#4: Trying Out Something New - Recently Read!
Bringing you 5 standout articles taken from long hours of scouring tech & finance content
Trying a new format!
Got held up pretty bad last month as work was busy, but all the while I kept spending my time reading newsletters and interesting articles. So I’m trying a new format where I outline my thoughts as I stumble upon articles that grip me so.
Hopefully I’ll be able to expand on some of my mini-takeaways later on, but I hope that I can give you, my readers, an exposure to some things that you might’ve missed in the intersection of tech & finance, or a new provoking way to frame your thoughts.
Let me know if you have any comments or feedback!
Articles of the Week
Jeff Bezos’ last letter to Amazon shareholders
It’s pretty amazing that in light of Amazon’s workers voting against forming a union (and the subsequent media framing that it is a win for corporate Amazon), Bezos instead saw this as another aspect that is to be improved upon, for Amazon to become “Earth’s Best Employer and Earth’s Safest Place to Work”.
Personally, the quote below made a huge impression on me. I love how he puts what I’ve been struggling to put into thoughts in regards to myself as a person.
On the details, we at Amazon are always flexible, but on matters of vision we are stubborn and relentless. We have never failed when we set our minds to something, and we’re not going to fail at this either.
What happens after a pandemic? A mini-boom.
One metric to rule them all: the North Star Metric
The north star metric (NSM) is how well the organization is executing your strategy. First few steps:
Define your strategy
Define your NSM
Allocate resources to improve in your NSM
The NSM should be intuitive and improvements should drive more value for the company. Alex Taussig (of Lightspeed) cites a few examples:
Netflix: time spent streaming
TripActions (corporate travel management): travel bookings under management
Faire (B2B marketplace for retailers to buy indie brands): share of wallet of buyers/retailers
Elaborated more: Often a wholesale marketplace will “land” a customer with a single SKU line that has high purchase frequency and low margin. The goal is then to “expand” through cross-sell into the other buying needs of that business — ideally the less frequent, high margin purchases.
Stripe moving to 1-year stock awards: potentially bad for employees if tech stocks keep going higher
Companies giving stock options staggered over 4 years instead of having them all at once means employees getting a shitton of money when the company eventually goes public. Sentiment captured well with this tweet:
Clubhouse: Funded to be sold?
While we’re lamenting the boom years of Clubhouse of the general public (circa 2021 Jan~Mar for users in Indonesia, Taiwan, Thailand, Japan, etc.), here’s a really interesting article.
My dark theory around Clubhouse is that it is, on some level, an incubated attempt for a VC to create and then sell a product themselves. Andreessen Horowitz were early investors, pumping millions into the product and throwing every single VC and friend and celebrity that they have at the app to give it an air of legitimacy.
A16Z wants to be the investor, the media company, the PR firm, and if things go wrong, I imagine they’ll be the PE firm to pick up the pieces. … [A16z] have forced a sense of FOMO around a company with a questionable value proposition, no doubt with the intention of a $15+ billion exit to a Fortune 500 company that doesn’t know they’re getting swindled.
Clubhouse isn’t built to be used, it’s built to be sold. It lacks the basic ability of any social network - the ability to share other people’s content - and has no clear way to monetize beyond sawing off bits that are currently free and adding some glitz. The fact that both Facebook and Twitter are either building or have built near-identical clones isn’t a sign that they’re horrible companies chewing up a startup - it’s a sign that they’re calling A16Z’s bluff.
Anyway, it’s now my full belief that Clubhouse is a new model that VCs are going to try out - the full-scale incubation from seed or Series A investment to acquisition. It is the ideal pipeline for the capitalist - the ability to take something “cheap” and invest resources that don’t necessarily cost you anything to take that company from unknown to an IPO or an acquisition, controlling the mediation of information about the company in your own horrifying ecosystem.
This is the final thing that explains why A16Z wants to control the media - they want to create a holistic system in which their word is the Bible, and where they are able to manipulate the system in which companies and valuations are grown in the companies that they themselves breed. As I’ve said, this isn’t remotely unique to A16Z, but their scale and power is such that they’re able to truly crush companies into these vast valuations, with Clubhouse being the ultimate test of the model.