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Learn to be a capital allocator

2024-06-12T00:00:00+00:00

Capital and labor are dual sides to our economic system.

In the past, labor was crucial to productivity. Companies had to find labor to weld metals on the factory line to make Ford trucks. This meant a factory worker in Detroit was paid a wage meaningful enough to provide housing and healthcare for their family.

Sadly the value of labor is declining. Which subsequently increases the value of capital. This divergence will only grow wider with emerging technologies like robotics and AI.

An example where we see this today is inflation. People think inflation devalues money but who has inflation hit the hardest? Laborers who grind to put food on the table the next day. Meanwhile the wealthy accumulate a larger share of the increasing money supply by putting capital to work.

Obviously if you’re already rich, it doesn’t matter. But if you’re not, what you need to learn is how to be a capital allocator. That takes in the form in either of two ways:

Outperform as an investor: This is at the top of mind when people think capital allocation. As long as you can drive strong returns, you’ll be on the last chopper out of ‘Nam.
Manage capital as an operator: Managing a business is all about capital allocation decisions. Business is a form of leverage. Management makes capital decisions for operational costs, capex, R&D, etc. with the intent to drive profits. If you can build a business or know how to run a business, your labor is irrelevant.

This isn’t a new relevation. Our modern world just imposes it on us with a bit more urgency.

Time is a flat circle

2024-06-09T00:00:00+00:00

Any serious Bitcoiner will recognize this picture.

Satoshi encoded a headline into Bitcoin’s genesis block: “Chancellor on brink of second bailout for banks”

It’s believed Satoshi added the line as a protest against irresponsible monetary policy, a manifesto of sorts for the invention of Bitcoin.

As Bitcoin Magazine put it: “It makes it clear that the system being ignited by that very block takes a stand against the central bank policies enabled by a culture of easy money. Bitcoin, instead, would seek to restore accountability and antifragility through a monetary system based on sound money; one that can’t be debased or controlled, manipulated or manufactured to benefit a lucky few.”

I saw this newspaper page again today. My eyes locked in to the same headline I’ve seen dozens of times. But this time I also noticed something else.

“Israel prepares to send tanks and troops into Gaza”

Saturday January 3 2009.

Time is a flat circle.

The UX for Internet review sites is bad

2024-05-28T00:00:00+00:00

The user experience with most review sites is horrible. Examples I have gripes with are IMDb, Goodreads, and Fragrantica.

I’ve found the sites generally lagging and aethestically unpleasing. Pages load slowly. Here are also site-specific gripes off the top of my head:

IMDb: Basic features like the ability to distinguish between movies and TV shows within a watchlist are missing. Adding a show to a custom watchlist is unavailable from the show page. Adding shows on the stadnard watchlist page require jumping to an edit view instead of a direct add even while the search bar + dropdown is already there. No ability to review individual seasons – say you hated the last season of Game of Thrones but liked most of the others; perfect use case.
Goodreads: Could use better SEO; I’ve noticed on occassion the site will appear at the bottom of first page of search results. Since Amazon owns Goodreads, integration between Amazon reviews and Goodreads reviews would be helpful for the buyer.
Fragrantica: Looks like it belongs in the 1990s. The direct purchase link – typically eBay – below the individual fragrance image doesn’t fit with the color scheme of the rest of the page. No ability for individual reviewers to display scores by attribute. Moderation speed to approve new products is slow (learned through user feedback). Troll reviews lacking detail or reviews for unreleased products. Inability to reply to reviews and/or automatically create a new thread in the Forum page.

I don’t have own a Yelp account nor have I spoken with core users so I can’t speak to the usability there.

The takeaway of this is how strong network effects are. A fresh competitor simply can’t offer the same depth of reviews as these sites. The advantage here is a self-perpetuating moat strong enough for the owner to ignore most else, to my mild chagrin.

Why crypto is appealing to me

2024-03-19T00:00:00+00:00

Crypto has a number of skeptics. People hold reservations about the tech, whether it delivers value, or the likelihood of any meaningful social adoption.

Many of the criticisms are warranted. For example, I’ve expressed concern, even back in 2018, about how market cycles hurt the average investor. I ended that post with “I think about [Maria Lomeli] often,” referencing a 56-year old housekeeper who staked her savings on bitcoin when it was $15,000 and had since then fallen to $7,000. My friends tease me and ask me if I think about her every time crypto cycles bust. The answer is yes, I do.

The latest example is this list of Twitter DMs SBF received in 2022 from FTX users when the exchange lost customer funds. The messages are heartbreaking. We should all empathize particularly since these people weren’t victims of a cycle gone bust but rather victims of fraud.

The government also submitted a LARGE document of DMs sent to Sam Bankman-Fried's Twitter account in the days after the #FTX collapse. They're a tough read.https://t.co/TJIz4ZtjLK
— David Z. Morris (@davidzmorris) March 15, 2024

That said, I also want to share why I find crypto fascinating. There are four primary reasons:

(1) The first reason is straightforward. Crypto has delivered strong returns as an asset class over the last 15 years. Even as prices approach all-time highs, the entire industry is just $2.5 trillion, multiples smaller than gold, real estate, stocks, and other asset classes. It’s reasonable to expect it to continue to grow. Now I am not looking to play PvP games. I don’t chase memecoins; I’d rather buy aspirational projects and just hold. If you take snapshots at how this strategy has held up, at times, it’s gone horribly. Other times it goes well. Either way, I set it and forget it.

(2) The reason I can set and forget is because crypto fits nicely into my worldview. Balaji has written quite a bit about this. Take a look around. Society is quite wonky. Fiscal mismanagement. Changing geopolitical realities. Economic issues and their corresponding social unrest. Emerging technologies and governments worrying how it’ll impact their authority. Sometimes I think it’s because I’m young, that older generations have survived these issues before. But I believe the challenges we face are serious enough to make bets on things turning out differently.

(3) Intellectually, I think crypto is interesting because the ideas are fresh. I like how the interoperability of the tech allows one to build upon the work of others. What’s most exciting in crypto is its primitives. There are plenty of fresh applications, uses, and design choices for builders and users to play around with. That leaves a lot of thinking both on a technical and a business level.

