Investing, Mindfulness

[VIC – 134] Different strokes…

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Business & Money

Buffet founded numerous investment partnerships focused on value investing and fundamental analysis. He then moved to investing directly in businesses hitting it big with companies like American Express and Geico.
Dalio pioneered a risk parity approach serving institutional clients.
Howard Lindzon seeds financial technology startups while Fred Wilson likes marketplace businesses and network effects.
At work, my team hunts down deals with medium to large advertising agencies and advertising technology companies, while my colleague manages and grows the large advertising holding companies. We’ve both done well.
Investors, salespeople, and anyone in business have a plethora of strategies to choose from.
In simple terms, it’s about figuring out what works for you and taking tips and cues from wherever you can find them.

Human Progress

I read this post from Sarah Newton of The Delusional Trader blog over the weekend. Sarah isn’t some big shot investment banker or associate on Wall Street.
I’m still just an average Jill, but previously shut and completely unknown doors are beginning to open. My mind is continuing to expand and my personal “Wall of Worry” is coming down like it’s June 1990. For now, I’m just a girl on a Greyhound bus, but maybe next year I will be writing to you from the Acela Express.
I especially liked it because I was reading the post from the Acela Express to Cape Cod.
It reminded me of the first post from Fred Wilson on his blog AVC 15 years ago.
I read blogs a lot. And I think they are great. So I am starting a blog. I have no idea if I’ll write a lot in my blog or rarely. I hope it’s a lot, because I have a lot to say. But we’ll see about that.
We did see about that. Fred’s blog has hundreds of thousands of readers and he’s arguably one of the greatest venture capitalists of all time.
A few weeks ago I got lunch with a friend. He’s starting an e-commerce company. It will be really hard to break through the noise of all the e-commerce companies starting these days, but I love his idea and am happy to see him going for it.
What’s interesting to me is that I hear echoes of Fred’s first post in my friend’s voice and in Sarah’s writing. Just people taking chances and starting something new. Regardless of what that looks like 15 years from now, I think that’s awesome.
And the Internet makes that a possibility. Despite all of the bad things that come with it, it’s a key reason I’m long-term bullish on the Internet and think we’re still in inning one of a very long game.
So start your blog or your company. Take a class. Buy your first stock.
Whatever you do, just get started.

Philosophy

So here’s a question: would you hire someone as a personal trainer if they themselves were not in shape?
A couple weeks ago, I came across this very situation at the gym. The trainer seemed to be in worse shape than the trainee. And worse, the trainer was in jeans and an oversized polo shirt.
But then I realized I was being judgmental for no reason. The trainer was up early making a living and the trainee was a the gym at 6 am. The last thing either of them wanted or needed was my judgment or opinion.
Perhaps I wouldn’t want to be trained by that person, but perhaps it’s less intimidating for someone just starting out at the gym or someone with poor self-esteem. Or perhaps the trainer was actually just a friend helping out another friend in need of extra motivation.
Who knows what the actual scenario was, but harboring negative judgmental thoughts didn’t serve anyone.
Thank you to mindfulness for cutting those thoughts short.

My Latest Discovery

A friend mentioned the Moment app a few weeks ago, so I decided to download it and give it a shot. It tracks your screen time and also which apps you spend the most time using.
Let’s just say it was a rude awakening. I would have guessed my screen time was at around an hour per day, but it’s double that (and occasionally more).
Since downloading the app, I’ve trimmed that to closer to 1 hour and feel like I’ve discovered more time out of thin air. Further, my mind feels clearer and less cluttered. I’d highly recommend that each and every one of you download it!
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[VIC – 133] Rocks, sand, and… jet skis?

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Business & Money

I’m not sure where it’s from, but there’ this metaphor in business and in life that involves rocks and sand.
Let’s say you have a pile of rocks, some big and some small, a pile of sand, and a jar. If you first add the big rocks, then the small ones, and finally the sand, everything will fit into the jar.
Conversely, if you first add the sand, then the small rocks, and finally the large ones, you won’t have enough space to fit everything into the jar.
When you start with the rocks, the sand fills all of the gaps and crevasses perfectly, but in the reverse order, you end up with air pockets between the rocks.
The metaphor is simple but profound. The big rocks are the things that really matter in business and in life. They are the complex things that you cannot complete in an hour or a day. They require deep thinking and a long-term perspective.
You might refer to the sand as “small wins.” It’s when you spend all morning responding to emails and hit inbox 0 by lunch and get that feeling of accomplishment. Meanwhile, you haven’t made any progress towards your important goals.
In life, the sand is the short term dopamine hits that you get from instant gratification. It’s when you wash the dishes as procrastination instead of studying for the LSAT or working on your book.
Don’t start with the sand.

