219: Zscaler, Winner Maximization, Tiktok #1 in 2021, Minecraft's Trillion Views, Gavin Baker, Geothermal, Omicron, and Plastic-Eating Bacteria
"if every job in the world suddenly paid the same thing"
How much pain have cost us the evils which have never happened!
Thomas Jefferson, in a letter to John Adams
🤔 Thought experiment: if every job in the world suddenly paid the same thing, ie. a good upper-middle class salary (and let’s pretend it wouldn’t affect cost of living/inflation, etc— that’s not what this is about), which jobs would suddenly become much more popular and which would become a lot less desirable?
In other words, what jobs are people currently doing largely for the money, or avoiding because of the lack of it? Which jobs are over-rated and under-rated if we take money out of the equation?
f.ex. I think there’d be fewer lawyers and dentists. Hopefully fewer proctologists too.
I bet there’d be more cooks (I don’t mean fancy chefs, I mean cooks at normal-but-decent restaurants). A bunch of extroverts would probably become bartenders, introverts librarians…
What else? Leave your answer in the comments on the site.
🛀 I was discussing writing voice with friend-of-the-show and supporter (💚 🥃) Conor Mac. I think it’s an interesting topic. Here’s my take:
One of the [reminders] I have at the top of the Notion file where I keep NL notes is "Write with your own voice".
'Your own voice' is different for everyone, it doesn't mean to be all whacky and unserious — for some people it may be the other way around.
I think success is if regular readers could recognize that something is by you even if they saw the text without a byline.
If you sound like everybody, you sound like nobody ¯\_(ツ)_/¯
📝 The latest version of Obsidian (0.13.14) has a new "live preview" mode.
You can edit in markdown in a kind of WYSIWYG view where the source is compiled in real time, and only the line you're editing will show the markdown code as needed.
There’s a video of what it looks like in action here.
Seems neat, but not sure if I'll keep it enabled yet.
Obsidian is still one of my very favorite pieces of software from the past, say, 5 years.
🐦 I had a little fun tweet go lightly viral (just a tad) this past week, with about 500k views and 450 replies and 350 RTs.
It gave me a new appreciation (and apprehension) for tweets that go *truly* viral.
In my case it was fine because it was just a light-hearted thing and everybody was civil and funny, but I can’t imagine the amount of crap when something contentious goes R8 on the network.
To paraphrase: Every day on the internet, someone is “it”, and your goal is to never be that person.
Now when I see a tweet with 200k likes and 35k replies, I shudder at how this person’s twitter has been ruined for a while. It’s possible to mute replies on that thread and get your life back, but you must still walk funny for a while after that…
🧐 It’s all about being well-calibrated:
Ho Nam replied:
As Feynman says, important to remember that the easiest person to fool is yourself.
Here’s my reply to the reply:
Only you knows all of your exploitable weak points to win an argument, and if offensive persuasion techniques are even 1% stronger than defensive barriers, against a perfectly matched adversary (ie. yourself), you'll "convince" more often than not.
🎄💚 🥃 You know what I’d like for xmas? For you to become a paid supporter 🎅🏻 (it’s inexpensive and quick):
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Investing & Business
The skill of getting the most out of your winners is under-appreciated.
If you have it, in theory you can make more mistakes than others, and still do quite well in the end.
The Internet’s Most Popular Domains in 2021
Cloudflare NET 0.00%↑ compiled the internet’s most popular domains in 2021 based on their own overview of the net (being in front of ˜20% of it, they have a pretty unique vantage point).
Most impressive is how big Tiktok has gotten:
Yes, being #1 means that it dethroned Google, at least in this ranking.
There were some days when Google was #1, but October and November were mostly TikTok’s days, including on Thanksgiving (November 25) and Black Friday (November 26). [...]
Facebook.com was steadily number #2 across 2020, but with TikTok.com going up Facebook is now a solid #3, followed by Microsoft.com (Office365 and Teams numbers are included there) and by Apple.com (App Store and Apple TV+ numbers are included), the same trend as in 2020.
Speaking of popular:
‘Minecraft crosses 1 trillion views on YouTube’
I believe about 1 billion of those are from my son…
Minecraft’s YouTube community has over 35,000 creators from over 150 countries. [...] Minecraft is the most popular game on YouTube ever. In 2020, it earned over 200 billion views; second place — which was curiously Roblox, another sandbox-style game — earned less than half that.
