Hanlon’s Razor: “Never attribute to malice that which is adequately explained by stupidity”
1. “The Covid-19 pandemic crushed vast swaths of the economy, slashing consumer demand, closing businesses, and vaporizing millions of jobs. But it’s been good to the nascent sliver of the digital economy that helps people channel their existing skills into sellable services and products.
Such products range from ebooks and meal plan templates to online classes, podcasts, membership clubs, newsletters, and porn. They proliferate on platforms including Patreon, Twitch, Substack, Etsy, Teachable, Knowable, Podia, Thinkific, Supercast, Lulu, Smashwords, Outschool, OnlyFans, and Gumroad.
These platforms generally take a cut of each sale made, ranging from 5% to 50%, or charge a recurring fee to sellers for accessing their market. Tech investors have dubbed this the “passion economy,” a place where anyone can profit doing what she loves. But because that term risks both exaggerating the payoffs of this work and obscuring its ties to the gig economy, the last great labor “disruption,” we might better call it the “hustle economy:” an online labor market in which platform-dependent workers create and monetize their own digital products.”
2. “She meant, only focus on large margin investments and turn inventory quickly. It’s also using sales and profits to prepare valuations, to further increase capital or funding.
The mantra “think in multiples” has become a consistent reminder to me as an entrepreneur as to how to approach business and financial decisions. It’s what those entrepreneurs who earn 300% of their invested dollars understand. This approach will change the way you address business planning, but it takes some understanding of the mentality in order to make it work for you.”
3. “Amazon is about a seven-year view,” he says. “Most public companies, it’s a one- to two-year view. And, as it turns out, they’re very risk-averse. Jeff and Amazon are willing to make a long-term bet and are very willing to be misunderstood for a long time while they’re building toward that.”
The former analyst speaks from firsthand knowledge of the short-term mind frame on Wall Street — a mind frame he rejected in the creation of Business Insider.
Now 13 years old, Business Insider — which, like Amazon, had a plethora of doubters along the way — was still in its relative infancy when Bezos came on board. But in 2015, the startup was sold to Axel Springer, one of Germany’s biggest media companies, which was keen to build a digital media presence in the U.S. With that backing, and Blodget at its helm, Business Insider has ramped up to be one of the most vibrant — and popular — media companies in the world: By December 2018, it had more than 98 million monthly unique visitors in the U.S., ranking second behind CNN in the Comscore general-news category, according to Business Insider. That year, Business Insider hit $100 million in annual revenues and turned a profit, Axel Springer reported.”
4. “Despite ample warning, the U.S. squandered every possible opportunity to control the coronavirus. And despite its considerable advantages — immense resources, biomedical might, scientific expertise — it floundered. While countries as different as South Korea, Thailand, Iceland, Slovakia, and Australia acted decisively to bend the curve of infections downward, the U.S. achieved merely a plateau in the spring, which changed to an appalling upward slope in the summer. “The U.S. fundamentally failed in ways that were worse than I ever could have imagined,” Julia Marcus, an infectious-disease epidemiologist at Harvard Medical School, told me.”
“But the COVID‑19 debacle has also touched — and implicated — nearly every other facet of American society: its shortsighted leadership, its disregard for expertise, its racial inequities, its social-media culture, and its fealty to a dangerous strain of individualism.”
5. Space Force!
“But for all the ways that civilians and the military rely on it, America’s network of roughly 1,000 satellites is virtually unprotected. And just as lightly defended access to deep-water ports or natural resources was a source of war in the past, leaders and strategists worry that America’s vulnerable satellite network is an invitation to conflict in our times. Raymond tells TIME that Russia executed a previous, unreported projectile launch in February 2017. China has started training specialized units with weapons that can blast apart objects in orbit. Both countries have deployed ground-based laser and communications–jamming equipment that can disable satellites.
In short, an arms race for space has begun. This is the story of America’s effort to keep ahead.”
“The mission of protecting America’s vulnerable orbital networks falls to U.S. Space Command and Space Force, which since December has the same status as the Army, Navy, Air Force and Marines.”
6. This is spot on.The Future of Silicon Valley Tweetstorm. Agree that it’s a good thing that the capital and expertise gets exported from Silicon Valley to the rest of the world.
7. This is a really deep take on the media world and its effect on us.
“IN THE 19TH AND 20TH CENTURIES, innovations like the telegraph, time zones, radio, and television led to new patterns of mass connectivity and synchronization. Time was made visual and divided into smaller and smaller units that allowed us to achieve unprecedented levels of coordination. But in our own century, digital media is fracturing our collective experience of clock time.”
“In the digital age, everything from the evening news to the 9–5 workday has been freed from the cage of industrial era timekeeping. As long as you have an internet connection, you can march to the beat of your own second hand.
