Marvin’s Best Weekly Reads February 18th, 2024
“It takes courage to grow up and become who you really are.” — E.E. Cummings
- Trillionaire within a decade. I think so and probably from Biotech is my guess.
2. “The strategy Russia and China are pursuing is simple and clever. America is a formidable superpower. You can’t take on America’s military might directly and expect to win. Instead, the idea is to make trouble for the US and NATO on multiple fronts at once, usually by relying on proxies or places that the US does not take seriously or cannot easily respond to. In practical terms, Russia and China have aligned with small militias that are problematic for the West but which usually can’t do that much damage.
However, with China and Russia quietly supplying superpower level intelligence, capabilities, and capital, these entities can wreak havoc. This way China and Russia can create expensive and difficult problems everywhere and all at once for the US. This is a different kind of swarm strategy. It’s flies irritating a lion.
All this raises a fundamental issue that now requires close attention. Could it be that Ecuador is not at risk of being overthrown by superpower-backed crime gangs? Rather, it has already been overthrown by superpower-backed organized crime gangs.
You may think that Ecuador is far away and not particularly relevant to your portfolio or political life in the West. You’d be wrong. Events in Ecuador are symptomatic of the new conflict. I’ve long argued we are already in WWIII. It’s just occurring in places we don’t pay much attention to. Ecuador is yet another example of that.
The strategy is ever clearer. China and Russia are aligning with small militant groups around the world that will make life hard for America. They are also picking strategic choke points like The Gate of Grief, the Bab-el-Mandeb Strait, which is a global choke point for shipping. That’s where the Houthis are causing trouble. The US can send in a 3rd Aircraft Carrier Group, but the lion is swatting at flies.”
3. This is a super useful convo on doing software sales.
4. Very solid discussion on how venture capital works and the unbundled model. The GP has a very interesting approach.
5. For anyone interested in building a creator business, this is a must watch. Justin Welsh is the king of helping solopreneurs.
6. I’m on a Justin Welsh kick. You can learn so much from him. It’s the age of the Solopreneur whether we like it or not.
7. A different perspective on family dynasties.
8. This is super instructive on building a creator business. They go into a lot of nitty gritty.
9. I actually agree with this view. I don’t like it but it’s happening. In a multipolar world, gold will actually be more important. Especially with growing weakness and debt in the Global West.
10. I think this will become more of a thing. Be a “War Lord”: don’t go to war but be prepared for it. Become capable.
11. “The 2024 US slowdown and/or recession is poised to create opportunities to buy US companies and assets at significant discounts, which will turbo-charge Japan’s global merger and acquisition activity. Already Japanese industrial companies — Nippon Steel buying US Steel — started leading the way in late 2023.
The 2024 surprise will be a broadening of the new “Japan buys America” trend to the services and asset sectors. Yes, I expect major Japanese financial institutions to buy US banks, insurers, or payments companies.”
12. “Unicorns ballooned 14x in the past decade, from 39 to 532! They now serve a wider array of sectors (we’re tracking 19) from climate and crypto to vertical SaaS.
The pendulum swung hard to enterprise (78%), the inverse of 2013.
It’s a bloated herd that will thin in coming years (likely to about 350) because…
• A whopping 93% are ‘Papercorns’ — privately valued companies.
• 60% are ‘ZIRPicorns’ — their last valuation is from ‘20–22, when interest rates were near zero.
• Many are running out of runway. Many are on the cusp: 21% are valued just at $1B (sorry?!)
• ~40% are trading below $1B in secondary markets.4
• BUT. There is lots of substance in this herd.
• And we see evidence of a Software Unicorn Power Law — the US will be home to more than 1,000 unicorns by 2033.”
13. This is such a fun and relevant convo on what’s happening in tech land.
14. This is a grim discussion on the geopolitical mess we find ourselves in the world.
15. One of the wisest men alive today. Luke Belmar. This is a worthwhile conversation.
16. “Successfully rattling the cage of a public company board and CEO requires a specific set of skills and attributes. Most activist investors possess three key traits.
1) Intelligence: Good activists see strengths/weaknesses the market is missing. After amassing a short position, Hindenburg revealed that Nikola was a fraud. Elliott is building a position in the underperforming Match Group, as it has a monopoly in online dating, minus the monopoly-like valuation.
2) Leadership: Every activist bid is a battle that requires significant financial and psychological commitment from the activist and their investors.
And 3) Narcissism: Like influencers, activist investors crave attention. They know their actions make headlines, because takeover bids are corporate violence.
Billionaires are humans, and thus, not to be trusted. Humans need guardrails, because we are temperamental, short-sighted creatures. We are irrationally suspicious of those different from us, and far too trusting of those like us.”
