I will be cutting down on calls next week. My goal is to get to Inbox Zero across all three email addresses (current status is: 22, 77, and 9). I’m optimistic.
Separately, I'm going to move the newsletter to Substack next week. Why? A couple of reasons:
It’s easier for me to write and edit on that platform. It looks cleaner and more modern.
You, dear reader, can make public comments, and that’s fun
It’s free for me forever
It’s dedicated to newsletters and writing (not marketing)
It’s easier to share and have people subscribe.
While change can be unsettling, it feels like a step forward. I will continue to improve the newsletter over the next month. Feedback is always appreciated.
Good Reads: Sensible Investing
Obviously The Future: Alternative Education Goes Mainstream
Book Review: 7 Rules of Power - Surprising but True Advice on How to Get Things Done
Weekly Song: Scream and Shout
Good Reads: Sensible Investing
Transitioning to Stagflation: An Update from Our CIOs. Analysis from Bridgewater. Here. I know everyone is excited that the market had a green July. I hate to convey bad news, but this Bridgewater analysis is pretty good. Bridgewater are the best in the business on this type of prediction. Their paper is quite technical, but the gist is that we aren't out of the woods yet. And they doubt that policymakers will be willing to tolerate the economic weakness required to bring down inflation sufficiently. And when inflation doesn't come down enough, they will start raising interest rates again, which is not yet priced into the market.
I can't summarize the rest of it for you because it's so tightly and smartly written. You should read it for yourself. Twice.
Money, Commodities, and Bretton Woods III.Here by Zoltan Pozsar, MD of Short-Term Interest Rate Strategy at Credit Suisse is also worth reading on this topic. Summarized: prices in dollars aren't stable but are backed by the key economic input commodities. I'm nearing the end of reading The End of the World is Just the Beginning: Mapping the Collapse of Globalization and will review soon. Paired together with Pozsar's analysis, a commodity-centric worldview is worth serious consideration.
What I'm Frustrated By in Crypto.Here by Amir Bolous. It’s helpful (and rare!) to see honest, public reflection from insiders.
I was wondering about the NFT volume and hadn’t seen the chart below before he drew attention to it with this comment: “If you look at NFT overall daily volume (original Dune query here), you can see volume now has decreased back to pre-Aug 2021 days - how much of that spike in volume and demand can be attributed to hype and speculation, where people tried to take advantage of the time to make money?”
An LPs Guide to Venture Funds (Part 1). The Unbundling and a Framework. Here.
There’s an Easier Way to Win in Alternatives: Betting on small funds over large managers gives investors better odds of outperformance. Here in Institutional Investor. It’s crazy how obvious and often stated this is when investors continue to pour more money into mega funds.
Yes, You Can Short a Startup. With synthetic derivatives, hedge funds can bet against a startup’s price, and VCs can de-risk an aging portfolio. Here.
Meditations: A Requiem for Descartes Labs. Here. This is a post-mortem tell-all from one of the co-founders of Descartes Labs. He details the strategic mistakes of the company, the Board, and the VCs. Three paragraphs I agree with are below.
I particularly highlight #2. ‘Services’ has been a dirty word over the last ten years with the market value being much higher on SaaS, but, uh, that could change and can be a great way to extend the runway without losing control of your company. There is more to be said, but I’ll save it for later.
When VC is at its best, it deploys its capital against world changing bets, even in the face of uncertainty. Our deck basically said “We have some science! We have some smart people! Satellites are going to generate a lot of data that we think will be useful! Here are some verticals who might care!” The fact that we were able to circle over $3m of capital on such a risky proto-company gave me hope for a better future through technology
We, like many AI companies like Palantir, were a hybrid consulting company: we built a robust platform that we were the best in the world at using and charged our clients lots of money for building unique, extremely valuable, proprietary (read: cannot be sold to others) models. Even if we structured the revenue cleverly by selling our customers a platform subscription and subscriptions to the models we built for them, we still weren’t a SaaS company.
However, firing the founding CEO is a huge disruption to a company and needs to be thought out carefully. Not only does the founding CEO know the company better than anyone else in the world, but they have the incentive structure to fight like hell to make sure a company survives.
Alternative Education Goes Mainstream
I wrote an essay this week on alternative education.
Alternative education is becoming the new normal. There is a proliferation of diverse offerings. Parents are more confident in the new providers and forms of schools. And opportunity abounds.
Enrollment trends show that what began as a trickle of students out of the public system has become a flood.
The data shows clear increased parent interest in alternative education. A March 2021 survey shows that half of the parents are considering an alternative education experience (see below).
Why is now an inflection point?
Traditional school teachers are leaving the public system and finding new career opportunities.
Technology is now ubiquitous.
US State governments have thrown their weight and funding behind alternative education programs.
With the rise of alternative education - what are the big opportunities?
Implementing online and hybrid forms of schooling.
Reducing the traditional barriers that prevent families from adopting alternative education.
Modernizing the administration of state funding for alternative education.
Providing access to a high-quality teacher or tutor.
Learning completely outside the system, maybe in the 'metaverse'.
Of course, it could all go wrong:
Regulation and legal challenges
Teacher unions are not keen on new market entrants.
Parents might suffer from the '40 year communication gap'.
The most interesting aspect of the book is the author’s admission that he originally set out to write a book about the leadership of Donald Trump but decided (or maybe his publisher changed his mind) to generalize the rules. The spirit in which the author wrote the book was pragmatic and optimistic realism. A view that “if you want power to be used for good, more good people need to have power.”
This argument resonated: “because people do not understand the behavioral realities of power, they are continually surprised by both what happens and the effectiveness of actions that seemingly violate conventional wisdom about leadership - mostly because this wisdom is untethered from research about the social psychology of human behavior.” How many conversations around female or diverse leadership have I been in during which people describe the social world how they want it to be rather than how it works empirically?
The book is long on practical advice and named case studies. The author advises finding a coach that doesn’t offer sympathy and emotional support but rather psychological and strategic preparation to empower yourself and navigate the many power dynamics you will encounter in your career.
I recommend 7 Rules of Power, particularly to the skeptical. It doesn’t take long to read, but the influence on your actions and thinking could be significant. Below are the rules:
Get out of your own way.
Break the rules.
Show up in powerful fashion.
Create a powerful brand.
Use your power.
Understand that once you have acquired power, what you did to get it will be forgiven, forgotten, or both.
This is a fun, end of week / beginning of August song. I re-discovered it on Spotify's 'Clubbing in the 2010s' list, which sadly feels like a while ago.
"Scream & Shout" by will.i.am ft Britney Spears
If you know what we talkin' 'bout
Turn it up and burn down the house, hou-house Ay, yo, turn it up and don't turn it down
Here we go, we gon' shake the ground
'Cause everywhere that we go, we (Bring the action)
I wanna scream, and shout, and let it all out And scream, and shout, and let it out
We sayin', "Oh-we-oh, we-oh-we-oh"
Thanks for reading, friends. Please always be in touch.