Marvin’s Best Weekly Reads May 26th, 2024
“Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.” — Dr. Seuss
- “But now, my 21st year in Japan, something has happened. On Feb. 22, the Nikkei 225 closed at 39,098.68, finally breaking the record set at the end of the 1980s. It was both an economic and psychological milestone — and the result of a confluence of painstaking policy changes, geopolitical imperatives and sheer luck.
And there’s far more than the market breakthrough to prove that the country is out of its funk: everything from global diplomacy, financial and corporate vitality, military strategy, pop culture and even sports (Shohei Ohtani ranks among the world’s most famous athletes).”
2. A great discussion this week. Best convo in Silicon Valley these days (outside of BG2 & All in Podcast).
3. “AI is accelerating growth in a $75b market, 20 year old market. If these growth rates aren’t a sign of anything to come, the amount of market cap creation in front of us will be a garguantuan figure.”
4. This is a great discussion with one of the best investors and operators in tech. Joe Lonsdale of 8VC ( Palantir and Addepar)
5. “America stands at a crossroads. The decline in our industrial leadership, contrasted sharply by China’s ascendancy, is not just an economic challenge, but a clarion call for a strategic, cohesive response. The urgency to act is not for a lack of competitors or existential threats, but from a diminished clarity about what to do about it.
We must redefine our national ethos with clear, powerful ideals to drive industrial revitalization and propel America into the 21st century. This means firmly committing to a set of principles, investing in reindustrialization — an unprecedented feat for nations that have previously de-industrialized — and drastically reducing administrative burden. The wealthiest areas in America should be innovation hubs, not regulatory centers. China does not inhibit themselves with IP issues or obtuse environmental policy. Ultimately, our policies must also foster an environment where manufacturing prowess is not only nurtured but celebrated. We must encourage daring individuals to build things, then actually let them do it.
Culturally, this means we must make doing hard, physical work cool again. Industrial roles won’t out-pay Google or Jane Street, so they must attract talent through their mission and values. Before SpaceX, the smartest kids in school were not going into aerospace. Companies like Anduril and Hadrian have similarly elevated the status of their sectors, attracting top engineers to work on the most important issues. But this must happen across every industry and problem set, not just the sexy ones like space launch.
To some, these words may seem familiar, even trite. Regardless, I hope recognizing our industrial lag and the high stakes involved resonates deeply. This is not merely a matter for venture capitalists and politicians to pontificate; it involves us all.
You have a choice: actively engage in manifesting this industrial future, or face being drafted into efforts to reclaim lost ground — this time, under duress, and at a grave disadvantage, perhaps under new rules enforced by an adversary.”
6. “The human brain has extensive circuitry devoted to imagining, and worrying about, the future. The seat of memory, the hippocampus, extrapolates possible futures from our experience of the past. Our default-mode network — the components of the brain most active when we’re not focused on a specific task — includes the brain regions concerned with the past and the future. Whenever we aren’t asking our brains to do something specific, they default to contemplating the future. And worrying about it.
An overactive default-mode network is associated with anxiety and depression, but a healthy measure of anxiety is one of humanity’s most valuable adaptations, comparable to language and the opposable thumb. NYU neuroscientist Joseph LeDoux says anxiety is “the price we pay for the ability to imagine the future.”
7. “~60% at rates below 4%?? Said another way, your wages are increasing by 5.9% year-over-year and you’re paying a fixed 4% interest rate on your house. Doggies are flush! The American consumer is consuming because it can. For many, the largest personal expenditure (i.e., housing) has been locked down, in many cases at a lower rate than the inflating wages and personal income at large.
Certainly over time, this will begin to decline as homes are sold, moves are made, and doggy houses traded, but you see the point right? This can and likely will go on for longer than you think. The US consumer drives 70% of this country’s economy, and if wages continue to climb (even at a shallower clip), the impact of the 2/3/4% mortgage rates will provide a tailwind for years to come.
So consumer strength? Expect it to continue, expect the dogs to keep running. Heck, they might even be flying soon as everyone seems to be traveling.”
8. “If Venetians’ fortunes were at their height, they were all too aware of how far they had to fall. Threats loomed to the east and west which might knock them off their perch. Their complete dependence on the maritime trade made them vulnerable to the rapid growth of Ottoman naval power, while her modest land empire was an inviting target for Europe’s growing powers.