Human Progress

You often hear people blame Facebook for the outcome of the 2016 election. And I agree that It’s Facebook’s (and Google’s) fault. But not for the reasons you hear about.
The reasons you most hear about have to do with “fake news” and Russian ads. Both are important topics, but I believe it to be intellectually lazy to stop there.
Before Facebook and Google, political power was implicitly reliant on the media. If you wanted to win the primary for either party you needed money for advertising or you needed earned media. That is to say that you needed major media companies to talk and write about you on TV, print, and radio.
And in order to get enough money or attention, you need to be in a position of power that was enabled by the party. You needed relationships with leading political donors and close connections in media.
Plus, you have to remember that media coverage wasn’t predicated on writing/saying what people wanted to read/hear. Instead, it was predicated on owning the means of delivery. It was predicated on being a big media conglomerate with printing presses, delivery trucks, and/or television networks.
The internet made all of that obsolete. It destroyed the gatekeeper function of media companies. Now, attention is predicated on how much engagement you can drive, that is how many clicks, likes, and video views you can drive. So feeding into confirmation bias and sensationalism is the name of the game.
Now the media companies are subservient suppliers to the big platforms and have to create content based on their dictates. They have to compete based on those engagement metrics I just mentioned a moment ago. So they are incentivized to give someone like Donald Trump more coverage and airtime. Not based on the merits of his viewpoints, but because he drives more attention, which drives more ad dollars.
So I’m not so much blaming Facebook and Google specifically, but rather blaming the internet more broadly and the business model that has come with. It just so happens that Google and Facebook have won the internet and so you can use either company as a stand-in for the larger issue.
The problem, though, is that giving people what they want is not always a good thing. If you let a child control their diet, they’d likely eat junk food and drink soda exclusively. So adults have to temper those desires and communicate the importance of eating well.
So I guess the question becomes, what does adult supervision look like on the internet?

Philosophy

Riding jet skis is one of my favorite things to do.
One interesting thing about jet skis is that you have more control over the machine the faster you go. It’s counter intuitive. Your inclination is to slow down when you get scared, but doing so too quickly is how people get thrown violently from the machine.
This is especially the case when you’re trying to turn. You have to keep the throttle engaged throughout the turn for maximum control.
It’s very similar to riding a motorcycle or even a bicycle in that way. When you first learn, you feel like going slow is the prudent thing. But it’s not. Balance and control again come with higher speed.
And it’s interesting because, if we circle back to where we started, you sometimes have to slow down and take a step back to really make progress on the big rocks.
But jet skis, motorcycles, and bicycles seem to say the opposite. Perhaps what we’re talking about here has to do with avoiding “analysis paralysis.” At some point you just have to make the decision and go for it.

My Latest Discovery

I’ve written hear before about my love of many different podcasts. And given that I’ve worked in and around the media and advertising industry for a while now, I’m just as interested in the business side as I am in listening to podcasts themselves.
The industry went from about $170 million in 2016, to $317 million in 2017, and is expected to hit roughly $650 million by 2020.
If you find this space interesting, I’d recommend checking out the Hot Pod email newsletter. There’s a free weekly edition, and also a paid version if you want to dive deeper.
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[VIC – 132] 💭 about the acquisition…

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Most of you know by now that Datorama (the software company where I work) was recently acquired by Salesforce. The exact value of the deal was not disclosed, but the internet will peg it somewhere between $800 and $850 million. Whatever the exact amount, it’s a pretty remarkable outcome after only 6 years in business. I joined about 3.5 years ago and feel incredibly fortunate to have been able to partake.

I’ve been thinking about this milestone for the last few weeks and thought I’d share a few musings.

It’s all about the people

This is a huge cliche. But the thing about cliches is that they become cliches because they’re true. There are two specific things about the people at Datorama that come to mind when I say “it’s all about the people.”

First, it’s so much fun to work with A players. It’s easy to grind and work late nights when you’re in the trenches with A players. You know, without question, that they are giving just as much, if not more. You never have to worry about their level of preparation. Their competence, desire, passion, and commitment are sure things.

Second, A players stick together. Of the first 100 people (I was around #40), I’d estimate that higher than 50% previously worked with one of the founders or early employees at a previous company or spent time together in the Israel Defense Forces. Because real A players are so hard to find, you keep them close once you find them. I can safely say that if our founders start another company together in the future, I’d have to seriously consider joining them for round 2.

Frugality

Our founders and management team are incredibly frugal. We never spent much on advertising or sponsoring events. The snacks in our office don’t compete with other Silicon Valley kitchens. We’ve always subleased out empty seats in our offices, that is, when we weren’t sublease tenants ourselves. We maintain strong unit economics. We hire responsibly.

