491: David Senra's Theme Song, Domino Effect, Andy Jassy's Amazon Letter, Quality Investing, Roman Trade Routes, and Books

"the spirit in which it was created, which is love and gratitude"

Do something wonderful, people may imitate it.

—Albert Schweitzer

📖📚🎙️☕️☕️☕️🎶 Last week the idea popped into my head that with the latest crop of AI tools, I could probably make a tribute song to my friend David Senra (📚🎙️).

I’ve learned so much from Founders Podcast over the years and have so much fun talking to David about everything from the founder mentality to Deadwood (🤠) — I have a Pavlovian reaction to his voice equivalent to 3 espressos, fueling me to try harder at life. ⚡️

To say thanks, I made the above. The lyrics are in the YouTube description.

Please listen to it in the spirit in which it was created, which is love and gratitude.

If you’re familiar with Founders, you can play Founders Bingo while listening and see how many Senra maxims you recognize.

A magician doesn’t reveal his tricks, but let’s just say that it involved many hours of compiling Senra maxims from across over a hundred Founders episodes, a ton of iteration and line edits with LLMs first on the lyrics, then iteration on the music (I went with old school hip hop because I remembered David mentioning it a few times…), stitching audio, creating the EQ video with the old school graffiti font, etc. It was more manual than you may think.

In any case, I hope you get at least a smile out of it (I showed it to David yesterday and he seemed to like it)! 💚 🥃

🦆 There’s a family of mallard ducks living in my pool.

I don’t know if they’re the same ones, but they’ve been coming every Spring since we moved here four years ago. I can’t help but feel like this:

If they have babies I’ll try to get a photo for you 📸

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🏦 💰 Business & Investing 💳 💴

🁓 The Domino Effect: From Tiny to Titans 🁄

I’m sure you’ve seen this meme. Take a sec to look at how small the first domino is (I don’t think I had ever quite noticed how tiny it is).

That meme popped into my head and got me thinking about how you could keep scaling it up until you eventually had a domino the size of a grain of rice toppling over a skyscraper.

Starting with a 5mm domino and increasing each size by 1.5x, the 29th domino would be as high as the Empire State Building while staying within the 1.5-2x size ratio limit for the domino effect to work.

Isn’t this what we want in the business world?

Steve Jobs in front of the garage of his childhood home 🍏

Apple began as a grain of rice in a Los Altos garage in Jobs’ childhood home and is now the Burj Khalifa.

(Trivia: while considered the birthplace of Apple, not much of the company’s early milestones happened in the garage, according to Woz)

Buffett gained control of Berkshire Hathaway (1965), a struggling textile business. He used its cashflow to purchase better businesses, like National Indemnity (1967) and See’s Candies (1972), progressively adding bigger and bigger dominos.

While today Berkshire has a market cap of $870bn, all that mass can be traced back to a fairly small grain of rice (or if you go farther back, to Buffett’s childhood paper routes, a grain of sand). How magical is compounding? We keep hearing about it, but we rarely get to really *feel* it in action, largely because it takes a long time and because our minds can’t intuitively think exponentially.

Technology is another set of dominos ⚙️🛠️

Medieval warlords didn’t have night vision goggles or assault rifles because a tech tree has dependencies, and those dependencies are a bit like the intermediate dominos.

This explains parallel inventions — once the building blocks are available, some ideas that were an impossible leap forward become a manageable hop for the brightest and/or most stubborn minds.

When the microscope was invented, a bunch of innovations suddenly became possible. When the fMRI or x-ray crystallography came, the same thing. New tools don’t only unlock new doors for people in white lab coats. Entrepreneurs and founders also get new opportunities to create value and make goods and services that people willingly pay for.

It makes me wonder what kind of microscope AI is 🔬🤔

✍️ Andy Jassy’s Amazon Shareholder Letter 🛒💳 🚚📦📦📦📦

Let’s have a look.

Some highlights with comments:

We have increasing conviction that Prime Video can be a large and profitable business on its own.

