Marvin’s Best Weekly Reads September 6th, 2020

“Wherever there is oppression, there is resistance” — Zhou Enlai, 1972

“But the pandemic and the subsequent ‘new normal’ across Europe has pushed neobanks to the edge. With not a penny of profit yet between them, the pandemic was an opportunity for the startups to strengthen their relationship with users, and come out of the lockdown having proved their value over the big banks they sought to disrupt.

This simply didn’t happen. Instead the prospects of the European neobank withered, unused and unloved in the wallets of their users. For years, no one has had reason to question the claim that the bank of the future would be a neobank, but as revenues dwindle, regulatory obligations sap energy and long-serving staff wave goodbye, the basic promise of Europe’s neobanks to deliver on this is fading fast.”

“You cannot be a successful investor by believing what everyone else believes, otherwise you would (literally) miss out on every single increase in value. The best investors I know are not necessarily the great spreadsheet makers (no shade to spreadsheets, I love spreadsheets!), they’re the people who have really unique perspectives and strong intuition + conviction. You have to do real analysis and work to make a call about what the future might look like. I think you have to look outside of just “data” too. Like you said, everyone has data.”

What a crazy story. A Must read.

“The case had come to remind Reed of the saying “perception becomes reality.” It seemed to him that Ted Wright had almost willed this character of “T. R. Wright” into existence. From the time he was a schoolkid wearing a suit, he was determined to become a larger-than-life persona, projecting the confident James Bond image in the stories he told his friends and, later, in his social media feeds, even when he might have been struggling financially. By the end of the period under investigation, Reed said, T. R. was “pretty close to everything he was representing himself to be.”

“I got to the point where I was probably too arrogant and cocky for my own good,” T. R. said. “I thought that I would never be arrested, or that I could buy my way out of it. That’s how things work in the rest of the world.”

“28% of restaurateurs are shrinking their menus because of the pandemic. That number is so large that New York Magazine recently asked, “Is It Time To Get Rid of Menus For Good?”

The underlying reasons for this are financial: Restaurants can’t bother with low-margin dishes. They have fewer employees on the payroll, so they want to be more efficient with a smaller set of meals. They’re prioritizing fewer — and cheaper — ingredients.

But rewriting a menu is no simple task. Every inch of text, from the typeface down to the order of items, must be workshopped for maximum profitability.

And when restaurants need help, they turn to a niche, little-known cadre of professional “menu engineers.”

BTW: Most LPs will not do this because they are too risk averse.

“For LPs, being “defensive” means investing in existing funds, established funds, and large “index-like” funds. If an LP has already invested in a GP and they are doing well, it is very likely they will receive another check in 2020.

Yet, we know there are emerging managers (EMs) today who are building the next Andreessen Horowitz or Lowercase Capital. We know there are opportunities to ignore the conventional wisdom and build a new, more sophisticated venture fund.

“There is rationale for being thoughtful and aggressive,” said Conrad Shang, Director of the University of Texas/Texas A&M Investment Company (UTIMCO). “While some LPs are dragging their feet, use this time to invest in notoriously hard-to-access funds and back the new innovative batch of promising general partners.”

“To recap, this is a gaming company that launched one of the number one games on the planet, and also built an e-commerce platform… and a payments/wallet platform… And all three of these efforts gained huge traction simultaneously, despite requiring very very different types of talent, skillsets, and resources.

American investors and product people tend to flinch at diversification that appears orthogonal in this way. But when you look at Sea’s chosen businesses in the context of “How do we best engage the high ARPU internet user in SE Asia?”, these three areas make a lot of sense. Sea wants to own the wallet and all of the commerce that users engage with — both for physical items (Shopee) and digital entertainment (Garena).”

These are great predictions. Community will be huge in the present and post Covid World.

The Bull case for New York City. Never count the place out. I personally cannot wait to visit when this Covid mess is over.