Startups are hard

I think the frugality has something to do with a recognition about how hard it is to do what we did. We count our lucky stars every day for having come as far as we’ve come, and we are by no means guaranteed continued success. As such, financial responsibility is a must.

Further, 0 to however many millions in 6 years is 🍌! But it didn’t always feel like that on the inside. We had quarters when revenue targets were missed. We had periods of increasing churn. We lost tons of deals.

Even many crazy unicorns out there don’t have purely “up and to the right” stories. Slack was founded via a pivot from a failed gaming company. Airbnb came from the founders needing extra cash to pay rent. When they launched out SXSW, they got 2 bookings. Then they apparently lived on cereal while being turned down by a series of investors, before finally being accepted into Y Combinator.

Basically every single startup will face challenging times. It’s part of the journey.

Tailwinds

Because things are so hard, I find that it’s best to pick companies with tailwinds. I found out about Datorama via a chance email from a recruiter. Complete luck. But when I met with the VP of sales and saw the platform, I immediately recognized tailwinds.

The ways to advertise online are too numerous to count. There’s an investment bank called Luma Partners that releases a market map of all of the different companies involved in digital advertising. The map went from about 100 logos 8 years ago to having over 7,000 companies now. Thus the challenge facing people trying to reach an audience online has gotten exponentially harder. Thus, I felt fairly confident that the need for a platform to deal with all of the resulting data would increase over time, and at a pretty healthy clip.

Additionally, many of the early customers were some of the largest and most complex advertising organizations on the planet.

So if you’re planning to take a bet on an early stage company, looking for tailwinds seems prudent.

The why

Lastly, and perhaps most importantly, there needs to be a why if you’re planning to give so much of yourself for something. And I’m not talking about the highfalutin “what impact am I having on the world” type of why. That’s all good and well, but I’m talking about the more pragmatic type of why. For me, it comes down to two things.

I’m a fan of learning. And there’s no better place to learn than a high growth technology company. As a team and an individual, you’re constantly forced outside your comfort zone and it’s learn & adapt or die.

Further, I hope to build and lead an important technology company of my own in the not too distant future (the wheels may or may not be in motion as we speak). So I am being a sponge to everything happening around me and what it takes to scale a company, hire incredible people, iterate quickly, and the like.

So that’s all I have for you. And to be clear, all the credit goes to our founding team and all the thanks to our customers for placing their trust in us. But hopefully you’ll find these thoughts somewhat helpful.

Compounding, Presence, Tencent

[VIC – 131] Steps 👣 hands 🖐️ and dots ⚫

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Business & Money

I coined this formula a couple years ago: MD = CI + NE. [Market dominance] equals [critical infrastructure] + [network effects]. For companies that are covered by this formula, they make it on to my “high conviction list.”

One of the companies on the list is Chinese internet giant Tencent. The companies lead offering, WeChat, is the definition of critical infrastructure. WeChat is Facebook (social) + WhatsApp (messaging) + Venmo (payments) + Apple/Google (mobile operating system and app distribution) + Activision Blizzard (game publisher) for 1 out of 1.4 billion Chinese citizens. That’s 🍌🍌🍌!

On the network effect side, the more people that join and the more services available via WeChat makes it more valuable for all of the existing users. Add to that the data network effect that powers the machine learning flywheel… what more could you ask for.

So why bring this up? The stock is down 30% from its high in January. And I have a rule about high conviction stocks. When they drop 20%, I add to my position. When they drop 30%, I add even more. So you can guess what I’m currently doing with TCEHY.

That’s not to say there aren’t risks. People like to bring up trade wars and geopolitical risk. But Tencent largely operates in China and only deals with intellectual property, as opposed to commodities like steel or soybeans. So I don’t see why tariffs and trade wars should be a big deal (please share if you feel differently).

Then you have censorship risk from the Chinese government, which feels like a more serious headwind. Censorship has definitely hit profitability in recent quarters. That said, given China’s desire to compete head-to-head with US technology and AI supremacy, it would seem counterintuitive to seriously hamstring one of your own tech darlings.

All things considered, TCEHY feels as “high conviction” as it ever has.

Human Progress

I’ve written here before about the power of compounding. I believe all previous mentions were in monetary terms, but the concept applies equally to other areas. Here’s a great example:

It’s no secret that venture capital is not a very diverse industry. Take race for instance:

The tally went from 2% black to 3% in two years. And while that seems meager, a 50% growth rate over two years is actually high. Following the logic of compounding, over 1/3 of all VC will be black by 2030.

What if we look at gender:

That’s an even higher 2-year rate of growth at 64%. Carry that forward and we’re at gender parity in VC by 2022.

I’m not trying to be literal here. You’d have to take into account the demographics of the overall population, the law of large numbers (becomes harder to maintain growth rates when starting from a higher base), and many other factors to attempt an accurate forecast.

