in the 20th century, and information is still their monopoly, which they dispense as they see fit & which we will accept on authority.”
"In fact, the public, which swims comfortably in the digital sea, knows far more than elites trapped in obsolete structures. The public knows when the elites fail to deliver their promised “solutions,” when they tell falsehoods or misspeak, when they are caught in sexual escapades, & when they indulge in astonishing levels of smugness and hypocrisy. The public is disenchanted in the elites & their institutions, much in the way science disenchanted the world of fairies and goblins. The natural reaction is cynicism. The elites aren’t seen as fallible humans doing their best but as corrupt and arrogant jerks."
https://www.thepullrequest.com/p/the-prophet-of-the-revolt
21. "There are many kinds of democracy in the world. The United States seems to be moving away from the Western model, where rules and procedures stand above outcomes. What we have seen in the last two political cycles is a dramatic relaxation of those rules, with the concomitant acceptance of a much larger spectrum of behaviours. Democracy in America has become much rawer and more direct, at times resembling a street brawl where everything or almost everything is now admissible. Trump is only part of this evolution, more symptom than cause.
In just one word, American democracy is becoming less Western. It now resembles the Indian or Indonesian democracies much more than the Western European experience. If the consensus about rules disappears, no other model is possible. And yet, that resemblance is more apparent than real. In America the element of entertainment remains dominant."
https://brunomacaes.substack.com/p/what-is-happening-in-america
22. “Picking winners in a calm market is something first-timers do just as well as old hands, but avoiding losers is where skill and experience matters.”
This means fund performance today relies as much on the investment decisions made beforeCovid as it does on VCs’ ability to navigate the new landscape.
In other words, Covid has already determined the richness of existing portfolios, where experience may have offered a degree of foresight."
https://sifted.eu/articles/covid-test-vcs/
23. This is why so many folks in Silicon Valley are sheep. Envy.
"Envy is at every step in the funnel. Founders without funding envy founders with funding. Founders with funding envy founders with funding from more prestigious investors. Founders with funding from prestigious investors envy founders who are favorites. Founders of companies with a $30B market cap envy founders of companies with a $300B market cap.
VC associates envy junior partners, who envy senior partners. Investors envy other investors who have better deal flow. Tech employees envy other tech employees who get to spend more time with the senior leadership. Get a drink in a product manager, and they’ll tell you all about how the CEO plays favorites. Everyone watches each other as if it's their full time job."
"TL;DR: Spend time with people who don't feel envy. Avoid people who do. Pick a mission, and direct all your energy into solving problems that stand between you and your target. Nurture relationships by overcoming shared challenges with others. Avoid "the scene". If you were a musician, you'd want to be the type who's practicing scales rather than trying to get backstage to party with the rock stars. Find the equivalent of practicing scales in your field, and do that."
24. "We are in the midst of this great big storm thundering across our planet to clean out the old and introduce the new. And the new is down to whatever you want to create that is in harmony with people and the planet. In the palm of your hand, you have more power and influence than any emperor or king that has ever graced the earth.
The model is simple: become great at what you love and share that with 1,000 fans from wherever you decide to live. That might be a small chalet in the French Alps, a cottage on the English moors, or a surf shack on the Californian coast. As you wish.
We are shifting from toiling for others in factories and offices to creating art from our self-educated hearts and minds to be of service to ourselves and others."
https://fewerbetterthings.substack.com/p/letter-from-future-swells-no-56
25. "Building a business is insanely hard, and building a great business is insanely hard, takes a long time and requires a cascade of miracles to achieve. But make no mistake, you should be raising money from those who are authentically excited by what you are authentically excited to build, full stop. And if you ever feel yourself drifting into the land of “telling them what they want to hear”, stop yourself, recalibrate and tell the real story of your vision for the future.
And if they’re the right kind of partner for you, you’ll know soon enough. Life is too short to start out misaligned with your partners from the get-go. Don’t do it."
https://infoarbitrage.medium.com/the-potential-tyranny-of-fundraising-865dbd6a9c53
26. The irony. Goes to show you that it does not pay to needlessly antagonize people. Closes off options.
Friends today are enemies tomorrow and vice versa. Don't be a D--k & play the long game.
https://www.bbc.com/sport/football/54826101
27. The Exodus continues. No surprise. California is a mess and SF is veering into woke left wing progressive stupid land. + Austin is awesome with the benefit of lower state taxes.
"The exodus from Silicon Valley and San Francisco has picked up steam during the eight months of the coronavirus pandemic, which forced offices across the country to shut down and tech workers to retrofit their homes and apartments. Between the high and rising costs of living, California’s hefty taxes and a broader shift to remote work, many in the tech industry are finding plenty of excuses to seek refuge elsewhere.
In some circles, particularly those that lean libertarian, there’s also a growing disdain for Bay Area politics, which have continued to swing farther to the left."
Palantir co-founder Joe Lonsdale leaving Silicon Valley
28. "As we move forward, people have entirely forgotten about COVID-19 as the election has created a massive veil/distraction. Meanwhile, those who have no emotions tied to the election have made good money (tech, healthcare, crypto have gone straight up for clear reasons). The other thing we can conclude is that stimulus is practically guaranteed at this point.
Looking across the spectrum of emotional topics, we can clearly see that there are many asymmetric bets/investments to make over the next 5-10 years. We’re still quite bullish on the future even if we have to change physical locations (seriously we are). In the end, life is about winning and you deal with the circumstances you’re given."
https://wallstreetplayboys.com/risk-management-politics-bitcoin-basketball-and-stocks/
29. I discovered Raf coffee this year. Literally a decade late. I have it whenever I can.
https://sprudge.com/raf-coffee-russia-91027.html
Looking for Shiny Dimes: How to Find Undiscovered Emerging Niches
Chris Dixon’s writing has long influenced a lot of my thinking. He wrote:
“It’s a good bet these present-day hobbies will seed future industries. What the smartest people do on the weekends is what everyone else will do during the week in ten years.”
As a longtime Silicon Valley resident, I'm always fascinated by technology trends.
You read all the latest books both non-fiction and science fiction, you talk to many young startups, you read anything and everything whether they are science papers, articles or subscribe to newsletters like meetglimpse.com or trends.co. You can also use Google word searches for new keywords. Or tracking App Annie to look at fast rising apps on the edge as a signal for which sectors are growing.
The question is why do all of this. It is to answer the question on everyone’s mind: what is coming next? And of course, trying to spot them before anyone else.
What has been shown over and over again is that “The Next Big Thing” ie. the coolest new things in tech and media will happen on the edges. This will usually be done by newcomers and outsiders experimenting. These are the folks you should be watching.
It sounds simple, look at where the smartest people are spending their time either industry wise or hobby wise.
So how do you do this?
One of the best thinkers on internet communities, Greg Isenberg spends time on surging topics, FB groups & Subreddits for opportunities.
The questions he asks are:
How do you figure out what they need?
What product around this can you build to serve them?
How do you find an audience & community and then go build a product?
Why is exploring these internet communities important?
“People who spend a lot of time exploring these subcultures feel like they can see into the future, and for good reason. What happens online often shows up in the headlines weeks, months, or even years later. The internet has become the petri dish of culture — the soil in which new movements and novel conversations find root.”
“WHEN AN INTERNET SUBCULTURE GROWS large enough, it often gets spotlighted in the mainstream media. But old-school media outlets watch internet culture on tape delay. By the time they identify a subcultural tribe, it's usually already splintered or evolved into something different. This cycle has played out a number of times over the last decade, but it seems to have picked up steam since the Gamergate controversy of 2014. The time lag between Extremely Online conversations and mainstream newspapers/TV reveals that 20th century institutions no longer set the pace.”
(Source: The garden of forking memes: how digital media distorts our sense of time – AZL)
These communities act as potential tripwires for the future. So it behooves all of us to pay attention.
As former Secretary of State Dean Rusk once said “If you don’t pay attention to the periphery, the periphery changes and the first thing you know the periphery is the center”
The American Main Street Economy Will be Rebuilt on Tech
The SMB (Small Medium Business) main street was devastated in 2020 due to the Pandemic, economic issues and government enforced lockdowns. At least 100,000 small businesses have shut down this year.
But out of the ashes we will see the green shoots of new business life emerge. And surprisingly in 2020, due to many company closures and job losses, we’ve seen a 40% increase of new business registrations in the USA over 2019. A very unexpectedly quick blossoming (to me) of new SMB businesses. And all of them will be built by embracing technology and leveraging all the new tech tools that have emerged over the last decade and half.
Jeff Richards of top tier venture capital firm GGV said it best.
"the SMBTech stack is the new Main St storefront.
