Conversation between Patrick O’Shaughnessy and Brad Gerstner

I haven’t listened to podcast for a while. Simply because I read a lot more than I listen to podcasts. But this podcast between Patrick and Brad is very good, packed with insights, nuances and common sense. Though there are a few points that I don’t fully agree with him, I learned a lot from his talk. A few key highlights are quoted below, but do give it a try. It’s worth for time if you are interested in technology, business and investing.

Buffett, although he comes out of the quantitative school, he has a quote where he says: my highest returning investments, those that really made the cash register ring, have come from simple qualitative insights applied to a big business opportunity

Source: Invest like the best with Brad Gerstner

While we’ve been talking about the cloud, since really 2002 and 2003, and I remember by 2010 and 2011, we actually started decelerating rates of growth of a lot of cloud companies, people started wondering: Did we overestimate the cloud? Just as they wondered in 2005 and 2006, after the demise of companies like Danger, whether we overestimated mobile. And the reality is we weren’t even getting started. So, we look at, we break down the backend of cloud software really into system infrastructure, the infrastructure software that enables companies to do the things they wanna do in the cloud and the application software. When you look at the TAM (total addressable market) of all three of those, by our account, we are still a decade away from having 50% penetration to the cloud.

Source: Invest like the best with Brad Gerstner

For almost all investors, a hugely disproportionate amount of their career profits that they generate, whether in public markets or private markets, will come from a few bets, a few great investments. And if you succumb to the ego that is easy to succumb to which is if I study it hard enough, I’ll be able to figure it out. You look at your Bloomberg everyday, and you have 100 different opportunities you can go and invest everyday and maybe a couple of hundreds of opportunities. People tend to overtrade, invest in too many things. It divides their attention. And so the opportunity cost is they are not there when the fat pitch comes. So they don’t have capital available when the fat pitch comes. And I’d argue for myself at least to less happiness because I can’t go as deep on a particular subject as I want to go because I am managing too many things at once…

Source: Invest like the best with Brad Gerstner

Far more has been lost betting on the end of times, trading out of your good ideas, trying to hedge out of Covid than just making great bets on great companies and allowing them to compound.

Source: Invest like the best with Brad Gerstner

Right? Is going to this dinner, is having this coffee, is having this meeting, is joining this board, is making this investment, is it an easy yes? If it’s not an easy yes, then it’s an easy no. Organizing your life with less, but enriching the stuff you do choose to do. Your children, your interaction with friends and family, your time in nature, your time spent with a couple of management teams, instead of divided across 15 boards. I can’t promise that leads to maximum financial return for you. But I am pretty confident that your return on happiness is going to be pretty extraordinary

Source: Invest like the best with Brad Gerstner

Weekly readings – 24th August 2019

Spotifyโ€™s pitch to podcasters: valuable listener data

Netherlands’ Building Ages. How cool is this? It must have taken quite some time and effort to build this map.

OuiWork? The quick case for WeWork as an actually disruptive business

Apple Targets Apple TV+ Launch in November, Weighs $9.99 Price After Free Trial

Where Top US Banks Are Betting On Fintech

Manufacturers Want to Quit China for Vietnam. Theyโ€™re Finding It Impossible

Appleโ€™s New TV Strategy Might Just Work

MoviePass database exposes 161 million records. Much as I am grateful to MoviePass, perhaps it’s time for the company to be shut down

Starbucks, monetary superpower. Let me give you a notable quote to get an idea of what this article is about

Starbucks has around $1.6 billion in stored value card liabilities outstanding. This represents the sum of all physical gift cards held in customer’s wallets as well as the digital value of electronic balances held in the Starbucks Mobile App.* It amounts to ~6% of all of the company’s liabilities. 

This is a pretty incredible number. Stored value card liabilities are the money that you, oh loyal Starbucks customer, use to buy coffee. What you might not realize is that these balances  simultaneously function as a loan to Starbucks. Starbucks doesn’t pay any interest on balances held in the Starbucks app or gift cards. You, the loyal customer, are providing the company with free debt. 

Now bigger than eBay, Shopify sets its sights on Amazon

Inside Indiaโ€™s Messy Electric Vehicle Revolution

Weekly readings – 22nd June 2019

โ€œAmazonโ€™s Choiceโ€ Does Not Necessarily Mean A Product Is Good. Amazon’s Choice is a popular trigger to shoppers about a product’s quality and popularity. This piece sheds some light on the feature.

Algorithms Wonโ€™t Fix Whatโ€™s Wrong With YouTube.