(4) Lastly, as an immigrant myself, I respect how international the community is. Industry knowledge is relevant in New York, London, Singapore and Dubai. That’s not true for every industry. For example, the knowledge to become an expert in the U.S. healthcare system is useless outside of the USA. Same with being a lawyer. Legal proficiency doesn’t immediately transfer due to another country’s own set of laws.

In my travels, I encountered people who believed in crypto from all walks of life. I was happy to see that my little Internet tokens held appeal not just to me but also millions around the world too.

(BTW as for Maria Lomeli today, I sure hope she held onto her bitcoin.)

Stay with a host if you're traveling solo

2024-03-15T00:00:00+00:00

A piece of advice I have for solo travelers is to stay with a local.

The easiest way is to stay at an Airbnb where a host or host family live. The goal is to select people who engage with their guests. Checking reviews and seeing if people mention how hospitable hosts are go a long way towards determining if the host takes a hands-on or hands-off approach.

Once you start your trip and arrive at your accomodation, there’s three types of hosts you’ll encounter.

The first type is a purely hands-off host. They greet you, help make sure you’re set up, and then don’t interact with you. This is the base case. Nothing good or bad about it and you can go along your merry way.

The good hosts will do everything the hands-off host will do but they’ll check in with you from time to time. They’ll ask what you did for the day. Or they’ll see if you slept well in the morning and ask what you’ve planned on the itinerary. These hosts are good because they’re primarily helpful. Leverage these hosts to understand local landmarks or see if you can learn a little more history or culture related to what you’ve seen. Most of the time these hosts are just trying to be friendly so don’t keep them too long.

My favorite hosts take friendliness a step further and engage with guests. They’ll take time when things are winding down to chat. Maybe they’ll ask where you’re from, what you do for work, why you travel, etc. I’ve found hosts are usually curious about the people who choose to stay with them. They’ll want to know what prompted you to visit. And that opens up the chance for you to ask questions too. I usually ask how they enjoy living there, try to get their thoughts on the food scene, what people in the area like to do, etc. If it’s not boring for them, I also try to inquire about their thoughts on the local economy or what they love and don’t-quite-love about their home.

It’s weird to put on paper now because it sounds personal, but some hosts really do want to share with guests these perspectives. It’s like the classic taxi driver case: You get into a taxi and the driver just doesn’t quit blabbing about life with you. Except you’re not in a yellow NYC cab hearing complaints about the taxi medallion market, you’re in a foreign country talking about life in a different culture!

I’ve written about how traveling gives me the opportunity to speak with different kinds of people. There’s no easier way to speak with a local than to get to know your host.

Part of making it all happen is luck. Everyone’s personality is different so you’ll have to select the right host. And part of it is up to you and how great of a communicator you are. It should go without saying that your main job is to listen. When you do, those conversations become less among strangers and more among friends, or at least people who could be friends.

*Obgligatory shoutout to my hosts in Tel Aviv, Jaipur, and Mumbai for belonging in the third category. Dozen of hours of conversation prompted me to share this thought.

The cost of distraction

2024-03-08T00:00:00+00:00

The cost of distraction is the life you could’ve lived.

If you suffer from distraction, read this.

Cal Newport’s protocol for deep work: pic.twitter.com/PgB3WAdk0g
— EDDIE CHENG (@ecomEddie) March 5, 2024

The cost of distraction is the life you could’ve lived

Wow, that’s powerful.

I’m like the quip. I think everyone my age can look back on and see missed life moments when they were too distracted by something.

The quote is extra relevant in our current age. It’s well known modern technology shortens our attention span. And Americans have such a surplus of entertainment options to fill their time. Being able to focus on your goals, whatever they are, and avoid the noise is something I really respect in those who can do it well.

Solo travel vs. travel with friends

2024-02-27T00:00:00+00:00

I’ve been fortunate to have spent time traveling both solo and with others for extended periods of time.

Most people always travel with others. But I think about it like this: If you’re generally starting life in your early 20s and settling down in your 30s, there’s only a short period in your mid/late 20s when its possible to go alone.

To give an example, when I told a few Indian friends I was spending a month by myself in India, all of them suggested I avoid doing it. It would be dirty, unsafe, chaotic, they told me. In hindsight, I came out better for it. By the time I left I was beginning to feel like a local. (Half-joking!)

Let me offer a comparative. A close friend is building a startup. When he got his first paying customer, he told me “This experience taught me I can make money with my own hands. Not having to survive by working for someone else. When things don’t go well, I know I don’t need to rely on anyone else.” I found that to be a relevant insight. In a worst case scenario, knowing I can adapt to a place where I don’t speak the language, don’t know the culture, can’t relate to the locals, don’t know the geography, etc. helps anchor my life.

Okay, enough with the life meta talk, time to get down to business. I’ve done some reflection between traveling solo and traveling with friends. Here are some differences I’ve noted:

Traveling solo:

More oriented toward learning – In my experience, solo traveling leaves me more engaged with my environment. This is a personal approach. In theory, going with others with a targeted goal of learning could also be highly actionable. Discussing what we saw helps bolster takeaways. But rarely does that happen when traveling in groups because the express goal isn’t to learn, it’s to have fun. So what happens is that I’ll note something and forget afterwards because my attention quickly shifts elsewhere. When I travel alone, I’m more apt to take next steps like reading up online and following-up on things I saw before I forget.
More meaningful conversations with locals – Group travel is for spending time with friends. Hence it becomes difficult to engage with locals when with a group. The only instance I remember finding success was during our hourlong drive to the Kuala Lumpur airport – because the driver could only speak Chinese and our group was in a captured setting. But conversations with locals are the type of memories I remember. Xi Jinping once said when he thinks about Americans, he thinks about the kindness an Iowan family showed him when he stayed with them in his early-30s. It’s a similar vibe when I think about my short time in foreign countries.
More destination optionality – Sometimes the other(s) I’m planning a trip with don’t want to go to the same places as me. This has happened to me multiple times. I had always wanted to go to India, but when I proposed it to a friend, they (probably accurately) assessed it wasn’t the best fit for them. The opposite happens too. I’m down to go anywhere but when a separate friend asked last year if I was interested in going to Kazakhstan, I told them I had other places I prioritized higher. (Kazakhstan is a gorgeous place, by the way. Or so I’ve heard and seen on social media. It would still be nice to go one day.)
More control of itinerary – I suppose this is another personal flavor since some are fine traveling without a plan. That’s challenging to me. I want to be time-maxing whatever time have. Solo travleing gives me the freedom to do what I want, see what I want, eat what I want, etc. For example, the first time I went to Palestine, I got the impression a companion didn’t find the hectic, tense environment enjoyable. So the second time I crossed the checkpoints, by myself, I gave myself more time to look at the separation wall, visit the Banksy hotel, things like that.
More research required – Conversely, itinerary creation requires more time spent on planning. This is the other side of having more itinerary control. Sometimes it’s nice to just show up and tag along. For example, I visited the UAE with a local. Was able to visit both popular and low-key hotspots because the person I was with knew the top things to do. Didn’t need to do any research beforehand since I had a de-facto tour guide.
More personal growth – I took traveling solo as a great opportunity to step outside my day-to-day life. It gave me a chance to think. To get more clarity. To see places where people lived differently from me. Particularly in places like China and Russia where deep societal differences exist from the West. And ultimately that taught me fresh perspective.