“More than one-third of the city’s inhabitants are foreign born! This diversity applies to industries: tech isn’t even in the top five for numbers of people employed! Since moving here four years ago, I’ve made friends in industries from art, fashion, journalism, media, politics and more. I love going to dinners with friends where no one talks about tech. This diversity of industries that make up New York will hopefully also make it more adaptable to the evolving economy in the years head.”

“Across each category of deep tech, we go through a hype cycle that leaves scars at the firm & market level, almost killing entire categories for VCs (try raising a VR series B+ over the past few years, for example).

Often these deep tech companies require patience as commercialization metrics lag traditional companies, with upside that is arguably not as asymmetric across all categories. This creates a valley of despair for many companies that were able to raise seed & A capital, but where series B firms struggle to gain $25M+ check size conviction without material social proof and company comparable metrics.

If a company is able to break through that barrier (often with great narrative and early signs of commercialization) then there is a secondary exhaust when it comes time to raise growth capital, as growth stage investors are even less primed to dream big without consistent revenue figures or scalable, decent-margin revenue, with a diversified customer base.

As Deep Tech has become a category, the universe of investors & well-funded companies has grown materially over the past decade. This has led to a large number of companies that are growth-ish stage, looking for liquidity.

Enter SPACs.”

Good advice for new VCs.

“Palantir’s core business, and probably its most profitable business, is its government business — especially work for three-letter agencies and the Department of Defense,” Garg said. “I don’t think that’s going to change.”

What remains to be seen, then, is if Palantir’s ability to marry 21st-century Silicon Valley disruption to 20th-century defense contracting will live up to its valuation when it hits the stock market.”

“Contrary to popular belief, Peter Thiel believes that technological growth has stalled, and that it has been this way for a while.

His claim is that we’ve had this narrow cone of progress around the world of bits — around software & IT — but not atoms. The iPhones that distract us from our environment also distract us from how strangely old & unchanged our current environment is. If you were to be in any room in 1973, everything would look the same except for our phones.

In the 50s and 60s, technology meant atoms and bits. It meant biotech and medical devices. It meant nuclear power, new forms of energy, underwater cities, the green revolution in agriculture, space travel, supersonic aviation, flying cars, etc. But, today, our only progress is in the realm of computers.”

“Today, we live in a world where we’ve been working on the Star Trek computer in Silicon Valley, but we don’t have anything else from Star Trek. We don’t have the warp drive, we don’t have the transporter, and we can’t re-engineer matter in this cornucopian world where there is no scarcity.”

This is really smart. Great for creative economy.

“Creator commerce platform Teespring is set to roll out the integration soon, and it’s currently being tested with a limited group of users. Thousands of TikTok creators have already partnered with Teespring to start creating merchandise they can sell to their followers. The integration will allow “creators to create their own products on Teespring, push it directly to TikTok, and then have fans be able to buy products directly through TikTok,” Teespring CEO Chris Lamontagne told The Verge. It marks the first time that creators can sell their own merchandise directly through TikTok.”

Stripe is the company to watch in my opinion.

“Building the economic infrastructure for the internet, and ultimately the Metaverse, is a massive responsibility. I wouldn’t trust Mark Zuckerberg with it. But Stripe possesses another cornered resource — the Collisons themselves. Their demonstrated thoughtfulness, appreciation of nuance, and dedication to intellectual rigor make them the most appropriate stewards of a new economy.”

“I’ve heard a variant of that idea from people who either wouldn’t work for anyone but Stripe or wouldn’t leave their current role to go anywhere except Stripe. PayPal and Adyen, while both seemingly well-run companies, don’t seem to inspire that same fervor. Over years and decades, the effect of hiring the best people and setting them loose on big problems together compounds and lengthens Stripe’s lead.”

Absolutely fascinating, platforms for indie rap artists. Creator economy is one of the more exciting areas to explode & underpins this.

“These new services address lingering pain points, especially in distribution. Stem and UnitedMasters help artists get their music on streaming services, simplify royalty splits, and gain access to brand partnerships. SuperPhone and Community show how far texting has come. Not too long ago, Mike Jones gave out his actual phone number and he got called 40,000 times a day. What a time. Long live 281–330–8004.

