80: My Thoughts on Local vs Global Contrarians, Microsoft + GM on Self-Driving Cars, Twitter, Bumble S-1, Elastic vs Amazon, Intel's Problems, Jack Ma, SpaceX Intrigue
"I hope they won’t let ego and sunk costs get in the way of the right decision…"
Many people think they’re contrarians, but they’re actually part of a local consensus.
They like to anchor on how they have differentiated views vs some larger group, but they are firmly consensus in their local sub-group, which is a lot more comfortable than the opposite, which is having contrary views to your local sub-group and agreeing with the consensus of a larger non-peer group (with whom you interact less intimately and don’t really seek approval from).
In other words, a lot more people follow the path of least resistance than they realize.
It’s not necessarily good or bad, but it is what it is.
🎂 Today is the 6-month anniversary of this project.
80 editions later, 3x a week, never missed a day so far (employee-of-the-month material, right?).
I’m still having fun. I hope you are too.
Been working on 𝕊𝕡𝕖𝕔𝕚𝕒𝕝 𝔼𝕕𝕚𝕥𝕚𝕠𝕟 #𝟚. Taking a bit longer than expected (but that’s just the planning fallacy).
When I started doing this as a hobby, I decided I’d give myself plenty of time to figure out what it is, because there’s a tendency to think that we know what something will be before we start doing it. That’s usually foolish.
I’m starting to get a better idea…
Investing & Business
Microsoft Investing in GM’s Cruise Self-Driving Unit
As part of the partnership, the tech giant will join GM, Honda Motor and other institutional investors in a combined new equity investment of more than $2 billion in Cruise, bringing the post-money valuation of Cruise to $30 billion. The company did not breakdown the new funding by company. [...]
Microsoft will become the preferred cloud provider for GM and Cruise. The companies said they will work collaboratively on software and hardware engineering, cloud computing capabilities, manufacturing and partner ecosystem. (Source)
Will the cars come pre-loaded with Minecraft Bedrock Edition?
$ Twitter $
There’s a classic Munger anecdote:
“I talked about patience. I read Barron’s for fifty years. In fifty years I found one investment opportunity in Barron’s. I made about $80 Million, with almost no risk. I took the $80 Million and gave it to Li Lu who turned it into four or five hundred million dollars. So I have made four or five hundred million dollars from reading Barron’s for fifty years and following one idea. Now that doesn’t help you very much. I’m sorry, but that’s the way it really happened.” (Via)
It made me think about Twitter.
I don't track it explicitly, but I'm pretty sure a large fraction of my net worth comes from ideas I've gotten from it.
Not necessarily “here it is, wrapped with a bow”, but sometimes it’s something mentioned in passing by someone that I respect, and that makes me dig deeper, and eventually leads to an investment.
I think it’s especially common with companies that I had heard about a lot before, but always quickly rejected for some reason; then when someone who I know is really thoughtful seems to like it, that’s a decent signal that there’s probably more to the story than it seems (ie. it’s not as expensive as it seems, or it’s a better business than it seems).
h/t Ari Ozick for reminding me of the Munger story
Bumble S-1 and Trevor Scott Throws His Hat in the Substack Ring
My friend Trevor launched his newsletter with a good piece on Bumble’s S-1 (give it a sub, I’m sure there’ll be more good stuff coming).
He knows the space, having following IAC/Match for a while and done a good presentation on Match early last year.
Looking at the S-1, the middle-school part of my brain can’t help but chuckle at the wording sometimes:
In addition to the expected upside in paid penetration of singles, we believe that there is a significant gap between what consumers are willing to pay for online dating and current monetization levels, which should support continued growth in online dating average revenue per user over time.
Thinking about Bumble, I wonder if anything keeps Tinder from just copying the "women have to reply first" feature, like Facebook copied almost everything from Snap 🤔
I mean, if it really is effective at bringing more women on the platform and creating a better experience, it's hard to imagine that the insight will never be used by others... There's no doubt more to the secret sauce, but that seems a big element.
I get that Tinder and Bumble have different uses for many, but I’m not saying that Tinder would have to do everything exactly like Bumble. There’s more than one possible way to incorporate an insight that works. Could be with new paid features, could be something that some accounts have the ability to enable but it’s not mandatory, some sub-section of the app, etc. Just something interesting to think about.
Elastic to Amazon: NOT OK
Elastic CEO Shay Banon wrote a pretty forceful blog post calling out AWS for misusing its trademark, misleading its users, copying features and even non-free code, and generally not following open source rules with its fork of Elasticsearch, and saying that they changed their license because of it. Some highlights:
So why the change? AWS and Amazon Elasticsearch Service. They have been doing things that we think are just NOT OK since 2015 and it has only gotten worse. If we don’t stand up to them now, as a successful company and leader in the market, who will? [...]
We’ve tried every avenue available including going through the courts, but with AWS’s ongoing behavior, we have decided to change our license so that we can focus on building products and innovating rather than litigating. [...]
imagine our surprise when Amazon launched their service in 2015 based on Elasticsearch and called it Amazon Elasticsearch Service. We consider this to be a pretty obvious trademark violation. NOT OK.
I took a personal loan to register the Elasticsearch trademark in 2011 believing in this norm in the open source ecosystem. Seeing the trademark so blatantly misused was especially painful to me. Our efforts to resolve the problem with Amazon failed, forcing us to file a lawsuit. NOT OK.
We have seen that this trademark issue drives confusion with users thinking Amazon Elasticsearch Service is actually a service provided jointly with Elastic, with our blessing and collaboration. This is just not true. NOT OK.
When the service launched, imagine our surprise when the Amazon CTO tweeted that the service was released in collaboration with us. It was not. And over the years, we have heard repeatedly that this confusion persists. NOT OK.
