[VIC – 102] Offshore war chests. Moore vs Eroom. Original thinking. When to scroll.

Business & Money

There’s been a lot of talk lately about how much money US companies have parked in offshore accounts. This is especially apparent in tech with Apple holding something like $250 billion offshore, Microsoft holding $100B, and Oracle, Cisco, and Alphabet all sitting on around $50B.
But how can you blame them? I’d leave my money sitting there as well if 35% of it immediately evaporates upon repatriation. You might even make the argument that it’s irresponsible to bring it home. Perhaps even against the fiduciary duty of the executive team.
That’s especially the case when you think about ridiculously low interest rates. It’s cheaper to borrow money at home and leave the cash parked where it is.
The downside, though, of these companies leaving the cash abroad is that they are incentivized to invest abroad rather than at home. They’re building new factories and creating jobs in other jurisdictions. Maybe those investments wouldn’t really be enough to move the needle, but you’d likely get share buybacks or dividends at the very least.
In any case, here we are in the present moment. I imagine these companies have continued to build these war chests to force the hand of regulators to make a change. And it looks like it’s working.

Human Progress

I’ve written about Moore’s Law here on VIC many times. The fundamental idea is that technology gets exponentially better over time, while the costs get cheaper.
For all intents and purposes, it’s a truism that applies across most markets and industries. But the one painfully obvious exception is healthcare. In fact, it’s so untrue in healthcare, people have coined the term Eroom’s Law (Moore’s backward) to capture the idea that drug discovery actually gets more expensive over time, despite our improving technological capabilities.
So I’ve been thinking about this over the past few weeks and decided it was worth writing about.
The first thing I set out to understand is why drug discovery is so expensive. And the simple answer I landed on is that it’s so damn hard and involves a ton of different stakeholders.
First scientists or companies need to hypothesize about what might be a good point for disease intervention. Then, tons of tests and experiments hopefully lead to some fundamental discovery (which takes a lot of time and $).
Then you need to test/prove that the drug is safe and effective via multiple stages of clinical trials (a lot more time and $).
Then you need to convince people to use by dealing with regulators and educating providers and healthcare systems (time + $).
And finally, you need an effective go-to-market strategy that gets it into patients hands.
All of that takes about $2.5 billion dollars and 10-15 years on average to for a new FDA approved drug (not to mention all of the drugs that fail along the way).
So that entire process is really long and messy, and probably too much to tackle for one post, but I do want to go back to that first step about making the discovery. And I want to do that because I believe we’re at a really interesting inflection point (take a look at biotech stock charts over the last few years).
To really innovate in healthcare via making a new discovery, there seem to be a few key steps.
1. You need to determine what outcome are you trying to achieve.
If we think about Sickle Cell Anemia, you want to eliminate the extreme pain that results from the disease, and the subsequent impact on patients’ lives, their families, and the economic impact on our healthcare system.
2. You need to have a pretty good understanding of the underlying disease biology that will enable you to achieve the desired outcome.
Following the same example, we know that patients’ have an error in their hemoglobin gene that causes red blood cells to fold or sickle.
3. You need to know, with a lot of specificity, what you’re going to target to get that outcome.
Here, the best way to address the disease is to repair/replace faulty hemoglobin.
4. You have to be confident that you can make a medicine to hit that target effectively.
We know that gene therapy has a pretty high probability of being able to repair the cells in question and a lot of people are working on that problem.
If you think about Alzheimers, in contrast to Sickle Cell Anemia, it’s a very different picture.
Following the same process, we don’t know the desired outcome. Can we reverse the effects? Should we just aim to halt progression? Or maybe just improve memory recall?
We don’t understand (very well at least) the underlying biology. Is it the plaques in the brain or neural tangles that we should focus on, or are those only symptoms of a larger problem?
And because we don’t understand the biology, we have no idea what to target.
And as a result, most of the recent attempts to discover new treatments have been failures, sometimes in late-stage clinical trials.
So why are we at an inflection point?
First off, we’re doing biology at a speed and scale that is unprecedented. For example, think about what Illumina has done in genomics by making it possible to sequence a genome faster, better, and way cheaper than was previously possible.
Secondly, we can now understand things at a single cell resolution. Scientists at the Broad Institute of MIT and Harvard have created an atlas of various cell types which greatly improves our ability to understand biology with increased granularity.
And thirdly, all of this generates a ton data that’s far too complex for the human mind. But lucky for us, AI and machine learning have reached a point where these tools can aid us in deriving real insights from the data.
I hope all of this can help rid of us of dyslexia and return to Mr. Moore.


A while back I read Zen and The Art of Motorcycle Maintenance. At one point the main character is teaching a rhetoric student suffering from writer’s block. He instructs her to write about her home town and she cannot think of anything to write. He then changes the assignment and tells her to write about the front of an opera house on a specific street in a specific part of that town. He tells her to start writing about the uppermost brick on the right side of the facade. The student begins to write and unleashes a torrent of creativity. The next day she shows up to close with 20 inspired pages of beautiful prose.
Similarly, in The Art of Learning, the author writes about making smaller circles. That is, when trying to master something it’s necessary to simplify practice into the smallest actions. Master the simple techniques. Depth over breadth. He talks about how winning championships is accomplished by complete mastery of fundamentals, as supposed to varied or sophisticated forms.
In The River of Consciousness, there’s an essay about Hellen Keller and her run-in with plagiarism. But the person whom she’s accused of copying doesn’t get angry. She wrote to Keller saying that everything in creative endeavors comes from other sources of inspiration.
I point these example about because I’m thinking about a specific question. Is there really such a thing as original thought? I’m not sure there is. I’m not sure there should be so much cultural stigma tied to plagiarism. Of course, you can’t just copy someone else’s work and submit it as your own, but digesting the ideas of others, then combining them with yet more ideas and some of your own, is really the only way to create anything.
Perhaps this is yet another reason I write here each week. None of the ideas here are entirely new. They are derivations and imitations of things I’ve read, listened to, and experienced. After consuming things in various forms, I spend some time thinking things through and mulling them over, then through the writing process, attempt to reorganize, combine, and pull things apart until I form something unique and personally refreshing.

My Latest Discovery

A few weeks ago I made a small change that has been very refreshing.
When you read an article or piece of content on your phone or computer screen, do you constantly scroll as you go, or only scroll when you get to the bottom? I had always done the former, scrolling little by little after every few sentences. I’m not sure why.
But now I do the opposite. I read everything that’s on the screen, then scroll to reveal the next section.
It’s a small change, but helps me feel more relaxed and less anxious as I read.
With social media and so much content at our fingertips, our digital overlords are trying their best to cultivate a degree of ADD in all of us. So I think small changes like these can go a long way.