[VIC – 78] A master plan. The evolution of free speech. Pause and begin again. The most enjoyable book.

Business & Money: a master plan

Do you remember back in 2006 when Elon Musk posted his master plan for Tesla? In short, the steps were as follows:
1) Build a high-end electric sports car
2) Plow all of the $ from sales back into the company in order to move down market with a more affordable model
3) Make consumers “energy positive” (produce more than you consume) via electric cars + other sustainable products like solar panels.
While Elon is killing it and following his plan to a T, he’s not the only one with a master plan. Brian Armstrong, founder & CEO of Coinbase (the largest cryptocurrency exchange), published his own version this week. Brian is on a mission to “create an open financial system for the world” (aka bring digital currency to the masses). I’d recommend taking 4 minutes to read the entire post, but just in case you’re feeling lazy, I’ll summarize it for you.
1) Make it really easy for normal people to invest in digital currency via a retail exchange (Coinbase’s product in its current form).
2) Make it easy for professional traders and institutions to participate in the exchange. Professional traders = higher trading volumes = more liquidity = lower volatility.
3) Create a mass market application to allow regular people to start getting real value from the payment network. In other words, build the killer app for digital currency. (just like the web browser did in facilitating the explosion of the consumer internet)
4) Pour gasoline on the fire by building/investing in/partnering with new applications for digital currency.
I can’t wait to look back on this moment in 10 years and see where things stand. Exciting times we live in!

Human Progress: the evolution of free speech

One of my primary news sources is the Economist. In reading a European publication, and also in speaking with European friends, it seems there are still remnants of social democracy across the pond. By that I mean that there is some memory of shared public space and the public good.
By contrast, individualism reigns supreme in the American context. It’s a core tenant of liberal democracy. Free speech is an excellent example of this. Any person should be able to say anything at any time via any medium (with rare exceptions like saying “bomb” on a plane). This is all good and well. Except for when it’s not.
We now live in a time of so-called “fake news” or “alternate facts.” So, regardless of truthfulness or verifiability, anyone can post a story on social media that has the potential to reach millions in an instant.
It seems we may have arrived at a point where we need a progression or evolution of the concept of free speech. It seems we are in need of shared standards around the quality of information. And these standards should not illicit feelings of an encroachment on the first amendment. I don’t believe a commitment to high quality information and truth equates to censorship.

Philosophy: pause and begin again

I wanted to share a snippet from a guided meditation session a few days ago. (you’ll have to imagine that dreamy guided meditation type of voice)

Just to help you maintain that focus on the breath,
just silently starting to count the breaths as they pass.
One with the rising sensation.
Two with the falling sensation.
Then three, then four.
Just up to a count of 10.
When you get to 10, you can stop,
then start again at 1.
Just try that a couple of times through.
Remember to allow thoughts to come and go,
but the moment you get distracted,
just gently bring the attention back again,
to that physical sensation of the breath

It’s perfectly normal for the mind to wander off.
Remember as soon as you get distracted,
as soon as you realize that the mind has wandered off,
just gently bringing the attention back again
and just picking it up on the number you left off on.

This is such a powerful idea. Many people say that the hardest part about meditation is calming the mind. You have so many thoughts running around at any given moment. How can you possibly just sit and think about nothing?
But that’s exactly the point. It’s perfectly normal to get distracted. It’s not about being perfect, but instead just allowing the distraction to come and go. As soon as the mind wanders off, just refocus the attention and begin again.
There are so many of these moments in life. For me personally, I lose deals at work, get upset with my fiance, have disagreements with family and friends… the list is never ending.
Whenever these things happen, meditation has made it easier to simply pause, refocus, and begin again.

My Latest Discovery – the most enjoyable book

Surely You Must Be Joking Mr. Feynman is one of the most fun and enjoyable books in existence. It’s not often that I’m constantly chuckling and smiling to myself as I flip through the pages of a book.
The book is about the life of the world renowned and Nobel winning physicist Richard Feynman. It’s really just Feynman telling short stories throughout his life in very simple and informal terms. He has an unbelievable way using seemingly frivolous events to convey profound ideas. It’s truly amazing!
BUT WAIT!! If you decide to check it out, watch this video first.

It’s Feynman talking about light. Seeing his quirky mannerisms and hearing how excited he is allows you to really see and hear the stories while you read.
If you don’t laugh while reading this, leave me a comment and I will reimburse you for the cost of the book. Scouts honor!

[VIC – 77] Greedy when others are fearful. Signal v Noise. Maps. Google Authenticator.

Business & Money

Warren Buffet is famously quoted as saying that it’s important to be “fearful when others are greedy and greedy when other’s are fearful.” When people are greedy, demand is high and prices go up. Thus it’s easy to overpay for things. Inversely, when people are fearful, demand is low and prices fall. This can lead to good value buying opportunities.
Safe to say that people are greedy right now. The markets are frothy.
If you look at Berkshire’s financials, their market cap is north of $410 billion. Almost a quarter of that is held in cash and other short-term investments. This ratio of cash to value is really high. When the inevitable correction comes, they’ll willing and able to acquire good business on the cheap.