17. This is super instructive on how to differentiate a new VC fund. Also how to think about riding the changes happening in the venture industry.
18. This hit a bit too close to home. Midlife transitions.
19. “Private military contractors have been increasingly used in the past several decades, but this was a step beyond their traditional role in combat zones, which has mostly been in support — training local forces, technical support, security, logistics, and occasional SOF roles. What distinguishes the UAE in Yemen is that a power deployed third-country mercenaries alongside its own regular troops — a rarity in the 21st century.
The demand for manpower may see more mercenaries in frontline roles, augmenting national forces during major deployments or even forming the whole of an expeditionary corps for politically sensitive operations. Russia’s Wagner Group is something of a template for this: although more of an organ of the state than a true PMC, used to deploy Russian ex-servicemen without official involvement, it has been active throughout Africa and the Middle East.
As things stand, small hydrocarbon-rich countries such as the UAE and Qatar stand to play an important role in any future mercenary marketplace, similar to what Genoa, Amsterdam, and the small states of the Holy Roman Empire once did. Their wealth gives them the capital to make the initial investments and a certain degree of political independence, while the Emiratis in particular already have a network of contacts that would allow them to raise large numbers of fighters.”
20. “Put together, the above seems to paint a dire picture for Ukraine and its prospects going forward. But one of the key lessons from watching this war, and the way that it’s covered in the media, is that perceptions can be fickle.
Throughout 22 months of conflict, the ironclad conventional wisdom regarding the war’s present state and near future has repeatedly been shattered. By my count, there have been no less than seven major narrative periods of this war, each of which has ended with the script flipping almost entirely.
Both Ukraine and Russia have regularly been seen as the conflict’s inevitable victor — only to fall back down to earth when the expectations created failed to live up to reality.
The length of each cycle seems to have expanded as the war itself has gone on and dramatic swings of battlefield fortune have become less common. But the characteristics of each new paradigm have fundamentally remained much the same, and there is every reason to expect more to come.”
21. This week’s episode was pretty damn funny and overall great biz discussion. They shine when it comes to tech business discussions.
22. “When thinking about different businesses and exploring entrepreneurial opportunities, my go-to is a simple distillation of the financial model in a way that can be described quickly and easily out loud. Start simple before adding complexity.”
23. Living the creator business life. This is an insight dense interview.
24. This was an illuminating conversation. On life, on loyalty and living with success.
25. “The whole remote or in-office debate is a fake debate. It is fake because anyone who’s worked in knowledge work for the last ten years already has been working remotely. Even if you happen to be in the same building or office as someone, your work is mediated by a screen, most of the time.
And this is why I think all this conversation around remote work is really exposing something much deeper: that most companies don’t have a worker location problem, they have a mission problem.
People want a place where they can thrive and some people might find that in a 100% in-office environment and others might find it in a 100% remote environment. Others might find it in a hybrid workplace. But the success of those companies will not be because of a top-down attendance policy. It will come from a bottom-up re-imagination of how people can do great work together in this new technological era.”
26. “That’s why if the California Forever project succeeds, the ramifications will go way beyond having one nice new city of 50,000 — or even 400,000. It would serve as an example to other cities all over the country, showing them a vision of what they might become if they had more density, walkability, transit, and mixed-use development.
The creation of a new city could also revitalize the discipline of urban planning in the U.S. The era of stasis that has engulfed America since the 1970s has made planners focus more on small-bore projects, or — even worse — on finding reasons to forbid things from being built. The creation of a planned new city that’s livable, pleasant, and environmentally responsible would undoubtedly get at least some planners to think big again.
This is what excites me about the California Forever project, even more than the prospect of more housing for Californians, or of a cool new city to visit. America needs to be shaken out of half a century of stasis, and we need to reimagine urban infill as a new frontier. Irvine, the corporate-planned city of the 1970s, became the ultimate sprawling modern city-as-suburb — a living symbol of what post-70s California would look like. California Forever has the potential to be the anti-Irvine — a city planned for density rather than sprawl, pointing the way to the next 50 or 70 years.”
27. “Writing is the skill that breathes life into any other skill you learn.
It is the meta-skill that people avoid learning until they are forced to (because they need to survive).
They don’t see it’s importance because it’s “just plain old writing, who needs to learn that?”
There was a reason I failed at almost every business model I tried.
Digital art, SEO, Facebook ads, dropshipping, e-commerce stores, and more.
I was so focused on learning the skill and building a website that I forgot I actually had to get customers at some point.
How do you get customers?
Writing.
