Marvin’s Best Weekly Reads November 19th, 2023
“Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.” — Winston Churchill
- “We all hear it. All the time. “Make onboarding simpler! Get people into your product as fast as possible! Make it free! You’ll figure out how to monetize later!”. It makes sense. And it obviously works for some. It just didn’t work for us.
We believe that making people invest time, commit to a trial, and put skin in the game will help you build a more engaged user base. This friction weeds out the people who aren’t serious and creates a sense of urgency. It also forces you to focus on the customers and users that really matter.”
2. “You may have heard Noam Wasserman’s “Rich or King” choice: Company founders are either in it for the money (“Rich”) or in it to build a lifestyle and personal identity (“King”). FogCreek and 37signals are built to be “King;” all venture-funded companies are built to be “Rich.”
Noam says that successful founders make the “Rich or King” decision up front, and that though it doesn’t matter which path you take, you must be consistent in your actions. You can’t mix “be king” tactics with “get rich” end goals.
In short, although the goal was “Rich,” I achieved it by behaving like the goal was “King.” I don’t know why people find this contradictory; after all, acting like “King” means building a long-term, sustainable business, and that’s exactly the kind of business that gets acquired.”
3. “In other words, there are basically four Global Souths. I think I’ll give them names:
The mostly-developed countries: Industrialized countries that are on the cusp of developed status, and are only thought of as “developing” for historical or political reasons. These include Turkey, Malaysia, and arguably China, Thailand and Mexico.
The industrializing countries: Rapidly industrializing countries that are still poor or middle-income but are growing fast. There include India, Bangladesh, Vietnam, the Dominican Republic, and potentially the Philippines and Indonesia.
The resource exporters: Upper-middle-income countries that specialize in resource extraction. These include Brazil, Colombia, South Africa, Iran, Botswana, Namibia, Kazakhstan, and so on.
The poor countries: These countries mostly export natural resources but either don’t have enough of them to afford decent standards of living, or are plagued by war and/or poor governance. These include countries like Nigeria, Ethiopia, Afghanistan, Somalia, Pakistan, Sudan, and so on.
Every time a country moves from the “industrializing” category to the “mostly-developed” category, the old dividing lines between Global South and Global North become a bit less relevant.”
4. “Carta, an otherwise boring company solving a mundane-if-important problem, managed to get itself in the news this past week for all the wrong reasons. The fiasco was the result of CEO Henry Ward writing a post on recent negative pressthat was presumably intended to inoculate his audience, but instead backfired spectacularly. “
5. “It becomes a self-fulfilling prophecy,” she says. “It has a cumulative, rich-get-richer effect, if you’ve managed it successfully.” Sales come and go, but a NYT bestseller bio line is forever.”
6. Long been a fan of global investor Jim Rogers.
Make sure you have different options in the world, especially now as we move from a unipolar world to a multipolar world.
7. “It’s funny: five years ago, I had an interesting-sounding job that paid very well, a brand new charcoal gray Jeep Grand Cherokee Trailhawk, and an abundance of predictability. There was nothing that resembled any kind of tangible crisis, no looming personal apocalypse. Money certainly wasn’t an issue.
I also had no control over my existence. No influence over the direction of my life. No ability to actualize what I really wanted. I spent much of that period thinking about how to kill myself.
Today, all I have is fear, uncertainty, and the threat of insolvency. This has objectively been one of the most challenging experiences of my life. But in many ways my existence has felt easier, or at least more optimistic, than five years ago. How could that be?
The answer is that I’m living a life that is mine.
My operating philosophy over the past few years has been that agency and self-sovereignty are the most important qualities we can cultivate in ourselves. My belief has been that when we develop a deep, genuine understanding of who we are and what we want and then learn to give ourselves permission to pursue that path, we show up as the best version of ourselves in the world and can fully engage with it. This imbues our relationships, our work, and our existence with a fundamental depth and meaning because we are acting from a place of authenticity.
