Marvin’s Best Weekly Reads August 30th, 2020

“At the end of hardship comes happiness” — Korean saying

  1. This is an Amazing tweetstorm. Josh Waitzkin is one of the most brilliant individuals around. Here are some of his mental models.

2. Talk about a rags to riches story. Love reading these kinds of immigration stories.

“In the local real estate rags, Lo is a misfit in a sea of manicured headshots.

He sports a jet black, Elvis-like pompadour, ostentatious spectacles, and bespoke pinstripe suits. He poses in outrageous positions. He plasters his full-page ads with slogans like “I caught a fish!” and “Wild and scary good!”

But if you take a look at the sales records of all those mansions, you’re likely to see his name.

Over the past 4 decades, Lo has sold nearly $6B worth of houses in the San Francisco Bay Area. Last year alone, his sales volume topped $347m — good enough to rank him in the top 5 broker-owned firms nationwide. In the process, he’s helped reshape the demographics of some of America’s priciest neighborhoods.

Who is this guy? And how did he rise to the top of one of the most competitive real estate markets in the world?”

Silicon Valley’s eccentric real estate king

3. This shows how broken the programmatic ad world aka adtech is. And at the expense of the advertisers and news publishers too.

4. The Toy company no one knows about. MGA. Amazing.

“In 2001, MGA encountered their first massive success with the launch of Bratz Dolls. In 2006, they acquired Little Tikes (makers of this thing). And in 2016, they launched the one-and-only L.O.L Surprise! dolls.

I’m guessing MGA has been doing $5–6 billion in revenue per year for the last few years, driven almost entirely by LOL dolls. Given that the US toy industry is relatively small (~$27 billion), it’s insane that MGA has captured such a big percentage of market share.”

“Today, there is more IP that exists in a transmedia way. Some obvious examples include Marvel and Pokémon. Less obvious examples include the Kardashians, the Hype House, Sesame Street, hit Roblox games, and Miquela. The characters we know and love can live on many platforms concurrently.

We familiarize ourselves with these worlds, and we watch narratives play out, to some degree, with our own time and space. Increasingly, we are also able to interact with them on “metaverse” platforms such as Roblox, Fortnite, and Niantic [games].”

“Insane Companies No One Talks About” Episode 2: MGA Entertainment

5. Robinhood doing very well. Interesting business model that does not totally fit its name.

“The pandemic forced millions of future Robinhood customers home to shelter in place, free from diversions like sports and armed with fast internet connections and free money from the government.

The result was unprecedented growth for the upstart brokerage. Robinhood now has more than 13 million registered customer accounts, nearly as many as venerable Charles Schwab, which after 49 years has 14 million funded accounts, and more than twice as many as E-Trade, with 6 million accounts.

“The secret sauce of Robinhood’s success is something its founders are loath to publicize: From the beginning, Robinhood staked its profitability on something known as “payment for order flow,” or PFOF.

Instead of taking fees on the front end in the form of commissions, Tenev and Bhatt would make money behind the scenes, selling their trades to so-called market makers — large, sophisticated quantitative-trading firms like Citadel Securities, Two Sigma Securities, Susquehanna International Group and Virtu Financial. The big firms would feed Robinhood customer orders into their algorithms and seek to profit executing the trades by shaving small fractions off bid and offer prices.”

6. “We’re no longer dealing with a world of scarcity, where exchange economies are the default way we assign and trade value. This is an environment of abundance. There’s no material scarcity or friction at work here, but there’s still a lot of work to do. And so a new value model emerges: gift culture. And with it, a really good metaphor for how we develop and share knowledge on Twitter: “Homesteading.”

“Abundant environments may surprise you: even though they’re lacking in material scarcity or literal friction, there’s still plenty of work to do. It’s just a different kind of work: the work of dealing with complexity, clarity, curation, and especially synthesis. The effort and value being traded here lend themselves far more naturally to a gift culture economy, which is still very much an economy. It’s just not a transactional one.

The other obvious kind of work to do in an abundant environment, of course, is achieve and maintain positional scarcity. Status is clearly scarce, and in a gift culture like the free software community — or on Finance Twitter — the way you earn status is by putting in real effort, and then giving away the fruits of that effort.”

7.“At YouTube, Pappas was, in part, responsible for scaling massive, worldwide growth, but at TikTok she is tasked with the opposite: Take a Chinese-owned product and tailor it to U.S. consumers, which, regardless of TikTok’s current quagmire, she’s unquestionably done. In November 2018, the month Pappas started, TikTok reportedly had 20 million U.S. users, according to Wallaroo Media; today, that number is 100 million. In the six months from October 2019 to March 2020, monthly users nearly doubled.