Nevertheless, Venice averted any sudden catastrophe. Although nowhere near strong enough to compete head-on with the centralized states that were then emerging, her inevitable decline was long and steady, lasting a full three centuries. It was not until 1797 that she finally succumbed to the tide of the French Revolution, to which no European state was immune. The ability with which Venice managed this, emerging as well as could be expected from such a time of crisis, makes it a fascinating case-study for the problem of grand strategy.”
9. “In hindsight, I believe one of the best things an entrepreneur can do is to find a mentor, coach, or friend who believes in them even more than they believe in themselves. Of course, entrepreneurs are often confident and visionary, but even with that, there is always a need for help and mentorship. Finding a person who genuinely cares and believes makes all the difference.”
10. Grim reading but doesn’t make it wrong.
“In the end, no one who wants to preserve and grow their savings they worked hard for can trusts losers, and they’ll never stop what they’re doing, so we continue on course.
Plan remains the same, high net cashflow to overcome the suppressed real returns our policy makers who preach about capitalism, rules based order, and democracy force on us, and work to diversify assets across jurisdictions since there is no united front among western policy makers so best to have assets in multiple jurisdictions so one set of policy makers don’t have absolute control over your life.
Then never trust them with your bitcoin and if you store gold be careful.”
11. One of the most important companies trying to scale and rebuild American industrial capabilities.
12. An excellent conversation on founding startups and doing Venture investing at a top tier VC like USV.
13. “In these coming battles, U.S.-armed Ukrainian soldiers have a good chance of heavily degrading Russian manpower and equipment, Kallberg believes.
“One thing that this highly lethal equipment will do is it will increase even further Russian losses,” Kallberg said, underscoring the heavy casualties Russian troops have already suffered in terms of experienced contract soldiers and officers, especially in recent months.
“For a real offensive combat, you need bigger units who can support each other… That’s not going to work because Russia doesn’t have tactical leaders like captains and lieutenants.
“So, facing more modern Ukrainian arms… any offensive they try will likely be a disaster.”
14. What a solid conversation on Islam, business and having the right mentality for success in life. Building your Custom Made reality.
15. “The average celebrity publicist does not have fans. But Paine, the 52-year-old redhead seen trailing Swift at awards shows and rubbing shoulders with Gayle King in the Eras Tour VIP area, has become a Swiftverse cult figure in her own right. Fans post reverently about her PR machinations and share videos of her expertly attending to Swift’s needs: smoothing out Swift’s dress on the red carpet, leading Swift right past a scrum of reporters whose questions have not been approved, subtly offering Swift what appeared to be water at the Video Music Awards — a night when the star was filmed dancing in a manner that suggested inebriation.
Swift has trained her followers to look for meaning in her every gesture, outfit and Instagram caption. Paine’s own work — the stories she chooses to respond to, the narrative she puts forward in the media — has become part of that lore.”
https://archive.ph/3PlhW#selection-2521.0-2537.183
16. “So getting back to NVIDIA, I don’t see any force stopping the juggernaut in the next few years, other than a huge decline in the need for AI compute, and that seems unlikely. Any startup competitor could easily be acquired by NVIDIA for tens of billions of dollars and it would barely be material given NVIDIAs market cap. And while the other major chip companies are mounting a challenge, particularly AMD, the demand for GPUs is so great, and will be for the next few years, there is room for massive growth for multiple players.
When NVIDIA eventually slows down, I suspect it will come from one of two areas. The first is a surprising shift in market use cases. Given the long development cycles of computer chips, it’s hard to be as responsive to the market demands as software companies can be. And product designers have to choose some level of predictability and reliability in their components and their partners, which is why they favor proven tech over innovative new designs most of the time. But the way NVIDIA benefited because their chips for graphics cards happened to be a good match for new AI workloads — I think something similar could happen to slow them down. Some new popular AI workload will be a better fit for something other than a GPU, but a chip that is already established in the market in other ways.
Or secondly, it comes from a company that is building their own chips and decides to get into the broader semiconductor business. This means Apple, Amazon, Facebook, or most likely — Google. But all those companies, even if they can compete technically with NVIDIA, lack the infrastructure to sell and support chips and those who develop them. Building those capabilities will be slow.”
