1/ Thread: "A Silicon Valley Ponzi Scheme"
Thanks to @chamath for laying this out in Social Capital's 2018 annual letter.
I've always appreciated his outspokenness.
This is creating a big bill that will soon come due...
But it's not who you think (that does), and the dynamics we’ve entered is in many ways creating a dangerous, high stakes Ponzi scheme.
Someone has to pay for the outrageous costs of this style of growth. Will it be VCs?
Eg: VCs habitually invest in one another’s companies during later rounds, bidding up rounds to valuations that allow for generous markups on their funds' performance.
if you’re a VC with a $200 million dollar fund, you’re able to draw $4million each year in fees.
Most funds never return enough profit for managers to see a dime of carried interest.
If u can show marked up paper returns & then parlay those returns into a newer, larger fund—say $500 million—you now have a fresh $10 million a year to use as you see fit.
There’s some deep misalignment here...
Partly why American healthcare is so expensive is bcos insurers, who play a key middleman role in setting prices for medical care, have a 2-sided biz model:
High costs allow them to charge higher premiums, allowing them to pull steadily more and more money out of patients’ and payers’ pockets.
In the end, both, patients and payers are the ones who end up as bag holders footing the bill.
The same thing is happening in today’s venture world.
Just as insurers’ biz model translates to higher costs of patient care,
So if its not VCs, who ends up holding the bag?
It’s still not who you’d expect.
In some cases, high prices may even work to their advantage.
Unlike the other pass-the-buck schemes
The real bill ends up getting shuffled outta sight to 2 other groups.
The 1st as u may guess are early stage funds’ limited partners, particularly future limited partners investing into the next fund.
Marking up Fund IV to raise money for more mgmt fees out of Fund V is so effective bcos fundraising can happen much faster than the long & difficult job of building businesses & creating real enterprise value
The second group of people left holding the bag is far more tragic: the employees at startups.
Although originally helpful as a way to incentivize and reward employees for working hard for an uncertain outcome,
Overall, you can understand how this arrangement endures:
Those companies then go spend the money on more user growth, often in zero-sum competition w/ one another.
What is the antidote here? Its 2-fold.
The 2nd is to break away from the MLM scheme that the VC-LP-user growth game has become.
It’s time to wait patiently, as the air is slowly let out of this bizarre Ponzi balloon created by the venture capital industry.
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Week 1 highlights: getting shortlisted for YC W2019🤞, acquiring a premium domain💰, meeting Substack's @hamishmckenzie and Stripe CEO @patrickc 🤩
2/ So what is Brew?
brew / bru : / to make (beer, coffee etc.) / verb: begin to develop 🌱
A place for you to enjoy premium content while supporting your favorite creators. Sort of like a ‘Consumer-facing Patreon’ cc @jackconte
(we’re still working on the pitch)
3/ So, why be so transparent? Two words: launch strategy.
jk 😅 a) I loooove doing something consistently for a long period of time b) limited downside and infinite upside (feedback, accountability, reach).
cc @altimor, @pmarca
4/ https://t.co/GOQJ7LjQ2t domain 🍻
It started with a cold email. Guess what? He was using BuyMeACoffee on his blog, and was excited to hear about what we're building next. Within 2w, we signed the deal at @Escrowcom's SF office. You’re a pleasure to work with @MichaelCyger!
5/ @ycombinator's invite for the in-person interview arrived that evening. Quite a day!
Thanks @patio11 for the thoughtful feedback on our YC application, and @gabhubert for your directions on positioning the product — set the tone for our pitch!
Here are the things I'm excited about.
🚂 Trailing commas in function/method calls!
🧵 Less disgusting heredoc syntax!
Inlining heredoc strings in any way right now is grrrosssss. Now we get sensible capabilities. Everything that was wrong with it is now fixed!
(Ignore the bad syntax highlighting)
☠️ Finally, not-so-silent json_decode error detection!
This really sucked before, now it just sucks a bit less (who wants to pass a 4th param and pass 2 default params first? (helper function anybody?)
📜 Not horrible functions for getting the first and last item (or key) from an array!
Before you either strung a bunch of functions together or messed with internal array pointers. This is a much-needed improvement.
To understand the statistic, we have to drill down into what the meaning of the word intersex is. Most people think of hermaphrodites. Let’s stress at the beginning there has been no example ever of a human being with both sets of working reproductive organs.
There is a very tiny percentage of people who are born with both testicular and ovarian tissue (what Fausto-Sterling calls “true hermaphrodites”). And when I say tiny, we’re talking intersex tiny, as in 0.0117/1,000 live births, or one in 1,000,000. These are very complex cases.
So, how do we arrive at 1.7%? What Fausto-Sterling does is apply a wider scope. Instead, she argues that intersex is anything that doesn’t fit into a platonic ideal. The platonic ideal, in this case, being a phenotypically perfect XX female and a phenotypically perfect XY male.
This means that intersex, used in the context of the 1.7% statistic, includes people for whom there is no sexual ambiguity. Take for example Klinefelter syndrome (XXY males). As Fausto-Sterling acknowledges, many males can go their whole life and not realise they are XXY.
