Marvin’s Best Weekly Reads November 26th, 2023
“Creativity takes courage.” — Henri Matisse
- “Bansko’s growing digital nomad population is at its most visible during the festival, but that’s only half the story. According to online resource Nomad List, the town is the world’s “most-consistently growing remote work hub” of the last five years. Since 2018, it has grown by 231%, more than Warsaw, Madrid and tech media darling Tallinn.
This seems somewhat anomalous: surveys suggest digital nomads generally favour coastal cities (Lisbon, Barcelona), islands and beach destinations (Madeira, the Canaries, Bali). So, why are more and more people heading for a small inland mountain resort in Bulgaria?”
2. Ohio is well positioned for the future. Manufacturing is back in America. More work to be done though.
3. Hmmm…..
“Adam Neumann is rich thanks to WeWork. Now, he has a chance to buy something on the cheap that he once held dear.
Neumann reportedly made about $770 million when the office space company went public via a special purpose acquisition vehicle in October 2021. And he sold hundreds of millions of dollars worth of stock before that. (It’s worth remembering that he made a fortune while many employees and shareholders saw their positions decimated as WeWork’s value fell.)
Now that WeWork has filed for bankruptcy protection, will the company’s wealthy and infamous founder tap some of that fortune to rescue the brand that he willed into being by sheer force of personality?
Today, one former WeWork executive texted me that he thought Neumann would try to reclaim the company he founded in 2010.”
https://www.newcomer.co/p/will-adam-neumann-rescue-wework
4. “There is no one doing more interesting work, more quickly than OpenAI right now. The company’s rate of progress is staggering, and it doesn’t look to be slowing down any time soon. At this conference, the word on the street was that OpenAI is a talent juggernaut, and that it feels very much like Stripe in its prime. (In fact, I’ve heard that OpenAI has hired a lot of people who used to work at Stripe.)
The energy in the room was palpable. I don’t think there’s a bigger or more interesting story in technology. The coming months and years are going to be wild.”
5. Founder-operator led fund for Southern Europe. It’s much needed.
6. This is an excellent discussion this week on the OpenAI developments and big changes in the VC industry.
7. This is an excellent discussion. Pomp is a friend and is building a media empire in an incredibly smart way.
8. An excellent episode with lots of interesting perspectives on AI and the various key players. Also SBF.
9. “The EUR 925m acquisition required Allegro to issue new stock and take on some debt, but in return it got access to another 32m consumers across five countries, 4.7m of whom were already active users of the various sites.
Suddenly, Allegro was the number #1 or #2 e-commerce player in not one but four countries of the region, and it got a less established but growing position in a further two countries. These new markets also came with a bigger catch-up potential than Allegro’s home market: below 8% e-commerce market penetration, compared to 11% in Poland. Eventually, Central and Eastern European consumers will give in to the convenience and price advantages of online shopping to the same degree as consumers elsewhere (in the UK, 25% of all retail sales are done online).
Plus, there is the ongoing overall economic growth aspect. As readers of my recent feature about Hungary will know, Central and Eastern European countries are generally growing at a faster rate than their counterparts in the Western half of the European Union.
In summary, Allegro has the chance to grow its markets to two to three times the current size, and backed by faster underlying organic growth.
After taking a look at it from a 33,000-foot perspective, it appears like the combination of structural growth and a strong market position makes Allegro worth doing a bit more homework (which you should always do before deciding on an investment!).”
10. “Our gurl Yellen publicly supports her boss, but in private she is scrambling to ensure the empire can issue debt at an affordable price to keep the children fed. Who are the children? Baby boomers who are getting old, sick, and need an ever-increasing amount of healthcare goods and other entitlements. The military-industrial complex needs to be fed an ever-expanding defence budget to produce more bullets and bombs. Interest to rich savers needs to be paid so that promises are kept to hodlers of debt.
Yellen might be a bad bitch, but the market ain’t buying what she is selling. Yields on long-end treasury debt (maturities >10-years) are rising faster than short-end yields (maturities <2-years). This presents a deadly problem to the financial system called the “bear steepener”.