Human Progress

One of the side effects of technological improvement has been an ever increasing access to information. You can whip out your smartphone and get the answer to any question you might have.
While this is great for many reasons, it’s also terrible at the same time. Specifically, it makes is much harder to differentiate signal vs noise. I constantly have to remind myself of this when it comes to investing. The tendency is to want to check my portfolio on a daily basis hoping for a quick shot of dopamine whenever I see a green arrow pointing up. But, daily stock performance is guaranteed to be more noise and less signal.
No one puts the signal v noise discussion in better context than Nassim Nicholas Taleb in his great book Antifragile: Things That Gain From Disorder. Here’s an excerpt:

Philosophy

A few weeks ago I needed to visit a jewelry store. I pulled out my phone, typed in “jewelry store” in Google Maps and viola, there were 5 stores within a ten block radius. I chose one and was on my way. As I neared my destination, the streets become increasingly packed with people. I probably should have picked a store that was NOT in the middle of a high traffic area of Manhattan during rush hour.
This got me thinking about maps in general, and how deficient they are. The map I looked at on my phone showed me a grid of NYC streets. It didn’t show may how many people might be in my target area during a specific time of day. Had I been a tourist, I may have jumped in a cab, only to find out that the subway would have been a more efficient means of transportation.
If you’re a city planner, maps of sewage systems and electrical lines would be equally, if not more important than ones showing street names. Or perhaps you want to consider a map of real estate values.
On an even larger scale, think about the map of the entire world. The first problem is that trying to represent a spherical object like a planet on a flat piece of paper will immediately cause problems. Shapes and sizes will inevitably be distorted. Africa, for example, would have to be 13-14x the size it usually appears on world maps.
Zoom out even further, a map of the solar system is actually a pretty ridiculous representation. It’s as if distance and size are of menial importance. It’s only real value is in gleaning the order of the planets from the sun.
All this is not to say that maps are useless tools in understanding the world, but any one map will always have serious limitations. You have to consider the subjective perspective of the creator, the mediums it’s presented on, when it was made, and many many other facets.

My Latest Discovery

I’ve recently switched to using Google Authenticator for all two-factor authentication (2FA). It’s much safer than receiving 2FA codes via SMS because Google Authenticator is not tied to your phone number. If a bad actor hacks a phone system, then can intercept 2FA codes coming in via SMS. One could even port your cell number without you knowing which would allow them to do the same. There has been a spate of recent attacks that have followed this formula so do yourself a favor and get Google Authenticator or something similar that doesn’t rely on your phone number.

[VIC – 76] Running 🏃🏃 for the exits. Early = wrong. Toasters as teachers 📝. Filter by unread. Do dreams 😴 mean anything?

Business & Money

Take a look at Best Buy and Home Depot over the last year:

At a time when most retailers seem to be hemorrhaging, these guys are both trading at all times highs. This fact reminds me of 2 key points in investing:
It’s not an abstract philosophical game. Regardless of what people are saying, you simply have to think deeply about the business and analyze the numbers. It’s purely rational.
Second, and more importantly, when everyone is running for the exits, it’s a great time to look for cheap opportunities to buy. When the housing market crashed, it was a great time to buy real estate. After the internet bubble burst, great engineers and companies could be acquired for next to nothing.
If investing was about consensus, everyone would be rich.

Human Progress

I want to talk about cryptocurrencies and the underlying technology today. But before we dive in, I realize I’ve written on this subject before without providing adequate context and background to why it’s really important.
First, let’s consider banks. Banks have essentially unfettered control over money. They can print it (causing the value to fall). They cash restrict your access to it (e.g. in the case of a run on the bank = close banks when too many people are attempting to withdraw cash). They prey on the poor with myriad fees and predatory loans. The list goes on and on. And the best part, when they screw up, there are basically no repercussions (hence the term “too big to fail”).
Long story short, the incentive structures are all messed up. And given that these centralized institutions control our financial system, we’re basically forced to simply sit on our hands and pray they do the right thing (don’t hold your breath).
It is here that we arrive at the central tenant of the blockchain (the technology behind cryptocurrencies): it’s decentralized nature. There is no central entity (person, company, government, etc) that controls the entire system. Instead you have a distributed system (think ledger or database) where each entry is verified by lots of independent and self-interested parties (“miners”). As a result, you have inherent trust baked into the system. All participants rely on all other participants for the safety and integrity of the system. Incentives are beautifully aligned. (The implications go far beyond money, but this core tenant provides enough context for now)
So why are we revisiting the subject this week? Because of the price action of course.

This past week, 9 different people hit me up asking where/how to buy cryptocurrency. And many were people completely outside of the crypto.. actually the technology industry altogether. This is a telltale sign that we’re in bubble territory. Speculators and uninformed consumers are artificially inflating the value of cryptocurrency right now. And moreover, we don’t have any mainstream consumer application that would equate to higher demand (and higher prices as a result). It reminds of the dot-com bubble of the early 2000s when regular people were sinking their life savings into internet stocks, only to have it all evaporate overnight.
But the dot-com bubble is a prudent analogy for another reason. While companies were going bust left and right, many were actually incredible ideas that would later become valuable in their own right. Remember WebVan? It was FreshDirect before FreshDirect. Or what about the spectacular failure of Pets.com? Just a few months ago PetSmart acquired Chewy.com for $3.35 billion. It’s too bad that being early is synonymous with being wrong.
Similarly, I am a blockchain bull all day every day. It seems obvious that this technology will be absolutely revolutionary. But how many real consumer applications are viable today? Maybe a few. But there are a ton of things that need to be figured out first. What’s happening right now is speculation, plain and simple. Don’t be a sucker! If you want to get involved, park 1-2% of your portfolio in a secure crypto wallet and let it sit there for the next 10 years. In the meantime, it’s a good time to start educating yourselves about what’s coming.

