Weekend Reading #97
This is the ninety-seventh weekly edition of our newsletter, Weekend Reading, sent out on Saturday 12th December 2020.
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What we're doing.
As we approach the New Year, we are starting to think about how we can improve and evolve our private markets offering, 3BC, by getting feedback from our users. The customer is always right, so it pays to listen to feedback and build platform functionality accordingly. If you’re a 3BC user with strong opinions, please get in touch.
This week we’ve been enjoying the start of Hanukkah. For those of you who don’t know, Hanukkah means “rededication” and commemorates the Jews’ struggle for religious freedom, when the leaders of a Jewish rebel army called the Maccabees rose up against their Greek-Syrian oppressors trying to ban Judaism in the Maccabean Revolt of 167 BCE. When they regained control of Jerusalem, they wanted to rededicate the desecrated temple, but could find only one container of the sacred olive oil needed which had the seal of the high priest still intact. According to legend, although there was only enough oil for one day the candles miraculously stayed alight for eight days – the time needed to prepare a fresh supply of kosher oil for the menorah.
Okay, history lesson over, now let’s celebrate! Hanukkah is observed for 8 nights and days, starting on the 25th day of Kislev according to the Hebrew calendar (late November to late December in the Gregorian calendar). At this time, we light the candles of a candelabrum with nine branches, called a menorah (or hanukkiah). It’s a joyous affair that gives us great nachas!
We wish everyone reading this newsletter a very Happy Hanukkah. As a tough year for the country (and the world) draws to a close and the nights draw in, we are more grateful than ever for ancient traditions that bring families together, put smiles on faces, and shine light into the darkness.
What we're thinking.
This week we came across a quote from French author and philosopher Albert Camus, who concisely sums up how we feel about life:
“You will never be happy if you continue to search for what happiness consists of. You will never live if you are looking for the meaning of life.”
Starting and growing a business is a great antidote to introspection. It forces you to step outside of yourself and view the world through the eyes of others – your customers. As we progress on our journey as a business and a group of people, we are reminded that happiness cannot and should not be chased; it’s a byproduct of meaningful work.
Away from philosophy, with all the frenzied price action this week we had a good long think about how to value software. Are these valuations crazy or are most people not seeing the wood from the trees? Honestly, it’s probably a bit of both. It is likely we are in the greed stage of the market, but it’s definitely worth considering how we think about traditional valuations. Most accounting standards were built in a time where intangible assets were a swear word. Today it’s all about intangibles. Software businesses should logically be valued according to other metrics. These businesses which own enormous amounts of IP should be recognised for the value they have spent money on to create and almost certainly this will never correspond to traditional EBITDA linked metrics. If anything as these businesses scale and succeed there is an argument for appreciation of their assets rather than depreciation like one would think about a traditional manufacturing business.
Last week we penned some thoughts on Disney and how it has transformed its business over the past year. On Thursday this past week, Disney announced a new pipeline of content which, quite honestly, is just spectacular. They are doubling down on what works – Marvel and Star Wars, with 10 series of each franchise coming to Disney Plus. The possibilities for content from these franchises is endless and now that distribution is just a click away, viewers will be entertained for many, many years. But what's truly staggering is that Disney announced expectations for Disney Plus subscriber numbers would be TRIPLE what they are today. There are already 87 million subscribers and Disney is guiding for 230 to 270 million by 2024. Just wow!
What we're reading.
One good thing about COVID is that it’s encouraged us to make our own fun. We have always loved games (both analogue and computer varieties) and the way they bring us closer together without families, and indeed friends. If you’re the same, you’ll love this book from Gyles Brandreth.
“The Lost Art Of Having Fun” picks out over 250 games, guaranteed to make even the grumpiest child or adult crease up in laughter. The book covers every eventuality: rainy days, car journeys, music, drama, general knowledge, brainteasers, and party games. A great thing to have on the bookshelf as we enter the holiday season!
We read with great delight the latest newsletter from Packy McCormack, who has written on many of our favourite topics in the past. This week he wrote a sublime piece about APIs, what they mean and why they are so important. We understand this well, as we are integrating our software offerings into many other pieces of code. What was so refreshing about this article in particular was its simplicity. Highly recommend a read and sign up for his other stuff too.
Staying still on the software topic, this week Stripe released a new product called Stripe Treasury. Stripe is changing the face of financial services as we know it and Stripe Treasury offers any customer of Stripe the ability to be its own bank by using Stripe APIs to connect to a group of partner banks including Goldman, and soon Barclays in the UK. The banks don’t seem to realise that although they may be increasing their footprint, they are commoditizing their products and losing the client relationship. This is a sign of much more to come. Interestingly for us, Stripe also expanded this week further into Southeast Asia. The banks in this region are under siege and they too don’t even seem to know it. Also this week, Sea Limited, one of our portfolio holdings in our Three Body Fund, received a digital banking licence in Singapore. With the rise of parallel payment rails in the form of DeFi also looming large, the decade ahead will be a tough one for traditional banks.