Think about it – if you were launching a new restaurant today, would you do so without mobile ordering, pickup and delivery via Slice, Toast, DoorDash or another technology platform? If you were launching a women’s clothing boutique, would you do so without an ecommerce presence on BigCommerce, Shopify, Etsy or Poshmark? Or if you were opening an outdoor gear rental business would you do without a POS system from Square or a web site from Wix? Today in almost every vertical there are SMBTech platforms like Brightwheel and ServiceTitan offering “operating systems” for SMBs.
Every single new company formed in every single industry will start with the question of “What technology do I need to launch and grow my business?” This is a trend that started a decade ago and will accelerate at an unprecedented pace over the next 6-12 months."
Jeff adds that “In general, think peeps are underestimating the depth and breadth of digital shift.” Every new Small business in the future will be omnichannel by default. We should definitely expect a major Renaissance in SMB mainstreet retail space. This is something worth celebrating.
Marvin’s Best Weekly Reads November 1st, 2020
'If you wish to be the king of the jungle, it's not enough to act like a king. You must be the king. There can be no doubt. Because doubt causes chaos and one's own demise.' - Mickey Pearson (The Gentlemen)
"When people say they have multiple priorities, what they’re really saying is that they have a hard time prioritizing. They are unwilling to make difficult, potentially uncomfortable decisions about what should take precedence over everything else.
The first step to catching and reversing burnout before it does damage is learning to take time to figure out which proverbial balls are actually important — and which need to be dropped."
https://thehustle.co/how-to-avoid-burnout-by-working-less-and-doing-more/
This brilliant man's death is a real tragedy for all of our society. Boy what a meaningful life though.
"This was a common tension throughout Gambhir’s career: a crystal-clear sense of where he was going, with an agonizingly complete understanding of the obstacles that would need to be overcome to get there. Cyriac Roeding, the CEO of the cancer-detection biotech company Earli Inc., told the hundreds of mourners at Gambhir’s memorial service that Gambhir once warned him, “The world of biology will always find a way to screw you over. It will be harder than you want, and it will take longer than you want.” Yet Gambhir always seemed content to wait. Naive or not, he had faith that society would catch up with technology. One of his mantras was “We’re in the field of research, not search. The prefix ‘re-’ is extremely important.”
As he told me, “The secret is not to give up, to take those decades and not look for short-term gratification, because most of the time, you won’t get lucky.”
https://www.theatlantic.com/health/archive/2020/10/sanjiv-sam-gambhir-early-cancer-detection/616784/
3. The Gold is in your email list as they say.
"Though loyal, Perry’s fan base is often underestimated. “That mailing list, that hunger that they have, can’t be tracked; nobody can really reach them. That’s why the tracking for all of my movies was always so far off,” Perry explains, referring back to the box office numbers for “Diary.” “It blew their mind because [Hollywood] didn’t know how to penetrate into the community.”
“When Perry sent the email to his fans about the production of “Madea’s Class Reunion,” there were about 170,000 names on the mailing list. That number has since grown to 800,000."
https://variety.com/2020/film/features/tyler-perrys-plays-email-mailing-list-1234811309/
4. This is thought provoking.
"Learning: Where you die, and who is around you at the end is a strong signal of your success or failure in life. I believe it doesn't matter how nice your home is; if at your exit you’re surrounded by strangers under bright lights, it's a disappointment. Granted this isn’t an option for many people, but if you die at home, surrounded by people who love you, you are a success. It’s a sign that you forged meaningful relationships and that you were generous with people."
https://www.profgalloway.com/life-death
5. What an interesting and important guy. The founder of Signal, defending privacy in our new surveillance economy.
"Whenever I asked Marlinspike what he had been up to, the answer was the same: “Work, work, work.” Wang, describing Marlinspike’s “masochistic anarchist workaholism,” told me, “I think the anarchy world rewards self-motivation, initiative, and experimentation. You oddly acquire a lot of skills that are useful, whether it’s graphic design or programming. There’s a strong work ethic, and a weird kind of anti-capitalist entrepreneurialism.” Reinhard said, of Marlinspike, “He is an incredibly efficient time manager, and he approaches his leisure in exactly the same way. Almost all of his adventures require, like, six months of planning—and he has the patience for it.”
https://www.newyorker.com/magazine/2020/10/26/taking-back-our-privacy
6. "Specifically, the difference between the best performing and average performing firms are incredibly wide. Venture is a hits business and if you think about a typical venture fund of almost any size having somewhere between 25 – 40 investments, the chances of any one of those investments being a true outlier and returning a multiple of the fund are quite small. In order to have a successful fund, it’s almost a requirement that you have an outlier return for at least one of your investments."
"my conclusion was that venture firms should place more bets and have more exposure across a larger set of businesses. Obviously, those inside the industry argue that managers who are good at picking businesses would do better to own more of fewer businesses if they can show that they have the aptitude to invest in those that become true outliers. But given how rare they are, I wonder if that is arguably the optimal strategy. As David Cohen replied once years ago when I asked him what the key to being a successful venture capitalist was: “Luck”.
https://www.sethlevine.com/archives/2020/10/vc-fund-returns-are-more-skewed-than-you-think.html
7. Excellent career advice and worth reading the whole thing.
"A majority of career success is to be aligned with trends and industries that are rising and even mediocre players can succeed in an unstoppable tide. Aligning with a trend and particularly aligning early is critical because not only will the force be with you, but your skills will be in demand as the area grows and if you have joined early you will be experienced and become well known in the field."
"do not make job or career decisions with three to five-month horizons but three to five-year horizons. Do not switch jobs just because of money unless you are under extreme financial stress. Try to give each company or assignment or adventure at least three years and if it is an industry or company at least five. Your decision making will be better, your skills will mature, and you will take daily and weekly gyrations in perspective."
https://rishad.substack.com/p/12-career-lessons
8. "The media’s status quo is accelerating towards disruption. We’re seeing the development of new media brands (micro-labels) on platforms and services, the prioritization of talent as a core business pillar by media companies and the shifting business models moving from content direct to creator direct.
As each component of creation evolves, there is another evolution happening with the most critical part of the media business’ formula: the consumers. In the media business, business models drive product strategy. And while that’s the driving force behind the product, it’s contingent on consumer interest, participation and loyalty. That means that as the economy shifts, so needs the consumer value. This is an opportunity to build a new business that puts the creator and consumer relationship front and center and introduces the element of ownership. This is the business of fandom and subcultures."
9. "Karp, far from being a public menace, was the chief executive of an American company whose software has been deployed on behalf of public safety in France. The company, Palantir Technologies, is named after the seeing stones in J.R.R. Tolkien’s “The Lord of the Rings.” Its two primary software programs, Gotham and Foundry, gather and process vast quantities of data in order to identify connections, patterns and trends that might elude human analysts. The stated goal of all this “data integration” is to help organizations make better decisions, and many of Palantir’s customers consider its technology to be transformative.
Karp claims a loftier ambition, however. “We built our company to support the West,” he says. To that end, Palantir says it does not do business in countries that it considers adversarial to the U.S. and its allies, namely China and Russia. In the company’s early days, Palantir employees, invoking Tolkien, described their mission as “saving the shire.”
What Palantir does is complicated and mysterious. As with the magical stones for which it is named, people seem to see in it what they want to see. I thought Karp put it pretty nicely. “Palantir,” he said, “is the convergence of software and difficult positions.”
https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html
10. One of the better guides I've seen to getting into VC.
"It’s about having a clear answer to these questions:
Why is my capital not a commodity?
Why will I see deals or get into deals that others won’t?
What’s my one sentence value prop that is easily understood in the market?
What’s my asset or structural advantage that allows me to add value beyond just my time?
In summary: People use track record to determine the “good investors.” Why does this matter? “Good investors” get better deal flow. To build a track record, write checks early into good companies and add value to the founder such that they will recommend you to others. To write checks, join a firm that lets you do so, angel invest, or become a scout.
Of course, there’s no one-size-fits-all approach, and, as with anything else, there’s a ton of luck involved."
https://eriktorenberg.substack.com/p/how-to-break-into-startup-investing
11. This was a master discussion of the art of VC from one of the best.
12. "Generally, you can divide problems into good problems to have and bad problems to have. In life good problems tend to be the result of great success and bad problems tend to be the result of no success. There are so many things a founder cannot control, but founders can choose which problems they want to solve, even in the earliest stages of your company."
https://foundermusings.substack.com/p/good-problems
13. Disagree with alot of what he says (especially re: Covid not being serious and his ultra libertarianism). But the key point at the end I am totally with.
"Financial and economic risks can be solved by investing properly and by going out and producing wealth and saving it. Economic and financial problems are things that you have some control over. No matter what the environment, you can make your life better.
People appear to want leaders—to be told what to do. They’ve been programmed to be irresponsible and to believe that somebody else—the State—is going to take care of them.