Philosophy

So I wanted to show you my toaster:

You’ll notice that the power is set to level 5. This is a recent change. Up until last week, it was set to level 3. I think it came that way when I bought it. And level 3 was a great setting. It cooks waffles perfectly. The only downside is that you to run it twice to achieve said perfection. So when the waffles pop up, I would simply push the button down again for one more cycle and viola. Perfect waffles.
One day last week my fiance noticed this pattern and asked, “why don’t you just increase the power setting so that you only have to run it once? Wouldn’t that be faster?”
“Blasphemy,” I thought to myself. I already had a fool proof system of cooking waffles.
For some reason, I kept thinking about the toaster at random moments throughout the day. Of course it would be better to find the optimal power setting, but that would force me to venture into uncharted territory (a.k.a. untested power settings).
The next morning I decided I was in a risk-taking mood. I switched the power setting to 6 and pushed the button down. It was a grueling 90 seconds of weighting. Then pop! They were too done! Not burnt per say, but more done than I preferred. I knew I should have stayed with my system!
The next morning I was at it again, but with level 5 this time. To my surprise, the waffles were perfect. That wasn’t so bad after all. One false start the day before, but now back on solid ground.
While this is a pretty trivial example, fear of change is a real thing. I spent almost 4 years avoiding the power setting on a toaster due to fear of change. If an obstacle this small can cause such cognitive dissonance, one can only imagine what happens when larger ones present themselves.
I appreciate my toaster for this much-needed reminder.

My Latest Discovery

I’m either an oblivious idiot, or you will thank me effusively. Did you know that this little icon filters your inbox by “unread.”

I’ve wondered so many times why there was no easy way to do this. All the while, it’s been right here in front of me.

Question Of The Week

Whenever I have a dream, I tend to journal about it the next day to parse it for meaning. I’ve always felt that dreams were a great way to listen in on your unconscious mind. What do you think? Do you place any value or meaning in your dreams?

[VIC – 75] Uber is dead 💀 . WannaCry 😭 ransomware. Seeking out the other perspecive. Mute videos 🔉 .

Busines & Money

Uber is dead in the water. The news of the Google + Lyft Partnership has to be the most devastating blow imaginable. Let’s lay out the reasons.
First off, let’s quickly define a couple terms. When it comes to innovation (as per Clayton Christiansen), you have two types: disruptive and sustaining. Disruptive innovation comes with not only a massive technological improvement, but more importantly a brand new business model. The innovator has thought up an entirely new way to go to market. On the other hand, while sustaining innovation also comes with technological improvement, it fits into the existing business model. It simply makes the existing advantages more powerful.
Up until now, I believe Uber has been in the lead due to their disruptive innovation in transportation. That innovation hasn’t been the technology itself (as shown by all the copy cats in ride sharing), but instead the business model. They have applied network effects to transportation and completely flipped the idea of car ownership on its head. 🍌🍌🍌🍌!!! It’s now more economical to use a ride-sharing service in many instances than it is to own a car. With more drivers on the road, wait times for passengers decrease. With more riders, more drivers are incentivized to come on line. It’s the perfect fly wheel! To boot, the company gathers more and more data as they handle more trips, thus allowing them to better optimize the entire system.
Now when considering the technology itself, that is the autonomous vehicle (AV) technology that takes ride sharing to the next level, Uber has not been in the lead. It is no secret that Google has been working on AV tech for a decade and a half. As a result, Google has an insane lead with regards to improving and iterating on the technology. For Uber, trying to compete with Google head to head on technology seems like a losing proposition. What they should have done is partnered with Google. Uber’s network + Google’s technology would have been an unbeatable combination. And it almost happened. Google Ventures invested $258,000,000 in Uber back in 2013 which seemingly put the two in bed together.
But now Google is suing Uber over the alleged theft of Google IP. On other words, the relationship has soured. In response, Uber has partnered with Lyft and delivered what could be the fatal blow to Uber. Google’s tech now has a clear go-to-market strategy via Lyft’s network. The only way Uber can win now is to get to market first with a viable AV. I wouldn’t hold your breath.

Human Progress

A couple months back I wrote about digital security and how you can protect yourself. I left out one key recommendation: BACK EVERYTHING UP! (I actually don’t store much of anything on my hard drive these days. I have both Dropbox and Google Drive downloaded so that whenever I save a file, it is automatically stored in one of these services)
Now we find ourselves here in the midst of one of the worst ransomware attacks in history.
So what happened/is happening? Over the weekend a few hundred thousand computers were infected with “WannaCry” ransomeware.
What is ransomware? Basically, someone will accidentally run malicious code on their computer, perhaps from downloading a sketchy attachment. Once the code (called “ransomware”) runs, some or all of the files on the hard drive are encrypted. The program then demands a ransom in exchange for decrypting the files. if the user doesn’t pay by a certain date, the files are lost forever.
In the case of WannaCry, the 7-day deadline hasn’t yet passed, so it is yet to be determined if the attackers will actually follow through on the threat.
There are a couple other points here that make this attack especially 🍌🍌🍌🍌.
First, WannaCry is particularly malicious in that it doesn’t need to downloaded by multiple users within a network. If, for example, one person at your company downloads it, the attack can spread on its own to other users in the network.
Secondly, WannaCry takes advantage of an exploit called EternalBlue which seems to have originated from the NSA. Apparently the NSA is stockpiling exploits (I’d imagine so that they could use them for spying purposes if/when necessary) rather than notifying software providers so that vulnerabilities can be fixed. Looks like that one back fired!
So what can you do?
Again, back up your files! Also, don’t download sketchy attachments. If it makes you double take for even a second, don’t bother. Third, install regular software updates. I know these can be annoying and seemingly always popup at inconvenient times, but software publishers are constantly pushing updates to fix problems so things like the WannaCry attack can’t happen. (I’m updating both iPhones as we speak).

Philosophy

I was recently talking to a friend about how to keep oneself intellectually honest. Here’s the suggestion that they gave. “When you come across a view point that you disagree with, seek out 2-3 other sources that confirm that viewpoint.” It might not be practical to do this for every single thing you disagree with in life, but I think it’s a fantastic suggestion when it comes to big important things.
One example I can think of is North Korea. Pretty much everything that comes from the media about North Korea paints the country in a pretty bad light. And perhaps for good reason. But after seeing so much negative publicity about the country, I thought it couldn’t hurt to look for information that confirms the opposite perspective. One example I found was this article on Medium. And to be quite honest, the article makes a lot of sense.
And none of this is to say that your mind should necessarily be changed about any specific subject. I still sit clearly on the side of liberal democracy over soviet-style communism. But understanding a bit more information about the historical backdrop and understanding the perspective of others allows for more informed and constructive conversations.

