261: Red Flags, AIs, Constellation, Adyen, Snowflake + Amazon, Robots in Pharmacies, Battery Investments, Green Metals, Wind & Solar, and Defibrillator Drones

"If my surgeon tells me he's a major fan of astrology"

Behind every little problem, there’s a larger problem waiting for the little problem to get out of the way.

—Variant on Murphy’s Law

🖥 ⌨️ I received my Mac Studio. This is the first edition that I’m writing on an ARM-based Mac (can you tell? Are my sentences more efficient?).

I’ll share my review when I’ve had more time to get acquainted with it. But so far so good: This thing is insanely fast! 🏎

🛀 I just realized I hadn’t thought about Clubhouse in a few months… (remember that app?)

To be honest, Twitter Spaces has lost a lot of my mindshare in recent times too. ¯\_(ツ)_/¯

🧠 🚩 Smart people can be more or less rational about different things. Nobody is equally rational about *everything*, but some people exhibit huge variation.

Someone whose day job it is to work at a hospital or in a research lab can sometimes come home and entertain beliefs that are incredibly unscientific.

It's a real thing, but it's not a good thing. To me it’s a red flag when people integrate their life and beliefs very badly.

Beliefs about different things may appear totally separate at first — like they belong to the “non-overlapping magisteria” that Stephen Jay Gould talked about — but everything is part of the same reality and the beliefs are outputs of the same brain.

If my surgeon tells me he's a major fan of astrology and lectures me about chemtrails, I'll suspect he's a bad surgeon and will seek out another.

Any illogical belief is a *symptom* that something is going on underneath, with the processes that produce the thoughts. After all, beliefs are just predictions we make about reality.

It’s not binary, it’s a question of degrees. But some claims are egregious enough that they’ll make me be more skeptical of everything else that person says, even if the topics don’t seem directly related (surgery & astrology). It’s the nature of trust — once you don’t trust someone’s integrity in one area, do you trust them in others? Once you don’t trust someone’s thinking abilities in one…

That’s not to say that any of us are anywhere close to perfect — whatever ‘perfect’ means — but I think our goal should be to *aim* in the right direction, work to get better over time, and make sure we periodically examine long-held beliefs to make sure we’re holding them for good reasons and correct mistakes and that we’re at least aware of the possible flaws or alternatives (even if probabilistically and under uncertainty… as with everything).

I’m well aware of the argument that it’s impossible to be certain of anything, but if knowing that makes you throw up your hands and stop trying, you’ll get worse outcomes than if you still try because it’s better to be, say, 30% wrong than 95% wrong.

🤖 In edition #260, I wrote:

When will we cross the point when we’re spending a large portion of our days interacting with AIs without knowing?

I expect that someday, OpenAI or DeepMind will pull a stunt where they reveal that some hugely popular Twitter account was actually an AI without human input something like that...

🎧 📥 I (finally) submitted my podcast feed to Apple and Spotify’s directories.

If you subscribe to either feed, you should automatically get new episodes as they are released:

• Apple Podcast feed

• Spotify feed

💚 🥃 For the price of one alcoholic drink, you get 12 emails per month (plus 𝕤𝕡𝕖𝕔𝕚𝕒𝕝 𝕖𝕕𝕚𝕥𝕚𝕠𝕟𝕤 and podcasts) full of eclectic ideas and investing/tech analysis. That’s 77¢ per edition for the serendipity engine.

If you make just one good investment decision per year because of something you learn here (or avoid one bad decision — don’t forget preventing negatives!), it'll pay for multiple years of subscriptions (or multiple lifetimes).

As Bezos would say of Prime, you’d be downright irresponsible not to be a member, it takes 19 seconds (3 secs on mobile with Apple/Google Pay — if you don’t see paid options, it’s because you’re not logged into your Substack account):

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Investing & Business

Podcast: Going deep on Constellation Software with MBI

Thank you for all the positive feedback on this. Motivates me to want to do more!

In case you missed it.

🏦 🐙 💳 Adyen Expands Service Menu

The octopus is supposed to mean that their tentacles are spreading over more areas, or something like that, but really, it’s just a cute animal and I like to use it as often as possible…

Payments giant Adyen, whose systems handle transactions for companies ranging from eBay and Etsy to Booking.com and Amazon, is moving into providing banking services, the company said Thursday.

The white-labelled banking services—which will include multi-currency bank accounts, corporate credit cards, short-term cash advances based on pending payment transactions, and instant business loans—represent the first major strategic expansion for the Dutch payments company since it went public in 2018.