Zscaler (or as we say in 🇨🇦, Zedscaler)
The long and the short of it is, once your company goes to Zero Trust and SASE, and pick a company like Zscaler to be the backbone of your enterprise network... you aren't ever going back to managing your own networking & security infrastructure. This is an extremely sticky service. This shift saves companies money, while lessening their risk. NOV saw a 35x reduction in infected devices after adopting. Siemens has seen a 70% reduction in infrastructure costs. GE has seen a 80% faster user experience when accessing apps.
Not only would it be hard for most companies to go back because the IT resources are going to be moved to some other high-priority area, and they won’t want to remove them from there, but there’s a pretty good chance that the company’s security expertise wasn’t that great to begin with, so it’s not only about replacing, it’s about greatly improving with best-of-breed.
This type of analysis also applies to other companies in the space, of course, but Zscaler ZS 0.00%↑ seems particularly well-positioned.
Beyond helping manage user access and security, Zscaler did a major pivot last year. They now can help manage machine-to-machine access and security as well, along with moving more fully into SASE features to become the interconnective glue that can be the backbone of an enterprise's global network. Zscaler can now be the entire perimeter.
This must be attractive to customers. It’s qualitatively different when you offer to take the *whole* problem off their hands, rather than just part of it.
It’s probably also why complementary companies like Zscaler and Crowdstrike do partnerships, so that they can benefit from each other’s channels and have a better package to offer customers.
Zscaler stands for the "zenith of scalability". They provide an enormous edge-based security cloud spanning the globe, distributed across 150 POPs in order to be as near to the users, apps, and network locations as possible. At its core is the Zero Trust Exchange (ZTE), which, per their latest stats, handles a massive 200B+ requests a day, flagging 7B+ security incidents or policy violations, and blocking 80M+ threats. ZTE sits across each of those interconnected 150 POPs, as well as has colocations with major cloud providers (AWS, Azure, GCP) and major enterprise SaaS applications (like Microsoft Office 365, Salesforce, and Slack) to improve its performance in interconnecting with those services. In their Investment Day presentation in Jan-21, they claimed to have >20M licensed seats, with their platform handling 2.0PB of monthly traffic to Office 365 alone. [...]
Essentially, the ZTE is now a globe spanning switchboard that helps interconnect users and apps in a secure and low-latency way.
You know what they say: Give a nerd a real-time dashboard and he’ll be happy.
This one is really cool too:
This stuff is good marketing too.
Here’s a clever capability that they’re adding via M&A:
Smokescreen's technology allows blanketing your network with decoys (known in the biz as "honey pots") in order to catch bad actors, as a way to test that network's resiliency of its app security and restrictions around lateral movement. This includes creating decoys at all levels, such as network (server decoys), endpoint (decoy files, credentials, and processes), identity (fake users), cloud (web servers, databases) and email. Once an attack is caught, it can help automate the forensics and root cause analysis
Security is a never-ending arms race between the attackers and defenders.
☁️ On the cloud workload front:
Zscaler Cloud Protection (ZCP) was announced in Dec-20 during Zenith Live 2020. ZCP is sold as protecting cloud workloads across any cloud environment – but also secures between those cloud environments as well, plus helps interconnect them. [...]
loud protection is an area that CrowdStrike is moving into, with its Falcon for AWS/Azure/GCP and the Falcon Horizon CSPM, but I see the two companies as having different pivot focuses right now. For CrowdStrike, they are pivoting into protecting the cloud resources, as they do the endpoint. For Zscaler, they are pivoting into protecting the workload traffic, as they do the user traffic. I expect more cooperation between their products, instead of competition, especially as Zscaler is entering SASE and new forms of Zero Trust, both of which rely heavily on device posture and added threat intel capabilities provided in Falcon
There’s plenty more in Muji’s (💾) writeup, but I’ll stop here for space.
Interview: Gavin Baker, Atreides
(I like just writing “Atreides” up there without more context — like, maybe it’s his fund’s name, but maybe he’s part of the Atreides clan.. ⚔️)
Interesting interview in G&D. Some highlights:
The ability to balance conviction and flexibility is hard. It’s one of the things that makes investing an art. And it is the reason why you must find a philosophy that suits your temperament so that you can find the right balance between the two. Too much of either and you are not going to succeed.