The average citizen of every country has become much less responsible as the State has grown much, much larger over the last century.
With that being the case, when there are problems, people are going to look for a strong leader—and they’re going to get strong leaders. It’s true all over the world. We already see this with Narendra Modi in India, Vladimir Putin in Russia, Xi Jinping in China, Erdogan in Turkey, Bolsonaro in Brazil, Fernandez in Argentina, and more.
It’s shaping up like the ’30s with Mussolini, Hitler, Stalin, Roosevelt, and the rest of them."
14. Old does not mean wise. This is why American politics is such a mess: Gerontocracy.
"Yet as much as people still like to crack wise about Soviet gerontocrats, it is a little-recognised fact that most of those seemingly ancient communists were actually younger than America’s political leadership is now. Brezhnev was in his late 50s when he became leader and 75 when he died; Andropov was 69 when he died, and Chernenko was 73 when he shuffled off this mortal coil. At 74, Trump has already outlived them all bar Brezhnev, while Biden, who will turn 78 in November, is almost a decade older than Andropov was when he breathed his last.
And that’s just the presidential candidates."
"As for America’s political elites, with Congress’ approval rating sitting at a lowly 17% the consensus appears to be that this council of elders is not only not wise, they’re not even all that competent."
https://unherd.com/2020/10/older-leaders-are-not-always-wiser
15. "You must act and replace the failed CEO with whomever is the best option in that moment and work with the new CEO to address the challenges facing the company, many a result of the failed CEO’s poor leadership.
Waiting is never the right answer. Failing to act is never the right answer. You must remove a failing CEO."https://avc.com/2020/10/removing-the-ceo/
16. I am coming around to this view very quickly.
"It’s strange how people will enjoy the digital nomad lifestyle, living in luxury and comfort in Mexico City, Bali, Kuala Lumpur, Bangkok, or Bogota for years on end, and think there’s any reason to go back.
Why would you?
Emerging markets are no longer the Wild West they were 25-30 years ago. There’s been a grand convergence in living standards.
It’s difficult to innovate and pioneer new technology, but it’s rather easy to look over your classmate’s homework and copy what they are doing.
This is why the West has stagnated while “The Rest” are set to match them within our lifetimes.
So, I fail to see much benefit from staying in the developed world."
But now that hundreds of other countries are becoming relevant on the world stage, a single country won’t be able to have a monopoly on a given aspect of life. There isn’t going to be “the next big thing” but there are going to be many “next big things.”
The world has never been as large and accessible as it is now. It’s wholly unlikely that you just so happened to be born in the best country in the world in absolutely everything."
https://nomadcapitalist.com/2020/05/15/living-in-the-third-world/
17. Combinatorial Innovation.
“we are entering … a new period of combinatorial innovation.” This happens, he says, when “there is a great availability of different component parts that can be combined or recombined to create new inventions.”
https://fs.blog/2014/10/google-and-combinatorial-innovation
18. Talk about the American "Gray Eminence" (historians will understand this term).
"The trouble is, like most everything else about Cohen-Watnick, it’s all but impossible to verify, or to reconcile with other versions. Perhaps it’s because he’s emerged so swiftly from the murky world of intelligence. Or maybe it’s because he sits on the fault line of a fractured administration."
https://www.theatlantic.com/politics/archive/2017/07/ezra-cohen-watnick/534615/
19. "Software is eating the markets. Flush with cash and empowered by new tech platforms that blur the lines between investment, experience, entertainment, and digital assets, a segment of consumer investors are shifting money from consumption to investment. Consumer investors expect different things from their investments than professionals do and value assets differently as a result. New technologies, regulations, social trends, and asset classes mean that this shift is here to stay, and could continue to gain momentum after COVID is gone. This time, maybe it really is different."
"It’s hard to measure the impact of “fun” on asset prices, but across almost every consumer category, a more fun product with a better user experience will attract more dollars than a more boring one with a worse user experience. The same applies to investing."
https://notboring.substack.com/p/software-is-eating-the-markets
20. Synthetic Bio is the future. No question.
"Looking back on the decade, the many research landmarks and new directions for synthetic biology are indeed very impressive, but as synthetic biology researchers it’s the advances in enabling technologies that excite us the most as these unlock what can come next. However, if we’re to look for the single biggest achievement of the decade that justifies the hype of the field back in 2010, then we can look no further than the proliferation and valuations of the hundreds of synthetic biology companies around the world.A multibillion dollar industry now exists that makes chemicals, drugs, proteins, probiotics, sensors, fertilisers, textiles, food and many other things from engineered cells."
https://www.nature.com/articles/s41467-020-19092-2
21. "This is the real risk of maxing out your traditional 401(k). Contributing up to the employer match is a no brainer that every investor should participate in (if they can). However, beyond that and you have to start considering the tradeoffs much more seriously.
Regardless of whether you have a Roth 401(k) or a traditional 401(k), the benefits of contributing beyond the employer match are much smaller than you might have initially imagined. The issue is that so many personal finance experts have sung the praises of “maxing out your 401(k)” without providing any data to back up their claims."
https://ofdollarsanddata.com/should-i-max-out-my-401k/
22. "As wi-fi and social media have become more ubiquitous, “digital nomad-ing” has become far more common.
And, as we navigate a global pandemic, the term is in vogue again as offices are closed, people are working from home, and many are rethinking their work-life balance. After all, you’re able to work remotely, why not travel or set up base in a cheaper, more exotic part of the world while you work online?"
https://news.airbnb.com/nomadic-matt-how-to/
23. This is a really neat company. I also kind of want some pizza right now.
https://www.protocol.com/slice-ceo-ilir-sela-interview
24. "It’s a new season to lift our heads up a little and look around. The world, yes, is filled with problems — terrible, horrible, and stultifying problems that can at times feel all but insurmountable. But human ingenuity has always found a way, and we have never had such an extensive toolbox to confront all of them simultaneously. If the 2010s were all about humans learning technology, the 2020s is all about technology learning about humans."
https://techcrunch.com/2020/10/27/lets-move-beyond-2020-and-start-thinking-about-the-2020s/
25. This is unbelievable insight and value on pricing in SaaS. Must read.
https://www.lennyrachitsky.com/p/saas-pricing-strategy
26.Wow. Impressive. Gaming is really coming to the forefront.
27. This is a worthwhile interview. Blindingly obvious but The future is Biotech and Technology. Fun too.
https://www.youtube.com/watch?v=E6lx5DP9r10&ab_channel=Bullish
28. Plenty of lessons here for anyone engaging a development agency. Worth reading the comments area too.
https://www.indiehackers.com/post/how-i-lost-10k-developing-a-no-code-app-d1959b56ae
29. For any emerging VC's this is very good news.
https://techcrunch.com/2020/10/30/you-can-start-a-venture-fund-if-youre-not-rich-heres-how/
30. "For entrepreneurs with proven metrics, the calculus on raising money is different now. Before, frankly, the spreadsheet math didn’t make sense to raise money. We were growing fast enough to be relevant and were on a path to build a business enough large enough to matter. Now, with valuations so much higher, markets so much bigger, and investors happy to provide secondary to founders, entrepreneurs can get cash for their business, grow at even faster rates, and put money aside personally to diversify."
https://davidcummings.org/2020/10/31/startup-financing-in-the-age-of-capital-abundance/
The Powerful Addiction of Variable Rewards: How Silicon Valley Uses This
My friend Nir Eyal introduced this concept to me in 2012. What is now the crucial underpinning of almost all of the most popular products that have come out of Silicon Valley in the last decade. Products that tap into the deeply ingrained human behavior and drive. Variable Rewards.
“B.F. Skinner in the 1950s, called a variable schedule of rewards. Skinner observed that lab mice responded most voraciously to random rewards. The mice would press a lever and sometimes they’d get a small treat, other times a large treat, and other times nothing at all. Unlike the mice that received the same treat every time, the mice that received variable rewards seemed to press the lever compulsively.
Humans, like the mice in Skinner’s box, crave predictability and struggle to find patterns, even when none exist. Variability is the brain’s cognitive nemesis and our minds make deduction of cause and effect a priority over other functions like self-control and moderation.
Source: Want To Hook Your Users? Drive Them Crazy.
This was further illustrated by former CPO of Tinder, Brian Norgard in his interview on the Pomp Podcast.
Tinder was exemplary in utilizing variable rewards into the product. This was the reason Tinder became the juggernaut in the dating space. Apparently they are one of the highest grossing mobile apps of all time. They brought this concept from the gaming industry which is the essence of video games itself.
As Nir writes “Players will agree to almost anything to get rid of distraction and keep playing. Variable rewards seem to keep the brain occupied, removing its defenses and providing an opportunity to plant the seeds of new habits.