17. Luke Belmar is the man. Always so much to learn from him.
18. “The pursuit of optimization in various aspects of life is understandable, and often commendable. But the relentless desire to squeeze every scrap of productivity or efficiency from each moment has unintended consequences, and is a robotic way to live. I’m still unsure why anyone would want to take inspiration for life from insects.
I also think it’s a clear symptom of why so many people are unhappy in the modern world. Balancing optimization with flexibility, spontaneity, and an appreciation for the present moment is key to a holistic and sustainable life. And isn’t that what we should be aiming for? Not all of it might be ‘efficient,’ but that’s the point.”
19. This video makes me miss Japan even more. I love that place. Counting down the days till I return there later this year.
20. Insightful discussion on the future of democracy. Worth listening to as it does a good job predicting civilizational rise and collapse. Do we enter a new world order?
21. “To say that everything is a cult is a bit of an overstatement, but as a general framework for understanding the world at the moment, it is helpful. The way we consume content, the way fandom works, the ways we sort ourselves into tribes and camps online, even the way lots of industries work, including the news business — it all has shades of culthood. This is easier to see if you set aside the more extreme examples of cults, like the ones that end in mass suicide or shootouts with the ATF, and instead think of cults as movements or institutions that organize themselves around the belief that the mainstream is fundamentally broken.
Understood this way, there are lots of cults, or cult-adjacent groups, and not all of them are bad. But if society keeps drifting in this direction, what will that mean for our shared democratic culture? How much fragmentation can we sustain?
Today, especially in the media and entertainment space, we have this really interesting popularity of new influencers or new media makers adapting as their core personality the idea that the mainstream is broken, that news is broken, that mass institutions are broken, that the elite are in some way broken and elite institutions are broken. The fragmentation of media that we’re seeing and the rise of this anti-institutional, somewhat paranoid style of understanding reality, I see these things as rising together in a way that I find very interesting.”
22. Tai Lopez is a legend and polymath. So many great ideas and wisdom.
23. “GQ columnist and avid gym-goer Chris Black isn’t built to lie on a beach all day. So when he needed to unwind, he caught a flight to the UAE, to spend an exhausting but rewarding week living, training, and recovering in a “Fitness Suite” 35 stories above Dubai.”
24. “Pairing the common warbot with the common soldier, in an effective design and execution of new doctrine, training, and acquisitions, is the difference between the American military winning future battles and bleeding out into irrelevancy.
We can’t effectively design and train large formations on man-machine teaming without first getting the basics right, and that means the integration of warbots big and small at the lowest levels. It requires everyone, from senior leaders and policymakers down to the E4 team leader, to think well and good about the integration of man and machine beyond the Terminator-ethics hysteria. Whether you like it or not, your next battle buddy might be a warbot, so start thinking well and good about how you’re gonna work together.”
25. Jackson has built an incredible Aerospace and defense-tech portfolio at Silent Ventures.
26. This is a good thing btw. Japan getting strike carriers.
27. My new fave podcast. Great discussion on what’s happening with AI models.
28. Excellent episode. You will always learn new business stuff from this show.
29. “1. Paid social traffic will eventually die. When I say die, I mean it’ll stop performing well as the highest income users will pay for not seeing ads.
Today you can make a product and test it with paid ads. In the future, you will have to pay influencers to promote you. This is already true and will get even truer as social moves from free to paid.
2. The future of ads is influencer marketing. Since the only way to reach a wide audience is via paying influencers (paying the platform will be a thing of the past), the value of influencer marketing will increase.
Of course we might see some sort of tiering where the base paid social media plans will still show ads and the only the top plans are fully ad free. Even if this happens, the top customers will only be accessible via influencer marketing.
3. Build an audience NOW. If you want to profit from this trend, you need to build an audience NOW. Not tomorrow, not next week — NOW.
Start posting regularly on any social media platform and try to grow. If you do the work now you will reap the rewards later.”
30. “And although his perspective is very much that of an investor, anyone — founder, investor or employee — can learn from his approach. Treat people well, help others even when you have nothing to gain in return, and be “outrageously reliable”.
In the long-term, you’ll have more success. And it’s a hell of a lot more fun.”
