Marvin’s Best Weekly Reads April 28th, 2024
“The only antidote to mental suffering is physical pain.” — Karl Marx
- “The startup adage “chips on shoulders equals chips in pockets” means that entrepreneurs with something to prove increases the chance that investing in these types of entrepreneurs results in better financial outcomes. So, the next time someone asks, “What does it take to be a successful entrepreneur and a successful angel investor?” Remember the saying: “Chips on shoulders equals chips in pockets.”
https://davidcummings.org/2024/03/30/chips-on-shoulders-equals-chips-in-pockets
2. “If you suck at sales, don’t stress it.
No one is born good at everything and we all learn with life experience.
You cannot escape it. You must get more life experience.
This means you spend 30% of your time on research and 70% of your time on action.”
https://lifemathmoney.com/everything-in-life-is-sales/
3. A rational take on AI, China and the growing multipolar world.
4. Always an illuminating conversation on geopolitics and investing.
5. “In the end, I can’t easily dismiss any of the technological, political, or economic factors here. It seems like the feeling that the world broke in the early 2010s emerged from a perfect storm. Smartphones and social media arrived just in time for Americans to rage at each other over the country’s increasingly racialized politics and the built-up economic stresses released by the Great Recession.
Whether America can put itself back together after that storm, or what that new country will look like, is still an open question. Racial polarization is falling, and there are many signs that Americans are starting to turn away from identitarian conflict. Meanwhile, wages have been steadily growing again, inequality has plateaued, and middle-class wealth has recovered. And there are signs that Americans are starting to turn their backs on the most divisive social media platforms and partisan news outlets.
The real X-factor here is geopolitics. Even if America slowly knits itself back together, there will be no restoring the American-led democratic hegemony that existed before Xi and Putin. And the political weakness that we’re now experiencing as a hangover from the ruptures of the 2010s will probably make us far less nimble and decisive in terms of responding to the new global authoritarian challenge.
So when we look back on the early 2010s a decade or two from now, we may remember that this was the time the world truly broke…but for very different reasons than we thought at the time.”
6. Not an easy read and I don’t write off the Ukrainian army yet but the Russian invasion of Ukraine has highlighted the weakness of the Professional Managerial Class and the West at large.
“This outcome will also be a defeat for the current intellectual and political dominance of western thinking about the operational and strategic levels of war. Perhaps the Moroccan Staff College invites an American General every year to give series of lectures about strategy. But maybe this year’s lecturer is someone whose highest-level command was a battalion in Afghanistan twenty years ago, and who helped to plan the disastrous Ukrainian offensive of 2023. Actually, maybe not, we’ll get back to you.
Likewise, the productions of western Staff Colleges and think-tanks, which have been shown to be hopelessly lacking in insight over the last two years may not be in as great demand. Now again, this does not mean that there will be a simple and immediate replacement of western experts and publications by Russian ones — there are all sorts of practical reasons why not — but it does mean that western expertise and western experts will no longer be treated with unquestioning obeisance.”
7. Really useful discussion on what’s happening in startup land in q4, 2023.
8. “Packetized media has rapidly become the dominant form of media, although it’s important to note that dominance doesn’t mean replacement since the earlier forms of media don’t disappear; instead, as we’ve seen, these older types will be integrated into the new dominant form.
Here’s how this shift happened.
— Technological change makes a shift possible (social networking, starting in 2001, was the start of true packetization, and the mass adoption of smartphones made it available to everyone).
— A dopaminergic effect drives early adoption — if you want to fall asleep at night, read a book; if you want to stay awake, scroll X or TikTok. This dopaminergic effect fades as our brains build up a tolerance to it.
— Repeated use of a new dominant media forcibly alters how we think and perceive reality — it actively rewires the neurons in our brains (as we saw with the mass adoption of reading during the Reformation).
This new method of thinking will inevitably force social reorganization.
In most previous cases, this social reorganization is modest (i.e., broadcast media) since the new dominant media is merely a variant of previous dominant forms.”