These businesses line up with the broader trends in the “creator” ecosystem. Email newsletter services like Substack were first built to breed more success stories like Ben Thompson’s indie publication, Stratechery. OnlyFans has evolved from an X-rated membership platform to an informal paywall for Instagram-style content. If there’s an audience to monetize, there’s a startup that’s on it.’”

If someone can pull this SPAC off, this is the team. Very impressive.

I don’t agree with everything in this article as it reflects the popular all tech rich are evil BS but it’s definitely food for thought.

“For there’s the real rub with digital isolation — the problem those billionaires identified when we were gaming out their bunker strategies. The people and things we’d be leaving behind are still out there. And the more we ask them to service our bubbles, the more oppressed and angry they’re going to get.

No, no matter how far Ray Kurzweil gets with his artificial intelligence project at Google, we cannot simply rise from the chrysalis of matter as pure consciousness. There’s no Dropbox plan that will let us upload body and soul to the cloud. We are still here on the ground, with the same people and on the same planet we are being encouraged to leave behind. There’s no escape from the others.”

The Privileged Have Entered Their Escape Pods | by Douglas Rushkoff | Aug, 2020

Prescient: nails the dangerous situation America finds itself in.

“Know who’s having fun tonight? All of the BLM “organizers” & all of the Antifa “cadres” & all of the Proud/Boogaloo “boys” & all of the MAGA militia “soldiers”, that’s who.

“How do we stop the violence & the carnage of these bullshit and criminal “fiery but mostly peaceful” night time waves of destruction, &– increasingly — the bullshit & criminal confrontations between rival political supporters?

How do we stop burning down the wrong things so we can get started on burning down the right things?

We change the narrative that these burners & looters & counter-burners & counter-looters tell themselves. We make it not fun, for the burners & looters as well as for the counter-burners & counter-looters.”

We make it not fun by removing the thrill of the chase and the thrill of the fight — we contain the rioters and the night time looters — so that all that is left is the boredom of walking around and yelling into the wind all night. We accomplish this with numbers and curfews.

That’s how we work our way through this.

We accommodate protester voice through new elections/plebiscites, & we contain criminal tag-alongs with sheer numbers of trained public safety officers.

Damn, no wonder 2020 has been so rough. This year cannot end fast enough.

The man knows what he is talking about.

“When you’re first starting and you may or may not have a job, or you’re at a complete uncertainty about your career, what I learned early on is that if I put in the effort, I can learn almost anything,” he says. “I taught myself technology… it was time consuming, and painfully so, but that investment in myself has paid dividends for the rest of my life.”

Although it seems like an obvious solution, it’s actually the one piece of advice Cuban would give his 20-year-old self if he had to restart his entire career in 2020 with only a $20 investment. Given how the pandemic has impacted the job market, Cuban also has a thought about monetizing a form of tech everyone knows about but has no idea of all its functions: Amazon’s Alexa.

“Particularly now with the pandemic, we’re trying to go touch-free,” he says. “The ability to use ambient voice to really help your business — nobody’s doing it very well. So I’d be all about that and I think I’d be able to build up a nice little business doing that.”

I like this. It’s never too late.

This is a fascinating tweet thread on Joe Rogan.

This is a great thread on the brilliant Balaji.

This is why the Samwer brothers are scum. But to be fair the other investors are idiots for investing without doing DD on their rep of slash of burning previous investors.

“Imagine you and I own half each of a $100,000 sports car that has another $50,000 locked in the trunk. The problem is that I have the car keys, so you can neither drive it nor access that money. I offer to buy you out for about $50,000. Fair deal?

You’d doubtless feel hard done by. Yet Oliver Samwer, chief executive officer and founder of Germany’s Rocket Internet SE, is making a similar proposition to his fellow shareholders. He wants to take the web-investment company private again, and he’s offering to buy out other investors in a way that would let him and his family keep that nice little stash in the trunk.”

This was an amazing teardown of an Emerging VC Fund Manager’s deck. Super insightful.