This is largely about allowing Adyen’s platform customers to in turn offer these services to their customers, not about the more vanilla parts of banking (they won’t really turn into a regular bank):

Adyen’s new banking products will initially be available to select customers in Europe and the U.S., where the company already holds banking licenses. The company says the banking services will be especially attractive to Adyen’s large “marketplace” customers, such as eBay, Etsy, or Airbnb, that have large numbers of small and medium-sized businesses selling on their platforms. [...]

Van der Does said the move into banking made sense because many of Adyen’s large “platform” customers want to be able to offer merchants credit and other banking services, and Adyen, because it has so much data on the transaction history of these merchants and others like them, is well-placed to offer it. Adyen is also well-positioned to collect any money it loans to merchants because it can simply take a slice out of future payments that it processes for these vendors.

Van der Does also says that Adyen already offers its own customers instant payouts on pending card transactions. Now it will be able to let platforms offer the same service to its own merchants. In addition, Adyen already runs many of the same risk and creditworthiness calculations it will need to perform to be successful in banking. It just does so right now internally—as part of its processes to prevent payment fraud, for example. The company also runs know-your-customer and anti-money laundering checks on merchants. [...]

“Our client is the merchant, the platform,” he says. “They own the consumer relationship, and we are not [interfering] with that. We don’t try to build a relationship with the consumers of the platforms.” (Source)

Pieter is a great founder/CEO. I love his clarity of vision and focus on the needs of his customers.

h/t my friend Jerry (💎🐕)

❄️ Snowflake’s brand new Retail Data Cloud plugs-into Amazon merchant APIs 📦

Snowflake is a very horizontal company, but they’ve been building verticals inside of their platform to better serve various industries.

The latest is a retail-oriented data cloud, and to kick things off they’re announcing a partnership with Amazon so that merchants can directly pipe a lot of their sales data and analytics into Snowflake:

With this announcement, retail brands and CPGs that sell on Amazon will now be able to receive their Amazon PO data natively in Snowflake, leverage brand-level and fulfillment center-level forecasts, and access new data from third-party data providers within the Retail Data Cloud, all on Snowflake’s single, integrated platform.

From Amazon’s point of view, this is great since retailers are using this data to increase their sales and most of Snowflake’s compute and storage are on AWS.

The Snowflake and AWS offering will enable retail and CPG customers to:

• Import Amazon purchase order data: More easily import Amazon PO data into Snowflake to better access, govern, and share data seamlessly across the organization.

• Increase forecast accuracy: Improve forecast accuracy using machine learning models from Amazon Forecast to create accurate time-series forecasts to predict demand for variable vendor purchase orders weeks ahead of time.

• Track product change impacts: Track product weight or dimension changes to ensure they adhere to manufacturer standards.

• Reduce OTIF penalties: Improve on-time in-full (OTIF) metrics to enhance organic ranking on Amazon.com, reduce chargeback expenses, and help ensure products are in-stock for consumers to buy.

• Ensure high velocity SKUs in stock: Match correct probabilistic forecasts with SKU sales velocity to help ensure key products will stay in stock and improve revenue.

🛒

💊 🦾Robots coming to Pharmacies 👨🏻‍⚕️

This seems like a really obvious development:

Bright yellow robotic arms are becoming a bigger part of Walgreens’ workforce.

Inside of a large facility in the Dallas area, they fill thousands of prescriptions for customers who take medications to manage or treat high blood pressure, diabetes or other conditions. Each robot can fill 300 prescriptions in an hour, the company said — roughly the same number that a typical Walgreens pharmacy with a handful of staff may do in a day.

Walgreens Boots Alliance is opening the automated, centralized hubs to keep up in the fast-changing pharmacy industry. [...] By 2025, as much as half of Walgreens’ prescription volume from stores could be filled at the automated centers (Source)

I know some pharmacists, and they do important work, but a lot of what they and the technicians surrounding them do all day long should be automated so that they can spend more time doing the high-value stuff that machines can’t do (with better speed & accuracy than humans), like customer service, explaining how to take medication, side effects, potential interactions with other drugs & supplements, etc.

It seems a bit crazy to me that we still have people opening pill bottles by hand, and then counting pills before putting them back into different bottles… All that stuff should be done at high throughput with robotic arms, machine vision, and conveyor belts in centralized locations.

Amazon’s purchase of PillPack makes a lot of sense.

🔋 Billion+ Battery & EV investments, India & USA Edition ⚡️🔌🚘

Gujarat:

Suzuki Motor Corporation (SMC) signed a Memorandum of Understanding (MOU) with the State of Gujarat, India, to invest approximately 104.4 billion rupees (approximately US$1.4 billion) for local manufacturing of electric vehicles (BEV) and BEV batteries.

