Marvin’s Best Weekly Reads December 13th, 2020
“Everyone thinks of changing the world, but no one thinks of changing himself.” — Leo Tolstoy
- I would like to see more stories like this in the media and around the startup ecosystems. Massively successful bootstrapped businesses built without VC money. So many different options for founders these days. Tired of myth making of Venture Capital as much as I believe in it.
“What’s next for Nextiva? Growing at more than 30% a year, it could go public. Given that it is self-funded, it cannot have horrorshow cash burn by definition and meet requisite benchmarks for an IPO. Even more, while Gorny did highlight that being private allowed his company to accelerate and decelerate growth when it wanted to focus more on product work, I got the impression that Nextiva wants to be better-known. And an IPO would help with that.”
2. Short selling is a tough biz. But when it works, it really works. Kudos to these folks for their research & conviction. In this case, the early bet against American malls.
“When CMBX.6 hit bottom in May, Catie McKee and Dan McNamara decided to sell their credit default swaps and reap the profits. MP’s main fund, which includes other investments, was up roughly 75 percent year-to-date, a staggering turn of fate after a tumultuous run that nearly bankrupted the firm.
McKee and McNamara’s sister fund, which was all-in on shorting CMBX.6, had it even better. They saw 120 percent returns after it was all said and done, an ungodly amount of profit considering that many hedge funds saw their capital cut in half when the stock market crashed. In just three months, the scrappy team and their black-sheep idea had brought in well over $100 million in profit for the fund and their investors (before filling the hole created by the previous year’s losses, of course).”
3. That time of the year. I remember going to buy a fresh Christmas tree as a kid in Canada.
“Quarter Pine is one of thousands of Christmas tree farms in America. Collectively, these farms sell 25m-30m real Christmas trees to independent lots, big-box retailers, and garden centers every year.
At an average retail price of $75 a pop, these trees make up a $2B+-per-year business.
But what are the economics behind that price tag? Who gets the lion’s share of the profit? And how have Christmas tree producers fared with the growing popularity of artificial trees?”
4. These are good basics. But valuable framework for investors and founders to evaluate if customers/users really do like what you are building.
“As a VC, I’m going to talk to customers and non-customers to discern whether your product is solving a real pain point for them — and to what extent your product is indispensable. I will even ask Sean Ellis’ question “How disappointed would you be if you could no longer use the product?” when I interview customers during my due diligence.
As a founder, I hope you’re regularly talking to your customers and asking the same thing. Many founders don’t, and so they don’t know if their product is a vitamin or a pain killer.”
5. I love Sauna, Banya and Onsen. Nothing better for the health and stress than this. (well outside of sleep, exercise and good diet of course)
“While these correlations are certainly provocative, findings on the physical benefits of sauna heat are well-documented. Laukkanen’s published studies suggest that frequent sauna goers tend to live longer and have a lower risk of cardiovascular disease, compared with those who go once a week.
These observations could have physiological underpinnings — saunas mimic the stress and sweating of light exercise with almost none of the physical exertion — but Laukkanen admits there are several possible explanations. As he put it to me, in less than perfect English that I’m paraphrasing: we shouldn’t underestimate the effects of sitting, calming down, and relaxing.”
6. WOW. oh WOW. Such an amazing story on many different fronts. So good. MUST READ.
“After a year of running two shops they had saved $40,000 and Ted decided to expand. He bought a bigger doughnut shop, and offered to lease the original Christy’s to a family of Cambodian refugees, who had been working in fast food outlets on low wages. He trained them and handed over the keys.
Ted began to look for more doughnut shops to buy and lease to fellow refugees. “Using money to provide for others is a feeling as powerful as any drug,” he later wrote.
Over the years, Ted and Christy sponsored more than 100 families, often hosting them before setting them up with homes, loans, and doughnut shops. Ted encouraged others to do the same. “It went like fire on the hill, so fast,” says Ted.
The Cambodians worked hard and because the whole family pitched in, they did not have to pay out any wages. It provided a path for refugees to settle and was a profitable business model. Eventually Cambodians owned so many doughnut shops in California that they dominated the market, pushing Winchell’s into second place.”
7. I think this is a really smart deal.
“From the Salesforce perspective, Taylor says that the Slack deal was worth the money because it really allows his company to bring together all the pieces of their platform, one that has expanded over the years from pure CRM to include marketing, customer service, data visualization, workflow and more. Taylor also said that having Slack gives Salesforce a missing communication layer on top of its other products, something especially important when interactions with customers, partners or fellow employees have become mostly digital.
“When we say we really want Slack to be this next generation interface for Customer 360, what we mean is we’re pulling together all these systems. How do you rally your teams around these systems in this digital work-anywhere world that we’re in right now where these teams are distributed and collaboration is more important than ever,” Taylor said.”
“As for the companies coming together, both men see a lot of potential here to merge Slack communications with Salesforce’s enterprise software prowess to make something better, and Taylor sees Slack helping link the two with workflows and automations.”