9. “Although razors are hardly the most expensive products in the store, data indicates they get stolen up to 2.5x as often as other products.
Why are razors such a hot item for thieves?
One reason: they’re a hot item for everyone.”
10. “But when you begin to dig deep and look closely at your objective function, at your reward function, at the status game, at what you put meaning on and what you don’t, then you gain a brand new power in life:
The ability to change.
Whenever anyone gets this power it’s as if they’ve opened into a totally different world, as if they were caterpillars and they’re now butterflies. But there is only one way to go there. You have to get there yourself. You have to peal back the layers of your own mind and ideas. You have to look closely at how you got here and where you’re going. Nobody else can do this for you. Nobody else can push you or pull you or make you do it. It’s up to you to open your eyes and see rather than imagining the world from behind closed eyes.
There is no way to understand it without doing the process of self-reflection and sharpening your self-awareness.
There are no expert caterpillars on the life of butterflies. There are only expert butterflies on the life of butterflies.
Do it and the world expands.
Don’t do it and you’re like a leaf blown around by the wind, drifting wherever life pushes you and imaging the whole time that you are the wind.”
11. Trust and how to gain it.
12. A good view on the future of buying software in a world of AI.
13. “When we started NextView back in 2012, we often used the metaphor of the beer industry to describe the evolution of the VC business. In a nutshell, the argument was that all industries go from being a cottage industry to one that is industrialized. A few big players emerge that compete on scale and scope, much like AB Inbev in the beer industry and the megafunds in venture.
The best way to compete in this world was to pursue a craft strategy on the opposite side of the spectrum focused on small scale production of high-quality products. At the time, we pointed to Dogfish Head and Stone Brewing as folks who were pursuing this approach, similar to the OG seed investors like First Round and Baseline.”
14. James Currier is the OG and this interview was done in 2021.
He was absolutely right on everything as his deep expertise from operating and investing over 25+ years shows.
15. “As this is an election year, everything is clogged up, and the people we need to be thinking long-term cannot see past November. From both a national security and I would offer moral perspective, I do not understand any of the reasons people have for not supporting Ukraine in their fight.
Russia under her present leadership is not a nation of good intent. There is no positive outcome from her winning in Ukraine. There is nothing but benefit for her being humbled in Ukraine. We can do that without a single American soldier.
What are we doing in a macro sense to build our credibility as an ally and friend in the last few years?
Specifically, what have we done in the Pacific to effectively counter PRC courting of those nations they are not directly threatening?
This is varsity football, but we’re performing like the JV team.
…and yes, it is all connected.”
16. “The West still cannot comprehend that the war in Ukraine might ever happen to them. People also cannot process the idea that we are already in a global conflagration. This is partly because war today involves locations and technologies that are difficult or impossible to see. But, war has never been a visual zone.
Luigi Russolo, a sound performance artist from the WWI era, said, “In modern warfare, mechanical and metallic, the element of sight is almost zero. These days, bullets, fighter jets, and hypersonic weapons all fly too fast to see. War is heard, “from noise, the different calibers of grenades and shrapnel’s can be known even before they explode”.
The sound of war is what tells us where the battlefield is. The geography of that battlefield is no longer constrained by nation-state borders. It has extended to non-combatants and to locations inside Western nations. This is evident both by debilitating acoustic sounds and by the sound of silence, which now move together, making for a punctuated, perhaps syncopated story. We are in an era of acoustic/sonic warfare and silence.”
17. More of this. Constraints lead to creativity and Ukrainians were very creative and clever to begin with.
18. Learning from the best. Founders Fund is a very unique VC fund.
19. “We’re going to see 10-person companies with billion-dollar valuations pretty soon…in my little group chat with my tech CEO friends there’s this betting pool for the first year there is a one-person billion-dollar company, which would’ve been unimaginable without AI. And now [it] will happen.”