How a janitor at Frito-Lay invented Flaminโ€™ Hot Cheetos. An amazing story about the VP of PepsiCo from a janitor to a C-Suite executive of a world class corporation. “I do have a Ph.D.,โ€ he responded. โ€œIโ€™ve been poor, hungry and determined.โ€

This psychologist explains why people confess to crimes they didnโ€™t commit

IAB Podcast Ad Revenue Study: An Analysis of the Largest Players in the Podcasting Industry

Reuters Institute Digital News Report 2019. A very interesting study on consumption of digital news across countries

Tesla, Facing Setbacks and Skeptics, Tries to Get Back on Course. A nice overview of Tesla’s situation

Why Googleโ€™s Advertising Dominance Is Drawing Antitrust Scrutiny

The ambitious plan behind Facebook’s cryptocurrency, Libra. A quick overview of Libra, if you don’t have time to read the supporting documents released by Libra Org.

Scooter Breakdowns Weigh on Lime

Podcast culture in Vietnam soon?

Podcast has been the rage these days in the US in terms of the medium to consume and distribute information. I can imagine why that is the case. There is a lot of navigating through traffic on the streets, doing mindless work at home and at one’s job or working out in a gym. Users need something to help them power through the boredom without using their eyes. On the content creator side, a podcast episode takes less work and time to produce than a video. As long as you have a reliable recorder, a decent Internet connection and more importantly, what to share with the world, that’s enough for a podcast episode.

I have been wondering whether Vietnamese folks at home will like podcasts as much as we do here in America. I quickly polled two friends of mine who are millennials and work professionally in the biggest city in Vietnam. They both told me that they didn’t think podcast would interest Vietnamese people as our folks nowadays tend to consume more tabloid news and instant gratification. There is some truth in that.

There is coverage on Vietnamese people’s losing interest in reading. Reportedly, my countrymen on average read one book a year. If a book is 300 pages long, that’s less than one page a day. I often see on my Newsfeed a lot of junk content shared by my connections. As a huge fan of reading and consuming quality content, that’s a seriously concerning sign. I suspect that there are several reasons for that. Firstly, we were dealt with a bad hand growing up. Reading is not part of our curriculums at school. We don’t get to know the beauty of reading when we are young. I didn’t. I grew up learning only maths. Luckily, I went to a high school where a lot of my peers read and the habit rubbed off on me. Secondly, there is not a whole lot of quality content in Vietnamese. Even though English is popular now among the young, folks still prefer consuming content in our native language. If they felt comfortable with English podcasts, there is no shortage out there. But content in our mother tongue is in short supply (or at least none that I have ever heard of). Sometimes, there are some quality pieces, but there is no consistent source of audio content on the market.

Nonetheless, there are signs that I think are favorable for podcast consumption as a trend. First, terrible traffic in Vietnam. If you ever travel to Hanoi or Saigon (Ho Chi Minh City), you’ll experience the terrible traffic there. There is traffic jam at ALL times from 7:30am to around 7pm every week day. My house in Vietnam is 10km away from the city center where I used to work. Every day, it took me at least an hour in total to commute back and forth, let alone time to meet friends. As in the case here in the US, folks can listen to podcast instead of music. Another favorable condition is that mobile Internet in Vietnam is cheap. About 200,000 VND, you can have decent speed and data packages to download podcasts. Plus, young professionals make up a big part of the population in Vietnam. My impression is that a lot of them want to learn and grow. The problem, as mentioned above, is that they don’t seem to find content in Vietnamese that they can consume comfortably. Last but not least, there are many interesting Vietnamese folks out there worth interviewing, from entrepreneurs, designers, chefs, actors, mathematicians or authors.

I hope that in the near future, Vietnamese people will read more and the podcast culture will catch fire for the sake of knowledge consumption and advertising hidden talent and minds.

Podcast’s rising popularity and implications

When a new service/product rises, it usually elevates several support services/products as well. For instance, smartphones’ popularity was piggybacked by the rise of support services or products such as phone maintenance, smartphone cases and applications. The same case can be applied to podcasts. As podcasts continue to capture consumer interest with 2018 as the banner year, I suspect that support services and the whole podcast ecosystem will come alive in the near future.

Content creator

The presence of Spotify offers content creators an additional stream of revenue. If featured, creators can earn money whenever their content is consumed, in the same way that artists are compensated for their songs. Of course, content owners can still generate income from the tried-and-tested method of advertising. But having two streams of revenue is definitely better than having only one, isn’t it?

In extreme cases, some podcasts can be acquired in exchange for exclusive access as platforms engage in a hunting race to woo users. Creators with unique insights or knowledge will be better compensated for their hard work than they would in the past. Hence, niche podcasts will be springing up like mushrooms after the rain.