This shift has been disorienting for the people who lived through it.”
“As a rule, twentieth century time was imposed on people from the top-down. Twenty-first century time is a bottom-up choose your own adventure story that allows people to make their own time machines and live anywhen.”
8. ”It wasn’t just that the U.S. had strong incumbents, or that the Chinese tech companies were still in their infancy. My default hypothesis was that what I call the veil of cultural ignorance was too impenetrable a barrier. That companies from non-WEIRD countries (Joseph Henrich shorthand for Western, Educated, Industrialized, Rich, and Democratic) would struggle to ship into WEIRD cultures. I was even skeptical of the reverse, of U.S. companies competing in China or India. The further the cultural distance between two countries, the more challenging it would be for companies in one to compete in the other. The path towards overcoming that seemed to lie in hiring a local leadership team, or sending someone over from the U.S. who understood the culture of that country inside-out.
For the most part, that has held true. China has struggled, for the most part, to make real inroads in the U.S. WeChat tried to make inroads in the U.S. but only really managed to capture Chinese-Americans who used the app to communicate with friends, family, and business colleagues in China.
In the other direction, the U.S. hasn’t made a huge dent in China. Obviously, the Great Firewall played a huge role in keeping a lot of U.S. companies out of the Chinese market, but in the few cases where a U.S. company got a crack at the Chinese market, like Uber China, the results were mixed.”
“How did an app designed by two guys in Shanghai managed to run circles around U.S. video apps from YouTube to Facebook to Instagram to Snapchat, becoming the most fertile source for meme origination, mutation, and dissemination in a culture so different from the one in which it was built?”
9. “While this go-to-market strategy dates back to the early days of software, it is becoming the predominant method of going to market in many verticals, even in categories in which conventional wisdom might say it would never work. Think GitHub, Zoom, Qualtrics, Slack, Atlassian, PagerDuty, Yubico, Stripe, Plaid — all of these started with a product-led, bottom-up motion, followed later with top-down sales.
Growth+sales changes nearly everything about building an enterprise startup. It changes the way startups build products and the teams behind them, and how they structure sales and marketing. It changes how we as investors evaluate companies, particularly in the early rounds. And it changes how new companies compete with incumbent vendors, most of which are on their heels trying to figure out how to respond.
The most exciting consequence of this shift is that in nearly every category of enterprise technology, it puts the advantage squarely with the startups. When the initial route to market is focused on how much a product sells itself, the winners are the product visionaries, not veteran sales leaders pushing outdated software.”
10. These guys are prescient. Pay attention. Below is a snapshot.
“you’re going to see a lot of pain and suffering for people in their 20s. They will be forced to live at home due to the current circumstances. This is going to stunt the growth of many young men so you can expect that in 2030 or so, a lot of the 30 year olds will have the mindset/thinking patterns of a person in his mid 20s.
From an investing perspective you only need to know that the money supply is going to go up. That means you’re simply going to own bitcoin/other crypto you believe in, gold and tech stocks. That has been the trade for quite some time. If you force us to choose we’re going to say the same thing we said when it hit $4,800, likely the best performing “asset” for the next 2–3 years will be bitcoin/crypto in general.”
11. More on the Headspin mess.
“it also reveals rot in the Silicon Valley ecosystem that is far worse than this one company. It also shows that some folks know how to exploit Silicon Valley’s one real Achilles heel — Fear of missing out or FOMO. Here what we have is a scenario that occurs all too often.
The FOMO leads to looser diligence and bending of rationality. More often than not, the deal gets done by capitalizing on the vanity of the founders. These days Silicon Valley has been afflicted by lunacy, affectionately named after a fictitious being, unicorn. A unicorn in Silicon Valley parlance is a company valued at over a billion dollars. No matter how rational, smart, or intelligent, every founder wants to be the head of a unicorn. Never mind that unicorns are mythical and non-existent in real life.”
12. Very interesting.
“Hobson notes that the man/meat link isn’t rooted in biological need. “There is a propensity for men to be drawn to meaty food,” he notes. “But that’s not because their bodies are craving it. It’s cultural.”
Men and women do require different nutrients, says Hobson, but they’re not necessarily the ones you’d think. “Women need about twice as much iron in their diet as men, because they lose blood every month,” he says. “For men, zinc is a much greater nutrient of need. It’s much more closely linked to reproductive health.” Iron is found in greatest quantities in liver, meat, pulses and dark-green vegetables. You’ll find the most zinc in shellfish, followed by meat, dairy and bread. But no one thinks of liver as female and mussels as male.”