But that’s not the point. The point is to say that compounding is a powerful force. If there is some area of your life, or of life more broadly, where you’d like to see progress, starting small can yield massive results over time.

Philosophy

I went on a gorgeous hike this morning near Lake Tahoe. It traversed 2,100 feet of elevation, 3.6 miles of trails, and just over 2 hours. It was a great time to think and I thought I’d share a couple thought bubbles with all of you.

There were numerous occasions when you were forced to travel downhill for 40 or 50 yards before heading back uphill. And each time, it felt counterintuitive. When hiking to a peak, it feels like a waste of time and energy if you’re not going up. But after a couple times, you realize that the downhill stretches are important elements in the overall journey and, better yet, a great opportunity to catch your breath. I think there are many moments in life where things don’t feel right and it seems you’re wasting time, but those are just parts of the journey.

Certain people out on the trail seemed focused on finishing quickly. But then we passed them around mile 2 and they looked spent. They had attempted the proverbial sprint in the midst of a marathon.

Similarly, we underestimated the amount of water that we would need. There were a couple times when it felt right to crush what was left in the water bottles. But remembering the marathon, we conserved the little remaining and made it last. It’s so important not to deplete resources too quickly.

When scaling 50 and 60-degree cliff faces, presence takes on a new meaning. Each step needs to test the rocks before planting and the same goes for each hand grab. You’re paying close attention to your center of gravity and ensuring that, if you slip, you want to fall forward and not backward. This level of presence and focus is scarce in modern life. If only we could approach every task with something similar.

As we progressed up the mountain, there would be an occasional spray-painted dot on a rock or tree trunk. These would remind you that you were headed in the right direction. Occasionally you would head off in a direction and fail to find any dots. At those points, you head back to the last one and try to rechart the course. Or sometimes you momentarily split up and communicate by voice to see if one or another person can find the next dot.

So, during the steep parts, you’re focused on the next step and the next hand grab. When things are more stable, you’re on the lookout for the next dot. But never much further than that.

I often hear people talk about their 5 and 10-year plans. And I think planning is all good and well. But, in reality, it seems that much of what happens 10 years from now is completely out of our hands. So, for me, I try to stay focused on the steps, hand grabs, and dots.

My Latest Discovery

Lake Tahoe is one of the more picturesque places that I’ve ever been.

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[VIC – 130] I’m not special

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Business & Money

Here’s the S&P over the last 5 years.

It’s up 71.56% over that span. That time frame happens to be roughly the same amount of time that I’ve been actively investing in public equities. And while my returns are significantly higher than that, I wanted to post that picture as a reminder to myself that I’m not smart or special.

You can see what I mean if you look at the following picture that shows the performance of the market during your teens and twenties from 2 different vantage points: if you were born in 1950 vs 1970.

I’m eager to say how things shake out when we hit some real volatility.

Human Progress

There are certain companies that have grown to become core parts of our communication infrastructure. To be specific, I’m thinking about Fedex, UPS, and other mail carriers.

Similarly, on the internet, there are certain companies that have grown to become core parts of our digital communication infrastructure. Here I’m thinking about social platforms like Facebook and Twitter.

In the first example, carriers have some responsibility for what’s sent in the mail. They have certain safeguards and protocols in place to screen for explosives, narcotics, and other nefarious items.

In the second, we have a scenario where the platforms try to abstain from taking responsibility for what’s sent via their platforms.

Would we allow for mail carriers to say, “we are not responsible for what’s sent; we just provide delivery services.”

I’m not sure that would hold water.

Philosophy

People spend so much time trying to think about how they can make a difference. They ask,

“What can I do that really matters? How can I have an impact?”

But I worry that often times people don’t think about the impact that they actually have.

Every time you smile at someone or hold the door for a pregnant mother. Every time you give up your seat for the elderly man on the subway or give an unexpected compliment to the barista at Starbucks. Or the flip side, when you throw a wrapper on the ground or yell at someone for cutting you off.

What you do every day and how you live has an impact. I think people just need to decide what type of impact they want to have on the world and the people around them.

My Latest Discovery

I’m really pumped to watch General Magic!

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[VIC – 129] High fives 🙌 and fist bumps 🤜🤛

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Business & Money

My team recently lost a deal at work to a competitor. The frustrating part is that the prospect falls square in the center of our ideal customer profile. We have a ton of case studies that speak to why our technology is specifically built for this type of customer and how other similar companies have been successful. But it didn’t matter. We were told that the decision solely came down to price.
We do not compete on price. And that’s for good reason. To lower our price would be to devalue the platform and service we provide. And that’s particularly true when the point of comparison is apples to oranges.

Further, we came to the table very late in the evaluation, so it’s unclear whether we were truly being considered, or if we were being used for leverage in a negotiation.