My Latest Discovery

I recently discovered a great way to improve my interpersonal skills. It happened at the gym a couple weeks ago doing a cardio session on the bike. I couldn’t get the volume on the TV to work so I was forced to watch on mute. Instead of giving up on the TV and just listening to music, I decided to focus on the silent interview in front of me to try and pick up on the nonverbal cues of conversation. It was fascinating! The way people sit, how often they shift their weight, what they do with their hands while speaking… There was so much information to be gleaned.
So much of life involves interacting with other people. And so much of communicating with other people happens outside of what’s being said. I think I’ll adopt this practice of watching mute videos more often as practice for being more attentive to nonverbal signals.

[VIC – 74] Small mammals prevail. AI for X. Ode to mothers. Voice dictation on Mac.

Business & Money

I spend a lot of time thinking about what personal project to embark on next. But rather than writing today about any particular idea, I wanted to write about the process of idea generation instead. There’s a lot of conventional wisdom out there regarding how to come up with ideas, some of which seems insightful while some seem utterly useless.
One trope you often see involves working on something that you’re passionate about. And it makes sense. If most ideas will ultimately fail, and those that are successful will take a long time to materialize, you might as well spend time on something you enjoy doing. While it’s hard to argue with this logic, it seems it can also lead you astray. After all, when thinking about the things you’re passionate about, many other people are often passionate about those same things. If you want to work on something related to music, healthy food, taking/sharing photos, entertainment… get in line. Countless other people also love these things and would love to turn it into a lucrative career.
Then you have the “scratch your own itch” idea. May as well work on solving a problem that you experience in your own life. I like this one better than the first. Even if you can’t scale the idea or figure out how to make money, at least you’ve solved a problem for yourself. But again, I think you run into the problem of competition. “I wish there was an app for [insert problem here].” We all have this thought a thousand times a day (at least many of the people I hang out with do). I’d encourage you to set aside twenty minutes one day, Google each of your last 10 “I wish there was an app for….” ideas. There’s probably at least 20 apps that do something very similar, all of which are relegated to oblivion in the app store. So while this one has some value, I’d say you have to go a bit deeper.
Where things really get interesting is with seismic changes in the larger (economic, social, cultural) environment. When a giant asteroid struck the earth 65 million years ago, which happened to coincide with a cataclysmic volcanic eruption, things were poised for change. If you were a giant reptile relying on sunlight to regulate your body temperature (the asteroid collision and eruption blocked out the sun for years), things were not looking so good for you. The environment had quickly changed to favor small mammals. Friendster and myspace were pretty cool, but supercomputers in every pocket allowed Facebook a much better opportunity to succeed. Voice as input has been an attractive proposition for decades, but improvements in natural language processing have finally allowed Apple, Amazon, and Google to bring viable voice assistants to market.
Recognizing these environmental shifts, and being first to market in an area that was previously not possible, seems to me where the most viable businesses can be built.

Human Progress

I often write on VIC about the impact of artificial intelligence. While I’m excited about the possibilities, there are also signs that the “AI for X” trend is getting a bit out of hand. Like this one for example. Do you like Roti (Indian flatbread)? What if you had a robot in your kitchen that could make fresh Roti on demand whenever you wanted? Even better, what if that Roti robot was smart? “Equipped with patented AI technology and intelligent sensors, Rotimatic does all the thinking for you! It makes real-time computations and adapts to every doughball’s characteristics.” AI powered Roti robot, I’d say that definitely solves a first world problem.

Philosophy

There’s one woman on this planet that’s unlike the rest. My mom. She delivered me into the world. Quite literally, my mother gave me life.
Then circumstances changed and I was forced to go live with my Dad’s family at his sister’s house. She was responsible for feeding and housing 7 children (not including me). Without question, my aunt took me in, despite her own plight.
Safe to say that situation was less than ideal. Lucky for me, I had an angel watching over me in my grandmother from my mom’s side. She swooped in at the perfect time to give me a better chance in life. Quite literally, my grandmother saved my life.
While much better, times were still hard. Extremely hard at times. Out of nowhere, one of my best friend’s mom came to the rescue. She often took me to stay at their house when things were challenging at home. Delicious food, a warm bed, the love of an entire family… all were offered in spades. Quite literally, my best friend’s mom changed my life.
I know a lot of incredible mothers out there and I wish you all a Happy Mother’s Day! But for me, it was important to take a second to give thanks to these three in particular. Thanks to you, I am the man I am today.
I may say it far too infrequently, but I owe these women my life!

My Latest Discovery

I’ve written here on VIC before about input/output methods in computing. That is, the methods by which information processing systems communicate with the outside world. The Amazon Echo, and to a lesser extent Google Home and Siri, are showing that voice will be a major input method of the future.
I was thinking about this one night this week and started to reflect on all of the time I spend on computers and how I could speed up my input. By far, the application that consumes the most time on my laptop is email. And most of that time is spent typing new emails.
After a few minutes of Google searching, I discovered that you can hit the function key twice (on a Mac that is), and you can immediately begin using voice dictation as an input method within most applications. The words you speak will begin appearing in the text field. This has been a God send!