11. Brad Gerstner is one of the best tech investors in the world period.
12. An incredible conversation here on Venture capital from some of the best in the business. Benchmark Capital.
13. “Meanwhile, under this onslaught of Russian and Chinese messaging, the U.S. government stands serenely aloof from the fray. Administration officials will give speeches and pen the occasional op-ed in Foreign Affairs, government officials make anodyne tweets, and the Voice of America is still putting out articles that no one reads, but the kind of coordinated forceful official advocacy of liberal values that we saw under FDR is considered propaganda to be avoided at all cost.
It should be obvious that this is a recipe for liberalism’s utter defeat. Imagine if a country being invaded by a conquering army declared that government shouldn’t get involved in violence, and outsourced the defense of the nation to private citizens with homemade guns? That is effectively what the U.S. government is doing by ceding the information sphere to foreign governments and private citizens. We are so afraid of being propagandists that we are refusing to counter the efforts of powers who have no such fear.
The U.S. government needs to get back into the information warfare game.
But simply sitting back and trusting in the Marketplace of Ideas to reach an optimal equilibrium is no longer a viable option for a liberal society. Totalitarian powers are on the march, and social media gives them the opportunity to reach American hearts and minds more directly than ever before.
One of our government’s essential functions is to guard us against such powers. If we force it to abnegate that function, mainlining totalitarian propaganda out of fear of creating our own, we’re all a bunch of suckers.”
14. “With 37 million people, Saudi Arabia is the 40th most populous country, trailing Ethiopia, Myanmar, and Morocco. The ocean of accessible oil beneath its desert makes it arguably the greatest swing vote in the world. Venezuela has greater reserves, and Iran and Canada are in the same class, but the Saudis’ wealth carries more weight. They understand they sit at the pivot point — able to swing east or west.
The most visible facet of their strategy is the normalization of relations with Iran in the face of proxy wars in Syria and Yemen while edging closer to diplomatic relations with Israel. The Iran connection was facilitated by China, with whom the Saudis are forging closer ties. (China is the largest importer of Saudi oil.) All the while, the Kingdom is still maintaining its tight relationship with the United States.
The measured, steady liberalization of Saudi Arabia, which MBS is undertaking at some riskto his power within the ruling family, is, I believe, a deft foreign policy maneuver. MBS didn’t spend $250 billion to win the 2034 World Cup, but to become the world’s soccer mom. The Kingdom is gaining influence, and the U.S. would be well served to counter China’s rapidly improving ties with Saudi — just as the Kingdom’s best post-Gaza move would be to normalize relations with Israel. That this is even feasible (it was in the works pre-October 7) is a function of MBS’s pivot from Islamism to capitalism. Like him or not, MBS might be one of the best things to happen to the West in a decade.
The Kingdom is not alone. Turkey has emerged as Europe’s swing player in recent years, extracting concessions on its priorities to accept Finland and Sweden into NATO, even as it buys Russian military equipment. Turkey’s stance in the pivot comes naturally; it is the geographic and cultural bridge between Europe and the Middle East. Istanbul also boasts a great Soho House. But I digress.”
15. A good talk with Jared Kushner, I am definitely becoming a fan of his. Very rational and insightful conversation.
16. “In summary, 2024 will see a ramp up of AI, powering tech and business market transitions at a speed we’d never seen before. This will result in many winners and losers, ranging from countries and economies to corporations and startups. I am optimistic that we are going to bypass a recession, inflation will come back under control, and companies will start to invest in growth again — despite interest rates remaining higher for longer than desired.
So, I think 2024 will be a better year than most expect but I caveat this with concern for the current geopolitical climate, as this is the real wildcard here, maybe more than any other time in recent history.”
17. “In a challenging market where new customers are a challenge, how does a company grow? Increase price & cross-sell.”
18. “Thorp beat the casinos at Blackjack and Roulette, set up the first market neutral hedge fund, Princeton Newport Partners, and pioneered strategies like convertible arbitrage.1 Before he shut down PNP, he was basically turning it into the first multi-strategy hedge fund (and later invested in the most prominent one, Citadel). If I had to summarize his story, it would be ‘genius2 becomes obsessed with games, repeatedly finds edge, survives, wins, and leaves to enjoy life.’”
