Weekend Reading #87

This is the eighty-seventh weekly edition of our newsletter, Weekend Reading, sent out on Saturday 2nd October 2020.

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What we're doing.

While the UK government has threatened another lockdown, with more stringent restrictions back in place, people have once again done what people always do: adapt. Although we have, for the most part, remained sensibly removed from large crowds in the heart of London, we’ve also had conversations with people who were actually in their London offices for various reasons: from a need for space away from home to focus to some very fundamental requirements for proper connectivity and IT infrastructure. 

Whereas the “productivity dividend” that came from working from home in the early months of this year seems to be largely wearing off, what seems to be taking its place is a “creativity tax” of sorts. As a team, we try our best to stay in touch with each other with Zoom calls so we can sit and chat and come up with new ideas, but the reality is that when it comes to creativity, nothing beats being in the same room and bouncing random ideas off each other. 

That said, as we’ve written about before, our reaction to coping with the lockdown situation has underscored how much IT infrastructure has advanced in recent years. The more astute amongst our readers may have noticed that while we speak of having 3 product lines, we largely only ever write about two of them (our fund and our 3BC platform). 

Product #3 has been in development mode for the past half year or so. In its prior form, it has been an important source of revenues for us; but where it’s going, it could be a life saver for an increasingly challenged trading and execution environment in financial markets. The conversations we’ve had this week suggest we are on the right track, and the very same infrastructure that made the transition from office work to work-from-home so seamless underpins our work here. 

All we will say for the moment is, stay tuned. 

What we're thinking.

When building a business from scratch, one way to go about it is to start by being a jack of all things. By not clearly defining a target client type or a niche sector, you allow yourself the luxury of thinking that your addressable market is vast and, hence, you stand a high chance of breaking off a small piece of it in the early days, despite not quite being sure where that small piece is located. Many businesses succeed by aiming wide before narrowing their focus later on.  

We’re finding that this path is one we’re veering towards with 3BC, our private market deals platform. On paper and in planning, when thinking about what we wanted to build, we were open to all options. On the supply side, we considered every sector, asset class, stage and we were largely ambivalent about the size of the transaction. On the demand size, we thought about ways we could include every type of investor, from HNW individuals to venture capital funds and everything in between. Launching the product with this mindset was hugely beneficial as it allowed us to test a bunch of different verticals, finding out what works and what seemingly does not on both sides of our marketplace.  

But as we grow and learn, it’s been gratifying to feel that we’re moving towards a couple of defined niches. We’re creating a set of criteria for the deals that we’re hosting and placing, and we’re homing in on the typical investor (our users) who are fast populating the demand side. Supply and demand are informing the other: As we learn what our investors want, we’re tweaking the supply side criteria. As we meet and talk with exciting issuers, we’re defining the sort of investors that we want to attract to the platform.  

This process is ongoing, and it will be from now until the end of time, but it is a process that is improving our product and our chances of doing business. And that’s the interesting thing about product development: It’s never static. A year ago, sat in our boardroom in Camden, spec-ing out all the whys, hows and whats of 3BC, we were, essentially, flying blind, guided only by anecdotal evidence, our research on competitors in the market and our experiences in finance and technology. Nothing betters the experience of having a product live and gaining feedback (both anecdotal and analytical) from a user base.  

So, as we grow, we’re changing. 3BC is gravitating towards a clearly defined niche and this is providing us with a clearly defined sense of purpose. We believe this is giving us a much higher chance of doing business which will allow us to grow faster and smarter than we’ve ever done before.
 
What we're reading.

Think life is pretty hard right now and you’re running on empty? Well, if you’re in need of a pick me up, this profile from 1843 Magazine of Erik Weihenmayer is well worth a read.  

Weihenmayer has spent his life pushing expectations. He’s climbed the highest mountain on every continent, kayaked the length of the Colorado river through the Grand Canyon and scaled the notorious “Nose” route of El Capitan in Yosemite. His accomplishments would be jaw-dropping even if he could see. But Weihenmayer is completely blind.  