[VIC – 73] Pausing To Take A Breath

Taking a break from the normal format this week…

I lost my sister last week to an untimely death. She was far too young. Circumstances of her life have always been far less than ideal and the circumstances of her death were about the same.
I did not know my sister well so the sense of loss is not the same as it would be if we had been siblings growing up together under the same roof. That said, there still seems to be a vacancy where something previously had been.
It was always so difficult to stay in touch with her. Her phone number and living situation were always in constant flux. To be honest, after a while, I didn’t try so hard to reach out.
One could say that she touted a poor history of decision making. But what could you possibly expect of a child caught in a shitty situation?
She called me a few months back asking for help. While not directly, it was pretty clear to me that she was asking for money and a place to stay. Given the limited information I do know about her, I did not feel it was possible to offer either. Instead, I offered to help search for suitable living conditions, a women’s shelter perhaps. I offered to pay for online courses if there was something she wanted to learn about. I felt that offering things along these lines would be more helpful than a quick cash infusion or place to rest. But that’s not all. If I’m being honest with myself, offering these things also served to protect the life that I am building and the circumstances I’ve created for myself. I couldn’t risk throwing everything into disarray for a person I barely know. Is that selfish? I’m not sure I have an answer at this point.
Now I find myself here in the present situation. Was her cry for help more dire than it seemed? Should I, or could I, have done more? What could I have even done?
When I woke up last Friday, I wanted to do what I normally do when these type of events present themselves. I wanted to take it in stride, go the gym, and head to work, like any other day. For much of my life, I’ve found this to be the best solution. The world won’t stop spinning for me due to a random unfortunate event. So why should my wheels stop spinning?
Luckily I have a life partner in my fiancé that’s a bit more in touch with the softer side of life than I am. She suggested that I take the day off from work, skip the gym and spend time with her reflecting on how I felt. She took off work as well to take a long walk with Dutch and me along the waterfront. She knew that I didn’t want to spend the whole day talking about my feelings or moping around, but she also recognized the importance of pausing to take a breath and reflect. She didn’t force me to talk about it, but was clear in communicating that it was ok to feel something and that it was ok to take a break. While the world would not stop spinning on my account, all of the trials and tribulations of everyday life would still be there the next day, even if we stepped away for a second.
She’s such an incredible human being and I’m so thankful for the unspoken wisdom she imparts to me on a daily basis.
Anyways, here we are.
Right here.
Right now.
And only one direction to go.
Forward!

[VIC – 72] This sucks 😩. Holographic mustaches. Just do something. The Internet History Podcast. Why are they trying to kill me? 🔫🔫

Business & Money

You know what sucks, deciding not to purchase a stock, then watching it go on a tear. 😩 😩 Check out Wix:

If you’re unfamiliar with this company, they create self-service web design software that allows anyone to setup and launch a site in minutes.
I was planning to make the purchase in early February when WIX was at $60, but decided the company was overvalued. Now things are above $80 five months later and I feel like an idiot.
That said, it makes me feel better to reiterate why I decided to pass:
First, the company was valued at about 10 times 2016 sales, that’s really high.
Second, if you read through the annual report, the company spent over 50% of revenues on sales and marketing last year. That’s also really high.
Related to this, Wix operates in a very competitive market. You know a market is really competitive when a free, open-source competitor (WordPress) own over 50% market share. Thus, sales and marketing spend will have to remain high to acquire new customers and there will likely be pricing pressure in the future which would have a negative impact on revenues.
In the end, this post may just serve to lessen the FOMO effect I’m feeling right now. But more importantly, when I think about my investment returns over time, it’s an exercise in reviewing the decisions that I did make, and the resulting outcomes, rather than focusing on the ones that I missed.
There will always be ones that get away – great white buffalo. (Leave a comment if you get the reference 😂😂)

Human Progress

Are you guys familiar with the show “Silicon Valley?” It’s a satirical series about a fictional technology startup (called “Pied Piper”) in San Francisco. The show’s lead character, Richard Hendricks, is a socially awkward computer programmer trying to strike it rich by developing a next-generation compression algorithm.
At one point in the show, Richard is fired from his CEO role and is forced to shop his talents at other startups in the valley. One company that aggressively tries to recruit him is developing a technology to overlay 3-dimensional mustaches on your face during video chat.

It’s pretty clear that this “mustache tech” is taking a shot at all of the lofty claims by tech companies to be building revolutionary software, much of which has no real market and/or value.
What’s interesting, though, is that SnapChat has built a real business based on similar technology. They leverage advanced computer vision technology that allows users to apply lenses and filters to their photos. Pokemon Go also applies computer vision to map your environment and place Pokemon into the real world.
I don’t use SnapChat much and I haven’t played Pokemon Go, so perhaps I am part of a small minority that didn’t recognize the reference to augmented reality (AR). But AR, sometimes referred to as mixed reality, will likely turn out to be one of the most revolutionary technologies of the 21st century.
I wonder what other technologies are now in the “gimmick” phase with seemingly no practical application, that will one day turn out to be game changers.

Philosophy

I was listening to a podcast recently wherein Sheryl Sandberg (COO of Facebook) was talking about losing her husband. While on vacation, he collapsed while exercising and was dead before he hit the floor. It turns out that he had a serious heart condition that had gone undiagnosed.
For obvious reasons, the sudden loss of her husband and the father of her children was incredibly difficult. What made it harder still was that many of the people closest to Sheryl had no idea how to be supportive. Some would say “Hey Sheryl, how’s it going?” as if nothing had happened. Others would completely avoid speaking to her in fear of saying the wrong thing.
Luckily one of Sheryl’s closest friends is the renowned psychologist and social scientist Adam Grant (you may know him from his New York Times Best Seller Originals: How Non-Conformists Move the World).
One thing that Grant encourages people to do that are in a support role for someone going through a difficult time, is to do something. That is, don’t ask “is there anything I can do?” or “do you need anything?” Instead, stop asking questions and do something.
This is one of those pieces of advice that seems so obvious in hindsight. A person that’s struggling to keep it together probably doesn’t have a checklist of items that they need help with. They haven’t written down a list of how people can be most helpful. In fact, they are often struggling to get out of bed or eat a nutritious meal. Grant suggests preparing a healthy meal and dropping it off or showing up unannounced to clean up around the house.
So next time someone is in pain, don’t ask if there’s anything you can do. Just do something!