So it’s easy to say that there’s not much we could have done in this situation. But the easy way out doesn’t provide much learning. And it’s a bit intellectually dishonest.

When I shop for undershirts, I generally buy Hanes because they are the cheapest. There are usually other options from Polo Ralph Lauren and Calvin Klein, but we’re talking undershirts. It doesn’t matter the brand because they serve a very utilitarian purpose. Just catch sweat and keep me comfortable.

When I buy jeans, I tend to pay up. Cheap ones rip and don’t fit well. So the value of more expensive brands has been proven to me on multiple occasions, and thus warrant more investment.

So to say that we lost on price is to say that we did not do a good enough job at communicating the value and differentiation of our software. I’ll be spending some time this week with the team to pull this one apart, dissect our process step-by-step, and try to see what there is to be learned. Perhaps there’s some small stone to be turned that might help us in a future situation.

Human Progress

You’ve likely seen the following series of charts before:

It represents a long-running research study conducted by the Pew Research Center that shows the distance between the median Democratic voter and the median Republican voter.

Here’s a time-lapse version:

In 94′ and 04′ you see something akin to a bell curve or normal distribution with a ton of overlap between the Republican and Democratic electorate.

In 17′ you see two distinct peaks, what’s known as a bimodal distribution.

The interesting thing to point out here is the total area of the different colors. Red is purely Republican, Blue is Democrat, and purple area represents the overlap.

When you have the normal distribution, the overlapping purple area is larger than the aggregate of the red area + blue area. That allows for relatively centrist politics.

But when the purple area is smaller than the aggregate of red + blue, a centrist politician cannot win a nomination or an election.

In 2016 we whipsawed to the far right, and perhaps we swing to the other extreme in 2020. But neither result seems ideal.
And the scary part is, because the center cannot hold, this divide is likely to continue getting wider and wider as we swing back and forth from one extreme to the other.

I’m not sure I want to see how this movie ends.

Philosophy

If you’ve ever spent a good amount of time in New York City, you’ve likely seen those long lines of young school children walking on the sidewalk. Kids need to burn energy, so I imagine these kids are heading to parks and/or playgrounds for recess.

What I love about this site is that all of the kids are usually paired up and holding hands. So you get little white kids, black kids, Spanish kids, Indian kids, Asian kids, and kids of all colors and creeds holding hands making their way through the craziness that is a New York City sidewalk (I’m not sure that I want this experience for my kids, but that’s a topic for another day).

Where else in the world do you get that? I’m sure that are a few other places, but I’m convinced that this experience must be incredibly formative for these kids.

What if everyone in your office walked to lunch together holding hands? Might you feel differently about the weird IT guy or the quiet office admin?

I think that something about human contact brings you closer to other people. It’s one reason I’m a huge fan of high-fives and fist bumps in the office to celebrate small wins.

My Latest Discovery

I usually try to surface something interesting or useful in this section. However, this week I watched such a terrible movie, that I must warn you so that you don’t meet the same fate. Whatever you do, DO NOT watch Netflix’s “How It Ends.”

China, Plants

[VIC – 128] What’s your favorite plant? 🌱

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Business & Money

I read a recent blog post wherein I happened upon a new financial ratio, the “hype factor.”

The hype ratio = VC / ARR (annual recurring revenue). On the theory that SaaS startups input venture capital (VC) and output two things — annual recurring revenue (ARR) and hype — by analogy, heat and light, this is a good way to measure how efficiently they generate ARR.

For example, take Trupanion, which I wrote about a couple weeks ago in VIC 126. They raised $9 million in venture capital and had $84 million in revenue in 2013 (before listing on the Nasdaq in July 2014). So the hype ratio would be 9/84, or 0.11. Put another way, they convert VC into revenue at a rate of 909%. For every dollar of investment, you get $9 in revenue and no hype (all heat and no light).

By contrast, Dropbox raised $1.7 billion in VC, and had $1.1 billion in revenue the year before their IPO, for a hype ratio of 1.55. So they’re converting VC into revenue at a rate of 65%. Every investment dollar produces $0.65 in revenue and $0.35 of hype (65% heat and 35% light).

I don’t think you’ll find the hype ratio in brokerage interfaces any time soon, but I think it’s a very interesting point of analysis, particularly comparative analysis.

Human Progress

You hear a lot these days about intellectual property theft perpetrated by Chinese companies, and by extension the Chinese government. From what I can tell, there seems to be some truth to this, while it also seems like excellent fodder for identity politics.

In any case, what I find more interesting is China’s borrowing of our strategic approach to international development following WWII.

