Weekend Reading #81

Photo by Charl Folscher on Unsplash

This is the eightieth-first weekly edition of our newsletter, Weekend Reading, sent out on Saturday 15th August 2020. To receive a copy each week directly into your inbox, sign up here.

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What we're doing.

It's often said that us Brits are obsessed with weather. Well, this week we had fair cause to be as for the first time in 60 years, London enjoyed/endured 6 straight days of +34degs, with the nights staying +22degs for the same period. Sweltering doesn’t even come close.  

For our regular readers from warmer climes, this likely sounds like child’s play, but for Londoners, these conditions have been all-but-unmanageable. Iced coffees replaced cups of tea, ice lollies were served at 9am, laptops set up in paddling pools. As we approach the weekend, the best/worst of it seems to have passed and the weather is finally breaking. Next up, the mother of all thunderstorms is forecast, which would be a fitting finale for an epic week of weather.  

Whilst keeping our cool, we closed our 4th official month end (15th of each month) in our Three Body Fund in a week where digital assets dominated the action yet again. Equities have been rather quiet, as one tends to expect this time of year. We look forward to sitting down over the weekend with a cool drink to process our thoughts on the past month as we compile our monthly investor letter. 

The big news of the week is that the move has finally happened! In some ways, it’s perhaps a milestone for the business, to have to care enough about data retention and data loss protection policies to migrate from G Suite to Microsoft 365. However, this is only worth mentioning because we decided to take the DIY (or DIO?) approach, with the measure of success being the extent of “teething problems” post migration.  

With a little help from the Microsoft Community, especially in navigating the endless roadblocks put up (equally culpably) by Microsoft and Google to make life just a little bit more complicated, along with a few forays into Microsoft Powershell (aka the “belly of the beast”), we are proud to say that we’ve largely managed a full DIY migration without any outages and only a little blood, sweat and tears expended!  

What we're reading.

An explosive bit of action unfolded late on Thursday involving one of our favourite companies, Epic Games. As many readers may know, there has been an ongoing saga involving Epic’s founder and CEO, Tim Sweeney’s crusade against the “monopoly” of the Apple app store. Today, Epic took the unprecedented step of offering Fortnite via a direct payment with a 20% discount to the app store price INSIDE the Apple app itself. Later on in the day, Apple removed Fortnite from its app store with the following statement: 

“Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users. As a result their Fortnite app has been removed from the store. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services."

Epic, in full expectation of this reprisal, proceeded to file a lawsuit against Apple for “anti competitive actions that Apple undertakes to unlawfully maintain its monopoly in two distinct multibillion dollar markets.” Epic then proceeded to release a cheeky Fortnite video, a spoof of Apple’s own 1984 “Think Different” advertisement.  

What’s amazing is that Epic is tackling Apple head on with a new age approach which combines social media, memes and action inside Fortnite itself. As one Twitter user put it, “Epic is tackling the real world through their metaverse. Wild!” It’s just incredible to watch this unfold and it seems like the only way to find out what will happen next is to keep an eye inside Fortnite. One can be sure that everyone will take sides. Already Google has removed Fortnite from its app store and a series of companies including hook-up app, Tinder, have come out on the side of Epic. The speed at which a similar antitrust lawsuit was subsequently filed by Epic against Google suggests that they were well prepared for this outcome. 

The official complaint documents filed by Epic against Apple and Google are well worth a read. One thing is clear: this isn’t about picking up some cash from Apple/Google – in both documents, Epic states explicitly so; the complaints for injunctive relief seek to address the dominance of Apple and Google’s respective app stores and hold both companies accountable for their behaviour. The aim here is fundamentally to increase the total addressable market for gaming: Epic provides the development tools (Unreal Engine) – shovels for their gold mine. Fighting for lower take rates (e.g. 10% vs 30%) for the entire ecosystem, whether on iOS or Android, means more revenues left for game developers, more games developed and more users of their tools. The end goal is a much larger, more diverse gaming ecosystem – of which Epic is at the forefront. Game on. 

Tom Nicholas’s history of the venture capital industry offers readers a comprehensive view of America’s pursuit of financial gain – from the financing of the whaling industry to the present multibillion-dollar venture funds. It’s long, sure, but it’s also very readable. We enjoyed digging into the legendary stories of how VC firms like Greylock Partners, Kleiner Perkins, and Sequoia launched companies such as Intel, Genentech, and Google. And we loved hearing about the origins o0f the VC industry in the 1800s, when whaling agents operated similarly to today’s VC firms. Not much has changed investors back in the day relied on a few home runs to pay for their unprofitable ventures. 