The feature doesn't care what the link contains, it just hashes the URL, including any query params, and returns a shortened code.
More recently, around Christmas time, I added another feature where I can click a button to send a template notification to a charity that their new listing has been reviewed and published. I call it a next-steps email.
For the past few weeks, its all been working well. Its nice to keep automating things that previously were done by hand.
Fast forward to today.
A new opportunity listing is posted by a charity.
I review and publish it, tweet about it, then click a button to send the charity an emailed notification of next steps.
🧵 thread 👇
In a 24 x 24 pixel artboard, use the rectangle tool (R) to draw a 18 x 10 pixel rectangle positioned horizontally centered and 6 pixels from the top of the artboard.
Using the ellipse tool (O), draw a 96 x 96 pixel circle and align the top to the center/top of the rectangle. Select both shapes and use the boolean tool to intersect the group.
Using the ellipse tool (O), draw a 48 x 48 pixel circle and align the bottom to the center/bottom of the rectangle. Select both shapes and use the boolean tool to intersect the group.
Flatten the shape (command + E) and double click it to make it editable. Select the top left and right points and give them a 2 pixel corner radius. Select the bottom left and right points and give them a 1 pixel corner radius.
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1/ Mindset: Someone from NYC won't think about it twice before taking a 6h flight to the Valley for business. Why do Europeans perceive a 2-hour flight / train ride as such a big deal? Travel more, there's plenty of opportunities around the corner you know nothing about ✈️
2/ If you spent more than a month considering whether to expand abroad or not, just try. What’s the worst that can happen? You can always do a big international launch, fail, try again and communicate it as a big thing every time - no one will care / remember the previous time :)
3/ Europeans perceive int'l expansion as a massive cost and therefore spend 1/10th of what US startups spend on it every year. Invest more, but keep a startup mentality: launch from home first, assess the market & then save costs as you go in, e.g. stay at a friend's; not a hotel
4/ Whilst not excessively risky / costly, expanding internationally is HARD. It's like starting up all over again, finding Product Market Fit all over again & building your team all over again. PMF will have to be your #1 priority, and an indicator of whether to keep going or not
the deal w/the New Republic, the First Order, and the Resistance is very weird and complex and I actually take issue with how Story Group frames the actual conflict.
pre-TFA stuff is presented as a "cold war" between the New Republic and the remnants of the Empire that form the First Order, which 100% makes sense.
But they frame the First Order's attack on the Hosnian system and the subsequent battle that takes place across TFA and TLJ as a full on war when it's very clearly a coup. A war implies at least equal standing, but the First Order completely wrecks shop and takes over the galaxy.
ok never mind I'm fucking doing this now.
The First Order fleet we see in TLJ is *not* the entire fleet of the First Order (I don't even think Starkiller Base was their main base of operations honestly, it couldn't have been considering they were operating out of Wild Space)
Why is this the most powerful question you can ask when attempting to reach an agreement with another human being or organization?
A thread, co-written by @deanmbrody:
Next level tactic when closing a sale, candidate, or investment:— Erik Torenberg (@eriktorenberg) February 27, 2018
Ask: \u201cWhat needs to be true for you to be all in?\u201d
You'll usually get an explicit answer that you might not get otherwise. It also holds them accountable once the thing they need becomes true.
2/ First, “X” could be lots of things. Examples: What would need to be true for you to
- “Feel it's in our best interest for me to be CMO"
- “Feel that we’re in a good place as a company”
- “Feel that we’re on the same page”
- “Feel that we both got what we wanted from this deal
3/ Normally, we aren’t that direct. Example from startup/VC land:
Founders leave VC meetings thinking that every VC will invest, but they rarely do.
Worse over, the founders don’t know what they need to do in order to be fundable.
4/ So why should you ask the magic Q?
To get clarity.
You want to know where you stand, and what it takes to get what you want in a way that also gets them what they want.
It also holds them (mentally) accountable once the thing they need becomes true.
5/ Staying in the context of soliciting investors, the question is “what would need to be true for you to want to invest (or partner with us on this journey, etc)?”
Multiple responses to this question are likely to deliver a positive result.
In this thread we will cover the different meanings behind D5 and what the near term might have in store for us.
D5 Multiple Meanings & Outlook:
1. Events that took place on 5th Dec 2018
2. Date of DNI Report regarding unmaski*g of Gen. Flynn.
3. CF Investigation re: Crim*s Against Humanity
4. D5 Forecast 432Hz (Ongoing Investigation re: Election Frau*)
1. Lets warm up with 2 Year Delta Drop 2549:
Role of Huber (as portrayed by 'Q')? What are the odds that Huber would be scheduled to testify re: Clint*n Foundation on D5? What are the odds GHWB passes away and the State Funeral date is on D5? What other interviews and
investigations were wiped clean (postponed) given a STATE FUNERAL takes up media coverage for a week? Why does the FAKE NEWS media [largest in the world] continually attack 'Q'? Why is the WASH POST leading the attack? Think ABC agency. When you are awake you can SEE CLEARLY.
My take: DS tried to cover up Huber BOOM via Funeral Date, but they didn’t realise D5 meant something else…👇