Bizarrely, we perceive this trance-like state as fun. This is because our brains are wired to search endlessly for the next reward, never satisfied.”
People are always looking for cheat codes & achievement experience. So for example “Superlike” or “Boost” features in Tinder. These features are always positive & aspirational.
Also these products have to be super simple to understand and use. They have to be “No Mind” because people do not want to go to your product, process and learn. They do not want to think about it, they want it to be consumed passively. We see this on TV, IG, FB, where you use it literally mindlessly.
Personally, I had to delete the Instagram and Facebook apps off my phone because I ended up wasting so many hours every day even though my intention was just to do a quick 5 minute check. It was that easy and mindless it was.
Variable Rewards is a key part of Behavioral Design methodology. Also no surprise that many of the best product people know of this methodology and why it is embedded in many of our favorite tech products. I personally think like most technology, it’s neutral and cuts both ways. It can be used for good and for evil. But regardless of any value judgments on this, as investors, founders, consumers and users we should be aware that this tool is now being used more widely. So the more we understand its power, the better we are able to manage it wisely.
“Be the chess player not the chess piece.”--Raph Charrell
Why Gaming Industry is so interesting (and why it’s difficult to stay on top as AN investor or operator)
I’ve become fascinated by Gaming Industry aka Video Games. And for anyone in the industry, there are few people who write or talk about it with more insight than Matthew Ball (full attribution of any insights below come from him). He is a keen observer of media in general but also states that gaming is its own unique beast.
If you contrast movies versus games, despite massive increase in technological & experience, movies have not changed dramatically in the last 2 decades. But the video games experience progresses every year. Games literally get better every year. Not sure you can say the same thing when it comes to Movies & television.
This has led to two very major factors in Gaming that make it so distinct.
Power Law Differential: Hits driven, Winner take-all dynamics like in most of technology business.
Red Queen Effect: It’s so competitive you have to run twice as fast to stay in the same place.
Gaming legend Yoichi Wada said “All media industries are a product of content, business model and technology. Tech usually comes first, which informs the business model which drives content.”
One of the things that is so unique about this industry is that new technology platforms do not cannibalize or undercut old prior ones. So for example, the arcade industry is now as big as it was 40 years ago. PC and Mobile games did not cannibalize console games growth. Same with Live services gaming. Each new technology platform acts as a new geological strata on top of each other and unlocked new customer segments. The clear counterexample is in Music where Digital replaced CDs, which replaced Cassettes, which had replaced Vinyl.
When we see new technology platforms like Augmented Reality (AR)/Virtual Reality (VR) emerge, we can expect little to no cannibalization. But we will also see new major players take the lead in those segments (like Niantic in AR/VR).
What is not surprising (or maybe it is surprising) is the dominant players in old platforms usually do not lead in the new tech platforms. So for example in Mobile it was Supercell, Rovio or King. In Console Gaming, Sony/MSFT/Nintendo were leaders. For PC Games, Activision & Blizzard were winners. We see Minecraft & Fortnite really own the Live Service gaming space. Based on history, with every new technology, we should expect the rise of new dominant platforms and gaming content studios.
The Gaming industry is expansive and unlike most media sectors, there are a multitude of dominant players that are multi-billion in valuation. Basically there is room for a multitude of players unlike in other sectors. And there is a rich M&A market as these big players gobble up smaller startups.
Cloud gaming as new tech platforms seem to be the new emerging battlefield. I see some big moves from Stadia from Google, Microsoft Live, Sony Playstation Now. But we are probably decades away from mass penetration due to bandwidth costs. Additionally the consumer experience is not as plainly not as good as the present technology platforms. The clear unique experience for cloud gaming is still to be determined but the promise is there.
Why should you pay attention to Gaming industry?
If you have read the Science Fiction book “Ready Player One”, the fully virtual world could potentially be bigger than our offline world. This metaverse or fully digital universe might seem like science fiction but for many of our lives in 2020 pandemic point to some semblance of this. We can only expect that digital will slowly become a bigger part of our world. Many experts believe Gaming will be a key entry point and onboarding to the metaverse.
Net net: Gaming is going to be an exciting place to be and I can’t wait to see all the new developments happening here from both a user and investor perspective.
Marvin’s Best Weekly Reads October 25th, 2020
“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” ―Aristotle
"Nerdy Nuts — the D2C peanut butter company they’d founded just 18 months earlier — had gone viral on TikTok. In the span of a few days, the couple had watched their sales multiply by 20x.
But they didn’t have time to celebrate.
They faced a backlog of $500k+ worth of orders, a depletion of inventory, and thousands of emails from cranky customers. What began as a tiny side hustle at a farmers market in South Dakota had ballooned into a monster.
Nerdy Nuts’ journey is every entrepreneur’s dream: Create a cool product. Find a unique way to market it. Hack your way to expedited growth.
It’s a case study in marketing, which touches on:
The underutilized value of TikTok as an influencer tool
The psychological power of scarcity
The “Holy Grail” of a product feedback loop
But it’s also a cautionary tale about the unglamorous underbelly of overnight success."
How a tiny peanut butter company grew to $500k per month in sales
"Combining mainstream pedigrees & pioneering crypto cred, Ehrsam, 32 and Huang, 31, convinced top institutional investors like Harvard & Stanford to give them $750 million to invest in a market they were too blue-blooded to touch directly.
The vehicle was odd, an open-ended fund with longer than usual to return it back. Then they did something even more unusual: they plowed it all into cryptocurrencies, mostly Bitcoin, at a time when prices languished in post-bubble lows. It was aggressive & it could have backfired badly. But it didn’t. Bitcoin has tripled in value since Paradigm’s investment, meaning aside from any other bets it’s made, Paradigm’s starting bankroll is already worth 3x.
All told, 13 of Paradigm’s 28 investments so far have already raised or circulated tokens at higher valuations. That’s helped the firm establish itself as an elite player alongside the likes of Pantera Capital & A16Z’s semi-independent crypto funds, where early Coinbase investor Chris Dixon says the scene feels similar to when collaborative early-stage VC firms fought their way into the establishment more than a decade ago."
Good to know. I'd favor Portugal and Thailand personally.
https://matadornetwork.com/read/americans-second-passport
This is a super interesting take on Clubhouse. I'm not on it btw just watching from afar.
"Insofar as the Clubhouse app allows for private belief formation among high-status individuals, while also distributing those beliefs semi-publicly in real time, it’s hard to overstate the threat that Clubhouse poses to institutional opinion leaders. Taylor Lorenz’s campaign against Clubhouse is best understood as desperation in the face of an existential threat."
"Clubhouse is unlike any other platform right now insofar as you easily encounter a bunch of previously “canceled” people—unable to tell their story anywhere else—not only telling their story, but to diverse interlocutors who both listen honestly and challenge aggressively. It’s frankly amazing, given the current wave of hypermoralism that started suffocating public intellectual culture since about 2013."
The Meaning of Clubhouse vs. Taylor Lorenz
"There’s a saying in commodities that the cure for high prices is, well … high prices. Because, usually, when prices increase, suppliers are willing to supply more of the goods they produce. This is also true if we think of employees as suppliers of labor — if we pay people more, they’ll likely work more. As prices continue to increase to levels no longer demanded by consumers, suppliers have to cut back to satiate the demand by consumers. Prices end up dropping again, but often drop too low, causing the cycle of increasing and decreasing prices to continue.
But with founders this is not the case. Higher valuations aren’t causing more people to start companies — ie. higher priced rounds are not causing increases in the supply of startups."
"Covid has changed all of these dynamics for category leading brick and mortar retailers. If most e-commerce companies have been pulled 1–3 years into the future in terms of their revenue, then the e-commerce businesses of most category leading brick and mortar retailers have been pulled 5–10 years into the future. Covid has permanently changed their destiny and driven significantly higher long term steady state FCF outcomes for them.
I sometimes think that investors do not appreciate how large and rapidly growing the e-commerce businesses at some of these category leading retailers are. Wal-Mart’s digital revenue in Q2 was an annualized $42 billion, growing 94% — faster than Amazon. Best Buy’s digital revenue in Q2 was an annualized $19.4 billion, growing 242% — faster than Amazon. Some will quibble about the inclusion of BOPIS revenue, but I think this is fair as it is a very different experience than actually going into a store.
Perhaps the simplest way to express what has happened during Covid is to note that Amazon has actually lost share in e-commerce during Covid."
A disaster zone in USA under Trump. Now on foreign intelligence side. #VotehimOUT
"The malt episode, which took place a few months after Trump took office in 2017, became legendary inside the CIA, said three former officials. It was seen as an early harbinger of Trump’s disinterest in intelligence, which would later be borne out by the new president’s notorious resistance to reading his classified daily briefing,... & his impatience with the briefers, current & former officials said."
