Weekly Wrap (#10)
Sunday reading because you're probably not busy at all😇
this is just my take on what I thought was worth reading/watching/listening to over the past week or so. This week it happened to be a bunch of podcasts. For those of you who follow me on Twitter, you may have seen some or all of this already.
Happy Sunday to all of you!
[Podcast] Frank Slootman: creating a performance culture
[Podcast] Daniel Ek: rethinking missions and meetings
[Podcast] Chamath Palihapitiya: personal and investment narratives
[Interview] Bill Ackman: another lesson on narrative
[Podcast] Jerry Seinfeld: creating systems and routines for creative work (this one would be my pick if you only had time for one extra podcast this week)
[Interview] Fred Liu: investing in winner-take-most, tech in Asia, and Afterpay
In case you missed it on Twitter
How Buffett de-risked his investment in the GEICO turnaround. Check out his letter from 1976. Large TAM + large gap in operating costs + market doubt over short-term issues= “a really attractive situation.”
I always have been attracted to the low cost operator in any business and, when you can find a combination of an extremely large business, (ii) a more or less homogenous product, and a very large gap in operating costs between the low cost operator and all of the other companies in the industry, you have a really attractive investment situation. That situation prevailed twenty five years ago when I first became interested in the company, and it still prevails.
Also, Exor’s John Elkann is investing in a Chinese luxury brand.
Frank Slootman (Snowflake)
[As an immigrant] "my credentials were hard to pronounce. My initial (career) strategy was to take on challenges that nobody would touch with a ten foot pole. While I didn’t enjoy working on these crummy businesses it was incredibly informative.”'
"Forget playbooks. With playbooks you're a prisoner of your own experience."
"While we're sitting here, the competition is out there plotting to kill us. Human beings naturally gravitate to a glacial pace, they lack urgency."
Daniel Ek (Spotify)
Podcast, transcript: another chat with a tech CEO but with a very different focus. This conversation was about his own background and the culture he built at Spotify. He seemed very explicit in questioning accepted routines that eat up productive time. What stood out to me is how he refused to let “corporate convention” dictate how he structured his day, his meetings, and the “missions” framework for managing talent. is take on meetings reminded me of how many companies waste time reading out the earnings release on the quarterly call.
“The reality is a lot of knowledge workers that work in companies, most of the work that they’re doing is done in meetings. And it’s surprising to me that we spend as little time as we do on actually thinking about the meetings we’re having, if they’re productive, if they’re worthwhile, and if they’re delivering on what the ambition was.
More often than not, that I to prep the people on how to do meetings and set it up. I do read the meeting material beforehand. I prefer spending only five minutes in the beginning rereading the material or the person reading a summary out of it and states the reason for the meeting up front. And then we can spend more time talking about were these the right questions?”
“Because I was thinking about my own journey at Spotify and a lot of times, the easy way to say it is I’ve had the same job for 14 years. But obviously, my job looks nothing like it from the beginning because in a startup, it’s very different than running a public company with a global presence, et cetera, et cetera. And so when I summarize that and I think about it, and part of the reason why I’m still excited about the job I’m doing every day and not just the company is because I’m probably on my eighth job at Spotify. And what I came to realize is that part of the reason why the tenure of people at companies end up being relatively short, certainly in Silicon Valley and a lot of tech companies, is that this job journey when you deal with startups is it doesn’t always confirm to better titles. Sometimes you retain the same title, but in reality, your job looks very different.”
Another evergreen quote:
“We believe that speed of iteration beats quality of iteration, which is why we’re not big on bureaucracy.”
Chamath Palihapitiya (Social Capital)
Podcast, my Twitter notes: Chamath talked about his longer-term plans (basically creating different pockets of capital and then taking the holdco public) and his emerging manager project. I learn a lot from how he builds narratives: both around his personal journey and growth, as well as around his investing themes, connecting big challenges like climate change to ideas/themes today. He is also very adept at using the new landscape of Twitter and podcasts to market his business and grow his network.
Bill Ackman (Pershing Square Capital)
Interview, my Twitter notes: Similarly, check out this conversation. On the surface it’s about his strategy (“growth annuity” stocks, activism, SPACs). The real takeaway is the narrative he built around his personal turnaround (remember Valeant, Herbalife, JCPenney).
Min 30: "It's hard to have good judgement if you're distracted at home."
Min 35: "The reason why we survived is we changed our capital structure" (launch permanent capital vehicles)
Podcast, my Twitter notes, transcript: This one I highly recommend for anyone doing creative or other “knowledge work” and looking for input on how to structure your daily systems and habits/routines. He talked about how to build systems that actually work (keep it simple - see the dog quote), his career as a comedian, how writing helped him survive. I enjoyed this conversation a lot.
"You’ve got to treat your brain like a dog you just got. The mind is infinite in wisdom. The brain is a stupid, little dog that is easily trained. Don't confuse the mind with the brain. The brain is easy to master - through repetition and systematization."
Anger as fuel after being rejected at the LA Comedy Store early in his career:
"I was resentful. I used that. It was just fuel for me. She wasn’t stopping me. I would say I was a 3 day a week guy in terms of my writing discipline. And I went from 3 to 7 right there."
Fred Liu (Hayden Capital)
“How do you maximize the handful of companies that you're going to get right. Every name that we're investing in, we're looking for them to return multiples of our investment and hopefully be able to return the entire fund, essentially. So, in that way, it's very similar to a growth equity or a late-stage venture fund. We're looking for companies that already have product market fit, that already have a sensible monetization model that actually matches the service they're providing or the product that they're providing.
We have certain, like signposts for our thesis for what will get them to that point. And we're looking for indicators that our thesis is on track. We operate in a similar manner (to venture funds). So, we start at like a five percent position because they are early-stage companies. That thesis may not be proven out. And so, we have capital mentally allocated to these companies or we know where the capital would come from as they hit certain thresholds or certain thesis points and as the companies progressed the way that we think they will.
Because these are winner take most types of companies again, the larger they become, the less risky the business becomes because they become more entrenched and pull away from all of their competitors, which allows them to also become a bigger position over time. It justifies making a larger position size because it is such a dominant flow company by that point.”