Traveling with others:

More fun – This is a personal preference. Human relationships are important to me. A big part of happiness is getting to share experiences with people. That’s only possible when others are there so this type of travel is better suited for pleasure.
(Potentially) more cost-effective – Going with others is cheaper if costs are shared. Lodging is significantly cheaper. Food is cheaper too. Of course, if you’re covering someone else’s expenses, then it won’t be. So this CAN be cheaper, but it’s not a universal truth either.
Ability to have each other's back – There is a stronger sense of teamwork when traveling with others. For a personal story, someone I was with came down with food poisoning in Mexico City. It was convenient for me to run to the nearby pharmacy to grab medication for them. Them having to do that alone while under the weather in a foreign environment would’ve been crappy.
More challenging to navigate personalities – People advise couples to live together before getting married to test if living habits are compatible. That compatibility is relevant with friends when traveling. Sometimes you don’t know how well you get along until you’ve spent weeks traveling with each other. Tempers flare up, people get annoyed, messy living habits grow frustrating even in the short-term. These things happen. Strong friendships survive.
More prone to disruptions – Giving responsibilties to others means a delegated task might go amiss. I once nearly missed a costly, non-refundable meal in London because the individual organizing dinner mixed up our reservation time. Another instance, someone in my group going to Canada forgot THEIR PASSPORT. I’ve made mistakes too: One time I meant to book a flight for a group returning to Tel Aviv from Eilat and accidentally purchased a flight the other way instead. I suppose Murphy’s Law is bound to apply when traveling.

Between the two, there is no better choice. Whether one is better is up to personal preference. Regardless which one you prefer, the only thing I wish you is a safe and happy travels.

Get into the diamond business

2024-02-09T00:00:00+00:00

Came across this blog post. The takeaway is worth some reflection. Let me summarize it using this tweet.

top underfunded industries:

-paper industry
-plastics +rubber
-housing construction
-chemical products
-education

worst places to build:
-saas
-marketing tools
-low code tools

hmmmmmmmmmmmmmmmm i'm thinking. https://t.co/CVfyLevyXm
— maggie (@cxqmaggie) January 14, 2024

I’m thinking about this because two of the wealthiest individuals I coincidentally stumbled across in Mumbai came from families who were involved in the diamond business. And I remember thinking “Wow, surely that can’t be a coincidence. The diamond business is big here, huh? This is the world outside of SaaS in San Francisco.”

And the blog post sums it up quite well. The most assymetric opportunities with the lowest competition will likely be in something overlooked like plastics, chemicals, or yes, the diamond business.

Five topics to present about (without prep)

2024-02-07T00:00:00+00:00

A good way to get to know someone is to ask what topics they could give a 30-minute presentation about without any prep. It’s a nice peek into someone’s professional and personal interests. Maybe there’s a match or it sparks an interest of yours – and then you’re off running away with a meaningful conversation.

I’ve been thinking about this question the last few days. Here are five things I’d present on:

Travel
Cryptocurrency
Favorite food joints
Seattle sports teams
Formula One

I’ve got two things to note about this list.

My first thought is that I’d like to learn more about coffee and have that replace my favorite food joints (#3). Consider this a 2024 goal. As for why, I enjoyed partaking in cafe culture in different countries during my adventuring and it’s made me want to understand the drink on a deeper level. I also began drinking coffee more consistently so the synergies pair nicely. Let me read James Hoffman’s The World Atlas of Coffee and How to Make Good Coffee at Home this year as a starting point and go from there.

The second thought is a sense of regret my topics aren’t more niche, aren’t more interesting. Imagine if one of them was escape rooms, medieval antiques, nuclear energy, or cheese making. Or my personal favorite, a talk about conspiracy theories, how they start, how they spread, popular theories, etc. I think any of those would draw a larger audience. It’s not that my interests are bad. It’s just so… typical of my local crowd. I think it’s a part of running in the same social circles in the same areas doing the same things, and a reminder to venture out of our bubbles.

(And yes, I recognize coffee isn’t exactly a unique subject matter in our current day and age for that matter. But past that, I understand life is big and I hope to choose something a little more uncommon.)

Bookish cities

2024-02-04T00:00:00+00:00

I enjoy bookish cities. There’s no clear definition for a bookish city. It’s just a vibe I get when there. So what may be bookish to me may not be for you.

There are some common features that tend to make a city more bookish than another. Generally they’re places where bookstores seem popular; sometimes the bookstore itself might be a tourist spot. You’ll find residents reading in the subway, a park, or a cafe. Maybe there’s a number of book clubs that are popular in the area. Sometimes the weather is conducive to reading.