But what initially seemed like mere boredom — which demoralized intelligence officials but could potentially be managed by including pictures & charts in briefings to hold the president’s attention — later morphed into something the officials saw as more sinister: an interest in wielding intelligence as a political cudgel. Whether selectively declassified by spy chiefs he installed for their loyalty, or obscured from congressional & public scrutiny if it conflicted with his preferred narrative, intelligence became just another weapon in the president’s arsenal.
Trump’s actions, & the endless partisan battles over the Russia probe & impeachment, have left the intelligence community bruised and battered.
https://www.politico.com/news/2020/10/19/biden-revamp-fraying-intel-community-430090
"It reminds me of that Bruce Lee quote, “Be like water.” Or whatever it is. Go with the flow. Once you start asking for more and more ownership, the competition set increases, founders put up their guard, and they expect a ton of platform services as a part of the bargain.
Sure, there are some GPs and even fund franchises who can demand the 20% land and hold it, and founders are happy and will continue to be happy making that trade. But, I don’t think it’s a large group who can lay claim to such a market position. In fact, the number who can is getting smaller. Stretching this out over 10 or 20 years, founders could very easily have more access to vertical-specific crowdfunding, debt financing products, or even low-interest loans backed by predictable revenue streams. These financial advancements will cut at the business model of larger funds, but they won’t eat the whole pie.
As a result, we will see even the largest investment firms (including hedge funds, etc.) going earlier and earlier. It’s already been underway for the last 3-5 years in venture capital. Today’s pre-seed and seed rounds are really the only consistent places to find alpha in a blind-pool portfolio model."
https://semilshah.com/2020/10/18/the-fight-for-ownership/
This is a great framework for evaluating career opportunities at tech startups.
Pick the stage of company, not the company name/brand. Worth a read.
Stage of company, not name of company
Everybody needs a side hustle! :)
Aeroflot Airlines employees charged in $50 million smuggling scheme
This was a crazy good interview. Really educational and entertaining. I'm a big fan of Mr. McConaughey.
https://tim.blog/2020/10/19/matthew-mcconaughey/
"It’s normal to feel frustrated. Even nervous or scared. But giving up is simply not an option.
Just like people back home during World War II, even doing small things to take back control– like Victory Gardens– proved to be enormously beneficial.
Now, I’m not talking about literally growing food… although there’s never any downside in doing so. Being able to produce even a small portion of your own food supply is a very powerful feeling.
What I’m really talking about are small steps to increase your independence.
For example, having some gold and silver locked away in a safe that you control means that you have a form of emergency savings that’s protected from inflation, or any potential problems in the banking system.
Additionally, a second passport means you have at least one other option outside your home country to live, work, and raise a family. It means one single country does not hold total control over your ability to travel."
https://www.sovereignman.com/trends/taking-back-control-one-small-step-at-a-time-29143/
"So to all new fund managers: Remember to be patient. Don’t beat yourself up. Put in the work. Stay focused. Invest in relationships. Invest in good companies. The rest will work itself out."
https://medium.com/parade-ventures/learnings-from-fund-i-time-is-your-best-friend-c4356e367fc4
"We’ve already started seeing a mass exodus from big cities to suburban and rural areas, all over the world.
And this has led many pundits to declare the big city DEAD.
Simon and I both disagree.
Sure, there will continue to be a lot of people who move out of the city; plenty of companies have already moved to online work arrangements, so employees can now live anywhere within reason and work remotely.
We’ve both been writing about this extensively and think that it’s great for people to have the freedom to move wherever they want.
Countless employees are no longer tethered to a place where they HAVE to be. Now they have the freedom to move where they WANT to be."
https://www.sovereignman.com/trends/the-death-of-the-big-city-has-been-greatly-exaggerated-29151/
Actually this is cogent reasoning.
"Yes, we in the commentariat do make mistakes, but analysts weren’t dumb in pointing out all of Quibi’s glaring, red-alert flaws. Those analysts were smart. They were right. They might not be right next time, of course — no analyst should get too overconfident in their predictions. But at the same time, we shouldn’t just collectively throw up our hands and declare every idea that comes our way a brilliant gift from the heavens. Most ideas are dumb, and we and everyone else have every right to point that out.
So respect the hustle. Don’t kick a hardworking entrepreneur down who is just trying to get their project out there and show it the world. But that doesn’t mean you can’t call out stupid when you see it. The best entrepreneurs know that — even at its most vituperative — critical feedback is the necessary ingredient to startup success. Lauding everyone lauds no one."
https://techcrunch.com/2020/10/22/respect-the-hustle-not-the-stupidity/
"When we look forward a few years and ask, “what will be the longest-lasting effect of Covid on homeownership and real estate”, most of the predictions and takes you hear involve people and their preferences: like “People will leave cities when they can work remotely.” But if you ask me, I’ll bet you that the most consequential impact of Covid on homeownership will be the temporary short-circuits and policy circumventions that cities and local governments set up to enact their pandemic agendas.
In the short term, like the next 3-5 years, this change will probably manifest itself in specific developments, rezoning decisions, and civic projects that could never have advanced before - even more likely if we get a round of fiscal stimulus after the election in November. But in the longer term, Covid’s real legacy for homeownership and residential development may be the temporary patches, circumventing local feedback loops, that become permanent."
Covid Kills Inertia: Homeownership Edition
I hope this comes thru. Jetpacks entrepreneurs trying to make the dream come true.
"Most of the jetpack entrepreneurs I spoke to hope that the devices will one day be everywhere. “The way I look at it, we have sedans and SUVs on the roads, just as we have scooters and bicycles,” Mayman says. Until then, their challenge is the same facing every entrepreneur: to find a market for them, so that they can continue to refine the technology. “There is a business [for jetpacks],” says Rossy. “It’s fun. You don’t need a paraglider to go from A to B. It’s just fun. I think the main business will be the fun business.”
https://www.wired.co.uk/article/gravity-jetpacks
"Not recognizing survivorship bias can lead to faulty decision making. We don’t see the big picture and end up optimizing for a small slice of reality. We can’t completely overcome survivorship bias. The best we can do is acknowledge it, and when the stakes are high or the result important, stop and look for the stories of those who were unsuccessful. They have just as much, if not more, to teach us."
https://fs.blog/2020/10/sharks-survivorship-bias/
"So it wasn’t possible to change News Corp from the inside?
“I think there’s only so much you can do if you’re not an executive, you’re on the board, you’re quite removed from a lot of the day-to-day decisions, obviously,” he said. “And if you’re uncomfortable with those decisions, you have to take stock of whether or not you want to be associated and can you change it or not. I decided that I could be much more effective outside.”
So far, Mr. Murdoch has made investments in the Tribeca Film Festival, Art Basel, Vice Media and in a comic book company whose publisher once worked for Marvel. The dream there is to create another Marvel-like universe of characters who could cavort across different platforms.
He is particularly excited about investing in start-ups created to combat fake news and the spread of disinformation, having found the proliferation of deep fakes “terrifying” because they “undermine our ability to discern what’s true and what’s not” and it “is only at the beginning as far as I can tell.” He’s funding a research program to study digital manipulation of societies, hoping to curtail “the use of technology to promulgate totalitarianism’’ and undermine democracies.
“So everything from the use of mass surveillance, telephone networks, 5G, all that stuff, domestically in a country like China, for example,” he said.”
https://www.nytimes.com/2020/10/10/style/james-murdoch-maureen-dowd.html
Vanilla Ice. That brings me back to the good old days.
"The story of Vanilla Ice has long been shrouded in a fog of shoddy reporting, breathless tall tales, and harmless self-deception. A white rap Rashomon, if the bandit battled Bebop and Rocksteady. Everyone’s narrative is slightly askew, which adds to the charm. You would just print the legend if you could figure out exactly what it is."
This is a fascinating framework for empires (implications for business or political). Highly worth reading.
"As an empire grows richer, Glubb noted, wealth becomes an end in itself, and the emphasis moves from national service to personal gain. The old nobility and their sense of virtue are replaced by merchants and the values of the market. With this diminishing sense of duty comes a defensiveness, concerned with protecting affluence for a minimum of shared sacrifice. The United States crossed this line a long time ago, all but codifying it in the Reagan era. Though lip-service is still paid to the pioneer spirit of the Founding Fathers, unchecked individualism has replaced the “united-we-stand” attitude that built the early nation. By the time of the second Gulf war, the middle classes were encouraged to go shopping to support the economy, while the military—drawn largely from the poorest classes of society—made the actual sacrifices. It’s not an exaggeration to say that the defining factor of the richest class of Americans, and their political allies, is the avoidance of all shared national burdens—from healthcare to taxes and the public services that rely on them—in favour of a hyper-individualistic notion of prosperity."
https://quillette.com/2020/09/30/pasha-glubb-and-avoiding-the-fate-of-empires/
"you must produce something (anything) immediately. There is just no way around it. Unless your net worth is increasing by 20-25% a year, you’re going to be falling behind. Why do we think the number is this high? Look at the prices of tech stocks. Since we know that tech is going to drive all the value going forward (or at least the vast majority) it’s the new standard for relativity. Buying something like the Qs (NASDAQ) is a lot more reasonable with a 10-year time frame than a diversified basket of stocks in dying industries.
