Weekend Reading #84
Photo by Caleb Woods on Unsplash
This is the eighty-fourth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 11th September 2020.
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What we're doing.
As our private deals network, 3BC, continues to grow and mature, the types of issuers that we’re getting the chance to work with are maturing, too.
We’ve always been reasonably agnostic about the type of opportunities that we want to host, but as we gain experience, glean feedback from our investor base and learn about the type of business that we want to be, we feel we are moving towards a focus on a certain type of deal and a certain type of issuer.
Typically, we’re finding that our sweet spot is raising between $1-10m, for companies who are revenue generative and have very experienced management teams. Whilst we’re always open to any interesting idea, technology is at the forefront of the deals that are gaining interest on our platform. The deals that we’re looking to host are beginning to centre around this core set of values and characteristics.
That’s not to say that we won’t look at deals that fall outside of these parameters – we’re always interested in interesting opportunities – but it’s quite pleasing to see that as our community grows and we gain feedback and traction, the size and maturity of deals we’re looking to host is changing and that is allowing us to be a little more selective, helping us to find a niche and double down on what’s hitting the spot with our investors.
From a fund perspective, we spent the week watching the volatility in the US markets. Interestingly the rest of the world, particularly some of the old emerging markets, were relatively unaffected. We also spent a lot of our time researching digital asset opportunities and learning more about the space. We cannot believe the innovation and excitement unfolding with each passing week. The opportunities are sizeable and the victims on the wrong side of this innovation will likely not know what hit them.
What we're reading.
Netflix impresario Reed Hastings released his autobiography/business book this week and we’re pleased to report that it’s well worth a read for anyone interested in growing a business from the ground up. Hastings is famous for the culture that he has attempted to instil within Netflix through the years and whether you agree with what he set out in his infamous 127-page Powerpoint, you can’t argue that the secret sauce he mixed up has had some awesome results.
As we know, Netflix began its life as a DVD-by-mail service in 1997 and it has grown (not always in a straight line) to become a streaming juggernaut with nearly 200 million subscribers and monthly earnings of just under $1bn. Hastings has been there steering the ship since day one, and his management philosophy is a key reason for that success, not to mention his foresight in spotting how super-fast internet was set to change the world.
In his book, No Rules Rules: Netflix and the Culture of Reinvention, Hastings spells out how he built Netflix's unique way of doing business, including illustrating how he treats his staff, builds teams and rewards individuals. Worth a read if you’re leading a team or part of one.
If you’re into weird, fantastic fiction, then Stephen Toltz’s debut novel, A Fraction of the Whole, is a novel for you. The fact it was Toltz’s debut is remarkable, given how experimental, confident and seemingly random the plot and characters are. Toltz was 36 when it was published in 2008 to great acclaim and it is pretty much unlike any other book you’ll have read.
Roughly, the novel follows the story told by the narrator Jasper Dean, who we first encounter in an Australian prison. Jasper wants to explain how he got there and so for the next 700 pages, Jasper tells his story, plenty of which revolves around his late father, Martin, a restless, paranoid, anti-social wannabe philosopher who died hated by his countrymen, and his mother who killed herself by blowing herself up. Doesn’t sound cheery, but we promise you it is.
There’s a lot to get through and this tome flips between narrative to diary entry to pages of dialogue only and everything in between. It races along and the language and laughter that Toltz imbues throughout all his characters makes this, oddly, a light, funny and easy read, which is saying something giving the heavy nature of the subject matter. You’ll be pleasantly exhausted by the end of this wild, looping rollercoaster of a book but it’s worth it.
We continue to watch from the sidelines as Epic’s battle with Apple rages on, with Apple filing countersuit against Epic for breach of contract – Techcrunch's coverage of the return volley here includes the full version of Apple’s reply filed in court, packed with some strong words: “Wilful, brazen and unlawful”. This is one battle that will be playing out over the coming months and years, and which has profound implications on how the Metaverse ultimately unfolds for every one of us.
While on the topic of the Metaverse, this two-part note on Tencent and its uniquely advantageous position is a must-read. Tracking the evolution of the company from an early Internet Pager (remember those?!) service to what is presently the world’s most successful capital allocator, this is a highly educational, detailed piece that ties in well with one of the biggest emerging opportunities we see right now.
Back in the real world, Wired magazine have put together another fantastic article, this time on sandwich chain Pret à Manger. The ubiquitous white star on red/black backgrounds had its existence so tightly bound to the fortunes of London that the onset of COVID and the violent swing towards working from home has left its shops in the capital struggling. Its plans to adapt, like every other business, may or may not succeed, but at the very least, the offer of 5 hot drinks a day (spaced 30 mins apart) for £20/month might be just enough to break the endless WFH routine and get the caffeine-heads out and about.
Camille Russo’s The Infinite Machine – How an Army of Crypto-Hackers is Building the next Internet with Ethereum, tells the story of Ethereum and its enigmatic founder, Vitalik Buterin from the very beginning. It is a riveting tale of how Buterin generated his idea and how the community came together to build what we think could become the base rails for the new financial system. After reading this book we have an even deeper understanding of the stories behind the people we read about and follow every day. For anyone who wants to understand the future, this is a must read.
Finally, while we’re sure that the personal, human touch is what makes our content engaging, this post in the Guardian, written by OpenAI’s GPT-3 language generator, does raise the question about how human a machine can become. Granted there has been some editing and chopping from 8 different versions of work by GPT-3; either way, the ending comments from the Editors at the Guardian is food for thought for many journalists:
"Editing GPT-3’s op-ed was no different to editing a human op-ed. We cut lines and paragraphs, and rearranged the order of them in some places. Overall, it took less time to edit than many human op-eds."
What we're listening to (and watching).
An excellent episode of the Tim Ferris podcast dropped this week when Tim had and enlightening conversation with Kelly Slater, the man widely considered the greatest surfer of all time. Tim and Kelly discuss all sorts, obviously covering Kelly’s surfing career but also looking into his business career too. Kelly’s business, Kelly Slater Wave Co, looks set to transform the world of surfing with its technology that creates man-made waves from solar power. Cool, huh.
Tim and Kelly also dig into routines, how to recover from setbacks and dreaming big. Even if you’re not into surfing or perhaps haven’t heard of Kelly Slater before, there is something in this podcast episode for you.
The Premier League returns this weekend and our team is properly split between Liverpool and Leeds United supports, so it's fitting that the opening weekend fixture for Leeds’ return to the top flight is at Anfield. Still minus the crowds sadly, this is still a fixture we are eagerly anticipating at Three Body Capital!