19. “Walt Whitman wrote, “America…counts…for her justification and success…almost entirely on the future. . . For our New World I consider far less important for what it has done, or what it is, than for results to come.”
San Francisco, too, counts for its justification entirely on the future. It is a synecdoche for America. The future is what is important. This is its sin and its charm, its peril and its undeniable promise.
In San Francisco, the future, too, is hot and cold. When the next round closes, the sun is on your face. When the acquihire falls through, the shade is cold as ice. On Monday, AGI and universal prosperity are at hand. On Tuesday, apocalyptic doom looms, or worse, stagnation — progress’s dreaded asymptote. Feast or famine. Fever is the nature of the future.”
20. “I have provided you with sufficient data to show you that people need our help, so we must rise to the challenge — isn’t that the whole point of Fintech?
There is ample business opportunity in providing value to customers of financial products. But if benevolence does not compel you enough, consider the massive economic opportunity that exists.
Not long ago both public and private markets understood how massive that opportunity was…and then the reckoning came. It appears that the pendulum has swung probably too far in the other direction. Remember, be greedy when others are fearful.”
21. “Today, I see similar forces driving American politics into similarly shocking outcomes. Americans are abandoning politics and the political parties. Politicians are now attacking the party system from the inside. As a result, the United States may be about to elect a President who is independent of the existing two parties while simultaneously bringing the party system itself to an end.”
22. Lots of insights here on living well and how to deal with money and the future. Really worth listening to.
23. This seems to be a naive and complacent view. Hope they are right.
“For all these reasons, the consensus I heard was that China will not make any military moves on Taiwan anytime soon. It’s just too messy, too noisy, and too likely to cause disorder and chaos — all of which the PRC disdains.
While many in Taipei conceded that Taiwan’s situation parallels that of Ukraine’s in some ways, they did not feel the situation was entirely analogous. Even as Putin amassed troops and materiel along Ukraine’s border in early 2022, the consensus in Kyiv was that Russia would not invade, and that the moves amounted to an empty threat.
By contrast, those in Taipei point to the fact that any serious effort to mount a military takeover of Taiwan would require preparation up to at least a year in advance. While China has increased its provocations in the South China Sea, they seem primarily intended to project a sense of strength and looming menace, amounting to inexpensive information warfare operations. But there is no sign that a major military operation is forthcoming anytime soon. However, there was at least some sense that if Ukraine did succumb to Putin’s invasion, Xi and the CCP may accelerate efforts to absorb Taiwan.”
24. “Lessons Learned
— If you’re in regulated market, often the game is rigged by incumbents
Understand Rent Seeking and Regulatory Capture
You need a lobbying/government relations strategy from day one
— Choose VCs who understand how to play the game not those who hope it stays away
— The CEO needs to get out of the building to understand the regulatory ecosystem
CEO and board need to be in sync about the learning and strategy
— Hire initial lobbyists (but learn from them, not just outsource to them)
As the company gets larger staff an internal public affairs group to manage the lobbying effort
— If you figure out the regulatory game, it can be your defensible moat”
25. “Note: You can have the perfect plan and all the skill in the world and still fail. Sometimes, life is just bullshit. You have to be able to take that data, recalibrate and attack again. Don’t overextend yourself so that the inevitable hits that you do take are not catastrophic.”
26. “Once entrepreneurs achieve product-market fit and have the start of a repeatable business model, they should undertake the 10X exercise. Thinking through what the business would look like at 10 times the scale, 10 times the revenue, and 10 times the customers is crucial. Going through this exercise will help foresee some of the challenges, start conversations on potentially challenging elements of the business, and overall help the entrepreneur orient more towards a long-term horizon.”
27. “So much of the world has become short-sighted, focused on profit margins and earnings in the next quarter, maybe two (what are you, Warren Buffett?) Personally, we’re centered around immediate satisfaction, status, and dopamine. We’ve built our stories, our values, our heroes, and our ambitions to be centered around things that, very often, will not last.