But it’s easy to justify a belief system when things are going well. I wrote a lot about the transformative power of these ideas when the business was growing and life was relatively easy. Now that I’m confronted with a crisis, it’s a perfect time to ask: does my belief system hold up?
Well, I’m staring down the barrel of bankruptcy with no idea what comes next, and I have a better quality of life than I did when my bank account and 401(k) had big numbers with lots of zeros after them. So I’d say that’s a yes.
Living on my own terms has fundamentally transformed the texture of my existence. The fact that these are problems I’ve chosen, that they are part of what comes with the path I’ve consciously created, makes them worth the cost a hundred times over. It gives them an entirely different flavor.
Instead of being forced to deal with the challenges of circumstances that were decided for me, I’m grappling with adversity in an arena I’ve built. That’s the kind of life worth living: one in which I control the terms of my engagement with the world, regardless of what happens.”
8. This is sad. Despite all the glamor and riches, we usually don’t know what other people are dealing with in their life.
9. “Even though we have a pervasive tendency to hold self-serving views about ourselves, we believe our social lives are more impoverished than others.
Most of us think our “social CV” is worse than average.
Why is this?
Our standards are biased by extremely visible and prominent people. Even among our social circle, the people we pay most attention to are the popular ones. They set a benchmark in our minds for what other people are up to.
But the paper also found that people do in fact desire a richer social life. They wished they attended more parties, had more friends, dined out more frequently, had a larger social network, and communicated more often with their families.
Furthermore, when people believed that their social lives were more impoverished than others, they reported lower levels of life satisfaction.
Having a more realistic view of the lives of others can alleviate negative feelings brought on by comparing ourselves to the most extraverted and visible people we know.”
10. “Creators and advertisers are constantly in need of image content, and supply has grown to meet that demand; the volume of image content has steadily climbed for more than a decade. The number of photos shared over social media has tripled since 2013, with 14.1 billion images shared per day across WhatsApp, Snapchat, Facebook, and Instagram as of October 2023. Even on video-first platforms like YouTube and TikTok, creators and advertisers rely on thumbnail images to get users to click on the video.
Not everyone can take breathtaking photos or draw photorealistic art, but anyone can type an idea for an image that AI can then generate. In its early days, this ability quickly attracted the interest of social media users; for example, Hank Green’“cat”thread on Twitter attracted over 100K likes. Outside of social media, “AI art generator” received an average of 864K searches per month globally from August 2022 to August 2023, while “stock photo” only achieved an average of 94K searches per month globally in the same period. Generative image AI is already being used to quickly produce concept art, make movie trailers, and even win art competitions.
Midjourney describes itself as an “independent research lab” known for producing a generative AI program that creates images based on text prompts. As the demand for online imagery continues to increase, Midjourney could offer a cheaper and more customized alternative to stock photography and reduce time spent on the brainstorming phase for contractors, game designers, and other artists alike.”
11. “Israel now has been forced to look beyond deterrence. It has now concluded that it is dealing with an entity that has never truly been deterred and can’t be deterred in the future. Wilder elements in Israel may fantasise about pushing all the Gazans out of the territory but that is not a serious option. This where the other flaw in Israel’s past deterrence strategy becomes painfully evident. It has not been accompanied by a more positive political strategy.
The only long-term vision Israel offers is a Gaza without Hamas. The chaos and instability that would result if Gaza was turned into an ungovernable space without anyone in charge would serve nobody’s interests. A way will have to be found to fill the space.
The way that Israel has defined its objectives, success for Hamas simply requires surviving in a commanding position in Gaza. Even if is forced to evacuate its positions, Hamas will not disappear. It represents a strong political tradition in the Arab world and whatever happens to it over the coming weeks it will have the capacity to regenerate, and return to power if there is no alternative government in place.”