This confidence is buoyed by the continued development of compelling, exclusive content (e.g. Thursday Night Football, Lord of the Rings, Reacher, The Boys, Citadel, Road House, etc.), Prime Video customers’ engagement with this content, growth in our marketplace programs (through our third-party Channels program, as well as the broad selection of shows and movies customers rent or buy), and the addition of advertising in Prime Video.

I wonder in what order these things he lists contribute to the bottom line.

It may be inverted, with ads and taking a cut on third-party subscriptions being the primary drivers 🤔

We spend enormous energy thinking about how to empower builders, inside and outside of our company. [...]

The best way we know how to do this is by building primitive services. Think of them as discrete, foundational building blocks that builders can weave together in whatever combination they desire.

This certainly has been a big part of Amazon’s formula for success.

There’s a famous Google+ post by Steve Yegge from 2011 about this (note: It was supposed to be an internal memo but was accidentally posted publicly).

Jassy also talks about the work they’ve been doing in recent years to turn their logistics system into a similar platform of APIs exposed internally and to third parties.

To do this requires a lot more work upfront, but it’s worth it if you can turn what would otherwise be just a cost center into a revenue center and — hopefully — a profitable large business on its own.

Next, they want to take that “build primitives” approach to AI:

Much of the early public attention has focused on GenAI applications, with the remarkable 2022 launch of ChatGPT. But, to our “primitive” way of thinking, there are three distinct layers in the GenAI stack, each of which is gigantic, and each of which we’re deeply investing.

The bottom layer is for developers and companies wanting to build foundation models (“FMs”). The primary primitives are the compute required to train models and generate inferences (or predictions), and the software that makes it easier to build these models […]

The middle layer is for customers seeking to leverage an existing FM, customize it with their own data, and leverage a leading cloud provider’s security and features to build a GenAI application—all as a managed service. [...]

The top layer of this stack is the application layer. We’re building a substantial number of GenAI applications across every Amazon consumer business. These range from Rufus (our new, AI-powered shopping assistant), to an even more intelligent and capable Alexa, to advertising capabilities (making it simple with natural language prompts to generate, customize, and edit high-quality images, advertising copy, and videos), to customer and seller service productivity apps, to dozens of others.

He’s certainly very bullish on the magnitude of GenAI:

Generative AI may be the largest technology transformation since the cloud (which itself, is still in the early stages), and perhaps since the Internet.

He also had some parting words for regulators:

while we have a nearly $500B consumer business, about 80% of the worldwide retail market segment still resides in physical stores. Similarly, with a cloud computing business at nearly a $100B revenue run rate, more than 85% of the global IT spend is still on-premises.

👋

🗣️ Interview: Joseph Shaposhnik on Finding Predictable Quality Businesses 🕵️‍♂️💰

I enjoyed this episode of the Investor’s Podcast:

• 🎧 TIP622: Finding Certainty in an Uncertain World w/ Joseph Shaposhnik

Joseph and I like a lot of the same companies, so I have to be careful about confirmation bias, but I thought he made many good points (nothing groundbreaking, but it’s good to refresh the fundamentals periodically).

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🧪🔬 Science & Technology 🧬 🔭

‘Roman trade routes and principal products in each region.’

Not sure what the original source is. It looks like it’s from a textbook. I found it via Vintage Maps.

🤖🤖 Google and Meta’s New Custom Silicon 🐜🐜👨🏻‍🔧

Chip nerds rejoice, there’s some new silicon on the block. First, Google joins the ARM club and gives TPUv5 a bump:

Axion processors combine Google’s silicon expertise with Arm’s highest performing CPU cores to deliver instances with up to 30% better performance than the fastest general-purpose Arm-based instances available in the cloud today, up to 50% better performance and up to 60% better energy-efficiency than comparable current-generation x86-based instances.

Unlike Apple’s ARM chips, which are mostly of their own design, Google is building on ARM’s Neoverse V2 core. But they’ve added interesting ingredients to the mix:

Axion is underpinned by Titanium, a system of purpose-built custom silicon microcontrollers and tiered scale-out offloads. Titanium offloads take care of platform operations like networking and security. Titanium also offloads storage I/O processing to Hyperdisk, our new block storage service that decouples performance from instance size and that can be dynamically provisioned in real time.