My Latest Discovery

I’m really enjoying the “Internet History Podcast.” It starts out with the creation of the first consumer web browser in the early 90s and goes all the way up through the dotcom era of the early 2000s. If you’re at all curious about how Google became so dominant, why Windows became to defacto operating system, or what social networks looked like before Facebook & Twitter, you should definitely check this one out!

Question Of The Week

Why is everything next to the checkout line terrible for you? Tobacco, Candy, magazines encouraging a consumerist culture… all the worst things in life are offered up while you’re at your most vulnerable.
How would Tobacco consumption change if cigarettes were in the back corner of the store? If candy was placed next to weight loss supplements?
It seems we could encourage our retail outlets to support healthy habits instead of trying to destroy us for profit.
Thoughts?

[VIC – 71] Monopoly vs Monopsony. Metadata. He’s just hungry. Shower thoughts.

Business & Money

The monopolies of yesteryear were scary behemoths. They gained their power by putting a stranglehold on one or many points in the value chain. They controlled infrastructure (a la AT&T with phone wires), supply (a la Carnegie with US Steel), and retail/distribution (a la Luxottica with glasses).
Within a business environment as such, it’s fairly easy to calculate the costs incurred by society. These companies are famous for price gauging, limiting supply and other nefarious means to pad their coffers.
Today’s internet monopolies though are very different for a couple key reasons.
First, these are largely monopolies by self-selection. By that I mean that consumers actually have a choice of multiple options, but the choose the monopolist due to a superior experience. You could choose to strictly use SnapChat, but if Facebook offer the same features and all of your Friends are already on Facebook, why make the switch? No reason to build a brand new social graph. You could choose to use a search engine other than Google, but Google is better. They have far more data from more searches, which allows them to better optimize the experience. Thus, people choose Google.
Second, these monopolies happen to offer free products. So it’s much harder to calculate and implicit cost to society of their monopolistic position.
So, due to free products and self-selection, antitrust legislation has a tougher time sinking its teeth into today’s internet giants.
All that said, what might make sense here is to think about monopsony vs monopoly power. If you think about Facebook and Google as Monopsonies in relation to content producers, here things are clearly out of whack. Musicians, publishers, blogger, video producers, writers… all of these parties have one game in town if they want distribution. Thus their profitability can be seriously constrained when they have no choice but to distribute via these massive digital platforms.
I think regulators may need to spend more time focusing upstream towards suppliers instead of downstream toward consumers to get a clear picture of what’s happening.

Human Progress

I have no idea how many pictures are posted to social media sites every day, but I know it’s a lot. When many people may NOT know, however, is how much metadata you’re uploading along with the picture. You probably know some of the basics: location (GPS coordinates), date, and time. Not so scary right? But how about these: phone make, phone model, wireless carrier. Ok, slightly more creepy, but still not too worrisome. What really starts to freak me out is thinking about each photo in the context of every other photo. For example, if you compare GPS coordinates of all of the phones within a city, you start to develop a sense of which phones are going to which places, and thus placing people in groups. You’re much more likely to be Chinese if you are always in Chinatown. Now this data becomes valuable for advertising purposes. What about how fast your location is changing relative to other people. With speed, acceleration, and deceleration, perhaps this could have implications for your insurance premiums. What if you are a homosexual in a Muslim majority country. If you are frequenting a location known to be a gay bar, this might impact your employment status or social standing.
Next time you go to post, keep in mind that you’re uploading a lot more than just a photo.

Philosophy

A few weeks ago my fiance was on a short vacation to visit a friend that just had a baby. While we were catching up one night via FaceTime, she switched the camera angle to show be the baby. While adorable, he was in the middle of a temper tantrum.
“I think he’s tired,” I heard from his mom in the background. She swooped in to take him off to rest.
Why is it that babies always get the benefit of the doubt? Whenever they act up, we immediately assume they’re tired, hungry, or need a diaper change (which is usually the case). But at some point, while they mature, we stop giving them the benefit of the doubt and just assume they have ulterior motives. I guess growing up removes the innocence.
Once we become adults, all bets are off. You’re simply a rude/mean/(insert adjective here) if you are nasty to other people. And with good reason. As an adult, you’re expected to be able to be respectful regardless of your internal state.
But the funny thing is, not much changes in adulthood. Fatigue and hunger still cause people to act in ways that they otherwise wouldn’t.
So the next time you get bumped in the subway or someone cuts you off on the road and yells some obscene phrase, just remember, they’re probably tired or hungry. Try giving them the benefit of the doubt.

My Latest Discovery

If you own an Amazon Alexa enabled device (Dot, Echo), then you probably know about “Shower Thoughts”. It’s an Alexa skill that offers of witty bite-sized morsels that one might ponder while taking a shower. On Saturday I was at a friends place when he decided to test it out.
“Alexa, play random shower thoughts!”
“In the age of Google, knowing the right questions to ask become far more important than knowing the answers.”
I thought that was rather profound.

[VIC – 70] Disagree and commit. Visit to the doctor. Sugar coating. Sea salt caramel.