Next up we came across this excellent piece from Bruno Macaes, in which he superbly sums up how he believes new US President, Joe Biden, will possibly be left wanting when it comes to dealing with China. Macaes continues to come up with pure original thoughts on how the world of geopolitics is unfolding and this is a must read.
This beautifully put together resource from A16Z was a pleasure to read. The design and layout is fun and wacky but the content is world class for anyone interested in where social media is going in the years to come. Quite a few pieces to get through but well worth the time investment.
With the lockdown still in full swing in many parts of the world, this week we read about one of the innovative ways that Father Christmas is able to remain socially distanced this festive period through a surge in Zoom meetings. Whilst shopping center grottos remain closed, websites like santascallingyou.co.uk have popped up allowing parents to book for a live video call from Santa from the comfort of their own home and are already becoming a great success.
We enjoyed this piece from The Spectator on what to eat during Hanukkah. It also shares some recommendations for where to eat in and around London and it was great to see good old Gail’s on the list – we look forward to nipping in for delicious challah when we’re next in town.
What we're watching.
Netflix's incredible true story “Three Identical Strangers” is the most bizarre, heartbreaking and shocking documentary you’ll see this side of Christmas.
The documentary film explores the true story of a set of American triplets who were separated at birth for a psychological experiment. The film was originally released in 2018, and if you haven’t seen it yet, you are in for a wild discovery and will probably get pretty angry at what happens to these three men.
Each boy went to a different family from a varying background and the families were never told their son had two brothers. When Bobby attended his first day of college he was greeted by everyone as Eddy. By pure coincidence they had both gone to the same university and eventually met up. They were featured in a newspaper article, and that’s when they discovered they had a third brother, after David’s mum saw their picture and realised her son looked exactly the same.
The triplets became great friends and the documentary follows what happened to them after they met, including how they became media sensations, and a detailed look into the experiment run by Dr. Peter Neubauer who separated many twins and triplets for a nature vs nurture study. The results of the study have never been published.
It's hard not to notice when a spaceship goes up in flames.
Which is exactly what happened this week, when SpaceX’s first high-altitude test flight of its next-generation Starship spacecraft ended in a massive fireball. What really fascinated us though, was Elon Musk’s response – shortly after the explosion, he tweeted saying “Mars, here we come!”
This might be social media bravado (something that Musk has in spades), but it also evokes the infamous “reality distortion field” that surrounds the world’s most visionary and successful founders. The monumental endeavour of putting human beings on another planet is going to take time, perseverance, and yes, a little bit of bravado.
What we're listening to.
Perhaps our favourite podcast episode of the year dropped this week. We talk about the Tim Ferris podcast quite a bit in this note, and, for the most part, it’s a great source of ideas and inspiration. But sometimes it can feel a little too self-righteous and dogmatic, constantly telling us to get up at 4 in the morning, take cold showers, meditate, yoga, journal, weight train, sleep 12 hours, etc. Quite frankly, it can be a pretty exhausting and demoralising listen, especially if it’s delivered over the course of 3 hours, the length to which some of the episodes extend to. It’s tiring trying to learn about all this productivity.
In spite of these flaws, it is still one of our go-to pods and this week’s guest, comedian, Jerry Seinfeld, is one of our all time favourite human beings. So it was no surprise that it ended up being one of our top episodes of the year. It didn’t disappoint, with Tim and Jerry having a short-ish chat (1 hr 25 ish) about the creative process, pressure, how to write, the art of comedy and everything in between. Yes, they do touch on meditation and exercise and journaling but not in a self-righteous way. Jerry isn’t here to teach – he’s just on the show to tell you what he does and why it worked for him.
That individuality is at the heart of what Jerry Seinfeld has always been about. He’s his own man. He doesn’t really care for what others think and it’s that confidence and aloofness that made Seinfeld, with Jerry Seinfeld as its central character, such a mega hit show in the 1990s. Hearing Jerry deconstruct how he goes about creating characters and writing comedy in his own idiosyncratic way was fascinating as it is clearly a method that is so personal to him. Sure, you might be able to glean a few tips for your own routine or work, but this was a routine and a method that was unique to Jerry and Jerry alone. Hence, it felt genuine and heartfelt rather than advertorial and self-promoting.
Jerry is also, to our minds, the best world’s best comedian, so any time spent in his company is well spent. Yep, you might learn a thing or two from this listen but you will, more likely, just be entertained. And being entertained is far more important than being productive.
On the more melodic end of the listening spectrum, we were pleasantly surprised to find on Spotify an old, not-so-well-known album from 2005 by Paul Ponnudorai, Right on Time. Born in Ipoh, Malaysia, Paul was one of the greatest guitar virtuosos to grace the Southeast Asian music scene, frequently performing in pubs and festivals in Singapore where he took up residency. His speciality: deconstructing classics and putting them back together with an ease and flair that came effortlessly. Unfortunately he only ever recorded one album before his passing in 2012. So perhaps we have spotify to thank for immortalising, for the record, a slice of musical history that would otherwise have faded into obscurity!