She might not be an influencer or a creator, but Pappas is influencing and creating. The future of technology. The future of social media. The future of how Americans connect…or don’t. The future, period — no matter where that might lead her or where she might lead it.”

8. Culture is the most important thing in companies. Organizational Leaders should be aware of this & actively shape it.

“It has been said that “culture eats strategy” and often when companies decay (Wells Fargo) or resurrect ( Microsoft) or have distinctly different outcomes in the same industry ( Southwest versus United Airlines) a key determinant is the culture. What it is like, how it is improving or how it is getting worse.

Once I read that the culture of an organization is revealed in how people behave when no one is looking or monitoring their behavior.

I do believe that this is right in the fact that culture is about people. Yes it requires leaders to set, correct and support the culture but it is how they treat people and how people feel about themselves, their company and their colleagues that is the fabric of culture.”

9. Great thread on an unknown but super impressive investor.

10. “The role that eCommerce has played in consumer habits over the last six months doesn’t really validate anyone’s eCommerce ambitions but instead creates opportunities for more customers to be exposed to janky, half-baked online selling solutions because of a pandemic. (Shopify, AGAIN, is there to make sure these experiences are not bad!)

The chances for a business to lose customers online has never been higher. And while the TAM for many businesses has expanded on paper, never have physical-turned-online sellers had so many unhappy and desperate customers sent their way.

So as the economy normalizes, we’re going to see millions of consumers faced with a simple question: do I want to go back to my old habits or keep my new ones?

The answer to this question is the biggest threat online sellers have faced.”

11. Good discussion on the tech press in America & the lingering after effects from dominance of the big platforms.

“I think there are three algorithms that have reshaped the American press in ways that we are just now starting to confront. You have Google and Facebook, which can serve up this incredible fire hose of traffic to publishers so long as they cater to the ever-shifting whims of that algorithm.

And that has just resulted in a lot of really cheap-to-produce content like “what time is the Super Bowl” and “John Oliver destroyed this industry last night. Here’s the clip.” And all of that stuff is mostly harmless, but it has robbed publications of their individual identities. So, every website is just a version of every other website, and I think that has kind of undermined trust in the press generally because there’s just kind of a sameness to it.

Then, the third algorithm is the Twitter algorithm, where in a world that is full of calamity, only the sort of noisiest, most scandalous, most outrageous stories break through. And because that’s where reporters are hanging out all day, and where they’re flogging their stories, I do think that that has led all of us to underline the elements of scandal and outrage in everything. And that has a wearying effect.”

12. Some big changes happening in the media space.

“A new class of content creators has emerged that is writing, recording, filming, and producing incredibly unique and compelling media and then connecting directly to audiences to showcase and sell their creative products. I call them Digitally Native Vertical Creators or DNVCs. And just like their retail DNVB counterparts, DNVCs are also building off a new wave of technology platforms that have democratized access to capabilities across the entire media product lifecycle for this new breed of content creators.

To run a creative business today, Digitally Native Vertical Creators (or DNVCs) have to manage far fewer things than traditional media creators of yesteryear because they can turn to a variety of enabling platforms to do those things for them.”

New media platforms are enabling a new creator type: Digitally Native Vertical Creators

13. Exciting times.

“The rise of the micro LP should result in the need for more GPs. And more GPs should mean more funding for entrepreneurs. It will create a virtuous cycle of sorts.

It will take awareness and education before serious dollars flow to venture but I suspect in 2030 the number of accredited investors with an allocation to venture will be far higher than 3%.

The next decade is sure to be an eventful one for founders, solo GPs, and micro LPs.”

14. “Overall I don’t think the underlying desire to become financially independent is going anywhere. In fact, I think people may become even more interested in taking control of their money and time after living through this difficult situation.

While I don’t think FIRE is going away, I do think it will change.

Short-term it’ll be harder to FIRE given the market and overall economy. But long-term my guess is that we’ll see some positives come from these hard times. I could see things changing in a few ways which all are positive:

Financial plans get dusted off: Most people roll their eyes when they think about creating and maintaining a financial plan. I suspect even many FIRE people have let their plan sit idle for a while. The downturn will push more people to create a financial plan and get back to basics when it comes to money.

Making money online will boom: The combo of job losses and everyone being cooped up at home will lead to a lot of lucrative new online businesses being created. More people will realize that creating a life changing business online is within reach.”