Business & Money

I’m working on a big deal at work. The kind of deal that, if it closes, could knock out 50-75% of your annual revenue target in one fell swoop. Us sales people call this type of deal a “whale.” Whenever whales present themselves, my best practice is to loop in my leadership team so it becomes a team effort. As such, I sent an email to our executives asking for thoughts and feedback about my approach. To my dismay, the response I got was that the deal was unlikely to close and the prospective customer likely wasn’t serious about wanting to work with us. At the same time, they offered any support and/or resources I needed to try to close the business. They basically said “we’re doubtful that this will close, but we we’ll support you in any and every way.”
For a while I was a little disheartened by the seemingly cold response. After thinking about it more though, I think there’s a huge leadership lesson hidden below the surface. It didn’t make itself truly apparent to me until I read Jeff Bezos’ annual letter to shareholders yesterday. Here’s an excerpt:

“Disagree and commit.” It’s so powerful! In a simple three word phrase, he is acknowledging his disagreement, but simultaneously letting his team know that they have his full confidence and support.
It’s the same thing I got from my leadership team. They weren’t quite as excited as I was about the opportunity at hand, but also have enough trust and confidence in my ability to give me freedom and support for whatever deals I choose to pursue.

Human Progress

I went to the doctor’s office this week for the first time in a long time. When I arrived they asked for my insurance card. I had previously taken a picture and uploaded it to ZocDoc, which then aided me in finding a doctor and booking the appointment. My assumption was that my insurance information would then be shared with the doctor’s office. Wrong! Luckily I have the picture saved on my phone so it wasn’t an issue. Why is that, in the era of the internet and instant digital information sharing, insurance info can’t be sent quickly and securely between relevant parties?
Once I made it to the examination room, I was asked the same 1000 questions that we’re always asked at doctors offices. Any allergies to medications? Family history? Bla bla bla. Can’t the answers to all of these rote questions be stored in some central repository on AWS that’s easily accessible by certified medical professionals?
When I was leaving, I asked how I would receive my results? “The doctor will call you in about a week.” Send be an email for Pete’s sake! If the companies in this space won’t centralize all of my data (or perhaps can’t, due to regulatory red tape), at least give it to me in a digital format so I can do it myself!
You all know that I’m a techno-optimist, but sometimes I wonder whether the healthcare industry will ever catch up to every other vertical.

Philosophy

A few weeks ago I had a slice of pie from the local grocery store. It was incredible. The crust was baked to the perfect crispiness and it had sugar sprinkled on top.
This got my thinking about sugar coating in more general terms. In most cases that I can think of, sugar coating is a great thing. Take a delicious food item, sprinkle some sugar on top, and it generally gets better. There is, of course, one downside. Whatever you’re eating automatically becomes worse for you due to the added sugar. Moreover, if you think about most of the food items that have sugar sprinkled on top, most already offer exorbitant amounts of sugar in the first place. So it’s really just insult to injury.
I think this idea also applies to sugar coating in the less literal sense. That is, using indirect or gentle language to deliver a difficult or stern message. Sugar coating the message will make it easier to swallow for the recipient, but this isn’t necessarily a good thing. There are times, when dealing with children or overly sensitive people for example, when it’s necessary to soften the blow. But in general, I’m a fan of being direct and blunt. It might sting a bit in the moment, but I find that people come to appreciate honest and forthright feedback. You actually build more trust and value into your relationships.
Best to leave the sugar coating for yummy snacks and desserts.

My Latest Discovery

This stuff is incredible!!! Go try it immediately!

Hasta la vista baby!

Jeremy

[VIC – 69] Early stage investing. Everything is digital. We can do better. National Poetry Month. Flattery or plagiarism?

Business & Money

When thinking about early stage investment opportunities, conventional wisdom says that these are generally reserved for silicon valley elites. There’s a small cabal of elite VCs that get access to all of the best deals and companies, while most are shut out. Thus the astronomical returns that accrue to these firms far out pace what the average person can expect to make while investing.
While mostly true, there are a few other ways to get a foot in the door for early stage opportunities. Here are a few:
1) You can always invest in startups yourself. Title III of the Jobs Act opens up the opportunity for regular retail investors to get their turn at startup investing. Regular people can create an account with any number of equity crowdfunding platforms (e.g. SeedInvest, MicroVentures) to participate in startup fundraising. While Title III is a good thing in general terms, it’s very unlikely that I’ll try my hand at picking individual companies. Chances are, all the best deals will be picked through by the VCs, angel syndicates, or individual angel investors. In other words, the equity crowdfunding platforms likely offer the bottom of the barrel in terms of investment opportunities. The platforms do take on some of the due diligence work to de-risk things a bit, but chances are you’ll still lose your money.
2) More realistically, you can try to take advantage of early stage opportunities by investing in public companies. For example, take artificial intelligence. We’re clearly in the hype cycle for AI and every company, both large and small, are trying to participate in the “AI gold rush”. To understand where the investment opportunities lie, we first need a bit ot context. Without getting into the weeds, deep learning is a subset of machine learning that uses computational systems loosely modeled on the human brain. Deep learning systems require a lot of processing power and thus require advanced GPUs (graphical processing units) which are far more powerful than their CPU (central processing unit) brethren. There are basically 2 companies that own the GPU market, Nvidia and Advanced Micro Devices, and both are publicly traded. NVDA is up 285% this year and AMD is up 481%. Not bad at all for a public market returns.
3) One slightly more esoteric way to get involved, and somewhat similar to above, involves investing in underlying technologies. Not investing in companies that produce the underlying technology, but the technology itself. I’ll give you two examples. First, think about the early days of the internet. Everyone and their mother were building internet based businesses and every one of those required a website. If you went on a buying spree in the 90s purchasing as many domain names as possible, you would be incredibly wealthy today. The average domain back then sold for around $0.50 – $5.00. Today, the average 5 letter word in the dictionary will cost you anywhere from $500,000 to $1,000,000 if you want to purchase the domain. That multiple is (you guessed it), 🍌🍌🍌🍌🍌! Secondly, I’m betting that cryptocurrencies will explode over the next 5 years. The value has already gone up over 100x since inception, and I’d say were in the first inning with no outs. I’ve been purchasing modest amounts of Bitcoin and Ethereum, the two leading cryptocurrencies, betting that they will be far more valuable in a few years. I’m less worried about these as digital currencies or stores of value, and more excited by the applications that will be built on the underlying technology. We’ll have to wait to see how this last one pans out.