Content (or media) is the front end of the internet. It’s how you capture, hold, and convert attention in a sea of self-deprecating memes and valueless content.
The foundation of content is writing.
Tweets? Writing.
Threads? Writing.
Newsletters? Writing.
Blog posts? Writing.
Cold emails? Writing.
Social media captions? Writing.
Landing pages? Writing.
Product descriptions? Writing.
Course modules? Writing.
Client communications? Writing.
Customer resources? Writing.
Ads of any form? Starts with writing.
YouTube videos? Done best with written scripts.
Instagram reels and TikToks? Like reading well-written tweets.
Images on Instagram? Usually designed from a well-written quote or saying.
Any other form of online marketing, advertising, or entertainment? Starts with writing.
Everything that your audience, customers, and network see starts with writing.”
28. “The rich want to keep the system as it is — it is working in their favour. But the poor demand change and redistribution of wealth. Both sides are logically fighting for their best interest.
But because monetary policy is complex by design, most people don’t understand why the wealth disparity exists.
And an upset population with no obvious enemy, begins to look for one.
The nation finds itself in a scenario where the people are angry — about everything. Blame is passed back and forth. The poor are called unproductive, the rich are called greedy, and civil discourse becomes impossible.
With emotions running hot, every issue becomes a boiling point of tension, and the population can seemingly no longer agree on anything.
Civil unrest sparks protests; protests lead to riots and eventually activity that begins to border on civil war.
However, a nation can continue in this state of dysfunction for a long time — until, the third red flag emerges — an external competitor.
For an empire to enter its sunset years, there must be another country that has risen in power enough to challenge the existing world order — a country whose economy is strong enough to offer alternate trade and military assurances.
Now, rarely in history does this external competitor emerge as one solo country. More frequently, a syndicate of smaller nations emerges — who are able to park their ideological differences to align against the global superpower.”
29. “We live in a knowledge economy. What you know — and your ability to bring it to bear in any given circumstance — is what creates economic value for you. This was primarily driven by the advent of personal computers and the internet, starting in the 1970s and accelerating through today.
But what happens when that very skill — knowing and utilizing the right knowledge at the right time — becomes something that computers can do faster and sometimes just as well as we can?
We’ll go from makers to managers, from doing the work to learning how to allocate resources — choosing which work to be done, deciding whether work is good enough, and editing it when it’s not.
It means a transition from a knowledge economy to an allocation economy. You won’t be judged on how much you know, but instead on how well you can allocate and manage the resources to get work done.”
30. “The SaaS ecosystem has fully matured. Each of those buckets of fixed costs can be selectively ignored, automated, delegated, or consumed as a service. Today, companies can forgo hiring sales and marketing people, and produce millions in free cash flow by selling their products through re-sellers (like AWS) with large client bases.
While a custom research and development project used to be the domain of million-dollar contracts, you can now buy a basic Django web app from a Replit bounty for $650 or monetize a scalable business intelligence tool built by AWS or Microsoft. Scaling operations used to require headcount; now all you need are virtual assistants. SaaS products like Zapier or Intercom that power countless vertical market software companies are increasingly charging for their service as consumption: software paid by the task, not, as customarily, by user by the year.
This future was emerging before our current generative AI moment; it will only accelerate if companies can use large language models to automate junior-level work. Generative AI is quickly ushering in a new frontier for software, where organizational structures, cost structures, and growth strategies can and should be re-imagined.
As hyperscalers and vertical software battle it out on the enterprise side, the lower and middle market will need services to take advantage of the opportunities to come. Enormous fortunes await those who can accelerate the deployment period of generative AI, to speed-run the Carlota Perez arc of technological revolutions. For the countless public and private sector organizations frustrated with their software, eager to adopt better practices, or just looking for a friendlier face to partner with, their business is yours for the taking.”
31. This is so very good. Conversation on how to live a full and interesting life.
32. One of the top experts on Russia and their (negative) effects on geopolitics. Worth watching.
33. Hybrid war happening. China using cartels to send drugs into the US.
34. “The hidden costs of private equity activism seem to have been higher than advertised in the Toshiba case. We should at least examine the evidence with care before uncritically accepting a leading consulting firm’s recent contention that private equity is a “force for good” in Japan.
It is certainly good for private equity firms and their activist helpers. The rest of us may prefer the slow and steady approach of the GPIF and TSE, whose prudent but creative activism has delivered enormous value with little fuss and lower fees.”
35. This seems like a good reason to want to be a multibillionaire.
36. Good overview of Scandinavia, a close alliance with UK & USA.
37. The art of VC investing from a veteran in the business.