31. “So now we’re swinging back the other way, and business apps are trendy again. Between 2023 and 2024, Matt Turck’s data landscape grew by 42 percent, from 1,416 companies to 2,011 companies. The general-purpose analytics categories — BI, data visualization, and data analyst platforms — grew by only 26 percent, but domain-specific categories — product, sales, marketing, finance, HR, legal, and customer experience — grew by 56 percent.6
It’s the circle of life in Silicon Valley: Bundle, unbundle; centralize, decentralize; pivot horizontally, pivot vertically. Build multipurpose analytics and BI platforms that are sold to data teams; build domain-specific tools that prestructure common departmental data sources and predefine popular business metrics. Do your analysis freehand; trace a ready-made template. Alternate between the two forms of BI. Though each cycle works a little better than the last, nothing fundamentally changes.”
32. This is a pretty sober discussion. But great lessons for VCs.
33. “New consumer devices are emerging because AI allows you to use the sensors, silicon, and interfaces developed for smartphones in novel ways. AI can take the input of large amounts of ambient data, such as the audio from your conversations and your behavior as you use your computer. Then, AI can output unique insights based on that corpus of data — much more personalized, sensitive, and accurate than what regular software can do today. It can also leverage existing data for new actions, such as following voice commands more closely. Basically, it’ll listen to what you say and bring out smart stuff that you missed.
While my description may be banal, the possibilities are exciting. Smartphones are dominant, but aren’t perfect. Consumer addiction is — at least in my estimation — largely due to the monetization of smartphone app stores and the form factor of the device. If AI can evolve our relationships with devices, it’s a meaningful change. An AI ambiently crunching data and performing tasks without the distraction of a screen is net good for humanity. And, as a happy capitalistic coincidence, it would probably make the inventor of said device the owner of several large yachts.”
34. Cloud continues to grow along with its Capex. But this is why big players will dominate AI.
35. “Language barriers are the very earliest thing that companies have to overcome when they build factories overseas. The fact that TSMC still can’t even communicate in English means that it’s still very early days.
That’s why it’s so unhelpful to declare that TSMC’s factories in America are a “debacle”, just because of a modest delay at the outset. Foreign direct investment is a long, winding, arduous journey. It’s not the kind of thing where we should expect everything to run perfectly smoothly on the first try.
Meanwhile, the mystique of East Asian culture is just not a good lens through which to view challenges like this one. Cross-country cultural differences are real, but they aren’t as impactful on business as people like to think. Humans are humans, and they can learn.”
36. “Today there are striking and troubling similarities between our current moment and the original Cold War between the U.S. and Soviet Union that defined the second half of the 20th century. Once again, the world is witnessing two major powers engaged in a global competition for supremacy, trying to lock in an economic, technological, diplomatic, and military advantage anywhere and everywhere an opportunity presents itself.
Virtually every region of the planet is a battlefield for this confrontation: from the scramble to secure mining rights for critical minerals and advantageous trade deals in Africa and Latin America, to the establishment of economic and military partnerships across Asia, to backing opposite warring sides in Europe and the Middle East.”
37. “But if we’re not wired for conflict, we’ll meet the same fate as if we never reproduced. Evolution is a competition for resources, and conflict is inevitable. The ecosystem isn’t much concerned with who plays fair: Everything is prey to something else; conflicts arise over resources, mates, territory, and pride. We either develop a reward system that deftly chooses battles, or we’ll be consumed by a species that does.
Humans are not immune. We evolved hiding in the trees while stronger, faster, and more sharply clawed creatures roamed the savanna. So we developed a robust neurological system for identifying threats, gauging their severity, and responding quickly, often before we’re conscious of the threat level. But fight-or-flight wasn’t enough to shepherd us out of the forests. First we had to develop our superpower: cooperation. The cocktail that’s made us the apex of apex predators is cooperation on the rocks of conflict. Under threat, we become a “band of brothers,” establishing “sisterhood” to “fight the power” and form “one nation, indivisible.”
38. Best conversation in tech and Silicon Valley right now.
39. “Of course, plenty of software companies sell to non-software companies. By and large, the economy is doing fine but not growing fast adjusted for inflation, so the sales from software companies to non-software companies have been slow and steady. Sales from software companies to other software companies have been nonexistent, resulting in an overall malaise in the software business.
When does it all end? I don’t know. We’re still bouncing along the bottom. At some point, things will pick up, and we’ll get back to a more aggressive growth orientation as a software industry. Hopefully, that’s in 2025, but you never know. The lack of investment by software companies and software companies selling to other software companies has been eye-opening to me and is one of the important reasons why the software industry has struggled for nearly 2 1/2 years.”