Here are some cities that I’ve felt are bookish:

Seattle: Weather is dreary and conducive to indoor activity. Strong cafe culture with people opting to read or work in public spaces. Lots of activity in neighborhood bookstores on weekends (Elliott Bay Bookstore comes to mind.)
London: Daunt Books in Marylebone is a classic tourist visit. Also notable for its Books on the Water barge, a popular place to visit for locals and tourists alike. And it certainly seems like there are more Waterstones stores in the city than there are Barnes and Nobles stores in American cities.
Edinburgh: Its claim to fame is The Elephant Cafe, the coffee shop where JK Rowling would visit to write Harry Potter. Edinburgh is also a cold, rainy, dreary city like Seattle. A perfect environment for book lovers. The city also hosts the International Book Festival each year. The NYTimes documents Edinburgh’s relationship with books.
Lisbon: Host of the world’s oldest bookstore, Bertrand, close to the heart of the city. Lisbon also owns the most bookstores per capita of any major city in the world. Books are available in both Portuguese and English.
Bangalore: A frequent site in Bangalore is the street carts filled with books sold on the cheap. Furthermore, Church St. is one of the city’s most lively commercial streets and is host to Blossom Book House, The Bookworm, and more. Buildings in the same neighborhood house book clubs to gather in. I did notice the books here leaned towards hustle culture. It’s common to see reads like “Zero to One” and “The Cold Start Problem” selling on street carts. Seems on brand for Bangalore’s tech reputation. Murakami books seem popular in the city.

How to blog more

2024-02-01T00:00:00+00:00

When I was 16, I started my first blog: jerrysunnewsletter.wordpress.com. I set up a Wordpress account, wrote a blog post or two, then told my friends about it.

“Look guys, check out this website. This is gonna be an archive of my insights. Make sure you follow along.” The purpose was to create a record to look back on and show people that I once had certain thoughts (ideally the ones that turned out to be correct).

Except after a few posts that site remained pretty empty. Over 5 years, I probably wrote 20 posts. Why?

For one, unique insights are rare for anyone, much less for a teenager. Teens all share the same life angsts. In my goal to write differentiated stuff, I found out that I didn’t really have that much differentiation to start with. And a few years onward, in the moments that I did, I didn’t actually have the courage to put it in writing. Being different is scary. It’s even scarier when it’s a political opinion where you worry someone might take personally.

An even bigger hurdle was the restrictions I imposed on myself. Each post had to be cleanly written with no grammatical or spelling errors. Each post had to be about 1,000 words. Each post had to be tied to current events, be it business or technology or along those lines. And it was something that I had to feel really added value to readers. All that meant writing was a heavy endeavor, not a carefree act. My approach towards these goals led me to fall discouraged and give up the endeavor entirely.

I’ve recently found some blogs where people just post whatever they want. Some of it is what I’d consider “productive” or professional thinking. But posts also include their fitness routine. Where they shop. Things they like to do. Anything they want. My friend calls is “journaling in public”.

So here’s my plan to blog more. I’m going to do something similar. I’ve got some time now so I’m going to take the pressure off myself to write great posts and just write about whatever I want. I’m not going to quadruple check each post for errors. Nor do I feel a need to post it on my resume or LinkedIn or out on social media anymore. Hell, I don’t even need readers. I’m hoping to just write with the carefree approach I was missing more than a decade ago and see where it takes me.

Reduce Twitter use for books

2024-01-31T00:00:00+00:00

One thing I would like to do in 2024 is to reduce Twitter use and replace it with more books.

I spend too much time on Twitter already. There was once a time when I needed to use it for work. Crypto lives on Twitter, and as an research analyst, there was signal in engaging with the community. But what I learned was Twitter is often noise. I’d rather dive depeper into a single topic and master it than to chase a narrative. I’m still heavily invested in crypto but I’m comfortable holding onto my positions and adjusting allocations strategically once or twice a year.

The other reason is because the general quality of information on Twitter has gone down. Curated, high quality analyses or links are hard to find nowadays. I log into Twitter and already know what I’m going to see: Memes, political rants, promoted content that’s irrelevant, et al. Dan Wang encapsulates this well.

For better or for worse, I’ve left Twitter. The platform was my reading aggregator for the last ten years to find information-dense articles. In 2023, that function completely broke down. Elon’s algorithm changes have deprecated tweets that include links, which drive perfectly sane people not to share their source, writing instead “link in bio” or “link at bottom of thread.” And after Twitter removed headlines from articles, it became much more difficult to figure out what I could be reading. What is Twitter anymore? Not the platform for surfacing information-dense articles, but rather mostly shouting and videos.

It also ruins my attention span. Tweets are quick to read. Addicting. Doomscrolling feels productive. But it’s not. I want to build up my focus and a better way to do that is by reading full chapters.

Books also give the author a platform to dive deep into a topic. No, Bill Ackman’s 2,000 word tweet rants on plagarism do not count. As I get older, I’m beginning to value deep knowledge more. There’s less desire to chase the narrative du jour.

A good way to think about Twitter is that it helps you stay 2x as informed but half as productive. I’ll be OK with 2024 if I’m less informed but more productive in life.

EDIT: An alternative is also to default to Instapaper instead of Twitter as my reading source. The advantage of Instapaper is it gives me focused pieces. Saved articles clearly interest me enough to mark for later reading and crushing those beats mindlessly doomscrolling.

Let's not make payments difficult for foreigners

2024-01-30T00:00:00+00:00

Both India and China skipped the traditional payments infrastructure and went straight to contactless payments.

India has the Universal Payments Interface (UPI), a instant payment system shared across Indian banks.
China has WeChat Pay and Alipay, third-party payments platforms run by private companies, Tencent and Ant Financial, respectively.

I respect the convenience it brings to locals but both systems leave foreigners out in the cold. Without a local bank account, it’s effectively impossible to join the same network of payments that all commercial activity takes part in. Foreigners aren’t allowed into the party and have to pay with cash.

We’re in 2024 and these countries have what I’d consider advanced fintech infrastructure, for goodness sake!

Alipay and WeChat Pay, China's two major payment apps, recently allowed foreign users to link international credit cards to their platforms, a move that will provide great convenience to foreign travelers in China's cashless society https://t.co/mGwn3dOAHU pic.twitter.com/J4x5Q3HC8g
— China Xinhua News (@XHNews) August 3, 2023

China permitted foreigners to link international credit cards to Alipay and WeChat Pay last summer. I haven’t been to China since the announcement but I’ve heard it goes a long way for tourists. India has yet to do something similar to the best of my knowledge but I hope that day comes soon.

Both countries share the distinct advantage of having a self-sustaining market so neither may feel a need to make adjustments immediately. But China is aggressively courting international visitors these days and India will want to show off its progress to the world. Making payments easier would go a long way to appeal to short-term tourists.