15. “While many companies get ahead of themselves, often targeting partners based on name or site traffic, they do not agree on broader standards to evaluate the opportunities that exist in market on a fully loaded cost basis (hint: cost does not just mean money). This is classic measure twice/saw once.

Agreeing on standards ahead of time and socializing this evaluation will save you downstream headaches and conversations, both internally (“why did we partner w/ X when it only yielded Y”) and externally (“why is this not performing like you told us it would”).”

16. “In my view, however, the business of influencer bundling has only just begun. Curators are the new creators, and as consumers, we’re going to be willing to pay someone with good taste to help us sort through the ever-growing mass of information at our fingertips……..looking at the current information overload we all face on a day-to-day basis, I think there’s room for a new market of creators as curators.”

17. I am always impressed by what I see in the tech ecosystems of Nordic and Baltic regions. Maximum bullish here.

Diving into the Nordic and Baltic 2020 Venture Capital Landscape

“Moskovitz, 36, who is worth $14.2 billion, is best known as cofounder of Facebook with Mark Zuckerberg. He was the world’s youngest billionaire for a few years starting in 2011. But for the past dozen years since he left the high-flying social network, Moskovitz and his Asana cofounder, Justin Rosenstein, 37, have been lying low, quietly toiling behind the scenes to solve an age-old problem: how much effort we waste in the meta-work around work.

“We were just kind of shocked and frustrated at how much of our collective time was going toward trying to establish clarity and getting everyone on the same page,” Moskovitz says in a recent video call.

Today Asana’s software is used by employees at more than 75,000 companies including AT&T, Google and NASA to help them take back control of their days by managing everything from writing a memo to planning an event. (Soon its AI-powered app will even set agendas and suggest ways to make workdays more efficient.)”

18. I really like this. It’s hard not to feel like you are stagnating when you are stuck at home for months on end.

19. “I was interested, I said, in his life, which was marked in equal parts by tragedy and luck, populated by a gallery of figures — Richard Feynman, Philip Glass, Joseph Campbell, Forest Whitaker, Steven Spielberg — too numerous and random to fully list.

I was interested in his work too — as a creator (of video games, VR, facial-recognition software, medical-training devices), as a thinker, and as an author of four acclaimed books in the past decade about the promise and perils of technology, books that suggested he might be the last moral man in Silicon Valley.

At a moment when our tech overlords seemed bent on consolidating power and taking over whatever parts of our lives they hadn’t already taken over, Lanier — a tech insider who has been part of the industry for nearly as long as the industry has existed — had chosen instead to speak out against his peers and to suggest a different, more human logic for how they might treat the rest of us.”

20. “Is San Francisco as a tech capital over?

There are clear short-term headwinds. Pre-Covid real estate costs in California, and San Francisco, were very clearly acting as an increasingly dissuasive force for either tech companies expanding in the region or new companies located there. All the major Bay Area tech companies had either relatively shifted hiring outside the Bay Area, or, in some cases, ceased net hiring in the Bay Area, and most of the expansion was happening elsewhere.

Overall, however, my expectation is it will return to the trend

where the Bay Area is a major locus. Human capital network effects and the benefits of agglomeration are just so strong.

At the same time, the longer-term outcome is less clear.

San Francisco has somewhat analogous long-term headwinds [with] its version of the local challenges from property prices, and then somewhat similar dynamics and international competition as other people just get good at building technology companies. But I think that’s going to be a multiyear, multi decade story. My expectation is that in 2022 to 2023, its relative position is not really that different. You don’t get many retweets for that, I know.”

21. “If you want to improve your productivity, everything should be focused on earning more. You shouldn’t focus on “learning” as you will end up going down the rabbit hole of meaningless factoids that are not applicable. The way to focus on earning is by aligning everything you do to either 1) building a reputation or 2) generating a profit. Most people ignore the first step & just want to make money “now now now”. Well, in order for people to trust you… Value needs to be added & a reputation needs to be built. The “freemium” model is one of the best ones to follow if you’re a newbie.”

“If all of the above seems mean or intense, you’re probably not going to make it in life. We’re not here to lie to people. If you cannot keep yourself accountable it just means you’re not interested in improving.

Successful people don’t day dream about scenarios that are unlikely. They don’t need hand holding to get started. They don’t ask questions that they can answer themselves in a few minutes. They don’t burn tons of time with entertainment. When you’re set for life you can increase the amount of entertainment (since you are no longer in the accumulation stage of life). Until then, best to focus on productivity.”

Ever curious: Tsundoku, Reader, Aspiring Shokunin, World traveller, Investor & Tech/Media exec interested in almost everything!