I am not a believer in having an investment thesis. A thesis is a belief statement, definitionally. [...] I believe in investment hypotheses. A hypothesis is a falsifiable statement and is used by the scientific community. If you have a falsifiable statement, you look to falsify it. And if you can’t do so, then the hypothesis is intact. My baseline assumption is that I'm wrong, which makes it easier to change my mind.
I think that’s the right way to think about it.
Many people who use the “thesis” terminology may actually be doing this, though, so let’s be careful about semantics.
5G changes nothing at all. If you are an incumbent, you are going to have to spend a lot of money just to stay in place. 3G was profoundly important because it enabled the mobile internet and allowed you to have applications. 4G was also foundational because it let you stream media. Without 4G, there would be no Spotify or Netflix as we know them. 5G doesn't enable anything new. Maybe it allows some of this IoT stuff. Maybe. And I do think it does make it more feasible for some of these mobile operators, on the margin, to compete with the fixed line providers.
Like with most things, we’ll probably fall somewhere in between the utopia of the hype and the “it’s just faster LTE and LTE is already fast enough” of the 5G skeptics.
I’m not expert on this, but the presentation about private 5G networks at AWS’ re:Invent conference a few weeks ago really intrigued me… Some of the new things enabled by 5G may not be enabled because of its higher speed 1-to-1, but because of other characteristics that make it much easier to do things like manage private networks, with a massive number of industrial devices, sensors, IoT, etc (which Gavin mentioned).
One of the most profound things I have read was this essay by Eugene Wei called Status as a Service explaining what social networks are really providing. And he basically compared social networks to blockchains. Initially, it was cheap to mine them, but then they got ossified. In other words, new social networks start up and there are all these people who were not influencers on any of the existing networks that get hundreds of thousands of followers just because they were first to switch. This is why every generation wants a new social network. Status becomes ossified on these big social networks. And there's constant disruption because of that. It's endemic to being a social network.
There’s probably always a tension between new networks, where early adopters can grab top-of-the-leaderboard positions and start compounding earlier than others, and the larger networks where you can provide more value to more people, and so by capturing some of it, get a larger quantity of value back in absolute terms.
Interesting systems dynamics to think about 🤔
It's hard to get around that, but the way you can do it is if you build in utility. And what's utility? It's payments. It's features that make you open the app and do something other than look at user generated content. You have seen a lot of this in Asia and very little here in America. And I think that is largely because advertising was a hell of a drug for these companies for so long. That is why all these big internet advertising platforms were slow to become marketplaces, because it would have a temporary negative financial impact.
This is an aside, but I was wondering how long it’ll take for the Big Tech companies to grow at about the level of GDP. Nothing can keep growing fast forever, so I wonder how long they have left, and which ones will taper off much earlier, and which one will be the last to grow at, say, above 2x GDP.
the meta, or the game within the game, is always changing in investing. 20 years ago in the NBA, three pointers were undervalued, statistically. Going for it on fourth down was undervalued in the NFL. And I would say that 20 years ago, understanding ROIC was undervalued in the market. It was so revolutionary when Michael Mauboussin started talking about ROIC and now everyone understands ROIC. It used to be that you could get a big advantage by really understanding the unit economics for public companies. All these silly people used to look at an e-commerce company and say, "Oh, it's an unprofitable business." But on a unit economic level, it was very profitable. I would say that unit economics are probably well understood now in terms of marketing efficiencies and trade offs between growth and profitability.
The meta of investing is always changing. But there are some things that are timeless, like if your return on an invested capital goes up, you are going to become more valuable. If you compound your free cash flow per share, you are going to become more valuable. There are these immutable things and a lot of those things have been written about by Buffett.
A good understanding of both what is changing and what is staying the same is invaluable. I wish I was better at it, but nobody said any of this was supposed to be easy ¯\_(ツ)_/¯
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Science & Technology
‘Geothermal Everywhere: A New Path For American Renewable Energy Leadership’
Today, the United States’ renewable energy portfolio is dominated by hydropower, wind, and biomass, with a rapidly growing contribution from solar. Electricity derived from geothermal resources is almost non-existent, providing just 17 billion kWh — less than 0.5% of U.S. electricity generation — annually. But this is not for lack of geothermal resources. The United States, and particularly the western United States, is a hotbed of geothermal energy that could meet the electric and thermal energy requirements of the entire country many times over.