Industrialization sucks to live through

2024-01-29T00:00:00+00:00

Everyone talks up countries developing like it’s the most exciting thing ever. But it’s easy to talk about from someone sitting in a desk job. In practice, industrialization sucks.

The negative externalities are everywhere. The air is unbreathable. The roads are congested. Chaos is abound. Itineraries routinely need to be re-routed. Several complained to me about how projects were wasted money that could’ve been used to help the poor. Keep in mind some, like India, are democratic countries where politicians have to balance things like infrastructure buildup with keeping their voter base happy.

In Mumbai, my Airbnb host was a family who complained about how all the construction meant the nature in and around the city was being destroyed. How bird migration was affected by the changes. How the peace of the city was disturbed by the sounds of banging everywhere. Or how the local farmers market they’d visit was shut down and replaced by a fancy supermarket that didn’t sell fresh vegetables.

This particular family had a fantastic enrichment opportunity handed to them on a platter. Since their building was in an attractive neighborhood, there was an outstanding offer from a developer to redevelop the building. It didn’t matter each owner would get paid market rent during the construction period and come back to a unit in the future building. It didn’t matter that the new building would have a modern gym, swimming pool, doorman, etc. either. Some people like my host family just didn’t want change. Because the process of development meant uprooting lives and adding inconveniences to the day to day. Last I heard, there’s a good chance over 50% of the building will vote to decline the proposal.

That industrial development can suck reminds of a story I once read about China in the 90’s. This is from a Chinese individual answering a question about why Chinese by and large now support their government today.

Back when the country was poor as f**k, the government started to build highways and railways, instead of handing out free stuff to the poor.

We were unhappy. A newspaper commentator wrote: “It [will be] funny to see, decades later, excessive trains tour the country with cars of empty seats.”

Today last minute tickets are hard to come by during holidays. Trains are almost always full.

When they built roads, we were sneering: one more excuse for officials to take bribe! Building stuff we won’t be using.

Today we complain the roads aren’t wide enough because of the traffic jam.

Leadership changes during the span of these mega projects, but the followthrough was steady.

Year after year, the Chinese government does its job. It hasn’t changed much about this. The only thing that changed, is that we the people living under its governance, stopped complaining as much as we used to.

Because compared to decades ago, we do, actually, live at a higher standard.

Arriving to that higher living standard in places like Mumbai or Ho Chi Minh City will inevitably happen too (because it’s important and necessary!) but the months and years getting there only be reminisced on in hindsight.

Joining Threads

2023-07-05T00:00:00+00:00

Twitter is my favorite app. I spend somewhere around 10 hours a week on it. My tweets never go viral, but reading news and every hot take out there has been invaluable towards becoming an independent thinker. Twitter is where I go for breaking news, funny memes, and to hear the opinions of those I respect.

Sadly, recent policies such as rate limiting have killed the user experience. Apps like Bluesky, Mastadon, Lens (for the crypto folks) have all gained varying levels of attention, but so far, failed to reach critical mass.

Enter Threads. I’ve scrolled it for a few minutes. Four immediate thoughts:

I don’t see a convenient way to be anonymous on Threads. Your account is tied to your Instagram or Facebook profile. At its easiest, creating an anonymous profile requires starting a finsta. I’m interested to see how this tradeoff decision affects user dynamics. Think about that Dolly Parton-inspired “LinkedIn, Facebook, Instagram, Twitter” meme. What happens when your identity on one network cannabalizes the other?
The conflict arises because Twitter is a different type of social media platform than Instagram. Most of the followers I’ve accumulated on Instagram are from this last decade as a high school and college student. Simply put, Instagram exists to put one’s personal life first. Twitter doesn’t. Twitter is closer to an online chat room. Your social graph can be a bunch of random Internet strangers… and that’s totally OK! Frankly, Twitter is for my miscellaneous thoughts on tech, business, whatever. The type of stuff that a bunch of my IRL friends are going to find boring. Like staying anonymous, I believe “legacy friendships” ingrained on Threads will have an impact on the engagement dynamic on the app.
I think celebrities will have an even bigger presence on Threads. And as I’ve mentioned to friends and might write separately about, there’s no better time to be a celebrity/influencer(?) than now. If I ran a consumer growth-stage or PE fund, having a celebrity as an investment partner is a no-brainer. Frankly, someone with the celebrity network should put a fund whose main value prop is to simply connect influencers with portcos.
Get ready for a lot of mobile notifications in the next two weeks. Most people I know have an Instagram account. People are talking about the latest social app du jour, which means a surge in sign-ups (already two million downloads in two hours!) - and the first thing after registering is the option to follow all your existing friends on Instagram. I have to respect Zuck’s abiilty to move billions of users at scale. It’s his one true advantage: he’s got a big social graph and he’s not afraid to use it.

I’m excited to keep playing around with the app. Join me on Threads and let’s see if it can finally take down the king.

Digital assets are inevitable

2022-02-27T00:00:00+00:00

Happy Sunday.

I didn’t intend to add another post to the growing list of ones about the metaverse, but it’s worth sharing this great article about NFTs. Quick warning: I’s a two-hour read so it takes a good chunk of commitment to finish it. I think it’s worth it.

The idea to share it comes from my friend’s group chat. One of the members, an avid gamer, doesn’t think highly of NFTs. And when I went to a party recently where a few of the others in the chat were at, I received a few “I don’t have much of an opinion because I don’t know enough about them” responses.

I get it. These things are niche and frankly, if you thnk they are scams, I don’t blame you. The media hasn’t done a great job sharing the underlying investment theses behind NFTs and have chosen to focus on (currently) true issues like impact on climate change – that however, won’t even be applicable after the move to proof-of-stake goes live this year.

On the other hand, what people don’t hear about is the multi-layer rationale for why NFTs do exist. There’s the first level, represented by fads, profile pictures, generative hype, etc. I think that’s where most haters are. They see people making and losing money off the back of not just intangible value, but off the back of real scams.

Then there’s the second level: Understanding where supply, demand, and where value comes from. This is the stage where NFTs become closer to art and where Sotheby’s and Christie’s is selling Beeple works for millions of dollars and pricing their auctions in ETH.