One of the most intensively covered topics in Chinese media (at least as it appears from the outside) is the Belt and Road Initiative. It’s a foreign policy initiative proposed by the Chinese government that focuses on infrastructure investment and regional connectivity with neighboring countries in Asia, Eastern Europe, and East Africa. It’s easy to list out tons of motivations for the BRI (new markets for Chinese companies, export excess capacities of commodities, economic development of Western China, etc), but the largest and most apparent would appear to be the creation of an economic and political powerhouse in Eurasia, led by China, similar to the transatlantic one dominated by the US.

Maybe it’s just me, but this seems fairly similar in motivation to the Marshall Plan. It’s easy to say that the Marshall Plan was all about rebuilding Western European economies following WWII (though its impact is up for debate), and a worthwhile goal that would be. And I hate to be a cynic, but foreign policy initiatives are never as altruistic and benign as their authors would have you believe. I don’t believe it would be crazy to say that the Marshall Plan was about rebuilding Europe in the image of America. In other words, it was about making strategic investments and building institutions that would further our values and cultural norms. And it worked perfectly. A long period of harmony and economic expansion continue right up into the present moment.

So, while DiDi may have cloned Uber and Baidu may have cloned Google, I think Xi Jinping is studying the history of empire building a bit more closely than the source code of our internet giants.

Philosophy

My wife loves plants, succulents to be specific. Those tiny little plants seem to melt her heart.

So I started to think about what plants, or perhaps what category of plants, might be my favorite. And for a while I was drawing a blank. But then I landed on moss.

You might be wondering, “why moss?” They don’t offer any blooming flowers or colorful designs. They just cover surfaces with a few centimeters of their little green fluff.

But in reality, mosses are exquisite.

These tiny plants aren’t very competitive in an ecological sense. They’re quite small and they don’t acquire resources very efficiently. So, as a result, they have to occupy spaces where many plants don’t do very well.

Yet, they’ve managed to persist as one of the oldest plant species that we know. They’ve been around for something like 350 million years. So I’d say they’re doing something right.

What’s fascinating is that they have an incredible ability to cooperate with surrounding organisms and their environment. Mosses manufacture soil. They purify water. You might say they’re something like coral reefs of the forest floor in that they provide homes for a myriad of tiny creatures.

They may not grow very tall (unless on a wall, of course), but mosses are powerhouses of persistence and biodiversity. And I happen to think they’re pretty cool.

My Latest Discovery

This game is so much fun!

If you have a barbecue, picnic, or beach outing coming up, I’d highly recommend picking one up.

Antitrust, Food, Google

[VIC – 127] 🔎 🧠 ⚖️ 🍣

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Business & Money

Google was recently fined $5B by the European Commission for antitrust violations. I find this ruling interesting for a number of reasons, but let’s start by listing out specifically what they were found guilty of:

  1. Illegally bundling Google Search, Chrome, and the Google Play Store. To get the Play Store, and a full suite of Google apps by extension, Android OEMs (original equipment manufacturers aka phone makers) were forced to preinstall Google Search and Chrome, and also make them available within one screen of the home screen.
  2. Illegally paying OEMs for search exclusivity – they had to preinstall Google Search (and no competing search apps) on every Android they made.
  3. Illegally barring OEMs from selling Android devices that ran Android forks (basically negating the open source nature of the operating system).

Does this ruling remind you of anything? For me, it harkens back to the days when Microsoft was facing its own antitrust allegations. Similar to Google, Microsoft was under fire for bundling Internet Explorer to the Windows operating system, effectively killing off competition from other browsers, namely Netscape and Opera. In the days when application downloads were slow and users often had to buy software in retails stores, it was an insurmountable advantage that Microsoft could bundle its browser with the operating system that was preinstalled by PC OEMs.

But the interesting thing here is that Microsoft basically got a slap on the wrist. They settled the case with the DOJ without having to unbundle anything or change their go to market strategy.

By contrast, Google has to:

  1. Pay $5B in fines,
  2. Unbundle Google Play from Search and Chrome,
  3. Stop paying OEMs for Search exclusivity, and
  4. Stop barring Android OEMs from running Android forks.

That’s a massive difference in outcomes. I think that difference partially stems from the business model. Microsoft charged a per-device license fee to OEMs that wanted to pre-install Windows. Android is free to smartphone OEMs. Actually, it’s less than free. OEMs were paid for Search exclusivity and Google also shares a portion of search revenues. One could easily make an argument that that describes predatory pricing.

Perhaps most interesting, though, will be what happens next. Will this result be enough to shake Google’s competitive edge? I’m not so sure. And how will this affect Google investors? AT&T is up over 500% since it was broken up in the early 80s. Microsoft is up over 300% since it’s tussle with Uncle Sam in the early 2000s. In other words, I don’t think there’s much to worry about for long-term investors. Regulation isn’t what usually unseats dominant players. More often it is a new paradigm (e.g. mainframes > PCs > web > cloud > mobile).