Arizona:

LG Energy Solution will invest 1.7 trillion won (US$1.39 billion) in Queen Creek, Arizona to build a new cylindrical battery plant with a total capacity of 11 GWh. Construction is scheduled to start in the second quarter of this year and mass production is targeted for the second half of 2024. [...]

LGES earlier announced $1.7 billion to quintuple the capacity of its base plant in Holland by five times.

North Carolina:

Vietnam-based VinFast and the government of North Carolina signed a memorandum of understanding (MOU) for the establishment of VinFast’s first North American manufacturing plant. The company intends to invest up to $2 billion in the project’s phase 1. [...]

Construction for phase 1 of the factory will start in 2022 after a construction permit is granted and production is expected to start in July, 2024. The capacity of phase 1 is expected to be 150,000 vehicles per year. According to the MOU, VinFast will continue to invest in this factory in future phases.

There’s such a tsunami of batteries and EV capacity building up and gathering force… The next few years will be really interesting.

Lots of Metal, but not that kind 🤘

Speaking of decarbonizing (more below), like most big changes, it’ll create winners and losers:

if the world embarks on a course to become carbon-neutral by 2050. That translates into huge demand for the metals, such as cobalt, copper and nickel, that are vital for the technologies underpinning everything from electric cars to renewables; the iea reckons that the market size of such green metals would increase almost seven-fold by 2030. And much like fossil-fuel reserves, these commodities are distributed unevenly. Some countries have none at all. Others are blessed with vast deposits. (Source)

Unlike oil & gas, the metals going in a wind turbine or EV battery aren’t destroyed by use. This stuff lasts a long time, and can be recycled. But during the buildup of this new fleet of vehicles and power generation capacity, the amount of these metals needed will be huge.

The Economist estimates that the “commodity superpowers” will get “$1.2trn in annual revenue from energy-related metals by 2040.”

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Science & Technology

‘Wind & solar generated 10% of global electricity for the first time in 2021’

Wind and solar generated over a tenth (10.3%) of global electricity for the first time in 2021, up from 9.3% in 2020. This is more than double the market share (4.6%) from when the Paris agreement was signed in 2015. Their growth rate has also increased: wind generation rose by +14% in 2021 (the highest since 2017), and solar by +23% (the highest since 2018); combined, they rose by 17%. This wind and solar growth was slower in 2021 than last decade, when they had an average of 20% year-on-year growth.

If you zoom out a bit:

Clean electricity sources generated 38% of the world’s electricity in 2021. Taken together, wind and solar are now the fourth largest source of electricity in the world. They were also the fastest-growing clean sources in 2021; other zero emissions sources of electricity either fell (hydro) or were roughly static (bioenergy and nuclear). Fossil fuels still generated 62% of global electricity; mainly coal (36%) and gas (22%).

A lot more here.

🚗💨 Canada to ban sales of combustion engine passenger cars by 2035 🚙 🔋⚡️

The Government will also put in place a sales mandate to ensure at least 20 percent of new light-duty vehicle sales will be zero-emission vehicles by 2026, at least 60 percent by 2030 and 100 percent by 2035. To reduce emissions from medium- and heavy-duty vehicles (MHDVs), the Government of Canada will aim to achieve 35 percent of total MHDV sales being ZEVs by 2030. In addition, the Government will develop a [medium- and heavy-duty vehicles] ZEV regulation to require 100 percent MHDV sales to be ZEVs by 2040 for a subset of vehicle types based on feasibility (Source)

‘Drone carrying a defibrillator saves its first cardiac arrest patient in Sweden’ ⛑ 🫀❤️‍🩹

That’s cool:

Someone experiencing cardiac arrest needs help within 10 minutes in order to survive. Everdrone’s Emergency Medical Aerial Delivery (EMADE) service is designed to deliver help as quickly as possible — it allows emergency dispatchers to send a drone carrying the device to a caller’s home, kickstarting the lifesaving process before the ambulance arrives at their home.

In this particular patient’s case, it took three minutes for the services to deliver the defibrillator to his home. A bystander, who happened to be a doctor on the way to his job, used the AED on the patient after providing CPR [...]

In Europe, about 275,000 patients suffer from cardiac arrest annually with approximately 70 percent of those arrests occurring in a private home without a defibrillator on site (Source)

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The Arts & History

Interview with CGI Character Animation Expert (he worked on Dune! Star Wars!)

This one is a lot of fun.

Even Ripley needs a coffee break sometimes

h/t Carl Quintanilla (📺)