The third level is where real-world value (for people like me) starts. I’ve written about the investment thesis behind blockchain gaming as an on-ramp for skeptics including our group chat-participant, gamer friend above. Alternatively, there’s Royal for music lovers. I’m not a BAYC afficionado but tokenholders receive access to eventspaces only for ape owners. We’re currently somewhere between level 2 and level 3 at the moment.

And finally, the fourth level starts to be where NFTs embody physical assets. Think about the tokenization of a bike. As I use in examples with friends, it could represent ownership of said physical bike. Get your bike stolen? The thief is not going to have the corresponding token that goes along with it and will have a harder time selling your bike on the market to honest people.

I didn’t intend to add this piece to the growing list of ones about digital assets around the corner, but typing it all together does feel like at this point it’s almost inevitable we’re going to live amidst a world where the line between physical assets and digital assets blur. Not in a real world meatspace way, but at least in terms of value and what ownership of each represent. Call it the early stages of the metaverse but as a society we’re already there. ‘Keeping Up with the Joneses’ and flex culture on Instagram is only the beginnning and there’s no going back.

Should you have the time, I do encourage you to read the article and let me know what you think.

Have a great week.

Why do some people follow so many Twitter accounts?

2022-02-23T00:00:00+00:00

One thing I stumble upon periodically on Twitter is an account following several thousand others. Which always strikes me as odd because how do you actually read everybody’s tweets?

Twitter has two ways of curating feeds: chronological or “top tweets” first. The former is a stream of tweets from all accounts you follow but the latter is usually a feed of tweets from accounts you engage with most. It’s a little like the TikTok feed where content you enjoy gets shown to you more and more frequently.

If you do use the latter, I don’t understand how it’s advantageous to follow thousands of accounts. The app automatically locks into the top accounts you engage with and show more and more of those tweets. The remaining accounts are basically nonexistent on the feed.

This issue is something that I can relate to personally and I only follow 800 accounts. Totally blows my mind people can do even more.

It doesn't pay to be a pessimist

2022-02-22T00:00:00+00:00

The Pessimists Archive has a history of successful ideas that were mocked by the public. It’s interesting to see what critics said about back then. I put out a Twitter thread highlighting some examples but it didn’t seem to get much traction:

Some of the examples are well-known (e.g. people doubting airplanes, the Internet, mobile phones, etc.) but there’s a few that surprised me. For instance, did you know people once feared teddy bears would destroy the maternal instincts of young girls? Or that people once thought elevators moving too fast would cause a sort of “elevator sickness”?

I was surprised to see how many article titles blamed a new invention for some societal problem. It was done with radio, elevators, television, etc.. It reminds me a little of people claiming today how social media is a big cause of crime or the root cause of demography’s failures or some other bold statement. That may be true by the way, I don’t know, but I don’t think we’ve changed much.

There’s isn’t an overarching lesson to be learned from these critics. Cynics have always said ridiculous things but that doesn’t mean they’re always wrong either. Take what was said about TVs; even today, we recognize TVs as a time suck. Those who said the same thing decades ago were pretty spot on, though society as a whole probably benefitted from the leisure TVs added to our life.

It’s easy to tie this into Web3 but nobody knows if crypto is truly The Next Big Thing. As I write towards the end, the only real takeaway from this is highlighting once again the risk/reward profile of game-changing inventions. Mark Cuban once said in business you only need to be right about one or two things to be successful. Even if you miss on several new ideas, hitting on a few is usually enough to reoup the losses. For that reason alone, it’s probably better to be an optimist than a pessimist.

Do tip wages match output of work?

2022-02-21T00:00:00+00:00

Happy Presidents Day to everyone. I just came back from a trip to Los Angeles this weekend, where among other things, I stayed at a hotel in Orange County.

I used to stay at hotels quite often as a consultant on the road. Frankly I enjoy spending a few nights in a structured environment where I can work from my room or in the lobby in the evening. It’s a change of setting from an office or home. Plus, getting some extra features as a rewards member helps add to the experience.

But one thing I noticed during this stay was the inequality of tips. Tipping culture in the US is a hot topic of debate. Who should receive tips? How much? Should we keep doing it – or if not, what’s the best way to stop?

I noticed I was tipping wait staff at the hotel restaurant the expected amount. Mind you, this was even though a guest and I were using a voucher complimentary from the hotel. Because of the rewards member perk, I felt obligated to go above and beyond to justify a free meal.

On the other hand, most people also tip housekeepers for cleaning the room. This can vary a little more than tips for wait staff, which typically range from 18- 25%, but from speaking with others, my understanding is most people tip about a few dollars a day.

Why do housekeepers get a flat rate while wait staff get a variable percentage of the total meal? Neither of the occupations vary in what they require the employee to do: Waiters serve food, clean the table, help answer questions; Housekeepers clean up the room and get it ready for the next day. But if someone spends more on food, the waiter earns even more. As another example, there’s a common tension between front-end restaurant workers (e.g. wait staff) and back-end employees (e.g. dishwaters) and the proper distribution of tips.

From a high level view, I could also make the argument housekeepers “do” more than waiters. How much time is needed to fully clean a room? How much time is needed in total to wait a table? Cleaning a room is a lot of work; so is serving customers at a restaurant but at least in my opinion, it’s not the same work.

As I went about my morning, I couldn’t help but question what I saw.

A renewable source for (crypto) mining

2021-02-12T00:00:00+00:00

Originally published in February 2021

Some recent events have made me reflect on Crusoe Energy Systems, a startup first introduced to me seemingly forever ago around January 2020:

A growing debate about Bitcoin’s consumption of energy
China’s Bitcoin mining dominance, responsible for around 66% of the world’s total output
Texas winter storms, which caused a spike in natural gas prices (and outrage at Jerry Jones)

And how do these points tie together with Bitcoin and this company? Because Crusoe Energy’s business model is a smart, climate-beneficial, proof-of-work energy source.

The basic premise goes like this: Fracking produces oil along with excess gases. With no established pipelines near many fracking sites and high shipping costs, drillers have no choice but to burn the gasses into the atmosphere. Crusoe Energy found a way to convert that wasted power into electricity on-site and use the electricity to power remote computing services. Seems useful, right?