Human Progress

Modern humans have been around for a couple hundred thousand years. Interestingly enough, our structure and physiology haven’t changed much during that time. However, our way of life has changed drastically. We’ve been hunter-gatherers, agriculturalist, and industrialists. We’ve covered all corners of the globe and subscribe to many different cultures and ideologies.

I don’t write this to kick off some long-winded history lesson, but rather because I find neuroplasticity to be fascinating. We are all basically the same, but each of our brains has the ability to undergo rapid changes based on our environment.

I remember reading a while back about how a taxi driver in London will exhibit an enlarged hippocampus after many years on the job.

Then you have the Moken, a seafaring people off the coast of Myanmar and Thailand who exhibit incredible underwater vision due to the amount of time they spend diving for shellfish and other food items.

I find myself thinking about this do to the moment we currently occupy. At a crucial juncture in our lives (our teens), my generation (dare I say “millennials”) experienced a shift to a world dominated by algorithms. Much of the news and information that many people consume is algorithmically curated to serve up things that confirm preexisting beliefs (or stoke anger and mistrust toward the “other”).

So I wonder how long someone needs to be exposed to this type of information before the brain rewires itself so that this is the new normal? And when that happens, how much harder will it be to reverse course?

Philosophy

What’s more, there’s a paradox at play here.

Many of the platforms that rely on algorithmically curated information are based around the premise of networks. In fact, it might be said that our ability to collectively organize is one of our greatest assets. Quotes abound about the value of working together and standing on the shoulders of giants.

However, when we organize, we are also at our most vulnerable. Collective biases, social pressure, and groupthink are nefarious forces. From these you get mob mentality and pluralistic ignorance. You get small transgressions that snowball into fascism.

Personally, I’m not sure how to reconcile the two.

My Latest Discovery

Last week I had an incredible omakase sushi dinner at Sushi by Bou at the Jue Lan Club. But neither the venue nor the food is the discovery, though both were incredible. Instead, the bartender was curating the evening with the “Sushi Flow 🐠🍣🦐” playlist on Spotify. It’s a must listen!!

Food, Insurance, Mortality

[VIC – 126] Musing on mortality ☠️

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Business & Money

I wrote in VIC 112 about why I love the insurance business. As such, I am always keeping my eyes peeled for new investment opportunities within this vertical. I recently stumbled upon Trupanion (TRUP), a pet insurer, and it’s got me giddy for a whole host of reasons!

First off, it’s basically a technology company masquerading as an insurance company. They’ve built a software platform that integrates directly into the practice management software of veterinary hospitals so that they can pay claims in under 5 minutes (while most of the industry uses a reimbursement model that requires the pet owner to pay out of pocket and later file a claim). Further, it appears that Trupanion collects a greater volume and far more granular data than traditional pet insurance companies. That means they are in a better position to deploy machine learning to better price insurance policies across different breeds of dogs and cats.

Second, I love how management thinks about the business model. Like a SAAS software company, they have created “a business model based on monthly recurring revenue,” as opposed to many traditional insurance companies that focus on float and capital allocation. Recurring revenue provides great predictability for companies and peace of mind for investors.

Third, the addressable market appears massive. Trupanion focuses on North America, where all of the research I can find puts market penetration for pet insurance at less than 2%. That’s in contrast to western Europe where I’ve seen estimates as high as 25% penetration.

There’s a lot to like about Trupanion!

Human Progress

There’s this saying that “everyone wants to go to heaven, but no one wants to die” (I’m not sure who said it). In other words, people want to reach the destination, but aren’t willing to make the journey.

There are also schools of thought (e.g. stoicism) that preach a constant awareness of one’s own mortality. They posit that an acute awareness of death encourages one to be present in each moment and live the best life.

In either case, or any other for that matter, death has been front and center in many (perhaps most) cultures/religions/philosophies for millennia.

But we’ve reached an interesting moment in time wherein it’s up for debate whether death is, in fact, a certainty as it has always been thought (putting aside reincarnation and things like that).

For example, there’s mounting evidence that caloric restriction has the effect of extending lifespan in many different types of organisms.

There are also certain genes that when inhibited or overexpressed in organisms can double or triple life spans, such as the overexpression of tkr-1 in C. elegans (a type of roundworm).

Then you have blood transfusions where you exchange young blood into older animals, with the effect of increasing the rejuvenating capacity of older animals to, for example, repair a damaged liver or increase neuroplasticity.

Finally, there are a couple FDA approved drugs, namely rapamycin and metformin, that have been shown to increase lifespan by up to 30% in a variety of different creatures.

It’s easy to dismiss these things as science fiction, but the evidence is real that there a number of things that can modify the pace at which different types of organisms, mammals included, age.

