Marvin’s Best Weekly Reads February 4th, 2024
“Courage is never to let your actions be influenced by your fears.” — Arthur Koestler
- Lots of important insights for running startups from a legend from Silicon Valley.
2. This guy is a pro Russia A — hole so it’s worth keeping in mind but it actually strangely also explains the weird behavior and fluctuating support coming from America to Ukraine.
“This is not to swing the pendulum too far to the other side and lay unrealistic claim to Russia being able to easily and instantly wipe out all of NATO — no, it’s simply to temper ideas about what US and NATO could realistically do to Russia. At the end of the day, a war between the two could very well be a stalemate but it would come at massive costs to the US/NATO, which is precisely the point that pro-UA supporters have made themselves blind to.
But the internal players — the CIA and policy makers — certainly understand this. Which is why they have openly made clear in the above article that a stringent set of ‘rules of the game’ have been laid out between the counterparties. Russia has obviously made it clear that it is willing to strike NATO assets that are assisting Ukraine if things are pushed too far. The US likewise now understands that Russia indisputably has the capability to do so. Thus they have shaken hands and agreed to limit the treading of each other’s red lines. Russia will allow the US certain clandestine operations within the purview of the gentleman’s agreement, and the US in turn will venture to keep its rabid dog on a short leash and within the narrow bounds of the playpen.
We’ve long known and suspected that such rules extend beyond just this, and could explain why, for instance, Russia has limited its strikes on Ukrainian rail infrastructure, bridges, etc. We’ve long known the West still receives critical supply deliveries from both Russia and China — particularly of precious metals, rare earths, etc. — by rail through Ukraine. This is simply realpolitik, and all wars in history have operated under more or less similar conventions.”
3. “Although the specific ratio has varied somewhat across venture history, when aggregated across each decade, the percent of investments required to generate 90% of the industry profits has remained within a relatively tight band between 17% to 23%.”
4. These are super tough & skilled people. UA Special Operations Forces.
5. I have not binge watched a series in a long time. But this was shockingly good. “The Brothers Sun.” Action, comedy & twists and turns. Also an amazing soundtrack. Highly recommend it.
6. This was so good. Worthwhile series to watch. Loved it.
7. “Bitcoin initially will decline sharply with the broader financial markets but will rebound before the Fed meeting. That is because Bitcoin is the only neutral reserve hard currency that is not a liability of the banking system and is traded globally. Bitcoin knows that the Fed ALWAYS responds with a liquidity injection when things get bad.
It might be called something new to confuse those who get their news from TikTok, but rest assured Bitcoin knows printed money in whatever guise is always printed money. Therefore Bitcoin will rise sharply before and into the Fed’s eventual capitulation to restarting money printer go brrr.”
8. Sober times in Silicon Valley. 2024 will be a clean up year. Delusion is not a strategy.
9. “My advice to entrepreneurs, when they receive repeated advice on more material topics, is to question it. Peel back the layers, understand who is saying it and why they’re saying it. Do they have an agenda? What’s their personal experience been? Work hard to see if that aligns with the goals and dreams of your own company.
While most of the time, advice will likely resonate and be applicable, there’s a chance that serious recommendations, when critically examined, may not be good advice for your own business. Always question the repeated advice from experts.”
10. “Now, Washington is trying to get back in business after three decades of post-Cold War belt-tightening that saw companies merge and production lines slow down. LaPlante said that the Pentagon has built a facility in Texas that has the capacity to surge 155 mm artillery shells as needed. Boeing is growing its capacity to build sensors for Patriot missiles at its Huntsville, Alabama, facility by nearly a third.
In Europe, Bulgaria and the Czech Republic are becoming major producers of ammunition. Germany is buying hundreds of millions of dollars worth of artillery shells while Rheinmetall sets up shop inside Ukraine. Sweden, Denmark, and Norway have begun jointly procuring 155 mm barrels for Ukraine. And the Swedish manufacturer Saab — which no longer makes cars — is producing so many diesel-electric submarine hulls that it’s even looking at Southeast Asia as potential clients.
Building industrial muscle means that the Pentagon needs to rebuild long-atrophied bureaucratic muscle, too. LaPlante has deputized a so-called “joint production cell” within the Pentagon, comprising defense officials who are visiting production floors. It’s not just a question of getting scientists and dollars, but also of getting factories full of skilled welders, assemblers, and foremen.
“It’s dusting off a lot of skills that we’ve had in this country that we haven’t used in a while,” LaPlante said.”
11. “But the rise of Singapore provides compelling lessons of a different sort, ones which help us understand how the city-state was built in its unique conditions. Today, the new U.S.-China rivalry is playing out in the divergence between different development paths — a divergence which may end the mythos of a universally applicable model.
While Lee’s admirers in the art of statecraft cannot import a Singaporean model, they can learn from the ardent pragmatism which drove him to reject the easy solutions of outsiders and build a state which defied all conventions.”