Altman’s idea is that AI tools will soon reach the point where they can replicate the entire output of human employees. Instead of needing to hire a designer, you can use GPT-6 to design for you. There will be far less need for software engineers (meh), sales staff (no one will miss them), and newsletter writers (a tragedy of Greek proportions, leaving our society barren and empty).
An ambitious founder could outsource the work they would use employees for to an army of artificial intelligence agents. Theoretically, this would allow entrepreneurs to focus on only tackling their most important competitive advantage.
To reach $100 million in ARR, founders will need to have an advantage in both taste and distribution. Taste will enable founders to have a unique insight into their customers’ problems to solve, while distribution will allow them to rapidly market their solutions. Remember, if AI agents are as powerful as Altman is predicting, someone can build an idea the instant they have it. So the only edge comes from having the quality of taste to generate the idea first and better, or in distributing it faster and more cheaply.”
20. This is an instructive interview on the art of venture capital and operating in startup land.
21. “The Trisolarans are an impressive bunch, so it makes sense that some humans would be so dazzled that they would treat them as gods and be happy to do their bidding — including sabotaging their fellow humans. In our world, such a role is played by environmentalists and NIMBYs. These are folks who, over the past half century, have acted as Sophons in slowing tech progress.
For example: You can thank them for 1970s-era environmental regulations that make it maddeningly hard to build big projects in America, either quickly or cheaply. And you can thank them for continuing to use such regulations today.
More Sophons: Those in Hollywood who continue their public demoralization campaign about technology — AI will kill us, cancer cures will turn us into zombies — and the future.
Sorry, it wasn’t aliens or Sophons. It was us.”
22. Mayers is an impressive person but being around the block, I wonder if it is not a curse to gain wealth and great success at a young age. Expectations get out of whack and you wonder if you can recreate that success (or worse you learn the wrong lessons).
“Building a hit app is hugely challenging, and chaos is a common feature of many or even most of the startups that set out to build them. Sunshine, which Mayer founded with Muñoz Torres a year after leaving Yahoo, has been no exception, according to interviews with employees, who all asked for anonymity to speak publicly about the company.
Mayer’s original idea had been to create simple utility apps powered by artificial intelligence. (She almost named the company Mundane AI, she told The Information last year.) In 2020, two years after the company launched under the name Lumi Labs, the pair announced the company’s first product: an app that promised to be “the world’s most advanced, intuitive contact manager,” according to The Verge.
The company raised a $20 million seed round in 2020 from a small group of investors, including Mayer. At the end of that year, it officially rebranded as Sunshine.
Despite high hopes, the contacts app has yet to take off. It was buggy at launch, duplicating contacts or introducing other errors into data fields. And it rattled some users by filling in contact information using public databases, raising privacy concerns.”
23. “The U.S. will not be able to stand against that juggernaut by retreating behind a fortress of tariffs and trying to become an expensive, smaller mini-China. The only way the U.S. will be able to stand against that juggernaut is to get a big gang together. We have to weld the economies of the democratic nations into a single whole, sharing supply chains and markets and technology. Only by doing this will we be able to match the incredible size and scope of the Chinese industrial machine.
The TPP would have been a first step toward creating that unified economic bastion, but we killed it. The IPEF’s trade component would have been an important step in that direction, but we killed that too. Just like the people in the legend of Pandora’s Box, we rushed to shut the lid on trade agreements when all the monsters had already escaped, and the only thing we managed to lock in the box was Hope.
We may still have time to reverse course. Perhaps if Biden wins in 2024, and the electoral pressure is off, the administration will gain the political breathing room to turn the country toward strategic trade agreements with allies. This will require some leadership from the administration, and also some attitude adjustments on the part of the American intellectual class. Yes, free trade was bad in the 2000s. But Fortress America isn’t a workable alternative. The alternative is strategic trade, and I hope we realize that in time.”
24. “To say that Taiwan is important to the global tech industry is like saying oxygen is important to breathing. Taiwan as a whole is responsible for making 80 to 90 percent of the world’s most advanced computer chips — ones for which there is no current substitute. Taiwan’s TSMC makes up half of that production on its own, and 90 percent of the chips TSMC makes are produced in its 12 fabrication plants — or “fabs” — on the island.