Some Google services, including YouTube ads and Google Earth Engine, are now powered by Axion chips.

On the AI side, their latest TPU v5p is now going GA:

TPU v5p is a next-generation accelerator that is purpose-built to train some of the largest and most demanding generative AI models. A single TPU v5p pod contains 8,960 chips that run in unison — over 2x the chips in a TPU v4 pod. Beyond the larger scale, TPU v5p also delivers over 2x higher FLOPS and 3x more high-bandwidth memory on a per chip basis. It also delivers near-linear improvement in throughput as customers use larger slices, achieving 11.97X throughput for a 12x increase in slice size (from 512 to 6144 chips).

The TPU isn’t quite a direct competitor to Nvidia’s GPU, as it’s not as general and doesn’t quite have the software ecosystem, but there’s still a lot of overlap. Without it, Google would no doubt have to buy *a crapload* more GPUs (so I’m sure it’s not Jensen’s favorite…).

Finally, Fa…Meta’s Artemis chip aka Meta Training and Inference Accelerator (MTIA) v2:

More details here.

🚘 The Science of Road Security 🛑 🛞 🤕

If you drive, bike, or walk, this is for you:

• 🎧 #295 ‒ Roadway death and injury: why everyone should care and what you can do to reduce risk | Mark Rosekind, Ph.D.

I’ve made an effort to turn into habits some of the things mentioned in this podcast, like avoiding distractions and always looking both ways before crossing an intersection — never assume everybody else is following the rules and paying attention!

You never know when situational awareness may save your life, or the life of your passengers, or even just avoid a ruined day and expensive repair bill.

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🎨 🎭 The Arts & History 👩‍🎨 🎥

📚 Books are Special: Future of Publishing Event in NYC 📚

Last Friday I woke up at 4:30 AM and flew to Newark’s Liberty Airport (where else?).

That first day was a day-long brainstorm with OSV’s Infinite Books team, and it was *amazing*. The idea-blast-radius will probably be at least 6 months as we think through multiple hypotheses and implement various experiments.

Then on Saturday, it was the ‘Future of Publishing’ event co-hosted by the one-of-a-kind Anna Gát and her team at Interintellect and my colleagues at OSV. It was great! My only regret is that, like at a wedding, there are more people that you want to talk to and spend time with than is possible!

I met some old friends for the first time. Special individuals that I’ve known online and consider to be very important to me, but that I had never been in the same room with before. How incredible is the internet? We take it for granted, but I would never have found my tribe in the pre-online world…

My role was MC in the upstairs room where the discussion panels took place. I gave a short intro speech that I want to share with you:

Books are special, books are magic, books are *telepathy*. 

You sit down, you think a while, you move your fingers like this (*mimes writing on keyboard*), or maybe like this if you’re old (*mimes writing with pen*), and then someone across time and space has your words appear in their mind. 

They can be on the other side of the planet or 100 years in the future, on the ISS, even on Mars someday, it still works.

Maybe you spent 20 years accumulating life experiences, skills, doing research, and thinking about those words. Polishing them up and making them the very best that you can. 

But once you’ve written them, with just a few hours of staring at them, a stranger — or a friend! — can inject them directly into their cortex. 

They can borrow some of your hard-earned wisdom or live through fragments of your life in the VR of the imagination. And it can change their life!

There’s a quote I love about how if you see someone reading a book in public, and it’s a book you love, what you’re seeing is a book recommending a person. 

What we're doing here is not moving paper or counting pageviews or subscribers. It's moving *ideas* and *scenes* and *memories* and *thoughts*.

It's really cool. I try to never lose sight of that. 

I'm really happy to be here today in a room with a bunch of fellow book nerds and idea lovers.

The next day, I flew back with 13 new books in my luggage and memories that will last a lifetime.

I call that a success!