12. “At the G20 Summit, President Biden, along with the leaders of India and Middle East and European nations, unveiled the India-Middle East-Europe Corridor: a project to link Europe and South Asia more closely together via the Middle East. As currently envisaged, IMEC would compromise of two corridors: an eastern one that connects India to the Gulf through sea lanes and northern one that connects Saudi Arabia to Europe through Jordan and Israel.
Once finished, IMEC would establish an efficient transit network that supplements existing transport routes for trade among participating states
Age-old overland and maritime routes around the Eurasian rimland have been and will continue to be reconceptualized. West Asia — the convergence of the Middle East and South Asia — is now being rebuilt as a critical geopolitical and geoeconomics space between Europe and the Indo-Pacific.
America is using its still-dominant global position to steer and influence the process of economic and geopolitical integration among the littoral states of the Eurasian supercontinent, in line with America’s interests. Equally important, it is a shared interest of the IMEC nations to build an integrated economic ecosystem around the Eurasian rimland that, by virtue of its existence, could contest China’s economic dominance in Eurasia.
For domestic social and political reasons, however, the United States can no longer afford to give concessions that many political leaders and voters believe hurt its heartland and middle class as part of its statecraft. In any case, America’s markets are already relatively open to many of its trade partners. IMEC aligns with the Biden administration’s “Foreign Policy for the Middle Class,” with Washington as a key driver, without resorting to market access as a bargaining chip for geopolitical and geoeconomic alignment.”
13. Excellent framework for looking at and building AI companies.
“As a vertical, point solution, you’ve now delivered successful unbundling.
Most ‘disruption’ of the status quo happens through unbundling. But most venture returns are realized through rebundling.
Fintechs specializing in one activity unbundle banks, Healthtech firms specializing in one aspect unbundle healthcare providers, and specialized energy startups unbundle utilities.
Yet, there is no sustainable value capture in unbundling. Unbundling unseats incumbents but doesn’t create scalable and defensible value pools.
That is achieved through rebundling. Rebundling involves bundling multiple unbundled capabilities into a cohesive customer-centric offering.
Most important, the successful ‘rebundlers’ establish a hub position and gain primacy of user relationship.
Venture capital chases unbundling because unbundlers hold the promise of rebundling and capturing value. Yet, most venture money is lost because a tiny handful rebundle.
Square, Plaid, Stripe are a few of the unbundling fintechs that successfully rebundled and dominated one or more horizontal layers in the value chain. Most others fell by the wayside.
The winners in Gen AI will likewise need a path to successful rebundling.”
14. One of the best global macro discussions I’ve listened to for a while.
I don’t agree with Arthur Hayes on many things but there are lots of interesting observations here.
Must listen to prepare for the big changes coming in the world geopolitically and economically.
15. Hmmm……this is a bit frightening yet it’s happening. There is a matrix it seems.
16. “Data businesses are fiercely competitive, both with other data aggregators, but also with the other players in the value chain (such as the data sources), so moats are foundational to building a large data business. In fact, many of the best data businesses employ multiple of these moats and have several layers of defensibility.
In the decade ahead, there will be dozens more $1+ billion data businesses created, and thousands more created that won’t hit that level of success. The ones that succeed won’t just be the companies with the most comprehensive data or the most curation, but they’ll also require thoughtful strategies designed around strong network effects.”
17. Solid interview on B2B enterprise sales for startups.
18. “In sum, Asia wants and needs the U.S. to protect it. It needs U.S. military power and economic engagement, not to crush China, but to preserve the status quo that has worked so well. Developed Asian countries want to keep being rich and free, and developing Asian countries want to keep getting rich on their own, and to do this they need the U.S. to deter Xi Jinping from trying to upend the modern world’s greatest success story.
The Middle East is in basically the exact opposite situation.
