- Outgrowing Software: Ben Evans makes the great point that software companies end up growing into non-software over time. When one winner takes all, there's less excitement about the pure software component. Meanwhile, the winner is generating cash flow and has a data/information advantage, allowing them to invest in the non-software parts of the supply chain. It's a domain-specific case of a generalized Peter Principle: whatever a person or organization can do best is what they'll finish doing first, and over time they'll spend more of their efforts on tasks they're worse at.
- The WSJ looks at the many wonderfully optimistic EV SPACs ($), many of whom project record-breaking growth rates. Looking at all of these projections together makes it look like investors have a collective, mutually-incompatible beliefs about each company's growth rate. But the other way to look at it is that speculators are implicitly betting that at least one of them will succeed, and that it will be valued based on a) general optimism about EVs, and b) a company-specific premium due to its excellent execution. Once the standard for these companies is rapid growth, no company can afford to project that it will take its time. So this ends up being an example of bubbles parallelizing innovation: these rapid growth plans create demand for the kind of infrastructure that would enable it.
- Ben Thompson has a great collection of interviews on moderation: high-market share platforms are often stuck making terribly fraught decisions. On the one hand, keeping a controversial client often means risking 5% of revenue in order to preserve 0.001% of revenue. On the other hand, every ban creates a precedent, and contributes to a broadly conspiratorial view among the people who are getting banned. If there's a chain of events that starts with you having unpopular opinions and ends with you being unable to get a cab ride, hotel room, or bank account, it starts to feel like the world really is full of powerful, shadowy organizations that are all in cahoots with one another. This makes platform neutrality a positive externality; it makes the world feel more trustworthy to people who are inclined not to trust much.
- Zachary Lerangis has a good piece on Leo Szilard's failed attempt to create a scientific ruling class. It's a very meta failure; Szilard was obviously brilliant, and was able to affect the course of humanity in roughly the direction he intended—he wanted to work on fission in order to contribute to space travel, and the creation of nuclear weapons did indeed inspire the space program. The meta bit is that Szilard's view was that political problems were easier than physics problems, so physicists could probably resolve them pretty easily if nobody got in their way. But those same physicists were largely outmaneuvered by more politically-savvy civil servants.
- The IPO Playbook is valuable to two groups: the relatively small (but, as of right now, rapidly-growing!) demographic of people working in finance at companies that are about to go public. And second, the much larger group of people who want to understand how CFOs think about the analysts who cover their stock. There's an ongoing and very absorbing metagame of interpreting a company's outlook based on nuances of management phrasing. (When the CEO says things look "Very good" in February and "Good" in March, shares get sold.) It's helpful to get a view of this from the other side.
- One pattern in bubbly sectors is that they temporarily recruit a lot of talent, and sometimes there's consolidation after the bust. Are there any interesting companies that emerged from recent bubble/busts?
- One way to look at Miami as a business cluster is that it's the place people go when they either just had a liquidity event or collect lots of cash compensation. What's the default business cluster for people who are accruing equity value but still have to watch their cash burn rates?
- About a year ago, a big part of the discourse was how much Newton and Shakespeare accomplished while self-quarantining. With the caveat that those two set a high bar, are there any interesting works of art/science that got started due to the Covid lockdowns, but that weren't about Covid?
- As always, feel free to add any interesting longform links or book recommendations in the comments.