12. Contrarian and not a bit kooky. But you should also listen to smart people even if you don’t agree with their politics. Some interesting thoughts on where the economy is going and the world at large.
13. “As monumental as he was, he is one of an infinite number who defined their generation and changed the world forever.
Every generation, in every region on earth, “has changed the world forever.”
14. Important breakdown and dispelling myths and misinformation re: aid to Ukraine & how we do it. Net net: we need to do more.
15. “Fernandes has written a book about Australia, But one can very easily replace Australia with countries such as the UK, France, Germany and even Japan to see that they occupy positions similar to that of Australia. UK is, thanks to its still far-flung empire, a “senior” subimperial power, while France and Germany are given the “proconsular” rights in respectively Françafrique and Eastern Europe.
One can even see the current conflict between Russia and “the collective West” as a conflict explained by American unwillingness to grant Russia similar “proconsular” rights over the former Soviet republics. And one can wonder how the current hierarchical system could accommodate China that certainly shows a strong desire to be an independent pole of influence and to dominate East Asia.
Finally, the current system has trouble including the rising non-European powers (India, Brazil, Nigeria, South Africa, Indonesia) that for historical and cultural reasons do not enjoy the level of affinity with the US equal to that of the present subimperial powers.”
16. I like reading these work style breakdowns. We all work at different tempos and styles, good to know what works for you. Somewhat anti-US but whatever.
17. “Instead of driving radical, company-wide change overnight, you can run an experiment. Say you’re thinking of eliminating customer success, passing account management back to the sellers, and hiring regional renewals reps to run the renewals process.
Will that work for your company? Test it. Run an experiment along one of these dimensions:
-Geographic. Run the new model in Europe or Asia for two to four quarters to work out the bugs, see the reaction, and track the early results.
-Vertical. If you’re organized vertically, pick one of your major verticals and run the experiment there.
-Cross-section. Pick a set of accounts and run the experiment on those accounts only. To the extent the set is a representative slice of your customer base, this might provide the most meaningful result.
I know this probably runs counter to management’s desire to be seen as decisive, having all the answers, and leading dramatic change — but, given the stakes, the prudent path may be the best one.”
18. “If a founder wants to keep going for another 2 years to try to get to $15M of revenue, the result for the investors in that $25M on $150M round will likely be the same ($150M exit, they get 1x their money back — excluding any additional financing needs).
But for the founder, it makes a huge difference. Let’s say they own 20% of the company, that is the difference between the founder earning $30M and $0.
But the investors may prefer to just get their money back now because the chance they make meaningfully more is low enough and will take long enough that they think it’s just not worth it to risk their principal investment.
This is another reason why high valuations are more likely to put companies in a bad position than a good one. If the round was done at $75M post, those same investors would be looking at a 2x, which is a big difference inside a fund.”
19. Somewhat grim but also realistic forecast for the rest of the decade.
20. I am a believer in this thesis. American Dynamism and how VC can help drive this.
21. We all need a lot more of Goggins in our life. He is pretty hardcore. But this is what is needed in this new world. We need to tackle the hard.
22. This was done 3 years ago but shockingly still relevant. Describes longer term trends in play that we see now, exacerbated by covid pandemic, Russian invasion of Ukraine and October 7th terrorist attacks in Israel. Unipolar to multipolar world.
23. Creator empire. Enjoyed this interview and it was a good view on what it takes to build an independent multipreneur business here.
24. Good overview of the geopolitical mess right now in the Middle East.
25. “2023 was one of the worst years in the history of venture capital.
Funding was down 74.7% over a two year period.
IRR’s hit -16.8% at the end of 2022.
Limited Partners investing into funds plummeted 73% year over year.
38% of funds disappeared.
38%. That’s 2,725 funds that became inactive over the past 12 months.
Insane right?
This, the early-stage game, is a game of principles, math, and patience.
If you have the fundamentals and a long-term outlook, you can completely change the world.”
26. Lessons from the past of the Defense industry. What happened after the Cold War ended and why the American defense industry is such an anti-competitive mess right now.
27. This will have massive impacts on global shipping and thus economies everywhere.
28. Slootman is one of the best CEOs in Silicon Valley. And toughness is back in vogue now…..finally.
29. This is a big change in VC land. What a start to 2024. Rabois leaves Founders Fund and returns to Khosla Ventures.
“In an interview, Rabois said he found Khosla’s culture a better fit. Khosla encourages lengthy weekly partner meetings with “unrestricted, unvarnished debate” and promotes hands-on involvement with portfolio companies, plus additional services for startups such as recruiting support, he said. Founders Fund is more “individualistic” and partners there have a “divergent set of styles,” he said.
“Founders Fund provides the capital and is happy to help when asked, which is very different from a mentorship model, which has been my forte,” Rabois said.”
30. Great discussion on building a personal holding company.