The U.S. should therefore continue to maintain as light a presence in the Middle East as possible. This doesn’t mean we should withdraw completely. There are extreme cases where judicious, targeted applications of American power can prevent some of the catastrophes that regularly plague the region — protecting the Syrian Kurds from genocide, restraining Israel’s brutality toward the Palestinians, or helping Israel protect itself from wholesale destruction by Iran and its proxies.
But these should always be done with a minimum of force and money and attention, and always with an eye toward withdrawing again.
In Asia, meanwhile, the U.S. should be beefing up both our defensive power and our engagement with other countries. We need to accelerate the supply of defensive weapons to Taiwan, Japan, Vietnam, India, and the Philippines, and to keep building and strengthening and expanding multilateral organizations like the Quad.
We need to re-engage economically by re-joining the modified TPP, and by creating a dense network of other economic agreements in Asia. And in general, we just need to pay a lot of attention to the region, making sure our allies and quasi-allies and potential allies know we’re there for the long haul, and won’t suddenly withdraw to go plunge into some foolish conflict in the Middle East.”
19. “I’ve done a lot of cost cutting over the course of my career so I thought I’d share one key rule that sometimes gets overlooked when you’re in the thick of this process. Here’s the rule: no matter what you do, no matter how deep the cuts have to be, keep the company a great place to work for those who still work there (aka, the survivors).”
20. “Napkin-math suggests quotas should increase about 20%.”
21. “And what have Iran, Russia and Hamas in common? And come to think of it, China and North Korea? Look at Armita Geravand. Consider the Russian atrocities committed in Ukraine. And yes, look at how members of Israel’s parliament felt after a private showing of the Hamas GoPro-captured pogrom.
All these nations are united in a total and utter disregard for humanity, even their own people are routinely thrown under the bus. It is a level of institutionalized violence and abuse the likes of which we thought we would never see again. That is the key commonality and that is what we are up against.”
22. “A founder who has a handful of venture-backed friends — successful ones who have raised multiple rounds of capital and who have grown their companies through different stages — has a huge advantage over one that doesn’t. This group of close connections can not only introduce them to capital but can give strong referrals based on years of shared history. It also provides a built-in set of advisors that can be called upon along the way.
You can tell when a founder has a goto set of people in their network to ask all the dumb, remedial questions about hiring, fundraising, deal doing, PR, etc.”
23. “The CCP has control over the most powerful, yet elegant, weapon in the history of propaganda, and the default position is they (i.e., the CCP) are not using it? I have stated this view before. China cannot beat us kinetically or economically, but it can beat us by tearing us apart from the inside. TikTok, in my view, has the potential effect of several carrier strike forces.
A 21st century Trojan Horse that also generates $100 billion in annual revenue. I was at the White House this week for an AI Summit. Government officials are not allowed to be on TikTok for security reasons. This comes at a cost, as I believe they’d be more alarmed at the skew of information.”
24. “There are no adults in the room
This can be applied to any industry but especially in VC. There is no set formula to be successful in VC, and no matter how much it may seem a partner can predict the next big winner in your portfolio, know that they have made hundreds if not thousands of judgement calls just like that which have not paid off. Everyone is human and putting people on pedestals because of their previous experience will only make learning from them harder.”
25. “There is no substitute — none — for solving real customer problems. No smoke and mirrors, no massive round, no PR and no hype will save you if you’re not solving a top-of-mind problem for your customers. It could be 10 customers or 10,000. But if you ask your customers if you solve their #1 or #2 problem, their answer needs to be “Yes”.”
26. This was a super fun interview I did while in Prague at the Engaged Investments Conference.
27. “With Israel and Palestine we’re now facing a new Current Thing — a situation where people have to take sides — but this time it’s much more complicated. Unlike previous moral movements, it’s unclear what the right Current Thing is.
Arnold Kling’s theory of politics helps explain what’s happening here: Liberals care about supporting the oppressed vs the oppressor, whereas conservatives care about supporting civilization vs barbarism.
So the left automatically supports what they see as the oppressed class (in this case, mostly Palestine), and the right automatically supports what they see as the more civilized group (in this case, mostly Israel).