Human Progress

If the 20th century was an industrial century, the 21st will be a digital one. Absolutely everything is going (or has gone) digital. Money, media, communication, commerce, conflict… everything. This transformation will, of course, bring great progress. But, it will also bring unprecedented risk. Cyber security risk that is. As the number of connected devices goes through the roof, so too do the number of vulnerabilities. I’m no cyber security expert, so I won’t try to delve into the details of the myriad vulnerabilities. Instead, I’d like to suggest 3 simple ways to greatly improve your digital security profile.
1 Turn on 2-factor authentication (2FA) for your email. For those unaware, 2FA is the process by which you use a second device to verify your identity. So when you log into your email account on your laptop, it will ask you for a password that you need to retrieve from your phone (SMS). As a result, you have a second layer of protection from someone trying to gain unauthorized access. And, while you can also enable 2FA on many other applications, email lies at the crux of everything. Anytime you need to reset a password, the reset link is sent via email. Thus, if someone gains access to your email, they likely have access to everything.
2 Use a VPN (virtual private network). VPNs offer a simple way to protect the data being transmitted over wireless networks by forcing all of your data through a server run by a VPN provider. These providers encrypt all of the data providing, again, another layer of protection. These require a simple, low-cost software download from any of a number of reputable providers. This is especially important if you regularly use public wifi networks (e.g. coffee shops, NYC parks & subways, etc). Anyone on these networks can access your data if it’s unprotected.
3 Use a secure browser (e.g. Opera). These run security checks in the background while you browse (checking for phishing, malware, etc) and many also include free built-in VPN software.
None of these will guarantee that you’re 100% safe, but you’re far better off with them than without.

Philosophy

You know that philosophical question, “if a tree falls in a forest and no one is around to hear it, does it make a sound?” I’ve been thinking about my own version. “If a person apologizes for a certain wrongdoing that they’ve committed, but the victim is not around to hear it, did the apology actually happen?” I would answer “no” to both questions. In the first, the tree hitting the ground would clearly disturb the adjacent air creating sound waves. But “hearing,” that involves those same sounds waves interacting with an ear drum and the associated nerve endings that translate those vibrations into an intelligible signal. In my own version of the question, the same logic applies. Yes, the apology is spoken, but the act of apologizing, if it is to be at all meaningful, involves both the speaker’s message and the listener’s reception and interpretation thereof. So even if the apology is heard, but there is no eye contact or a lack of conviction in the voice of the apologizer, we’ve adulterated the content of the words.
I began thinking about this when someone posted on Facebook about what’s often referred to as the Apology to Native Peoples. I wouldn’t be surprised if you’ve never heard of it (I had not before coming across this post). In essence, this was a resolution signed by President Obama in 2009 as an acknowledgment of the depredations and mistreatment of Native Americans by the US government. A formal apology of sorts. I see two glaring problems right off the bat.
First, the delivery. The resolution was quietly passed, buried deep within the Defense Appropriations act of 2009 (not an obvious location for such a resolution). But no attention was drawn to it. It’s almost like the apology was whispered under the breath so that no one could hear it. Not an apology at all if you ask me. If no one can hear it, it’s safe to assume that the act itself is narcissistic or inward focused. It serves to remove some guilt or responsibility, without putting the speaker at any risk or empathizing with the listener.
Secondly, the language.
“Whereas the arrival of Europeans in North America opened a new chapter in the history of Native Peoples.”
A new chapter?!?! Are you kidding me?? Let’s drop the warm and poetic language and call a spade a spade.
“Whereas while establishment of permanent European settlements in North America did stir conflict with nearby Indian tribes, peaceful and mutually beneficial interactions also took place.”
Peaceful and mutually beneficial? 😂😂 What a joke!
“Whereas Native Peoples and non-Native settlers engaged in numerous armed conflicts in which unfortunately, both took innocent lives, including those of women and children.”
Innocent lives taken on both sides? More like genocide or extermination of one side and flourishing on the other.
There is so much power in language. What is said is often less important than how it is said.
All of this makes me think about my own progress in delivering apologies. I, for one, can say I have a long way to go. I’ve often delivered apologies while staring at the floor, using defensive language, voice raised, arms crossed, and no eye contact. If I can’t do any better, our nation and our federal government likely can’t either. 😩 Come one! We’re better than that!

My Latest Discovery

On the same topic of native peoples, Layli Long Soldier is both a US citizen and a citizen of the Oglala Lakota Nation (a Native American Tribe). She is also an incredible poet. And, I’ve discovered that April happens to be National Poetry Month. I thought I would share one of her exquisite yet painful compositions called “38.”

I would highly recommend you listen, but if you prefer to read, you can do so here.

Question Of The Week

When is it ok to copy?
I’m thinking about this in the wake of rampant copying by Facebook. After seeing the success of SnapChat, Zuckerberg has basically copy/pasted SnapChat’s best features, pixel for pixel, into all 4 Facebook properties (WhatsApp, Instagram, Messenger, And Facebook).
I’m specifically thinking about this in relation to other great innovations that have been copied and commoditized. In the digital realm, think about the like button or the news feed. Basically every social application now has both. Someone had to be first. In cars, what about sunroofs? Whoever came up with the sunroof is a genius. Now every car on the block has one. The inventor must be pissed!
When does copying stop being the sincerest form of flattery and become plagiarism? Should there be more IP protection for digital products? Would this impact innovation in a negative way? So many questions!