The criticism towards Bitcoin mining’s energy consumption feels rejuvenated on social media of late. No need to rehash the debate, aside from stating a fair assumption we’d all would like to see actionable solutions to make Bitcoin mining “cleaner”. Yes, mining for physical gold contributes to climate change. So does the printing and circulation of our current fiat system. But at the end of the day, Crusoe helps mitigate Bitcoin’s impact, if ever so slightly, so I’m down with it.

There is also a second reason to be excited, which is increase the hashing power in the United States. The US only accounts for roughly 7% of the world total, on par with other productive countries, but significantly behind China’s 66% referenced above. The centralization of Bitcoin mining leads to inherent risk. What if the Chinese government decided to crack down on Bitcoin mining, an activity it has so far refused to do, but could one day suddenly reverse? That would be devastating for the network and hurt the ability to validate transactions quickly.

Low electricity costs are the main reason China is leading significantly. It allows Chinese miners to function at peak efficiency and outlast foreign competitors. China uses a mix of “clean” hydraulic energy and “dirty” coal to power Bitcoin mining. With Crusoe, we have another opportunity to leverage technology for “clean” mining. Like many of you, I strongly believe Bitcoin has a future as a store of value. It is imperative for the United States to attract miners without sacrificing at the altar of climate change.

So, to recap – Bitcoin mining is energy-intensive, and we have a company with a creative strategy to take excess flared gas, convert that to electricity, and use it to safely mine Bitcoin. That sounds like a win-win proposal for two of the points above (sympathies to Texas…but not sorry to Jerry Jones).

Coronavirus, Wuhan, and the truth

2020-01-18T00:00:00+00:00

Originally published in Jan 2020

It’s hard to go anywhere without hearing my friends discuss the Coronavirus spreading throughout China and into other countries. And while widespread fear hasn’t arisen yet in the United States, it’s important for everybody to be cautious and prepared for the worst.

To give some credit to China, the government seems to have learned from the SARS disaster and done a better job providing the international community with updates from health workers on the ground. And while I do acknowledge their effort, I’m hesitant to give the country full credit for its response due to continued concerns about officials handling the fallout from the situation.

For me, to understand people is to understand incentives. What drives someone to do something and what is your motive? China’s political structure is built in a way where government leaders are effectively incentivized to keep a spotless profile, deliver positive results, and most importantly, avoid bad attention. Viral stories showcasing negative headlines can single-handedly derail career advancement for municipal-level officials, and pandemics, by nature, spread fear expeditiously among the populace. So while I’m not accusing officials of misleading reporting, it is, hence, hard for me to trust Chinese officials not to downplay the numbers of infected patients. If they are doing so, here are some thoughts.

A few days ago, I stumbled across an article called “How to Tell the Truth” by the venture capitalist, Ben Horowitz. In the piece, he assumes a majority of people would describe themselves as honest. But he lists several scenarios where it’d be challenging to do so. Let’s take a look at some of his examples:

Sales are not going well. If you tell the company the truth, employees might rightly worry about the viability of the company and leave to go to another company. If they leave, you will surely continue to miss your numbers and introduce a spiral of under performance and attrition.
The expense structure is too large for the business and you will likely have to do a layoff. The company isn’t doomed, but if you do a layoff, the press will write that you are doomed and employees will read it. If they read it, they will worry and leave and then you really will be doomed.
An important executive just quit. If you tell the truth, people will wonder why and if they might have better options too.
The product has a serious flaw that is causing customers to fail and causing you to lose deals. If your employees learn this, they may wonder why they are working for the number 2 company and not the company that’s beating you.
The valuation on the last round was too high and you are looking at a down round. Your managers sold new hires on the promise of the old, higher stock price going even higher.

Let’s add: Your city of 11M people has fallen ill due to a potentially global health epidemic. The world is watching. You don’t have the resources needed to treat everyone who might be sick. If anybody hears the number of sick are significantly higher, pandemonium will occur.

I’d be remiss to equate startup failure with losing hundreds of lives but I believe lessons can be gleaned from these two situations. Horowitz lays out a three-step solution:

State the facts clearly and honestly — Don’t try to say that you needed to clean up performance issues or that the company is better off without the people that you so painstakingly hired. It is what it is and it’s important that everyone knows you know that.
If you caused it, explain how such a bad thing could occur – What was the decision process that you used to expand the company faster than you should have? What did you learn that will prevent it from happening again?
Explain why taking the action is essential to the larger mission and how important that mission is — A layoff, if done properly, is a new lease on life for the company and an action that was necessary to fulfill the prime directive and mission that everyone signed up for. As the leader, it’s your job to make sure that the company does not let those people lose their jobs for nothing. Something good needs to come out of it.

Startup founders and provincial leaders alike can apply these steps to foster transparency. Sharing bad news is scary but finding a larger purpose behind everyday efforts can encourage those who are afraid to face those fears with purpose. To prove his point, Horowitz chooses Abraham Lincoln’s Gettysburg Address as a historical example. With the reaffirmed notion that all men are created equal, Union soldiers persevered their fight and all Americans today attribute that idea as a fundamental life value.

I understand leading Wuhan today isn’t an enviable position to hold. But the Coronavirus also presents China with the opportunity to shed some of the past criticisms associated with its government. Demonstrating better honesty allows the country to affirm its self-confidence in the Xi Jinping-era and shed its insecurities as a poor, weak country. China would be better off for it.

AA 1356, in memorandum

2019-08-01T00:00:00+00:00

Originally published in August 2019

I woke up this morning in a hotel expecting to take an early afternoon AA 1356 nonstop flight from Albuquerque to Chicago. Yet somehow, it’s 11:30 PM and I’ve found myself a thousand miles away in Denver about to take a United flight. Wild.

So here I am, sitting on a worn chair at the end of this airport terminal. There’s a few strangers nearby browsing their phones while straddling the line between sanity and deliriousness. I wonder what they’re scrolling through. Others are sleeping on the ground, clutching their possessions like a toddler protecting her toys. Are they not afraid of getting their stuff stolen? What about how dirty the ground is? Brave.

I notice I always seem to end here. One of my favorite trips with friends involved laying over at this airport. On the other hand, I recall another nasty flight cancellation when a serious snowstorm passed through Denver some day in early May on my way back home from college - seriously, how can there be a blizzard in May?!

