Originally posted as a Twitter thread on January 10, 2021
The internet drove instant, rich, free communication in a form humans have never before seen. With that comes good and bad.
*Right or wrong*, when the leader of a country is kicked off a massive communication network, it creates a geopolitical risk that will…
…likely undo this trend and create many regional, more siloed networks. It has to. It’s simply too much risk for another country to allow a foreign private company (or the US Govt which controls this particular private company!) to “control” the means of communication.
I had previously written about this re: payment networks (when I was at Visa, we stopped payment processing in Crimea…per US law). Again, right or wrong, friend or foe, it is TOO MUCH GEOPOLITICAL RISK for countries to allow their networks to be domiciled elsewhere. Fin. https://x.com/arampell/status/1158952157137297410
Originally posted as a Twitter thread on December 25, 2020
Real Estate: location location location
Startups: timing timing timing
Obviously none of this is to discount the teams that make real estate projects or startups successful 🙂 But right team + wrong timing or right team + wrong location != success
Originally posted as a Twitter thread on December 02, 2020
Are high salaries the *cause* or *effect* of expensive housing? In NIMBY-prone areas (hello SF!) where supply is artificially constrained, companies anchored to the geography need to pay a high enough wage to attract talent, which then anchors rent/mortgage payments
Prediction: the current remote-work salary adjustment concept, the Marxian “from each according to his abilities, to each according to his location,” will not last. Why pay people more simply because they choose to live in a more expensive area? Pay them more if they are good!
So looking at lower-cost areas, and paying a discount to prevailing SF wages to get to “parity,” is a crutch of sorts to get to a more sensible end-state: pay a prevailing wage to get the talent. And then let’s see what happens to housing prices…
Home prices will always be based on supply and demand, of course – WFH doesn’t change economics. But “desired location to live” is going to drive that more than “high wage employers” — where those wages could conceptually plummet given increase in supply (global worker pool)
Originally posted as a Twitter thread on November 18, 2020
The absurdity of closing ALL SCHOOLS based on the positivity rate of a (presumably selection-biased sick?) less than 1% sample of the population should offend anyone who understands what a fraction is
NYC had 66K tests out of an 8M population. If you only test sick people, you will get a high positivity rate! If you over-test healthy people, you could make Ebola seem pleasant based on its “low positivity rate”
Positivity rate is garbage
Originally posted as a Twitter thread on August 28, 2020
There’s been a lot of misinformation about IPOs — particularly around the narrative of “intentional underpricing” and subsequent IPO pops / “money left on the table.” IPOs aren’t perfect, but the problem isn’t the pop — a sideshow caused by quirky supply/demand imbalances.
The things to fix are aggregating the most demand, blurring the lines between private and public for a seamless transition to being public, and more thoughtful lockup releases, while also ensuring that a company is sufficiently well capitalized.
Many are celebrating SPACs and Direct Listings, which both have their place as valuable tools, as the “death” of the IPO *because* of a misunderstanding of what causes a pop. A price without a quantity is not a price: block sales happen at a discount, M&A at a premium.
But today, an IPO remains the best way to raise a large block of primary capital. It *should* improve, but the way to measure improvement is not pop against low float, but on aggregation of the most demand (*all* investors) in a way that sufficiently capitalizes the company.
There’s a lot more data and examples to back this up in this piece which @skupor and I put together. It’s long but hopefully shows exactly the dynamics and game theory in play around how a company goes public and what’s in a price: https://a16z.com/2020/08/28/in-defense-of-the-ipo/
Originally posted as a Twitter thread on August 16, 2020
Today is August 15, the 49th anniversary of the de facto end of Bretton Woods, creating the fiat currency world we know today. Bitcoin’s birthday is October 31, 2008, but it has a spiritual secondary birthday of today — the widespread beginning of fiat money.
Until August 15, 1971, dollars were backed by gold at a fixed rate of $35/ounce. The dollar was the world’s reserve currency, and underpinning this reserve was this gold backing. Any foreign government could convert their dollars to gold.
At least, they could *conceptually* convert dollars to gold. In reality, by 1971, the US was “writing checks” (printing dollars) that the gold vaults couldn’t “cash” (or metal!) — a run on the gold, so to speak, would metallurgically bankrupt the vaults.
Before 1971, there really wasn’t a notion of purely fiat money with floating exchange rates — or at least not one that was taken seriously. The US was the manufacturing center of the world and dollars were the needed, default currency, backed by gold.
Nixon delivered the following speech on August 15th, announcing this change and codifying it with Executive Order 11615, closing the gold window. It never opened again.
What’s really fascinating is that because gold backed the entire monetary system, owning (non-jewelry) gold was *illegal* from 1933 until 1974. Gold was the settlement ledger for currencies, the true reserve, although the more easily portable/official reserve was the US dollar.