Weihenmayer’s astonishing attitude towards life and adventure is hugely infectious and the story of his life and accomplishments makes you want to go and climb the nearest peak. In times like these, when even going for a morning jog can feel like a marathon, a little inspiration like this goes a very long way.  

We started reading a monumental new graphic novel entitled "XX", written by Rian Hughes, who became famous as a graphic designer and comic artist. He was involved in designing logos for the Avengers, Superman, MTV and James Bond as well as a number of creative projects. This novel is his first and goodness gracious it is spectacular. The old saying that one cannot judge a book by its cover has never been more irrelevant than in this case. The cover is beautiful, an artwork in itself and the story is made up of compelling narrative with bits of journals, images, newspaper clippings and other media thrown in. It centres on a signal from what may be extra-terrestrials being received but the story is way more than that. All we can say is buy it and dive in. At 976 pages it is a deep commitment, but filled us with long lasting nachas! 

Arriving in the mail this week is Scott Patterson’s latest work, Dark Pools, exposing the intricacies of the complex, opaque beast that is the world’s electronic trading networks – at least, as much as can be discovered – and the behaviour of AI trading machines, algorithms and all things not-so-human within this fully digitised trading environment. This book comes highly recommended by some friends of ours and after only a few chapters in, we’re already getting a glimpse into the black hole of global securities trading: one ruled by machines and algorithms that operate at the scale of billionths of a second, rather than “common sense" and human logic (or speed). 

What we're watching.

Is it always true that entertaining TV must include some sprinkles of drama, politicking, violence or other forms of provocation? We’re sometimes of the view that the real world already has a sufficient supply of all the above, and often, all we’d really like to watch at the end of a long day is something happy. 

Traditionally, something out of the Disney catalogue would’ve done the trick – although recent additions have also included some extent of tension that arguably makes the viewing “exciting”. But what if you don’t want any excitement at all? What if all you wanted was the TV equivalent of sitting on a sunny hillside looking down at the ocean? 

If that’s what you need, Netflix’s recent addition of two seasons of Hyori’s Bed & Breakfast to their catalogue might do the trick. This is reality TV without the suspense, conflict and drama that has come to characterise evening TV. Following the lives of first-generation K-Pop star Lee Hyori (the “Beyoncé of South Korea”, some call her) and her musician husband Lee Sang-soon, the couple decide to open up their home on South Korea’s scenic Jeju Island to guests, turning their home into a B&B for a fortnight.  

The notion of a multi-millionaire superstar couple opening their home to guests as a B&B would probably be unimaginable anywhere else – much less the idea that said superstars clean, wash, cook and serve guests staying at their home, pick them up from the airport, give them yoga lessons, join them in conversation around a barbecue and generally behave like an ordinary B&B host. 

Of course, their guests know they are in the presence of K-Pop royalty and behave accordingly. Crews follow the guests (and their hosts) around their largely everyday lives as they explore Jeju Island’s scenery, history and food, a big plus given no one’s travelling there anytime soon from the UK. Bookings and guest arrivals remain fully in the hands of the series’ producers, and an overbooking is probably as dramatic as things get. And clearly, with two seasons available (we’re still on Season 1) it didn’t turn out to be that dramatic. 

The entire series is in Korean, but Netflix as always does a fantastic job of subtitling – highly recommended for a cosy evening TV session on the couch, especially as the weather turns cold. 

What we're listening to.

During these lockdown months, a musical hero of ours, Bruce Springsteen, has been putting out radio shows, titled From My Home to Yours, from his home in New Jersey. Over the course of an immensely enjoyable hour, Springsteen selects the music and lets us know how he’s getting on in isolation. We’ve found that there are few better ways to spend a little evening time than in the company of the great man and his music picks.  

Springsteen was 71 years young last week, but he continues to be as on the pulse, music-wise, as anyone else around. His musical tastes reflect this with the records he plays covering all of the decades of his life, including those most recent. It’s also telling to hear him updating his own sound with modern ticks and shifts. That sound will be demonstrated once again on a new album, his twenty-first, that’s coming out later in October. Until then, check in with the The Boss at home and enjoy a radio show better than most others.  

Oh, and this Springsteen profile from Rolling Stone is well-worth a read if you're a fan, too.