Let’s say I have a love/hate relationship with this place. Today’s manifestation of that relationship - and with airlines in general - is of the latter.

Rewind back several hours. My original flight got canceled due to stormy weather on the inbound flight. Quite truthfully, it’s no big deal. Getting home a few hours past usual doesn’t even register as a tremor on the scale of life problems. Not specifically my life problems, but in the grand scheme of things. Neglible.

I wasn’t the only one on my team who had a flight canceled today. Everybody who lives in Chicago had to undergo the same panic this morning. We all woke up at the same hotel at the same time. Look at where we ended up. They’ve all arrived home by now, sleeping soundly in their own bed. I drew the short end of the stick. Unlucky.

The person on the other end of the phone working Customer Service at American Airlines was a nice lady named Karen. I had to wait an hour to speak with her to change my flight. Twice. Then she had to wait an hour to speak with the United Airlines rep to put me on a new flight. Twice. Almost four hours in total. I don’t care if you are Christian, Jewish, Muslim, Agnostic, or Capitalist. Whichever God you pray to, he doesn’t want to get involved in this. Lawless.

At long last, we’re beginning to board for this second leg. I don’t have a seat so I have to go to the gate counter to ask for one. I always wait until the end to go up and ask for a seat. I assume by then most of the seats in the back are filled so they have to start giving out premium ones. I have no idea if that’s how it works, but sure enough, I get put in Economy Plus. I notice they didn’t give me my usual window seat preference to rest my head against. If anybody can hear me, please cue up Jesse McCartney’s “How Do You Sleep?”.

On second thought, I might be stuck in middle seat purgatory but 7th row ensures I’ll be among the first quartile to deplane. Blessed.

The guy sitting on my right is watching House of Cards on his iPad. I think I see Kate Mara. Is this Season One? That was forever ago. I can hear the audio. We’re on a plane. He’s got headphones in but it certainly doesn’t sound that way at all.

I take a quick glimpse over at the guy sitting to my left. He’s scrolling Instagram. I look back and look over again. Now it’s Clash Royale. He realizes I’m preparing to stow my laptop away for takeoff and tells me it’s not a safety hazard so I don’t actually need to put it away. Are you kidding me? Sir, it’s midnight and I’m almost home. Best not turn back now.

He cranes his neck, looks past the barrier separating Economy Plus and First Class. “Oh look, there’s a spot left in First Class. Wonder if I can get it”, he ponders out loud in a slightly high-pitched voice. Then he leans over to me and whispers, “That’s what happens when you fly every week”.

Oh, don’t I know buddy. Don’t I know…

The flight attendant comes by asking for our drink order. My seatmates both order an alcoholic drink. I think one of them is a Rum and Coke. She looks at me, expecting a similar request. Laughable. I’ll stick with ginger ale.

Thank goodness we’ve finally landed. Now it’s past 3:00 AM and I’m in a new time zone. A part of me fears I won’t be able to find an Uber or Lyft driver nearby this early in the morning but, miraculously, I do. There’s a few office lights flickering amidst the skyscrapers on the horizon, the only sign at this decrepit hour of a bustling metropolis during the day. I presume the employees inside must be real office warriors. Tenacious.

I see my front door. I’ve made it. I shower and slowly crawl into bed.

It took a roundabout trip but I’ve finally ended up in the same place as all my teammates. And is it the end or the journey that matters? Does it even matter? You decide.

Rest in peace, AA 1356. Truth be told, I hardly got to know you.

Revisiting bitcoin

2018-03-31T00:00:00+00:00

Originally published March 2018

I wonder how Maria Lomeli is doing.

You may not realize it but today marks three and a half months since the height of the bitcoin bubble. On December 16th, the cryptocurrency hit its peak price with one bitcoin worth more than $19,300. A month later, on January 13th, the New York Times published an article titled “Everyone is Getting Hilariously Rich and You’re Not“. It reads like a manifesto to those who believe in the value of the currency. It’s also led to some personal disillusionment.

Cryptocurrency originated as an experiment in ledger decentralization. Was there a way to build a decentralized recordkeeping system that could still be trusted by all its users? In 2009, bitcoin was created as an experiment to answer this question. Developers worked to enhance the idea over the years, but recently, a fraction has grown critical of the varying agendas within the community. In fact, the developer Mike Hearn even wrote this widely circulated Medium post announcing Bitcoin as a “failed” experiment. As skepticism grew, recent enthusiasm was spurred by individuals looking to profit off the invention.

In the New York Times piece, the author profiles various people aiming to make money off the cryptocurrency craze. Telling details are provided if you look closely. These individuals, almost all male, are committed enough to base their entire life around cryptocurrency. They’re technology-savvy and imagine a new world order. Many met through the online community and have known each other for some time. Mostly, they’re young enough to afford to take risks.

A number of these proponents were early adopters who prospered from the world’s sudden interest. I imagine they’re benefitting quite heavily from the recent media coverage.

Of course, late arrivals are looking to make life-changing money too, aren’t they? Although not mentioned in the article, cryptocurrency has been partially tainted with its connotation with pump-and-dump groups which do little to deter fears of unpredictability. Participation in these groups require an upfront fee. Once a member, individuals gain access to information of carefully planned market spikes. The closer you are to the center of knowledge the more profitable the information edge is. Later entrants into these pump-and-dump groups, bridging the chasm between the group’s core and general public, benefit less so. This system divides investors into castes: If you don’t have access, then you’re on the outside looking in.

The article concludes with a story about an individual, Maria Lomeli, who is attending the annual San Francisco Bitcoin Meetup Party. Ms. Lomeli is different than our millennials in one significant way: She is 56-year old. A housekeeper by trade, she appears just as excited as others. After an initial investment yielded a positive return, she chose to ignore the advice of her children and entrusted another $10,000 of her savings alongside everyone else. Her defining quote? “Something is telling me I can trust this generation. My instinct is telling me this is the future.”

Maybe this is the future. I won’t question the potential of cryptocurrency or blockchain, but it’s equally important to remember the very real consequences bubbles cause.

When Ms. Lomeli staked her savings, BTC was worth over $15,000, driven by the excitement of our aforementioned youth. It fell under $7,000 earlier this week.

When will that future come?

I think about her often.