If you don’t have money, we would go ahead and trade your time for money and work those 60-80 hour weeks. There is just no other way to gain ground. If you have $50,000 to your name, producing even $5,000 of extra income is a 10% move for you. This gives you a shot (at least). Go ahead and start fixing iPhones, repairing watches, doing yard work for money etc. Anything and everything is on the table since the value of assets are going up rapidly."
"There have been several profound consequences of Shopify being a Canadian company, tucked out of the way in Ottawa (and then Montreal, Toronto, Waterloo…) and not in the Silicon Valley limelight. The most important consequences have to do with people.
The first impact is on employee retention. Shopify never competed in the never-ending war for Silicon Valley product and engineering talent, where average employee tenure at some companies is under two years (!) and employees work for a portfolio of high-growth companies over their best years, not just commit to one. Instead, the common complaint about Shopify up here in Canada is that all the good tech talent comes to work here, and then never leaves. There’s a virtuous feedback cycle at work: since Shopify can count on you staying for longer than your average tech company can, they can invest more into you when you start. Reciprocally, having everyone get more up-front investment and more context and tenure means that you can make a lot tactical choices in how you work that people really like, and makes them stick around."
https://alexdanco.com/2020/10/23/six-lessons-from-six-months-at-shopify/
Platform Dependency is No longer Heresy in B2B
Common Wisdom in Silicon Valley is that Platform dependency is a big NO NO. But particularly in the B2B sector, this might not be true anymore.
As backend technology starts to get commoditized thanks to the Cloud, it also becomes abstracted away and arguably less of a competitive advantage to build yourself.
“By using a set of Salesforce services, companies could take advantage of work that SFDC had already done, speeding up building time and reducing time to market…..back in 2007 building atop a Platform as a Service (PaaS) wasn’t a common way of developing software.”
(Source: In the cloud era, building on platforms you don't own is normal)
This has led to the rise and massive growth of Vertical Saas Giants.
“Why are vertical SaaS companies thriving? There are fewer competitors within each industry and early leaders tend to dominate their field. The best SaaS companies that achieve the golden standard for the industry tend to maintain that leadership role.
People in a particular industry network with peers in other companies, attending conferences and events together. People tend to invest in software that others recommend and are likely to remain loyal customers.”
(Source:https://www.trustradius.com/buyer-blog/the-growth-of-vertical-saas-companies-today)
Go-to-Market strategy and speed become critical pieces to winning a market.
The front end is how they win: customer acquisition piece and UX. Something that can only be built with deep customer insight and industry experience. I’ve seen huge companies like Veeva, ServiceMax that were also built on top of Salesforce. But here these are specific for their vertical industry. Big massive industries such as Life Sciences & Field Services in prior examples that have specific nuances that can only be served by expertise from that industry.
Other examples include Procore in the Construction Industry, Clio in the Legal industry or Guidewire in the Insurance industry.
Watch this area of Vertical SaaS as we can expect many more billion dollar giants to emerge here over the next 5 years.
Play Against Rubes
A great perspective from this interview Andy Rachleff had with Pomp.
Institutions and Professional investors used to do well in public equities because they would be taking opposite trades against amateurs. One of the reasons returns have declined because most of the players around the table now are professionals so the edge has disappeared.
This is analogous to the professional poker players, who don’t make their money playing at the Poker World Series where they are competing against other top players. They play there to hone their skills. But they make most, if not ALL, of their money going to lesser known competitions or backwaters where they can play against local “Whales” who have money but have a lot less skill.
This is why I spent so much of my time traveling the world looking for great startup founders. I compete in Silicon valley deals against other Silicon valley investors to hone my skills. But then I go hunt in other overseas markets where there are awesome yet overlooked founders. Ones not being well served by their local investor base. It’s “Geo-Arbitrage” at this best. Or as I prefer to call it “Airplane Arbitrage.”
These local investors for the most part are not bad folks. They just don’t have the skill set, experience, connections and reputation to compete against someone like me. It’s just a fact. The overall awful advice & service I hear these founders get from investors in their region makes me weep for the state of Venture Capital and angel investing there. But assuming I do a good job here advising/helping the local startup founders and sharing best practices with local investors, this raises the bar and forces the other local investors to raise their game too. Co-opetition at work! :)
Peter Thiel says “Competition is for Losers.” I fully agree here. You compete in the top markets to upgrade your skills. But then you apply these skills in a market where you have an unfair advantage. With this unfair advantage you build your monopoly. This is how you win in the long run.
Marvin’s Best Weekly Reads October 18th, 2020
"Don't Complain about the world, Figure out a way to thrive in it."--Michael Mauboussin
I've always been a fan of John Cusack.
"And “you just don’t know” is the primary lesson a long career in Hollywood has taught him. A 30-plus-year veteran of the business, Cusack has known what it’s like to feel hot as an actor, and also what it’s like to feel the icy touch of irrelevance. When I ask about the difference between those two feelings, being hot and cold, Cusack pauses for a good long while and then says: “We-e-e-ell. I haven’t really been hot for a long time.”
https://www.theguardian.com/film/2020/oct/04/john-cusack-i-have-not-been-hot-for-a-long-time
110% agree with my friends at NFX.
"Incumbents are in a (historically) weak competitive position compared to startups
Think of a downturn as a bumpy road full of potholes, and incumbent companies as big cars. They are very efficient at carrying lots of things and people from Point A to Point B on smooth roads. But they can’t easily swerve when the road is bumpy and full of potholes. Startups, by contrast, are more like little, zippy bumblebee cars. They can swerve, adjust, and change direction quickly. They can drive on tiny roads that would be unnavigable for big cars. In a downturn, that small bumblebee can get from Point A to Point B faster and more efficiently."
https://www.nfx.com/post/10x-advantage-of-starting-a-company-now/
This is such a great story. I need to subscribe to his newsletter.
"Mr. Levine wasn’t always a darling of business media and finance Twitter. (The best measure of his audience’s devotion may not be his 112,000 Twitter followers, but rather the 3,000 that follow @MattLevineBot, a fan account describing itself as a bot that mimics his writing style.) He began his post-collegiate career as a Latin teacher, then worked as a lawyer at Wachtell, Lipton, Rosen & Katz before advancing to Goldman. Despite having made more money at white-shoe law and Wall Street firms than he does as a writer, Mr. Levine says he is happier now. He is doing exactly what he has long wanted to do. This is the story of his ascension."
https://www.nytimes.com/2020/10/08/business/matt-levine-bloomberg.html
Very laudable. The former Mrs. Bezos is shaking up philanthropy.
"With that, Scott far outpaced her ex-husband in the giving realm, and rewrote the typical playbook for high-profile tech philanthropists — who often operate as if they know best not just in business, but in solving societal problems, too."
"In July, via a Medium post, Scott announced she’d given away $1.7 billion of her money to 116 organizations, including Point Foundation. “A civilization this imbalanced is not only unjust, but also unstable,” she wrote, as she laid out the areas she’d contributed to, from “empathy and bridging divides” to “functional democracy.” Scott worked with the consulting firm Bridgespan Group to vet nonprofits, and wrote that she tried to choose groups led by people of color, women, or LGBTQ people where possible."
There is so much insight in this excellent interview with Ek, founder of Spotify. Highly recommended read.
"It's been fascinating to see some leaders lead one-to-one; they're the tentpole and everyone goes right to them for certain decisions. That’s not really my style or how I do things, but it's highly effective for some. Because, again, with a singular vision you can accomplish great things. Elon Musk comes to mind. Evan Spiegel actually comes to mind too. Leaders that fit that mold are very consistent and they can move very fast when making big decisions.
Collaborative decision-making is the other end of the spectrum. I have seen some amazing companies operate that way…though I haven't been able to scale group meetings. Facebook is able to have meetings with twenty, thirty people that are still quite effective."
https://www.theobservereffect.org/daniel.html
Talk about a monopoly. So fricking interesting.
"the founder of Nichols Electronics, a tiny Minnesota-based company, Bob supplied the music boxes — preloaded with dozens of jingles — for the vast majority of the country’s ice cream trucks.
In short order, “The Entertainer” was on Nichols music boxes all over the nation. And 25 years later, it has become the country’s ice cream truck song of choice.
