Weekend Reading #88
This is the eighty-eighth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 9th October 2020.
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What we're doing.
We all met up to clear out our old office this week. It was like a scene from a dystopian movie as the entry path we use to access our door was overgrown with green foliage. We went for lunch, had a couple of drinks afterwards, and it was so good to all be together. Going forward we will be physically getting together once a week to just hang out. Not to work or brainstorm or anything – the truth is that when we are all together, creativity happens anyway.
The actual mechanics of arranging a get together once a week have turned out to be more complicated than we thought. As the last 7 months have gone by, we have all found ourselves deeply integrated into the daily home routines of ferrying kids back and forth from school and afternoon activities. We discussed how we would now need to re-uproot from our new routines to prioritise getting together once a week at least as a start. This is a priority now as we look to refocus on working out a better way of working remotely. Fortunately there are only 6 of us in the UK at the moment, so we do not fall foul of the government’s gathering criteria!
What we're thinking.
As President Trump came back guns blazing from his stay last weekend in hospital, he didn’t fail to deliver a shining testimony (on Twitter, no less) of the efficacy of the drug he was given, Regeneron, subsequently pledging to make it available for free to everyone who needed it. R&D into pharmaceuticals has always been one of the most fascinating and complex industry functions in the world. This piece from the archives (aka 2017) suggests that the golden days of pharma R&D may well be over, as all the low-hanging fruit in the industry has already been plucked, leaving only the difficult to crack challenges on the shelf, demanding lots of work with very little return.
For us, biotech/pharma has always been a little bit too esoteric for us to really get our heads around. But what was always fascinating was how the industry is carved into two extremes: on one hand, the high-end labs like Merck, Novartis, AstraZeneca et al invent and produce some of the greatest, most innovative therapies in the world, albeit at great research and development cost; on the other, an equally brilliant ecosystem of generics labs, dominated by the likes of Dr Reddy’s and Sun Pharma in India, work towards one singular aim – to break the patent protection accorded to the former group by finding a different way to produce the same pharmaceutical product, thus creating a generic which the winning codebreaker is entitled (thanks to none other than the FDA) to monetise exclusively for a short period of time.
If it looks the same, works the same and is chemically identical to the “original”, but is produced by a cheaper, most cost-effective process, then why not?
The benefits to the masses that the work of these generics companies is immense, making healthcare available to many at reasonable prices (imagine paying for branded aspirin??), even if they are the bane of their high-end counterparts, curtailing the pricing power accorded by patent protection. And if there is indeed an efficacious treatment in existence that could put to rest concerns about COVID-19 infection risks, then it is perhaps through these generic codebreakers that such treatment finds its way to the masses.
The more interesting question here is: why doesn’t this set up (innovators vs codebreakers) exist in every other industry, especially when the product in question can be replicated at a much lower cost?
Commoditised offerings like utilities, energy and telecommunications are really the same thing regardless of what brand is stuck on top of the pipe. And in these challenging times, surely any reason to take costs out of the equation with no compromise in performance would be welcome for any business.
What we're reading.
This week Square announced they would be investing $50mm into Bitcoin. This is roughly 2.5% of their cash pile but is a groundbreaking act from a very well-known and popular company.
A month or so ago a lesser known public company in the US called Microstrategy announced that they had invested in over $400m of Bitcoin on their balance sheet and it was seen as a somewhat gimicky publicity move by most mainstream market participants. But Square is front and centre of the current market narrative and this may have kicked off a movement. Only time will tell. Square also kindly published a guide for other corporates who may not be as familiar with Bitcoin to follow should they want to go through the process of doing the same thing.
We love reading profiles of inspirational business leaders. There’s always something to learn from a well written interview or piece about one of the titans of our age who are shaping their corner of the business universe.
This long interview from The Observer Effect is a fantastic insight inside the mind of Spotify founder, Daniel Ek, as he explains how he works and thinks. There’s much to learn from Ek, who over the last dozen or so years has built Spotify into the behemoth that it is today. It was his vision that shook up music streaming and took it to a whole new level, forcing giants like Apple and Amazon to rethink how they were presenting audio content.
Ek is a fascinating and thoughtful chap and Spotify sounds like a unique workplace and there is much in this piece to be learned that can be put into action in all our personal and professional lives.
An excellent new read that dropped on our doorstep this week was Kleptopia: How Dirty Money is Conquering the World, by FT journalist Tom Burgis. This is a more than worthy addition to the recent catalogue of titles, including Putin’s People, McMafia, Dark Money and Gomorrah, that have done their best to shine a light into the murkiest corners of global finance.
In Kleptopia, Burgis weaves together 4 true stories that reveal a terrifying global web of corruption that sits just beneath the surface of global finance: a troublemaker from Basingstoke who stumbles upon the secrets of a Swiss bank, the ex-Soviet billionaire constructing a monstrous private empire, the righteous Canadian lawyer who begins to work with a mysterious client, and the Brooklyn crook who is being protected by the CIA.
Kleptopia goes digging in the piles and piles of dirty money that is flooding the global economy, emboldening dictators and poisoning democracies. From the Kremlin to Beijing, Harare to Riyadh, Paris to the White House, it shows how corrupt so much of the global financial system has now become. It’s not a settling read but it is a highly entertaining one.
What we're watching.
News that the release of the latest James Bond film, No Time to Die, was going to be delayed until next year was bad news for Bond fans and catastrophic news for the UK cinema industry. So we took the decision to, firstly, try and enjoy a big screen moment in our own homes and, more importantly, support the cinema industry by watching a couple of great films via Curzon Home Cinema.
Sure, the microwave popcorn isn’t half as good and the screen may be about 30 times smaller but buying a great film to watch whilst supporting an independent cinema chain felt great. We’ve watched Eternal Beauty, a drama starring the great Sally Hawkins, and a musical documentary, Max Richter’s Sleep, where film and contemporary composer Max Richter’s epic score for the nocturnally restive is the basis of this uniquely entrancing and compelling documentary about sleep.
High class cinema from the comfort of your own sofa and, hopefully, a little bit of support for UK cinema.
What we're listening to.
Rather a good musical collaboration we revisited this week was Johannesburg, a short album from the love-them-or-hate-them British band Mumford & Sons, which was recorded during the band's tour in South Africa in early 2016. It is a collaboration with Senegalese singer Baaba Maal, South African pop group Beatenberg, and Malawian-British singer-producer combo The Very Best.
The 5 tracks aren’t like anything you’ll have heard from Mumford & Sons before and the African influences and sounds that are threaded throughout bring edge and an extra joyfulness to Mumford’s usual light and folksy offering. The tracks recorded with the legendary Baaba Maal are especially special with the first track, There Will Be A Time, being the highlight.
Whatever you thought of Mumford & Sons before, their musicianship is undoubted and, on this album, they get a chance to riff with some of the finest musicians from the African continent and the output is tremendously uplifting.