8. The Great Dispersion driven by the pandemic. Very observant.
“Amazon dispersed retail to desktop, to mobile, to voice. Netflix dispersed DVDs to our mailbox, then to every screen. The pandemic is causing dispersion in even larger industries — the greatest opportunity for wealth creation in decades. Work from home, telemedicine, & remote learning represent an impending disruption of over 25% of the U.S. economy. The largest sectors are about to leapfrog HQ, doctor’s offices, hospitals, & campuses.
Not all dispersion is about “x from home” or from cities to smaller towns. Social media is a form of dispersion, enabling connections, competition, and debate despite physical distance, print, and paywalls — the dispersal of community. It has also removed healthy friction (truth, science, editors) resulting in an afterburner for misinformation and conspiracy.”
“Dispersion offers the same potential for wealth creation as globalization and digitization. This time around, however, we must be more conscious of downsides. Previous paradigm shifts catalyzed massive prosperity but little progress. We’ve embraced a winner-take-all economy crowding the spoils to fewer firms and people.”
9. I’ve always been a fan of Ukraine. Have so much more respect and admiration for the people here now after watching this.
Freedom and Dignity are universal rights. Something we should not take for granted in the USA & western developed world. This documentary was both heartbreaking and inspiring. Recommended.
10. This is timely and good. Getting close to the end of the year. So a personal Annual review is always good.
11. “Ideally, lockdowns are only done once and done well,” the proposal’s authors, Stephen Duckett and Will Mackey, explained. “The benefit of zero is to reduce the risk of ‘yo-yoing’ between virus flare-ups and further lockdowns to contain them.”
They treated the threats to public health and the economy as intertwined, which most experts agree they are. The Australian states that contained Covid-19 best also saw the strongest economic recoveries.”
“The US probably cannot achieve zero Covid-19 cases anytime soon. But it could embrace the spirit of the Victorian model: a clear goal, support for the proven mitigation strategies, and a commitment from the public.
“Having a clear, uniform goal — that everyone could work toward — was critical to Victoria’s success,” Jennifer Kates, director of global health policy at the Kaiser Family Foundation, told me. “But they didn’t just have a goal. They established the underlying components that were needed and provided strong social support.”
“All of this,” she continued, “has been mostly absent in America.”
12. “It perfectly breaks down the difference between a time billionaire and a dollar billionaire. One has financial resources and the other has life resources. Our society overvalues the former, but undervalues the latter.”
“With modern technology, the average human will likely live into their early 80s. A billion seconds is just over 31 years. The 20 year old has two billion seconds. The 50 year old has one billion seconds. Take a step back today and ask yourself — do I invest my capital based on the greatest resources that I have access to?
For some of you, that resource is money. But for most of you, that resource is time. Press your advantage. Start thinking in terms of decades. Use your status as a time billionaire to become a dollar billionaire, but remember — the time billionaire always dies with zero.”
13. I agree with this perspective. SPAC Boom in long run is probably going to be good thing.
“There seems to be a lot of pretty crazy froth, and it’s gonna take years for some of these companies to grow into the valuations,” Thiel tells Forbes. “But I keep thinking the other side of it is that one should think of Covid and the crisis of this year as this giant watershed moment, where this is the first year of the 21st century. This is the year in which the new economy is actually replacing the old economy.”
14. Of course the Russians and others are attacking the new remote work infrastructure. I’d do the same thing if I were in their place.
“THROUGHOUT 2020, AN unprecedented portion of the world’s office workers have been forced to work from home as a result of the Covid-19 pandemic. That dispersal has created countless opportunities for hackers, who are taking full advantage. In an advisory today, the National Security Agency said that Russian state-sponsored groups have been actively attacking a vulnerability in multiple enterprise remote work platforms developed by VMware.”
15. This is one of the reasons I love Japan so much. I need to visit this Ichiwa mochi shop one day.
“Their №1 priority is carrying on,” he added. “Each generation is like a runner in a relay race. What’s important is passing the baton.”
Japan is an old-business superpower. The country is home to more than 33,000 with at least 100 years of history — over 40 percent of the world’s total, according to a study by the Tokyo-based Research Institute of Centennial Management. Over 3,100 have been running for at least two centuries. Around 140 have existed for more than 500 years. And at least 19 claim to have been continuously operating since the first millennium.”
16. “Substack is the medium of the solo artist. High-rolling soloists at that. Like Patreon, Onlyfans, book publishing generally, or any other medium where creators connect with the masses sans bundled packaging, Substack has (and will continue to have) a power-law distribution. The biggest names will earn in their hundred of thousands; the median user is going to scrape away $100–200 a month, at best. If measured in page hits instead of dollars, the same could have been said for the high and low tiers of the old blogosphere as well.”
17. Super thrilled to see this. My old colleagues and friends at Better Tomorrow VC & Unit. So excited to see this news public.