That’s according to Bob’s son, Mark, who now runs Nichols Electronics alongside his wife, Beth. Today, Nichols Electronics no longer controls just the vast majority of the music box market; it is the market.
Mark estimates that the company, which he inherited, is responsible for up to 97% of the music boxes in circulation.
How did ice cream truck music become a thing? And how did one tiny family business secure a stranglehold on the market?"
The company that has a monopoly on ice cream truck music
"When you create great products, and people get engaged, you become a show. Shows create their own success: fans create more fans, just like product use creates more of itself. Conversely, if no one’s at your show, no one will go next time. If no one uses your product, it won’t improve. There’s no business on earth with a greater divergence of outcomes between the winners and everyone else.
There’s an old bit of wisdom that nothing is harder to sustain than an emotion. Momentarily putting on a great show is one thing; sustaining that environment and that emotion, not just for the fans but especially for the creators, is incredibly hard to do. Show business, in a nutshell, is the art and science and orchestration that happens around the show that keeps those emotions renewed, and not exhausted.
It feels strange to juxtapose these two kinds of vocations. Making technology seems like a world apart from entertainment and show business. But in this new world, making is show business."
“The hardest thing to do is to create, and then keep creating. The people who make the greatest impact are the people who can keep creating, one thing after another, growing in impact each time. If you look at the world’s great makers - Elon Musk, Beyoncé, whoever you like - they don’t stand apart because of their raw talent. They stand apart because they’re able to sustain their creative output for year after year. They manage to keep shipping and compounding their success while leveraging the show around them.”
https://danco.substack.com/p/making-is-show-business-now
"Few realize it, but the New York City-based organization that offers the SAT and Advanced Placement tests is a nonprofit that operates as a near monopoly. Its tests, which have a stranglehold on their student-customers, fuel more than $1 billion in annual revenue and $100 million in untaxed surplus. It has $400 million invested with hedge funds and private equity, and its chief executive, McKinsey-trained David Coleman, 50, pulls down compensation of almost $2 million a year."
"But it’s the Board’s inability to safely adapt its operations to the pandemic that has prompted customers to opt out in droves. Since March, more than 500 colleges, including every school in the Ivy League, have joined the growing “test optional” movement. All told, more than 1,600 four-year schools will not require scores for admission in 2021, and a growing number are becoming “test blind,” meaning they won’t consider scores at all."
"A common theme we saw regardless of industry / business model was when it came down to certain software costs such as AWS / Azure / DataDog / Okta / Twilio, even If those represented a disproportionate amount of total spend, they were unable to turn those off; as they couldn’t operate their business without them, these systems were the “Central Nervous System” equivalent."
“It is our view that all recurring revenue can and soon be tradable.”
https://medium.com/@John_Street_Capital/recurring-revenue-the-rise-of-an-asset-class-eff0c4be9fa0
"Musk’s car company is now worth five times more than Ford and General Motors combined, and Wood has made a fortune. The nitpicking skeptics, she believes, have missed the big picture: As electric cars go increasingly mainstream, production efficiencies and advances in batteries and other technologies will cut what it costs to make them. And as sticker prices fall, demand will surge, including from businesses like ride-sharing companies. In September, Musk promised a $25,000 car within three years.
Meanwhile, Wood, 64, is perfectly happy to have a chorus of critics: “It almost makes me feel comfortable, to be honest, because it means if we’re right, then the rewards will be pretty enormous.”
Wood’s comfort with going her own way has helped her turn Ark into one of the fastest-growing and top-performing investment firms in the world. Its flagship $8.6 billion Ark Innovation Fund is up a staggering 75% in 2020 and has returned an annual average of 36% over the past five years, nearly triple that of the S&P 500."
“While most star stock pickers treat their work like state secrets, Wood makes Ark’s research freely available online and posts real-time logs of her firm’s trades. Instead of hiring MBAs, she prefers to bring onboard young analysts with backgrounds in subjects like molecular biology or computer engineering, figuring they’re more likely to spot the next trend.
Even the structure of Ark, an acronym for Active Research Knowledge, is original. Wood manages seven portfolios designed to capitalize on breakthroughs in robotics, energy storage, DNA sequencing and financial and blockchain technology, and makes them available to investors, particularly Millennials trading on Robinhood, as tax-efficient exchange-traded funds."
"So when a company has achieved IPO scale, and especially when the company in question doesn’t need money (as TTD did not — they generated mounds of cash and truly built the business on $8m in capital), what’s the motivation for the founder supporting a public exit? Some CEOs embrace it, others don’t.
And when there is a public/private market arbitrage (meaning that while there is abundant capital for private secondaries, I’d argue that the pricing isn’t a true proxy for a public market security, as you’re able to access a much broader array of investors in a public format than otherwise), it can lead to tense discussions where nary friction had been experienced in the prevailing 5, 7, 10 years."
This should be damn useful for founders and investors in consumer social vs. consumer subscription businesses. Good stuff.
https://www.unusual.vc/field-guide-consumer/consumer-subscription
"Financial crises have many causes, but generally they boil down to a few key elements:
-easy money
-poor regulation
-consensual hallucination that the market always goes up
The crisis is preceded by a cocaine-fueled party, where everything and everyone looks and is great. The party creates an asset bubble — a wave of optimism that lifts prices well above levels warranted by fundamentals — ending in a crash. The first documented asset bubble was the Dutch tulip mania in 1636, when speculation drove the value of the rarest tulips to six times the average salary at the time.
Story stocks are the new tulips, and Robinhood is the E*Trade of our age."
https://www.profgalloway.com/tulips-to-tesla?
The irony here.
"Anttonen’s concern is curious for a man in the oil business. A former energy trader, he now runs his own Helsinki-based firm, called St1. The company, which had 2019 revenues of $7.8 billion, refines over a billion gallons of oil each year, operates 1,300 gas stations in Scandinavia and has a 15%-plus share of the diesel fuel market in Norway, Sweden and Finland."
"But Anttonen is determined to move beyond fossil fuels. St1 has put $200 million into renewable energy projects over the last three years, equivalent to 44% of its net profit during that period, or 1% of its revenue. Anttonen is lobbying European governments to charge firms for their carbon output and to restrict short-distance flights. At conferences and EU summits, he shows up with his “energy transformation” PowerPoint in tow. Despite the oil under his fingernails, Anttonen hopes to become a credible engine for change. “It is our responsibility to contribute,” he says."
Nuff said. Relevant to many places in the world ahem....USA is tops here in bad way.
“You can have the best health system in the world,” Gostin says. “You can have the most expert scientists in the world as the UK has. But if you don’t have a leader that can effectively implement good policy and effectively communicate the importance of risk avoidance behaviors, you’re finished.”
https://www.vox.com/2020/10/10/21508165/covid-19-uk-cases-news
"We’ve gone from a world where advertising could largely be on autopilot where once a course is set you can trust your partners to successfully land the plane to one where to succeed you need to make course corrections on a daily basis, collect and rapidly interpret feedback from every instrument that can measure any aspect of a campaign or activity."
"Our current platform era is really built on the back of self-serve advertising. The Top 5 largest advertising businesses are all built on self-serve revenue."
https://sparrowone.substack.com/p/self-serve-ads-and-the-rise-of-diy
No Surprise here.
Back in the Office January 2021? Not so Fast.
https://www.linkedin.com/feed/news/back-in-office-jan-2021-not-so-fast-5200250/
"What does this mean for you? It means this is the right time to focus on asset accumulation. It doesn’t matter what it is (we already gave our big three tech/healthcare/crypto). All that matters if you focus on being an “accumulator” of assets for the next few years. Ownership in anything that uses robotics/high tech should do well as it reduces costs dramatically.
On a final note, this is actually good timing for you as well. If you’re making good money, we wouldn’t recommend showing it at this time. The socio-economic divide has escalated rapidly. In fact, Luxury home sales are up 42%… That is an insane figure.
So you can see that the divide between the rich and poor got a lot bigger this year. So? Adapt to the situation. Accumulate assets, wait for the economy to normalize and socio-economic stability to return. At that point you can go back to flexing on the gram if you feel like it."
https://wallstreetplayboys.com/adapt-or-die-some-things-wont-be-like-the-past/
Neat new VC fund.
"Something really interesting is also happening in venture capital right now — almost a ‘back to basics’ return to the pure essence of venture capital. As established firms grew large in size they were forced to develop ‘platforms’ to justify the management fees of their large AUMs and to create a form of differentiation. In this new era, I question the continued value of expensive platform divisions that provide hiring, HR, or data services to their portfolio companies.
Instead, I am excited to see the rise of the founder-investor who has walked the same path, developed a strong network and can act as the founder’s consiglieri on their own journey. In the era of COVID where so much is being disrupted but personal relationships are ever more valued, I have seen this become far more valuable than anything a large and less-personable VC firm can offer."
https://medium.com/monochromevc/announcing-monochrome-capital-and-our-first-investment-e7a175a56a7a
“the secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.”
