Longreads + Open Thread

Longreads

• This 2009 profile of Susquehanna International founder Jeff Yass is a great piece on the trading mindset. Yass started out his business gambling professionally, and then switched to trading options—the edge is smaller but the pot is bigger. (One fun anecdote: a trader at the firm was reprimanded for betting that he could do 300 push-ups in 45 minutes, "Not because of the amount — $500 is lunch money to a trader. Mendoza was reprimanded because he’d gotten ahead of himself. He had made a dumb bet, because he really didn’t know if he could do 300 push-ups in 45 minutes.")
• Alexey Guzey's lifehacks. Speaking of bets made without knowing the true odds, I'd wager that there's at least a single-digit percentage chance that you'll get a measurable improvement in some important aspect of your life from following at least one of these recommendations. Highlights: "feeling stupid now is better than feeling stupid in 10 years," and, very importantly, "the smarter someone is the more they can afford to have terrible epistemics and still be successful."
• Harry McCracken at Fast Company has an oral history of LinkedIn. LinkedIn is an extremely rare situation: a social network that got acquired by a bigger company and kept growing and getting more relevant to its target audience. That's hard to pull off. The piece is a great look at how this happens. It's a good reminder that growth always feels risky: the bear case that competing networks will duplicate LinkedIn's features dates back to Friendster.
• Jared Kramer has thoughts on electricity storage. The grid always needs to be able to supply peak power, but is nearly always called on to supply less. Which means that even expensive batteries can be less costly than low-utilization backup power. This piece goes through lots of data, both on a household level and more aggregate, to show just how much storage you'd need under different scenarios. Interestingly enough, the model spits out a recommendation for a grid that mixes fixed and renewable/variable power; very conveniently, solar generates peak power in the hours before peak demand, so solar subsidizes storage directly. Which, given the healthy experience curves for both, is a very good thing.
• Dan Wang released his annual letter. It's a great meditation on China's lockdowns and the limits to their state capacity. One important point from the piece, on how multinationals' view of China is changing: "For executives, a posting to China used to pave the way to the highest corporate ranks. That’s starting to feel less the case, since China is so different a market—given political complexities and data controls—that a posting there is now viewed as often as a quagmire as an essential rung on the corporate ladder."

Books

• Making a Market in Acts of God: The Practice of Risk Trading in the Global Reinsurance Industry. This book is a bit like Codes of Finance, where an academic spends some time embedded in some specialized financial services and analyzes it through an anthropological lens. There's a lot of fun jargon here, but the core of the book is a look at reinsurance as both a financial and social phenomenon. The social part is important, because reinsurance is one of those industries that looks like a tempting opportunity to apply data science chops to get an edge. Which it is, but it turns out that the ability to scale an edge is weakened by industry norms. For example, reinsurers who are excessively choosy about the risks they underwrite have a hard time getting access to the best deals, while the companies that are big enough to get the risks they want are also operating at a scale where their returns are necessarily tied to how the entire industry performs. Reinsurance is valuable financial infrastructure, and like other industries where there's a social benefit to their existence and stability, it's hard to do anything too original.

A Word From Our Sponsors

This newsletter is brought to you by Tegus, your modern research launchpad.

Investors waste too much time looking for actionable information across disconnected sources. Tegus streamlines the information you need to move quickly with conviction and make better decisions. With access to the largest transcript library, expert calls with no markups, driveable financial models, and searchable SEC filings, you’ll be the smartest expert in the room.

Right now, readers of The Diff can trial the Tegus platform for free.

Open Thread

• Drop in any links or comments of interest to Diff readers.
• I'm interested in the possibility and limits of reshoring. Any readers who have direct experience with this, or strong views on it, are invited to leave comments—or, if you'd prefer to talk directly, feel free to reply.

Diff Jobs

Companies in the Diff network are actively looking for talent. A sampling of current open roles:

• A profitable AI startup is looking for ML engineers to help build new services to help small companies accelerate their growth. (SF)
• A new service that's trolling the dating market with a better product and better monetization is looking for a full-stack founding engineer. (Los Angeles)
• A fintech startup that lets investors trade any theme as if there were an ETF for it is looking for a senior backend engineer. (NYC)
• A company building zero-knowledge proof-based tools to enable novel financial arrangements is looking for a senior engineer with a research bent. Ideal experience includes demonstrations of extraordinary coding and/or math ability. (NYC or San Diego preferred, remote also a possibility.)
• A VC backed company reimagining retirement wealth and building a 401k alternative is looking for a founding CTO. (NYC)
• A crypto proprietary trading firm is actively seeking systematic-oriented traders with crypto experience—ideally someone with experience across a variety of exchanges and tokens. (Remote)

Even if you don't see an exact match for your skills and interests right now, we're happy to talk early so we can let you know if a good opportunity comes up.

If you’re at a company that's looking for talent, we should talk! Diff Jobs works with companies across fintech, hard tech, consumer software, enterprise software, and other areas—any company where finding unusually effective people is a top priority.