“Vaccines, like most injectable drugs, need to be packaged in sterile glass. Glass is essentially impermeable to corrupting gases like oxygen while even high-grade plastic lets some air inside. Making these vials was a big business even before Covid-19 appeared in January. Last year, the global pharmaceutical industry purchased some 12 billion vials.

The Stevanato Group, a 71-year-old family-owned firm, provided more than 2 billion of those (The company is also the world’s largest manufacturer of cartridges for insulin pens). A Covid-19 vaccine, which likely will have to be administered in two separate injections, will require billions of additional vials. Stevanato expects the pandemic to drive up demand for its glass vials by 20% over the next two years.”

This is gold for SaaS founders. Churn is a killer of businesses if you don’t watch it closely.

“This is why I think “no code operations”** is the next great job in tech. If I were thinking about how to break into a startup right now, I would start building with these tools immediately.

Even better, I’d start my own business on the side with only these tools. How far can you get with Airtable, Zapier and a website? Go for it, and develop your go-to-market chops and business building prowess along the way.”

“This is the VC version of the future of work,” said Bi, who managed a remote-only workforce for 10 years. “With Rolling Funds, micro LPs from all over the world now have access to invest in the next wave of underestimated innovators.”

The West (coast) is the best?

“In the West, elites make their fortunes in building things (rather than collecting rents), and then rejoice in turning around and funding the nascent startups that challenge the very companies that made them wealthy, just for the goddamned lulz of it.

In the West, you are an individual. Whether your provenance be Boston or Bangalore, your family descended from brahmins or the actual Brahmins, the perceived value of your future arc matters more than your past or parentage.

In the West, hard-fought and daring failure is more noble and marketable than steadfast respectability.

In the West, dropping out of a storied institution to actually create something is more lauded than having graduated from it.

A place, in short, where the past, rentier capitalism, and “that’s just the way it is” trade at a steep discount, and the future, wild-eyed schemes, and “…one more thing” command the highest premiums.”

Some impressive investors and people now striking out to do the Solo Capitalist thing.

“I felt like venture was changing enough that I could be a more independent player with a smaller vehicle but still go play with great companies,” said Sarver, who is restarting his venture capital plans after having spent five months setting up Frontline Foods, a not-for-profit delivery service for hospital workers and others on the front lines of the pandemic.

Sarver is part of a new wave of VC investors leaving bigger firms, many with plans to set up their own funds. It’s a growing list that includes Nikhil Basu Trivedi, formerly of Shasta Ventures, and Li Jin, previously a partner at Andreessen Horowitz. While venture capitalists have left established firms in the past, more appear to be taking the solo plunge these days.”

Cool story.

“Soon after the coronavirus lockdown hit, some peculiar posts appeared on the New York City forum of Reddit, a popular discussion site. A user calling himself “meat boy” was offering crazy low prices on cuts ranging from drum sticks to pig lips at an obscure Chinatown butcher shop.

“Let your poor and broke ass friends know that they don’t need to starve in times like this,” he wrote.

The missives, which offered even steeper discounts to folks in need, were long, funny and rude. There were 26 F-bombs in one post alone.

They garnered thousands of likes and hundreds of comments on the usually curmudgeonly forum.

“Heart of NY right there,” was a typical response.

“Meat boy,” I learned when I called, is Jefferson Li, a 28-year-old military man who works at the butcher shop with his parents. His folks immigrated in 1985 from China’s Guangdong province and speak little English.

Mr. Li said he hoped to lure new customers to the struggling store, which caters largely to Chinese immigrants.

His dad worked long days at the shop for decades and drove a taxi at night. “I can’t stand to see all that effort go down the drain,” he said.”

Why is none of this surprising?

Dan Bilzerian=Fyre Festival.

Fake it till you make it is a real thing. He is a character and have definitely enjoyed the show.

Ever curious: Tsundoku, Reader, Aspiring Shokunin, World traveller, Investor & Tech/Media exec interested in almost everything!

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