Why the lack of progress? Many reasons, including:
Federal permitting restrictions on drilling geothermal wells on public land are more burdensome than for otherwise similar oil and gas drilling projects.
What are some things we can do to improve things?
Adjusting the criteria for Renewable Portfolio Standards (RPSs) in states that are unnecessarily restrictive would help put geothermal energy on an even playing field when compared to wind or solar. Further, adding a requirement that some percentage of RPS goals be met by a clean, baseload power source would acknowledge the special importance of geothermal for firming our energy supply.[...]
Establish federal innovation prizes (or related mechanisms) for the development of key geothermal technologies [...]
Reskill oil and gas workers for geothermal projects through federal jobs programs and private investment — The U.S. has a lot of machinery and a specialized workforce that is well-equipped for oil and gas drilling. There is a high degree of overlap between the skills and equipment necessary to effectively drill for fossil fuels and for geothermal energy. The U.S. should speed the transition away from fossil fuels to geothermal by aiding in worker retraining efforts and/or equipment retrofitting.
This last part is especially elegant. There’s already plenty of the skills and equipment, it just isn’t being used for that right now AND what it’s used for is what we’d like to see go away over time…
The authors of the study estimate that with their suggested policy, 60 GW of geothermal energy could be produced by 2050, or about 8.5% of electricity generation in the US at that time.
Combine that with nuclear, solar, wind, battery storage, some additional hydro, and efficiency/conservation gains (“negawatts” are often the cheapest watts…), and we can get somewhere.
h/t Extra-Deluxe supporter (💚💚💚💚💚 🥃 ) Byrne Hobart
Friend-of-the-show and supporter (💚 🥃) Brad Slingerlend posted this:
As plastic waste accumulates around the world, nature is responding with an increasing number of microbes capable of consuming plastic. In a recent survey of microbial genes sampled from around the globe, some 30,000 enzymes able to break down ten different types of plastics were discovered. The more plastic in the environment, the more enzymes were found, as the plastic-chomping organisms evolve to take advantage of the 380M tons of plastic produced a year. It raises the question of what happens if one of these adaptable species becomes particularly voracious and goes after non-waste plastic, like the ubiquitous stuff in walls, cars, electronics, etc.? Scientists are also creating enzymes to target specific waste products, like single-use plastic bottles.
His question is a good one indeed: What happens if some kinds of plastics start “rotting” rather fast while still in use?
It’s probably not that likely, since plastic must be a pretty bad food source even for specialized bacteria, but who knows, stranger things have happened…
🦠 Omicron Grab-bag
This anti-Covid pill changes everything. So why won’t it be available for all? (dec 21 op-ed, calls for Defense Production Act)
with a reported 268,000 new cases yesterday (excluding backlog), and more than 1,700 deaths. We have only 61% of Americans 2-shot “fully” vaccinated (that includes millions with J&J one shot), and only 1 in 7 with a 3rd shot booster. Among our highest risk group of people, age 65+, only 55% have received a booster shot. For perspective there are many countries with >80% of their population vaccinated and >90% of their highest risk boosted. [...]
there are certainly several strategic points that could have been enacted today, such as:
Booster shots at 4 months after the 2nd dose, not 6 months. [...]
Redefine “fully vaccinated” as 3 shots [...]
No airplane passengers who are not fully vaccinated [...]
500 million free rapid tests by request sometime in January is totally inadequate. We need several billion of these [...]
Distribute KN95 masks to all households. The US government can purchase these for very low cost (i.e. pennies) [...]
Rapidly scale the production of the anti-Covid pill Paxlovid [...]
Fix the data mess. The CDC is apparently unable to track hospitalizations and deaths by vaccine status, timing, age of the patient and their relevant co-existing medical conditions.
As an aside, I haven’t seen anything on this, but I’m curious: Are anti-vaxxers clamoring for Paxlovid and pushing for production to ramp up, or at they against it too because, like the vaccine, this one actually works, and they’d rather stick to only taking stuff that doesn’t work..? ¯\_(ツ)_/¯
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