When Amazon announced their Open Distro for Elasticsearch fork, they used code that we believe was copied by a third party from our commercial code and provided it as part of the Open Distro project.
We have differentiated with proprietary features, and now we see these feature designs serving as "inspiration" for Amazon, telling us their behavior continues and is more brazen. NOT OK.
It’ll be interesting to see how AWS reacts to the mounting pressure. Will they just double-down on their fork of the project and either follow the new license and contribute their own code back, or try to somehow re-invent the wheel and further separate their codebase by sticking to an older version that they build on?
Seems like a lot of trouble and more bad PR down the line. The smart move at this point would probably to do what Azure and GCP have done and partner officially with Elastic. It’s not like that’s not a lucrative option, and wouldn’t free up a bunch of engineers to go work on other projects that aren’t this contentious instead of having them try to keep up with Elastic’s insane development velocity.
I hope they won’t let ego and sunk costs get in the way of the right decision…
Of course, all this move is not 100% without potential issues for Elastic. A lot of users worry when a license is changed, big companies can need to get their legal departments involved to make sure everything is ok, some users may be scared away by the uncertainty (which is sometimes cultivated by competitors — the old FUD).
Ben Thompson on Intel’s Multitudes of Problems
I won’t spend too much time on it here because there’s likely high overlap between my readers and Ben’s, but it’s a good piece that does a 360 on Intel’s challenges.
The prescription that they split design and manufacturing makes sense to me at this point. I don’t see how else they can compete with TSMC’s volume, and I don’t see how they can attempt that well if they stay integrated and the fabbing unit is always pulled in two directions at once.
Jack Ma: Still ‘Embracing Supervision’?
Alibaba Group founder Jack Ma made his first public appearance since October on Wednesday when he spoke to a group of teachers by video (Source)
🤔
Documentary on Putin’s Vast Wealth and Corruption
Yea, there’s definitely no need for an Oxford comma in that title…
Alexey Navalny 2-hour documentary on Putin, in Russian but with English subtitles.
I haven’t had a chance to see it all yet, but considering what’s been happening to Navalny lately, I think the time for the world to see this is now:
‘SpaceX bought two former Valaris oil rigs to build floating launchpads for its Starship rocket’
Ok, *that* is a sci-fi-cool headline.
There’s even a deep-value angle, and a spycraft/intrigue angle:
Public records show that Valaris “ultra-deepwater semi-submersible” oil rigs 8500 and 8501 were sold for $3.5 million each. Valaris, headquartered in Houston, Texas and the world’s largest owner of offshore oil rigs, filed for Chapter 11 bankruptcy in August as it sought to lighten a heavy debt load.
The pair of rigs was purchased in July 2020 by limited liability corporation Lone Star Mineral Development, according to public records. Lone Star Mineral Development was incorporated in June 2020 and registered in the name of SpaceX CFO Bret Johnsen. (Source)
‘Renewables service 70% of Western Australia electricity needs the majority of the past week’
Western Australia has seen around almost three quarters of its midday summer electricity demands being met by solar and wind generation in five of the past seven days. [...]
Western Australia is notably devoid of big batteries to date but is powering ahead in terms of solar installations and wind farms. [...]
the [South-West Interconnected System] operated just fine – without outages or compromise to energy security,” [said] Professor Wills, Managing Director of Future Smart Strategies (Source)
GFX
So true, on how video game graphics age in our minds vs how they age in the real world. Via Reddit.
The Arts & History
Dostoevsky’s Mariage Proposal
In the Memoirs, Anna describes how Dostoevsky began his marriage proposal by outlining the plot of an imaginary new novel, as if he needed her advice on female psychology. In the story an old painter makes a proposal to a young girl whose name is Anya. Dostoevsky asked if it was possible for a girl so young and different in personality to fall in love with the painter. Anna answered that it was quite possible. Then he told Anna: "Put yourself in her place for a moment. Imagine I am the painter, I confessed to you and asked you to be my wife. What would you answer?" Anna said: "I would answer that I love you and I will love you forever".
On 15 February 1867, the couple were married. (Source)
At the peak of Rome's development, no fewer than 29 great military highways radiated from the capital, and the late Empire's 113 provinces were interconnected by 372 great roads. The whole comprised more than 400,000 kilometres (250,000 miles) of roads, of which over 80,500 kilometres (50,000 mi) were stone-paved. In Gaul alone, no less than 21,000 kilometres (13,000 mi) of roadways are said to have been improved, and in Britain at least 4,000 kilometres (2,500 mi). The courses (and sometimes the surfaces) of many Roman roads survived for millennia; some are overlaid by modern roads.
NOT
I’ve been kind of obsessed with a moment in a song lately. It’ll probably mean absolutely nothing to you and leave you cold, but just in case, allow me to give the backstory:
I discovered the song ‘Not’ by Big Thief via a live cover of it by Hamilton Leithauser.
His cover is excellent (you can hear it here). That made me go check out the original, and at first I was like, yeah, that’s good, but I love Hamilton’s voice and think I preferred his more sparse arrangements to the more indie rock original.
But I tried the original again, and it kept growing on me. And then I kept thinking about a certain part, where the singer — Adrianne Lenker — seems to get carried away in the moment and pushes her voice just a bit too much and basically growls out “it’s not the HUUUUNGER revealing” and that just hits me right in the feels for some reason (the dissonant guitar doing that descending pattern in the background helps make it a bit eerie).
I don’t know if it was planned, or if it’s just one of those lucky accidents that happened in studio and they kept it because it works, but I like it.
If you want to check it out, the song is here, and the moment is at 2:24min in (but don’t just skip directly there, you need a bit of buildup for it to work.. If you must skip, go to 2:00).