And, of course, earthquakes and volcanoes are just one threat to Taiwan’s semiconductor foundries. The better known one is just 80 miles across the Taiwan Strait, where the People’s Republic of China has made it increasingly clear that it could be willing to use military power to force reunification with what it regards as a renegade province. Should Taiwan’s chip foundries be destroyed in such a conflict, the damage to the global economy could be on par with the Great Depression.”
25. Fascinating discussion on AI making the rounds. It’s worth listening to.
26. This is why America is an unreliable ally. Its embarrassing. Curse the MAGA for their gutlessness and inhumanity. Either support Ukraine to win or broker a peace. Don’t half a-s it like we seem to do everything these days.
“Ukraine’s largest single supplier of ammunition was the United States until the latest round of military assistance stalled in Congress. Representative Mike Turner of Ohio, a Republican who is the chairman of the House Intelligence Committee, told CBS News over the weekend that American military and intelligence officials had made it clear Ukraine could not hold out much longer.
We are at a critical juncture on the ground that is beginning to be able to impact not only the morale of the Ukrainians that are fighting but also their ability to fight,” Mr. Turner said.
On the front lines in Ukraine, they call it the “shell hunger,” a desperate shortage of munitions that is warping tactics and the types of weapons employed. It is not just the overall lack of ammunition that is so damaging but also an imbalance in the kinds on hand.”
27. This is a good perspective on angel investing.
I don’t agree with the investing with accelerators now as the top ones shift all the time with exception of YC. But in general as newbie this is a good view.
28. This is a good state of the union for venture capital and Silicon Valley.
29. “Building a calm company has meant saying no to opportunities that don’t align with our values. We’ve purposefully declined complicated enterprise contracts that would require us to staff up, add more compliance, and sign complicated legal contracts. We try not to commit to projects that burn us out. We’ve prioritized doing work that we enjoy and that brings customers value.
The world needs more indie entrepreneurs building calm businesses. We won’t get more calm from publicly traded companies or the over-funded venture-backed class. It’s going to come from the next crop of small, purposefully built, indie startups with healthy margins.”
30. “Entrepreneurs would do well to read both the Startup Founder Survival Guide and the SaaS Growth Playbook.”
31. Fascinating talk on the major changes in SaaS and enterprise software. So many smart investors out there.
32. This discussion explains the great delusion in the West and why we are losing against the autocratic powers.
And also how Africa is strategic to the west and how we are losing there too.
33. “So I’ll end with this. As we rage on in The Glass-Half War, it isn’t enough for the Glass Half-Full Brigade to tell exceptional stories. It isn’t enough to reframe the stories of the Glass Half-Empty Annihilators. We have to seek to improve. To seek superior outcomes. To find better solutions that move progress forward for everyone.
That is how we win. We fill up the cup. The cup should be overflowing with so much optimism and excitement, that the Glass Half-Empty Annihilators no longer have a leg to stand on, and can’t do anything other than stand back in awe of the progress we’re making.
Fight the good fight.”
34. “Big Fiscal thus represents a risky bet. It’s a bet that avoiding even a small rise in unemployment at all costs is worth the risk of potentially keeping both inflation and interest rates uncomfortably high. I don’t know where the correct balance of risk lies, but I worry that progressives over-learned the lessons of the Great Recession. Unemployment isn’t the only thing that makes American voters mad.
In any case, I think that after the election, we’re likely to see increased concern about the federal deficit — no matter who wins. Even if rates do get cut, it seems unlikely they’ll soon return to the near-zero level of the 2010s. 3% rates would likely still be high enough to force uncomfortable fiscal decisions on Congress and the President, given how much debt the government has built up since the days of Bill Clinton. An Age of Austerity — or at least, unpleasant political battles over austerity — is probably on the way.”
35. Legendary seed investor. Investing in the age of AI & how to differentiate yourself as a VC.