18. Really interesting company here. Varda Space.
19. I can’t wait to see this documentary. Silicon Valley is everywhere.
20. Without sounding like a hater. This is a signal we are at #peakVC
21. These are fairly good future of work trends worth reading about.
“Whether you call it “craftsmanship” or “passion economy”, there’s a trend that’s not about to stop and that’s likely to transform work as we know it. More workers seek autonomy at work and want to see the direct impact of their work. They want direct feedback from users, clients, or from the work itself. It means scientific management and division of labour are increasingly challenged.”
22. Thank goodness I am a lazy person. Or Tactically lazy.
“Nature seems to have optimised our biological processes for laziness. Even beyond notoriously idle species such as pythons — which sleep about 18 hours per day — most animals spend a majority of their time doing nothing in particular. And the amount of time they spend doing nothing is correlated to the amount of time they don’t spend on activities such as hunting, foraging, and reproducing.
In Time Resources and Laziness in Animals, Professor Joan Herbers explains that because they have more free time, highly efficient predators may appear to be lazier than relatively unproductive predators.”
23. Prepping has become mainstream.
“We’re used to just-in-time inventory,” he says, referring to the widespread practice among governments, private organisations and firms of only keeping enough stock on hand to fulfil current orders or maintain production.
While the current Covid pandemic is not “the big ‘un” in terms of disasters, it has highlighted weaknesses in how we live, he says.
“We’ve removed slack from the system, whether that’s your local energy grid or your water supply, and prepping is a way of taking back onto your own balance sheet the resources that have been reduced in the overall system.”
“many have taken to prepping out of a sense of despair at the inaction of government in the face of crisis. “Taking care of your core survival needs, that should be one of the functions of government and where our tax dollars should go.”
24. “as Viktor Frankl discovered, beyond the needs for pleasure and power one can find the need for meaning, in the present, moment by moment, even during the most intensely difficult of times.
Everything else, especially the material successes like money, image and status, are secondary, transient and can really only lead to temporary, fleeting happiness. They can be a wonderful part of experiencing life, as long as they are not the foundation upon which our experience and identity are built.”
25. I discovered Khe Hy, really fascinating story. I can really relate to him.
“the truth was I was interested in money. There was this backstory of money — we grew up lower middle class, but we were raised into this scarcity mindset. Very much the immigrant mindset that at any point, everything you have can be taken away from you. You can lose it all. They’re just very frugal. And so to me, money could solve a lot of problems and anxiety if you had access to it.”
“I had been executing on this plan since I was 15 years old, thinking that one day my bank account will be this size and all of my worries will melt away. And it happened and life got better for sure; life was easier when you’ve saved more money. But the core anxieties that I had — envy of other people, anxiety about not being able to focus on my wife, and this nagging sense that at the end of the day I’m just moving numbers from one cell to another and helping rich people get richer — were still there.”
26. I firmly believe in paying it forward. I will also have to try Pecking House one day.
“The moral of the story is that it’s not a zero-sum game. What might be only a few minutes of your time to help make an introduction via an email or text, or to take a 30 minute phone call, can make a huge impact on someone’s life. Take the time and pay it forward. Good things can happen. Lord knows we need them to now more than ever.”
27. “But the hallmark of a flywheel is momentum, and Roblox is spinning up fast. Prepaid revenues were $1.2 billion in the first nine months, and are growing 171% year over year. Negative working capital is a concept I understand well enough to know it’s awesome.
Roblox could be to Facebook what Shopify is to Amazon, the non–social media social media firm. Just as hospitals, doctors offices, headquarters, shopping malls, and campuses are being bypassed and shifting hundreds of billions in stakeholder value, Roblox could disrupt the kid attention economy. Roblox is set to go public this month, and will create meaningful shareholder value.
Prediction: stock trades up 70% or more on first trade. More important, Roblox could be the first social media firm whose shareholder value isn’t designed to extract value from the least powerful stakeholder, kids.”
28. “The appeal of running your own newsletter is obvious and simple: instead of working for a boss, you can work for yourself. Instead of having your salary determined by management, you can make more money just by getting more subscribers.
And most importantly, instead of feeling like you’re chasing clicks in an ad-supported business model, getting paid directly by subscribers theoretically incentivizes a different and better kind of journalism.”
29. “If Core Scientific’s mining ventures are successful, the company will not just make a lot of money. It will also help to repatriate crypto production to the United States, where Bitcoin got its start.
The recent resurgence in crypto mining feels like a good-news story. Mining companies like Core Scientific are in a position to make money and create jobs in rural areas, while also ensuring more Bitcoin — which is becoming a strategic asset — ends up in American hands.
But there are also reasons for caution. The last crypto-mining boom promised similar benefits but resulted in fly-by-night companies leaving a trail of scams and environmental degradation in their wake. Will the outcome be any different this time?”
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