The same is true for a lot of jobs.
The traditional eight-hour work schedule is great if your job is repetitive, customer-facing, or physically constraining. But for the large and growing number of “knowledge jobs,” it might not be.
You might be better off taking two hours in the morning to stay at home thinking about some big problem.
Or go for a long mid-day walk to ponder why something isn’t working.
Or leaving at 3pm and spend the rest of the day envisioning a new strategy.
It’s not about working less. It’s the opposite: A lot of knowledge jobs basically never stop, and without structuring time to think and be curious you wind up less efficient during the hours that are devoted to sitting at your desk cranking out work."
The Advantage Of Being A Little Underemployed
Everyone needs to listen to this podcast and read this. TWICE.
"Which is, in modern life, what happens is the person who is the best at doing something in the world will get to do it for the entire world through a combination of leverage and distribution, accountability, and specific knowledge.
If you’re the best in the world at doing something, if you’re the best teacher in the world at math, you should be teaching the entire world math. If you’re the best podcast interviewer, you should be doing all the top interviews and their returns will accrue to you, especially in this highly digital world where we live in, where the cost of distributing something is very close to zero. And so what you kind of want to do is, you want to productize yourself into a business, and then you want to own that business."
https://tim.blog/2020/10/15/naval-transcript/
"Most of USV’s big wins have been in companies where we were the first institutional VC to talk to the company or where we had way more conviction about the opportunity than other investors at the time of our investment.
There was no social proof on these investments other than the fact that nobody else wanted to make the investment as much as we did. You can call it negative social proof."
https://avc.com/2020/10/negative-social-proof/
"The world is experiencing incredible turmoil right now. The election in the US. Brexit. Covid lockdowns. Economic recession.
Everything is changing in front of our very eyes.
But this doesn’t have to be darkness. As Simon has frequently written, the world is not coming to an end. We just have to be aware and expect radical change.
Tax laws will change. Business regulations will change. Immigration policies will change.
But just because all these changes are happening doesn’t mean life will be worse.
We’ll need to make adjustments, sure. But we can still take control.
Smart, talented people don’t stress about change. They accept it.
They learn the new rules and use the resources at their disposal to figure out new, creative ways to accomplish what they want to achieve."
https://www.sovereignman.com/trends/the-first-time-we-went-to-see-the-germans-29089/
This was a crazy educational read. Impressive founder grit and so much learning. Every founder should read.
And re: their board member and investor. Cray cray.
https://ryancaldbeck.medium.com/transitions-fa7ce4af435
The Bull case for Airbnb.
"The most valuable private firm in America is Airbnb.
I believe this time next year, Airbnb will be the most valuable hospitality firm in the world and one of the world’s 10 strongest brands. (Note: rankings of “the world’s best brands” are a desperate yelp for relevance from ad agencies begging clients to buy more media and cling to the nineties, the Brand Era.) The SF platform will likely be worth more than the three largest hotel firms, combined."
https://www.profgalloway.com/airbnballer
I sometimes take for granted why its awesome to be in the key center of tech startup world.
But other tech startup communities are growing. Why it's important. Decentralization & spreading the wealth and knowledge.
"Instead of teaching people to cut out “unhealthy” foods, community leaders were able to accomplish successful behavior changes as a result of the framing of the campaigns: Rather than disciplining citizens to eliminate salted foods and shaming them for having too much of it, the focus was on ways to still enjoy their local foods, but in ways that could complement a healthy lifestyle. They encouraged eating pickles and salty noodle broths, but to only have it in moderation, and doubled down on efforts to promote fresh, seasonal vegetables from the area, and taught communities how to cook with it.
But lessons from Nagano can also be applied to the way you approach health at home: Instead of relying on willpower and strict dieting, emphasize moderation with the foods you love, and add fresh fruits and vegetables that you enjoy. The foods we love and enjoy can coexist with the foods that nourish, heal, and build our bodies — this was the key idea in getting Nagano to change for the better."
https://heated.medium.com/how-a-sick-city-became-the-heathiest-place-in-japan-5abf6c7b1c92
The importance of a good partner in business.: A Multiplier or the Voltron effect.
https://justinjackson.ca/multiplier
Good summary of recent VC news. Also good discussion on SPACs and VCs. Expect a lot more VC firms to adopt SPACs.
https://www.protocol.com/newsletters/pipeline/spac-and-going-full-stack?rebelltitem=5#rebelltitem5
This is long overdue and I'm glad this is coming together.
"I decided on the name Hyphen Capital because we are cross-cultural entrepreneurs and investors who bridge both East and West. Many of us grew up in a Western world that values independence and individuality, a culture that promotes and rewards taking risks and being bold.
We also grew up in Eastern families and homes that encouraged filial piety, humility and diligence. The hyphen bridges our two worlds that we straddle every day of our lives and represents who we are as a generation of third culture kids."
https://medium.com/@davelu/announcing-hyphen-capital-8284fd13a744
"There are real reasons to consider locations outside of traditional tech cities like San Francisco and New York. Where a founder chooses for HQ and location (or none at all) sets the tone of the company. The decisions founders make now will have lasting impact on the company’s values and the talent it attracts.
At the end of the day, it comes down to people; the pandemic time period has shown us how unique we all are, whether we prefer working from the office, working from home, living in cities or the suburbs, or hanging in a “hacker house.” Where to set up HQ will be a key consideration for the next generation of founders, and may be less obvious than it was nine months ago — and also, a bellwether of where the startup world is heading."
Many Are Fleeing Cities Like San Francisco and New York. Where Are All the Founders Going?”
This is a crazy good detailed fundraising guide. Must read for founders going down this path.
https://www.lennyrachitsky.com/p/a-playbook-for-fundraising
Really useful for both investors and founders. Good framework for how to build an enduring & VC fundable business.
What Founders can learn from Investors
I’d normally say NOT VERY MUCH but that’s not completely true. For Founders who are running large scaling businesses there actually is a lot to learn from an investor. The top investors are very good at allocating money and building a portfolio of investments that hopefully return excess capital. This is actually no different than what a business owner does. They allocate money, time and resources (people) to the most promising opportunities of the business whether it is international expansion, new customer segments, new products or even acquisition or investment.
A good business owner should be using investor frameworks to evaluate where they put these precious resources and when to double down and when to cut them off. Start with small teams (the Amazon way of not having a team that can eat more than 2 pizzas) and some little bets of time & money. Continue to invest as they prove themselves out.
Then the question is: What is the time horizon of the investment?
Invest in stuff that will drive returns in one year or one quarter, or invest in initiatives that will drive results and returns 5 year or 10 years out? Also when should you do this. Or perhaps it is some balance of both. Publicly traded companies tend to have more constraints here due to a wider number of shareholders versus private companies.
But as the Founder led FAANG tech giants have shown, it is possible to do this and still thrive. I think it’s very clear that companies like Amazon, Oracle, Cisco, Salesforce, or Netflix are masters at this.
Great tech companies really understand this portfolio management of initiatives. Adopting investor frameworks are a good way for managers and founders to discuss and prioritize these initiatives.
Foolishly Trading Time for Money in the Age of Leverage
How do you move from this mindset of trading your valuable time (services) to selling products (or productized services)?
This is something I wrestle with all the time. Trading time for money. This idea of Industrial age legacy mindset is due to a dated 20th century education, and societal indoctrination. This is why the book “Rich Dad, Poor Dad” was such an eye opener for me. Many business owners end up building businesses that are no worse than a job (or even a mental prison) with little freedom. They don’t know how to build systems around them and scale themselves.
You scale yourself by either hiring people to do this for you or building a product.
There is a big element of knowing the time for money works and I can do it all day long (and at really high rates too). I believe my conservatism in knowing and relying on the tried and true is the big problem.
I honestly still have a mental block around this even though I know this is the only way to scale yourself. The big secret of many of the most successful business people in the world is they are able to break the chain of time equaling money.
Easy to say, hard to do.
I see many early stage founders fight this as well. They know they are the best people to do everything, at least in the beginning. But as you scale and or/raise money, you need to bring new people and build out the processes and start focusing on core areas. Also more importantly you need to devolve authority and to get out of your people’s way. Your job as leader is to set the tone and unblock your people from doing their best work.
As uncomfortable as it is in the beginning, this is how you get leverage and freedom. It also allows you to focus on what you are good at and what you enjoy doing (in business or out). This is the GOAL. Independence, Achievement (ie. putting a dent in the universe) & ultimately Freedom.
I hope this acts as a good reminder for founders. Remember WHY you are building what you are building. If you do, this might help you remove that mental block and makes scaling yourself much easier.