13. “It’s overwhelming to try to fathom the pain, despair, and loneliness tens of millions of households are struggling with right now. And we didn’t need to be here. America is about generosity, grit, innovation, and a willingness to sacrifice for one another and future generations. There’s nothing wrong with America that can’t be fixed with what’s right with America. However, at this moment, our nation has never been less American.”
14. “Market and human psychology show that LPs are more comfortable with battle-tested managers in times of uncertainty.
The gross majority of funds that have raised year-to-date have established brand names, market positions, LP bases, maturing track records, and in many cases realized returns, as well as critical experience in weathering downturns. Crisis or no crisis, these are all signals that LPs value. In an uncertain market like the one we face today; these attributes can be even more attractive.”
15. “The notion of the “organization man” — a term popularized by William H. Whyte’s seminal 1956 book that describes the subsuming of individual agency in service of a large corporation — is giving way to the rise of “micro-entrepreneurs,” or free agents, creators, freelancers, and independent workers who utilize digital platforms to make a living by leveraging skills and knowledge in the absence of a traditional employer-employee relationship.
Accelerated by digital platforms that help surface job opportunities, facilitate customer connections, and aid in setting up and operating a business, workers are empowered to go independent and to earn a livelihood outside the confines of a traditional company.
This trend spans the gamut from individuals who convert their passions into professions — think of YouTubers, podcasters, and gaming livestreamers who’ve monetized digitally-native hobbies — as well as those whom we don’t traditionally think of as “creators,” but who are also similarly shifting to digitally-mediated self-employment, including teachers, salespeople, farmers, chefs, and personal shoppers.
16. The West should be very worried.
“Xi has said that he wants China, by year’s end, to be competitive with the world’s AI leaders, a benchmark the country has arguably already reached. And he wants China to achieve AI supremacy by 2030.
Xi’s pronouncements on AI have a sinister edge. Artificial intelligence has applications in nearly every human domain, from the instant translation of spoken language to early viral-outbreak detection. But Xi also wants to use AI’s awesome analytical powers to push China to the cutting edge of surveillance. He wants to build an all-seeing digital system of social control, patrolled by precog algorithms that identify potential dissenters in real time.”
“The emergence of an AI-powered authoritarian bloc led by China could warp the geopolitics of this century. It could prevent billions of people, across large swaths of the globe, from ever securing any measure of political freedom. And whatever the pretensions of American policy makers, only China’s citizens can stop it.”
17. “You don’t need to figure out if it’s possible to scale it yet. Focus on product love.
What you might see here is that this is essentially the same question that Rahul is after in the Superhuman story — he’s segmenting and drilling down his user base to find that specific group of people who really need and love Superhuman and would be disappointed if they could no longer use it.
The difference is, as a “stage 0” founder, you’re starting from scratch to find your very first version of a product that might attract enough users to begin measuring.”
18. Please support my friends in Beirut. The Lebanese people are amazing. Let’s help them where we can.
19. “Want to identify the sources of content that you should consume? Ask yourself two questions — is this person writing an unbiased piece that contains facts and commentary from an array of experts? If yes, then that is a good source. If no, then ask yourself, “Does this person have skin in the game for what they are saying?” If yes, then that is a good source.
Unfortunately, if you answer no to both of those questions, you will be better off moving on. Remember, you focus on your food diet. What you put in your body ends up determining how physically healthy you are. Your content diet is not much different. What you put into your head ends up determining how mentally healthy and financially wealthy you are. Proceed accordingly.”
20. This is what Venture Capital is about. Taking the big swings. If you are investing with a mindset of limiting downside, you probably should not be in VC.
“more focus on limiting the downside can be inverted as more focus on limiting the upside. The highest alphas in venture don’t come from limiting the downside, they come from the positive outliers — the power law of distributions.
In a recent venture deck I saw a famous Warren Buffet quote as the only content on a slide:
Rule #1: Never lose money.
Rule #2: Never forget Rule #1.
Seeing this was an immediate turn off. It’s much more interesting, and intellectually stimulating, to attempt something with a 1 in 50 chance of succeeding as opposed to something with a 9 in 10 chance of succeeding, assuming the upside is correspondingly larger. Yes, we want to control our own destiny, but we also want to take big risks that have the opportunity for big impact.”
21. Plenty to learn from the giants of the Chinese consumer internet market. This is a long write up on Pingduoduo. Extremely insightful.
“Pinduoduo’s rise has been nothing short of impressive. It represents a case study of an excellent team quickly building and scaling a transformational business. Like Amazon used books, PDD used fruit as a wedge to build what became one of the world’s largest ecommerce companies in five years. It went a step further than Tencent building games, or Facebook selling ads, and created an asset-light vertically integrated social gaming company. It built farmers, and eventually manufacturers, a business-in-a-box solution for operating their companies. And it entertained consumers while giving them low prices on products they buy everyday.”