Philosophy

Now, extending lifespan seems like a great thing, assuming that we can maintain good health and a high quality of life during the extended period.

But there are also tons of second-order effects that we need to consider, such as overpopulation, energy consumption, climate change, health care costs, etc.

But more interesting to think about, for me at least, are the social, ethical and philosophical implications.

We seem to be in a time of rising income disparities and less social mobility. So if someone is born poor, would a lifespan that’s twice as long give them a better shot at upward mobility, or simply lock them in a disadvantaged situation for longer?

What about power structures and societal norms. If people lived for 200 years, how much longer might slavery have persisted? Might it have taken longer for women to secure the right to vote?

If you think about Thomas Kune’s definition of paradigm shifts, scientific progress itself might even be at risk. “A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with [the new paradigm].”

Or you might even think about this from a personal perspective. If your forties technically lasted 30 years instead of the normal 10, how might you live your life differently? Would you have children earlier or later? What about marriage? Do you stay single longer? Or perhaps have multiple families sequentially?

Tons of questions here and not a lot of answers. But one thing’s for certain: this conversation is as philosophical and ethical, as it is scientific.

My Latest Discovery

On a lighter note, the brisket burrito at Flats Fix Taqueria in Union Square is 🔥🔥🔥!!!

Do yourself a favor and get one!

Uncategorized

[VIC – 125] Learning how to hunt

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Business & Money

I loved this shot from the earth official Instagram page.

It reminded me a bit of what I do when we hire new salespeople. Shortly after they’re hired, I’ll pass them a deal that is 60% of the way closed. I’ve already identified the customer need, ensured that budget is available, and have all of the right people involved in the conversation. All that’s left do is execute the final 40% and get ink on paper.

After each meeting, we’ll debrief on what went well, what could have been improved, and other ways we might have handled particular things.

The new seller writes the follow-up email, but we sit down and review together before sending to the prospect.

It’s not quite as dramatic as what the Cheetah does with her cub, but I think it’s a similar idea.

There’s much to be learned from mother nature.

Human Progress

Something interesting is happening. Employees at Google, Amazon, IBM, and Microsoft have launched a petition to discourage their companies from bidding on Pentagon contracts.

“We are tech industry employees concerned about the lack of accountability, accuracy, and safety in the use of artificial intelligence (AI) technology in offensive capabilities of the U.S. Military. Many of us signing this petition are faced with ethical decisions in the design and development of technology on a daily basis. We cannot ignore the moral responsibility of our work. We believe that tech companies should not be in the business of war, and that we as tech workers must adopt binding ethical standards for the use of AI that will let us build the world we believe in.”

Now don’t get me wrong. I’m all for employee activism and for taking ethical/moral stands. But I think it’s important to point a couple things out.

First off, tech is pervasive. It’s not simply an industry, but rather it is quickly becoming the underpinning of every industry. The large tech companies technically sophisticated, flush with cash, and vacuums for the world’s best talent. To think that those resources and capabilities should not be extended to government an defense seems a bit naive.

And combine that with the fact that technological supremacy is a two horse race, with China closing fast. The Chinese government not only has the full support of its leading technology companies, you might even say it controls them. So withholding our best tech from Washington in a country founded on human rights and civil liberties seems to fly in the face of the moral argument being made in the first place. How much will morals and ethics be worth when China leads the world militarily, technologically, and economically?

Perhaps we’ll find out.

Philosophy

Anjunadeep is a deep house record label and one of my favorites. There were in NYC this past weekend for a show at the Brooklyn Mirage. The excitement and anticipation that I had been building up over the last few months were palpable. And yet, my expectations were blown away by the reality of the night.

A good friend who is far more eloquent than I am put it this way…

“I think I had a top 3 NYC evening last night. Something special happened at the show.

The eve started off amazing, exactly how you would think. Sun setting. City skyline. Lot’s of beautiful women. It was a hot night, but there was a cool breeze and the music was perfect.

Then as the crowd started to heat up, right around it’s most momentous point at 1 AM, a rainstorm came in. Slowly at first. But it came and it came in strong. They didn’t shut down. Instead they curated the music to the intensity of the rain. Everyone soaking wet, finally cooled from the water and dancing their lives away in the storm for maybe 30 minutes or so. Soaked to the core. It was wild!”

Definitely one for the ages and it won’t soon be forgotten.

My Latest Discovery

I started at Datorama 3.5 years ago when we were 40 people. We’re now closing on 350. Perhaps one day I’ll be saying the same about my own company.

In any case, I’ve been making my way through the “blitzscaling” series on YouTube to see what I can learn. If you’re interested in what’s involved with rapidly scaling technology companies, it seems like a pretty good resource.