Sports autobiographies can be the perfect way to rest the mind at the end of a long, busy, hot day. You can also glean one or two rules and lessons from each, as many of the tactics and strategies employed by elite sports stars can be migrated into the world of business. However, you often have to shift through a few hundred pages of fairly mundane action in order to find the good stuff!

But England rugby coach, Eddie Jones, is different to other sports stars, and his recent autobiography, My Life and Rugby, starting with his early days growing up in Australia and ending with England’s defeat to South Africa in last year’s Rugby World Cup, is excellent in many respects. First up, it’s a rip-roaring read and sounds like it’s Jones speaking to you as the words jump off the page. Second, it’s packed full of life lessons he has learned throughout a long, hard and, ultimately, hugely successful career.

During his career, Jones has suffered a fair few defeats (who doesn’t in 30 years coaching rugby?) and he’s keen to make clear that the lessons he learned whilst getting beat – be it as a 17 year old playing grade rugby or coaching the losing team in a World Cup Final – are life’s most valuable. As the old cliched goes, there is no such thing as losing, only learning. And despite Jones’ enormous success and the great wins he’s had throughout his career, this is the lesson he’s most keen to reflect.  

What with the sweltering heat, ice cream played a central role in all of our weeks. And if you stand in the frozen aisle at a supermarket, you might think that we’re living in the golden age of ice cream, such is the hubris of our age. But that would discount the origins of ice cream and the entrepreneurial spirit of one of its early makers. Agnes B Marshall, aka the Queen of Ices, was a 19th-century culinary entrepreneur who chose to mix spices, meats, custards, and vegetables into her ice creams. Sounds odd to our fairly tame palates, but without Agnes we may never have had the foresight to begin work on edible ice cream cones, liquid nitrogen ice cream, and homemade ice cream makers. She was a true ice cream pioneer and for that, this week especially, we are all extremely thankful. Read more about this extraordinary woman and the history of ice cream in this cool read from The Hustle.  
 
What we're watching.

There’s an argument to say that hour-long crime dramas hit their high-point at some point during the 2010s. When scanning through Netflix now, it’s hard to find anything that’s been made in the recent past that compares to some of the shows that were put out during those golden years. True Detective. Breaking Bad. Bloodline. Fargo... world class TV... and all made in America!  

But British television was also producing some worthy additions to this genre at this time and The Fall is a show worth returning to as it’s aged well and its plot is as tight and gripping as ever. Led by the excellent Gillian Anderson and set in a very bleak version of Belfast, The Fall is crime drama done good, with slow moving plots, excellent action and direction and just enough (but not too much) grim and gristle. The 3 series put together between 2013 and 2016 stand up to its American contemporaries and, in our opinion, bests most of what’s been made since.  

The Edge is a great documentary for all sports fans about English cricket’s rise from complete turmoil into world beaters, exploring how they managed to galvanise themselves and come together in order to achieve top spot in the Test rankings under the guidance of Andy Flower. With first-hand, behind-the-scenes access, the cameras get up close and personal with the big personalities in the team, the intense camaraderie and bust ups and the big ups and downs involved in any epic journey and the huge emotional stress of the beautiful game. 

We revisited what might eventually make it into the “classics” section of popular TV, with the 2003 production of Children of Dune on Amazon Prime. With no intention of downplaying the success of Star Wars as a franchise, one can most certainly argue that Dune – underrated and under-appreciated in our humble opinion – deserves at least equal acclaim in popular culture. We did wonder why this never caught on, although we did have some theories: the Dune universe is complex, even for avid readers of Frank (and his son Brian) Herbert’s work. For a start, compressing such complex plots and back stories into 3 episodes might be a bit of a squeeze. 

Sometimes the best things take time to develop – perhaps with a much more generous budget, a more accessible re-make of the entire Dune saga could be a reality. Perhaps one by Netflix? 
 
What we're listening to.

Computational complexity theory attempts to formalise how hard it is to attack a well-posed problem, aiming to quantify the resources (the algorithms) required to solve them. It’s fascinating to think how some computational problems are so difficult that all we can prove is that no algorithm yet exists for solving them. In short, these problems are so complex that we don’t know how we’ll ever find an answer to them.  

Many of the problems do have algorithms that will solve them – they are solvable – even though they’re not obvious or knowable to us today. For example, nobody knew the correct algorithm for testing whether a number is prime until 2002. Now we do know that that algorithm exists.  

Scott Aaronson is one of the world’s leading thinkers in computational complexity and quantum computing. In this episode of Sean Carroll’s always mind-blowing Mindscape podcast, Scott and Sean talk about how to quantify complexity, and how that relates to ideas such as creativity, knowledge versus proof and what all this has to do with black holes and quantum gravity. 

If your brain hadn’t been fried by the heatwave, it surely will after listening to this episode! Enjoy!