And so the fact that the right supports it for bad reasons could drive people on the left to not support it. The same way Trump advocating for coming out of COVID lockdown caused the left to go bananas for endless lockdowns and masks etc.”
28. “While the Americans and the Europeans have taken the initial steps to increase production, it is unlikely that Western defence production, and Ukraine’s indigenous production, will fully meet the needs of any 2024 offensives by Ukraine. Ukraine needs around 1.5 million rounds of ammunition annually. Europe can produce around 300,000 rounds per year and the Americans are building towards a total production of 1.2 million rounds per year.
But at least some of this will be required to backfill stocks that have already been sent to Ukraine. And as the concurrent wars in Israel and Ukraine demonstrate, the US defence industrial base — and that of its allies — are not adequately prepared to support these wars and build up stocks to deter a war with China.
At the same time, Russia increased its defence budget and spent the past year increasing defence production. It is also sourcing defence materiel from the huge stocks of the North Koreans. While Ukrainian munition stocks may last for several more months, the combination of insufficient Western production, dwindling on-hand stocks in the militaries of Europe and the United States, and the increased supply to Russia means that Russia may have an advantage in munitions by the middle of 2024.
None of these headwinds portends disaster ahead for Ukraine, however. It is a nation that has demonstrated widespread individual heroism, societal resilience and a broad spirit of innovation. The political, strategic, and industrial challenges are solvable. But they will demand more attention from Ukrainian strategists — and more assistance from the West — to ensure that in 2024 they do not collectively and with other surprises in war overwhelm a nation that is fighting for its very existence.”
29. “It’s best to start with the subjective experience, because there is no doubt when you have it. (If you’re not sure whether you have Product/Market Fit, you don’t.)
It is a momentum change from “push” to “pull” — a change from fighting for each customer, one at a time, to a flood of signups that you can’t even explain. It’s a change from “how do we get more customers” to “how do we handle the influx of demand?”
It’s working. Something clicked, like a final puzzle piece snapping into place, a “fit,” and suddenly the floodgates are open.”
30. “Anyway, I don’t want to claim that “demography is destiny” here, and it’s all too easy to look at individual countries and tell just-so stories about how aging and fertility might have affected their conflicts. And even if an older population and fewer children do make war less likely, there are still a handful of war-torn countries — Afghanistan, Yemen, Iraq, Palestine, and Syria — that are still young and still have fairly robust fertility.
But it’s hard not to look at these graphs and feel that something big is changing. The old Middle East, with massive crowds of angry young people thronging the streets, ready to explode into nationalist or sectarian or revolutionary violence, is steadily disappearing, being replaced by a more sedate, aging society. Given the horrific outcomes of the last few decades, it’s hard not to see that as a good thing.”
31. This looks really good. Reminds me that I need to go back to Japan soon!
Man I LOVE that place.
32. Lots to learn from the legendary Sequoia Capital.
Last couple years have not been great but they are playing the long game.
33. “They learned that nothing governed by natural laws stays the same — but every spring, the cycle would repeat. The leaves always returned after the winter. They watched the rivers. They learned that the salmon would arrive, depart, and come back again.
They learned that our world is governed by cycles.
We say that the most undervalued asset on Wall Street is a history book. I think that same principle extends to government and culture.”
34. Long overdue. Taiwan needs to arm up and train up fast.
“The $80m is not a loan. It comes from American taxpayers. For the first time in more than 40 years, America is using its own money to send weapons to a place it officially doesn’t recognise. This is happening under a programme called foreign military finance (FMF).
Since Russia’s invasion of Ukraine last year, FMF has been used to send around $4bn of military aid to Kyiv.
It has been used to send billions more to Afghanistan, Iraq, Israel and Egypt and so on. But until now it has only ever been given to countries or organisations recognised by the United Nations. Taiwan is not.”
