What We’re Reading
A few good articles the Collab team came across this week …
Time and money
Great framing:
In grade school, I remember being asked, “What would you do with your life if you had a $1 million?” Perhaps the better question would have been, “How would you spend your time if you weren’t concerned with meeting your needs?”
Diligence
A process:
In a previous postI said “There are two kinds of pitches. Those that are clearly bad ideas, and those where it’s not clear at all if it’s a good idea or a bad idea.” The reason this is true is that some ideas simply will not work and can be ruled out immediately: perpetual motion machines, selling dollar bills for ninety cents, etc. Ideas that might work, on the other hand, often have some intrinsic element of the unknowable about them. This argues for setting constraints to bound the space of venture-investable companies but also that the constraints can’t be so tight they’re a process for picking winners. Creating a process that picks winners is the same thing as creating a machine that predicts the future. I don’t believe that’s possible.
Industry
A new market:
In China, young women like 23-year-old Huan Huan can earn up to $20,000 a month livestreaming themselves just doing regular things. That’s about 30 times more than the average college graduate makes at their first job. PG-rated livestreaming has become a $4 billion-a-year industry with nearly 350 million followers — more than the entire population of the United States.
Scale
Vanguard has reached the end of the road, says its founder:
The economies of scale just can’t keep going on much longer. We’ve only got 12 basis points to go, and let me say it: There’s an irreducible minimum, no matter how big you are, just for the fun of it, 8 basis points, cost a lot of money to run this business. We’re now talking about a 4 basis point improvement in cost. I just don’t think it’s worthwhile, hyping and trying to bring in more and more money.
Collaboration
This is great:
If you buy a Nissan Leaf in the U.K. in 2018, you probably won’t ever have to pay to charge your new electric car.
Anyone who has a garage will be able to sign up for a new program through the energy company Ovo, which will install a special charger, and then manage charging. At “off-peak” hours, when fewer people are using electricity and the cost is low, the charger will fill up car batteries. When rates go up, the battery will switch to charging someone’s home or selling energy back to the grid.
Distribution
This isn’t new, but Ray Dalio does a great job highlighting this problem:
There has been no growth in earned income, and income and wealth gaps have grown and are enormous. Since 1980, median household real incomes have been about flat, and the average household in the top 40% earns four times more than the average household in the bottom 60%. While they’ve experienced some growth recently, real incomes have been flat to down slightly for the average household in the bottom 60% since 1980 (while they have been up for the top 40%). Those in the top 40% now have on average 10 times as much wealth as those in the bottom 60%. That is up from six times as much in 1980.
Have a great weekend.