Original thinking comes from casting off the myopic mythologies that are institutions have increasingly become built on and, instead, ideating new institutions that should get built up. What are the organizations that you want organizing the people, places, and things around us? And then do what you can with what time, talents, and energy you have, to bring those institutions to bear.
We need new stories that will drive us, and that will outlast us.”
28. “While western democracies were involved in these long duration but low intensity conflicts, emerging competitors such as China and Russia became richer developed new modes of competing with the West. These new approaches broadened the conception of national security and embraced all elements of national power in strategic competition.
Their new strategies were designed to play out over longer periods of time than Western nations and governments might otherwise prefer. They developed forms of competition that exploited western predilections for short war, through political warfare, lawfare and unrestricted warfare.
Western nations had begun the slow process of strategic adaptation required to address these Russian and Chinese strategies in the wake of Iraq and Afghanistan when the war in Ukraine forced a reappraisal of modern war. It saw the return of high intensity and large-scale war, as well as long duration conflicts. This was a strategic surprise for Western politicians whose approach to strategic risk management over the previous decades had assumed away the need for the capacity for large scale mobilization of people and industrial capacity.
Countries like China and Russia were now exploiting time — especially Western impatience — in the development of their strategic concepts for competing against the United States and other democracies.”
29. “I see so many entrepreneurs falling into the trap of hyper complacency, from investors telling them what their ego wants to hear, promising the world to them, and making them shiny introductions that are just too soon or, down the line, worthless.
Search for tough love from your investors, not blindless passion. Expect from them brutal honesty with rational compassion, not blindless support. Ask for real perspective, not ordinary thinking. Look for what’s in-depth, not just at the surface.”
30. This seems like a nightmare. Newsom is awful. So is Xi btw.
“In advance of Xi’s visit, Newsom just held up a hand and rolled up SF’s seemingly permanent homeless encampments. He spent the political capital to do this, overriding all the Democrats paid by the city to feed drugs to addicts. Of course, Newsom could have done this at any time2 to the homeless industrial complex, but why now? Because their local business model is temporarily less important than his global power model: the question of how to hold onto power for his Party when his country is in decline.
If Newsom pulls it off, we may soon see rapprochement between the farthest culturally left party in the world (the ultra-woke American Democrats) and the farthest culturally right party in the world (the ultra-nationalist Chinese Communists). That is, after the last few years of kicking and screaming, the declining Democrats may actually settle for a power-sharing agreement with the Communists to become their allies — and perhaps eventually their clients. At least, that’s certainly what Chinese state-run media seems to think of Newsom’s visit!”
31. “The Dollar is the world reserve currency. This meant it would be used in international trade, as central bank forex reserves, to settle financial transactions, and to borrow and lend dollar loans offshore (Eurodollar). However, the rest of the world lacked a crucial factor- the ability to generate dollars.
The current consensus among macroeconomists is the TINA doctrine- There Is No Alternative. Russia is a commodity exporter (current account surplus), which would need to be switched into deficits to be a reserve currency. China has a closed capital account. India does not have a deep enough bond market. South Africa is politically unstable. None of the above have good enough rule of law.
As Brent Johnson points out, the U.S. has deep and liquid bond markets, rule of law, a sophisticated financial and monetary system, and a gargantuan military to enforce the dollar system- basically everything one could want. This is the system we are stuck in.”
32. “Eiseman is the person to ask. She’s directed the institute since 1985. She’s been called the international guru of color. Her colleagues have called her “Ms. Color in America.”
Slight and bespectacled, with a bob that rivals Anna Wintour’s, Eiseman says picking a favorite color is like picking a favorite child: She can’t.
But she does have to choose. Once a year, she’s tasked with summing up the entire world, and all its complexities, in a single color.
Every year, she oversees the brand’s wildly successful Color of the Year campaign, unveiled in early December. She turns one color into a celebrity, and watches as consumers around the world pull out their wallets for the results.
Back in 1994, trend forecaster and writer James Woudhuysen took a big swing. “Whoever controls color, controls the world,” he wrote in Marketing magazine. That was before the era of internet dominance, but you get the idea.”
33. The story of cultish and ultra-expensive cool grocery store Erewhon. Worth visiting.