There are many things about a gold standard that make little sense (eg, the supply can increase with a newly discovered mine in South Africa or Russia!) and its inflexibility provides fewer tools for dealing with economic shocks like the Covid one we are dealing with now.
But more so than anything else, gold represented a de facto store of value — and this was *codified* into the financial system until 1971. Seeing as gold now trades at >$2000/ounce, vs $35/ounce in 1971, there’s clearly a divergence between fiat and gold.
And yet gold is: heavy, next to impossible to send around the world (think checks are bad?), hard to divide, and hard to verify. This was NOT a problem before 1971 because the US dollar was none of these things and yet had the backing of/convert ability to gold!
This is why I consider today to be the second birthday of Bitcoin. From 1971-2008, there really wasn’t a financial instrument that had “fixed” dimensions, a reputable store of value but with an easy form of settlement/transmission, which the US dollar until Aug 15 provided.
Given how long it’s been since gold was a reserve currency, and how antiquated gold vaults seem, Bitcoin — for all its flaws — is a logical and superior successor. Particularly given how much money is now being printed by every government, kept in check by…nothing.
There’s an opportunity to turn remote education from a weakness to a strength — from a badly rendered “sage on a stage” (constant in education for 100s of years, but *worse* online!) to individualized instruction. To see why, let’s take a trip to 1984 — not Orwell, but Bloom
Prof Benjamin Bloom wrote a seminal work in 1984 showing that individualized instruction lifted outcomes by 2 standard deviations — outperforming 98% of regular students: http://web.mit.edu/5.95/www/readings/bloom-two-sigma.pdf
But he remarked, it was “too costly for most societies to bear on a large scale”
But the Internet has solved this problem, conceptually! What we need(ed) was a forcing function to abandon the status quo, which Bloom showed is demonstrably worse than individualized tutoring. We potentially have that in Covid, which has incredibly made the status quo *worse*
But Zoom school has none of this. It’s worse in every way than what was already a proven-to-be-suboptimal model for education!
I hope some forward thinking schools will try to go on remote education offense, whereas most are just going on “how do I turn this thing on?” defense.
I encourage everyone to read the Bloom paper. We now have the means (so many great tutoring platforms for a fraction of the cost of private school). We have the motive. And with Covid, we have the opportunity. Fin.
”It’s temporary”: there is NOTHING else to do, people stuck in homes, kids cannot be shipped off to school or daycare, therefore MORE work gets done + people always accessible…but upon opening, people will start playing hooky
“It’s permanent”: the tools for WFH are great (think Slack/Zoom), meeting length gets collapsed to the core substance (1 hr -> 30 mins etc), less travel/commute, accountability via more trackability…
For small companies, “it’s permanent” could have a seismic change on their financials given real estate costs as a % of revenues. But IMHO jury still out on productivity gains/losses given unique nature of this forcible SAH (stay at home!), not just WFH, experiment
And clarifying the first point, parents whose kids are stuck at home cannot go to the beach / play hooky because they need to watch the kids 🙂 Versus normal times when they could.
Originally posted as a Twitter thread on November 06, 2019
Net Promoter Score (NPS) is, when used properly, a great metric for many businesses. But many startups are trying to tout high scores, not *accurate scores* which is both dangerous and intellectually dishonest.
The classic question is “On a scale of 0 to 10, how likely are you to recommend this company’s product or service to a friend or a colleague?” — so if you have no organic traffic but a high NPS, something doesn’t jive / one of those measurements is wrong
Many companies only (whether by accident or on purpose!) survey their satisfied customers, those who made it through a giant funnel…a form of denominator dishonesty that makes it seem like things are rosy when they are not.
10% NPS might sound terrible, but it could mean you surveyed 10 customers and got nine 8s and one 10. NPS *should* be both a leading and lagging indicator of retention and organic growth, but it loses all meaning when it’s gamed to look rosy. Survey everyone! Face the data!
Originally posted as a Twitter thread on October 27, 2019
This is the top “story” in the NYT app right now. Such a ridiculously sensationalist headline — confusing correlation and causation isn’t enough, might as well figure out how to present a broad policy (Opportunity Zones) through the cartoon-like representation of a “villain”
“Symbol of 80s Excess Stands to Benefit from Flu Shot”
“Man Who Once Met Putin Benefits from Opportunity Zones, Raising Questions of Russian Influence”
“Mnuchin’s High School Girlfriend, Fluent Russian Speaker, Owns Property in Turkey, Raising Questions on Kurdish Policy”
“Grandchildren of Symbol of 1890s Greed, John Rockefeller, Stand to Benefit from Vaccine Developed by Salk”