Content platform

Content creators can publish their work everywhere now, whether it’s Apple Podcast, Stitcher or Spotify. A normal piece of content is hardly exclusive. However, a platform needs exclusivity and original content to differentiate itself. Hence, if you are a comedian or an expert in a field such as archaeology, astronomy or economics and you deliver great content, you may be cast for an original show and earn money for your knowledge. Platforms are likely going on a shopping spree to secure highly sought-after content just like Spotify did with the acquisition of Gimlet Media. That way, the acquirers can reduce marginal costs to almost zero and become more profitable as the rate of consumption grows.

Support services

We already saw Anchor, a startup that specializes in podcast distribution, acquired by Spotify shortly after Anchor was founded. As more podcasts are created, marketers need tools to easily edit audio and turn audio into text. Transcripts will facilitate interaction with users and a boon for their SEO. In that sense, I expect that startups such as Descript will see more opportunities in the coming months.

More podcast consumption means rising interest from advertisers. As a consequence, there will be demand for data analytics to optimize advertising. Brands will be willing to pay to link podcast advertising with conversion into actual purchase, whether the purchase is online or offline.

Video: Tesla and the nature of disruption

I came across this very interesting conversation between Ben Evans and Steven Sinofsky on Tesla and disruption. When we say Tesla is disrupting, what exactly is it disrupting? Also, who is Tesla truly competing against? Between the electric part and autonomous part, which one is bigger? If you are interested in Tesla, have a listen.

a16z recently started to release their podcast episodes on YouTube, which I truly really appreciate. I learned a lot from them and it serves as an inspiration with regards to B2B marketing/content marketing.

Podcast: Russell Brand and Candace Owens

A friend recommended to me the interview below that featured Russell Brand and Candace Owens. Even though I still have 17 minutes to go, I think I have enough to say a couple of things about it.

Extremisms

From my perspectives, the two people in the clip came from two opposite extreme positions in a variety of topics, whether it was about the role of governments, the entitlement mindset, socialism, capitalism… The issue with coming from an extreme position is that it is too generalizing and often times it is right in a few scenarios. Take socialism. Candace cited multiple times Venezuela as the proof of socialism as a failed social system. On the other hand, Nordic countries have thrived in the past decades because of governments and societies that are more socialist than capitalist. Yet, such cases are conveniently ignored when critics of socialism take a stage and voice their criticisms.

Decentralization vs Centralization

Decentralization has become increasingly popular nowadays whether you talk about governments or cryptocurrency. Fans of decentralization don’t hesitate to criticize governments and centralization. Don’t get me wrong. A lot of governments fail at their jobs and deserve criticisms. Essentially, governments are run by human-beings and we are naturally flawed. We tend to succumb to excessive greed and thirst for power. That’s why we need checks and balance.

Nonetheless, centralization has been there for centuries. And it happened that way for a reason. If it were so bad, why wouldn’t something like centralization happen earlier? We may have the technology in what powers bitcoin or cryptocurrency to actually have a shot at scaled decentralization. When that will happen remains unclear, but I am amazed at the tendency to dismantle completely centralization by some crypto fans.

I believe it is a more efficient way between the two concepts at hand (centralization vs decentralization) to distribute resources and run societies. If there were no banks, how much less efficient would our societies be? If everybody had to keep his or her record and there were no trusted intermediary, how much more time and effort would be wasted to do what we normally do with government agencies and banks.

Additionally, many are concerned about growing influence of big corporations on our societies. Yet, without governments, who would be able to keep those corporations in check?

Conclusion

The interview itself is a refreshing one that features a civilized argument littered with disagreements. A rarity nowadays.

There are points from each side that I agree and disagree with. One of the things I have learned in the past two years is to have strong opinions and loosely held views. Or in layman’s terms, I avoid extreme positions. Particularly, regarding very complex issues such as socialism, centralization vs decentralization and macro-economics, just to name a few, I believe the extreme perspectives are even less accurate or helpful. You can’t tell me a government-led society won’t work when there is Singapore. You can’t tell me socialism won’t work when there are Nordic countries.

Each country is very different. One concept that works for one country is not guaranteed to work in others. Using one particular failure/success to dismiss/over-hype that concept is, in my opinion, not right. What is failing is the execution. Not the concepts. What matters is reality. Whatever works works, regardless of what it is called.

A podcast worth listening to

I enjoy listening to episodes in the Knowledge Project by Shane Parrish. There are a lot of interesting and helpful lessons from conversations between Shane and his guests. The one episode I love the most is here, between the host and Naval Ravikant. I have listened to this episode for at least 5 times simply because it is so good.

Naval talked about a wide range of topics. The following points stood out the most to me:

  • The importance of reading and how to read books
  • The importance of habits
  • Happiness & anger
  • The meaning of life

It is a two-hour conversation. A bit long but definitely worth your time. If you look for something to listen to in your car, in the gym or just to have a peaceful time at a coffee shop, I’d highly recommend it. After that, his conversation with Tim Ferriss is a good follow-up.

Have a good weekend ahead!