This is a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.
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Thoughts, opinions and typos are my own.
3.5 Lessons From The Theranos Debacle
This week, Theranos CEO Elizabeth Holmes’s net worth has been marked down to market value: $0 on the Forbes rich list, down from $4.5 billion.
- Companies should have domain experts on their board. (This applies to more than just life sciences companies, obviously.)
- Corollary: run for the hills if the politician:expert ratio exceeds .2 on a startup’s board of directors.
- Startup success is often inversely correlated with the fawning sentiment it receives in the tech press. (See, for counter-examples: Facebook, Snapchat, Amazon, and Uber, all of which have weathered a lot of media skepticism yet continue to outperform their peers.)
- Life sciences companies should be more transparent to regulators. It doesn’t really matter if some social media app proves to be vapor-ware, but there were probably real health decisions made on the basis of tests that may have proven faulty. That’s the real tragedy.
Observations From Other People
Aaron Harris on Investing In Tech in Emerging Markets
In his brief post, “Carts without horses”, Aaron Harris helps to reframe the question investors (particularly early-stage investors) need to ask when investing in developing markets. Harris suggests that rather than trying to copy a business model from developed markets, investors should view these markets as the opportunity to “start fresh” using today’s technology. His conclusion: “Developing markets are a kind of mirror of the future, or maybe of the present if things had happened differently. As such, they’re hugely instructive in understanding the types of companies that can be built, and of the founders who can build them.”.
To paraphrase Harris: this mode of thinking allows emerging markets to “leapfrog” over incumbent technologies. For example, it makes more sense to build something like M-PESA in Kenya than to replicate all of the financial infrastructure in a market like the USA in Kenya from scratch.
On the flip side, it’s often the case that emulating solutions from the developing world in developed markets merely results in something that’s nice to have, but not a solution to a deep unmet need. Harris cites Venmo as an excellent example of this. Mobile money is just a convenience in the USA, but it was possible to securely send money using something like Paypal for almost two decades now.
There was more in the article than what can reasonably be summarized here. It’s well worth a read though.
Riva Melissa Tez on Silicon Valley’s “Problem” Problem
Riva Melissa Tez, an entrepreneur, transhumanist and longtime resident of the Bay Area, writes that Silicon Valley has lost its grasp on what the word “problem” means. The goal of Silicon Valley, according to Tez, is to “achieve some form of a fully-automated, seamlessly efficient version of existence.” Anything that stands in the way of that vision (such as needing to run an errand or perform everyday chores) is problematized.
She suggests that “We must stop referring to these things as problems, and instead see them for what they really are,” because doing so cheapens the meaning of the word problem. Just like the boy who cried wolf, calling things like laundry or dog walking problems means that more serious issues – like the “800 million people across the globe [who] have limited access to food or water” she cites – are rendered as banal as the first ones.
Rather than think of menial tasks as problems, Tez suggests reframing the services that allow users to circumvent or outsource inconvenience as privileges. Or, put differently, “They are perks that enable us to further our level of highly efficient living.” This would make the entrepreneurial community more honest with itself and seem less disconnected to those outside of the startup echo chamber. And I for one am all for that.
Conor Sen: The Post-Recession World Doesn’t Scale
Portfolio manager and macroeconomic blogger Conor Sen makes the case that businesses that arose out of the Great Financial Conflagration (GFC) of 2007–08 are experiencing scaling problems, and that post-GFC economic conditions are making scaling difficult. His argument takes the form of a short but well-developed list of businesses and phenomena, from which I sample a couple points and offer my comments here:
- “On demand startups were the solution to mass unemployment and megacity renters who demand services immediately. But they’re finding that as the labor market tightens those workers are getting harder to find, and maybe the unit economics never worked to begin with.” (My comment: This is backed up by recent news that Uber received a $1 billion loan from Goldman Sachs to make subprime leases to new drivers. Bloomberg published an excellent profile of Uber’s subprime arm, Xchange, last week.)
- “Conservatism is finding that the demographic groups that believe in conservatism no longer scale to form a viable national party. Trump will soon find the same to be true for his white working class coalition. The Republican Party needs a new ideology or constituency that can scale to compete with Democrats.” (My comment: The main force that repels me from the Republican Party is the desire to legislate the private lives of Americans. Should the party drop its obsession with sex – gay sex, out of wedlock sex, the resultant risk of pregnancy that stems from abstinence-only sex ed, etc – drugs, and other social issues, I think its platform would be more appealing to younger Americans, including myself.)
I just discovered Conor Sen’s blog this week and have really been enjoying his other posts, mostly because they are shorter and more matter-of-fact than other stuff I’ve found. Other good articles:
- “Why Housing Is About To Eat The US Economy”
- “Economic Analysis by Decade: 1970’s–2000’s”
- “The Next Tech Cycle”
- “Why I’m No Longer an Economic Bull”
Other things I found this week (this time with categories!)
Tech trends & Industry commentary
Probably the best long-read I’ve read all quarter: Jerry Neumann makes the case (published October, 2015) that we’re moving out of an era of “installation” and into one of “deployment”. It’s very long, detailed and well-sourced. Two overarching themes of the Deployment era:
- “Information and communications technology becomes ubiquitous but invisible”
- “Innovation becomes ubiquitous but small”
Vlad Savov explains that technology is the great luxury destroyer for The Verge.
In a move that came as a surprise to some, Tony Fadell, CEO/founder of embattled home automation company Nest, announces departure.
Dushiant Kochhar explores how Big Data awareness is transforming public transportation, especially rail.
Scott Rosenberg [explains the economic philosophy]neolib that’s “killing” mission-driven companies. Spoiler alert: it’s Neoliberalism.
Design & Culture
Strategic design agency Information Architects (iA) published an article about when designers should use icons vs. labels in their interfaces.
In which writer Ben Thomas explains that artist James Needham’s controversial painting, “Bathroom Selfie”, is not some harbinger of the artistic apocalypse. Needham’s work carries on a very long (like, 40,000 years long) tradition of lewd artistic expression.
The Daily Beast reports on the long and sordid history of… political rallies. Yes, in Victorian times, booze-fueled midnight campaign rallies provided the perfect venue for young Americans to get it on. Oscar, a popular speaker at Lincoln rallies, said the female attention he garnered was enough to “tickle the vanity and rouse the ambition of anyone my age.”
The former CEO of Ticketmaster explains, in excruciating and delightful detail, how and why the market for concert and sports tickets is so messed up.
The Tribune Company’s online content arm has a new name: TRONC. (shudders) Alastair Coote tweeted speculation that the new brand is the result of some, ahem, truncation.
Personal Finance / Job Hunting
Software entrepreneur, blogger and now podcaster Patrick McKenzie talks salary negotiation tactics with Josh Doody, who recently published a book on the subject. The full transcript is worth checking out, but the main takeaway is to not answer the questions about your current or desired salary; instead, do some rhetorical aikido and spend as much time as possible focusing on the value you will bring to the organization. Lots of nitty gritty details follow from there.