Alvin's Newsletter: No. 10
Weekly newsletter on what I saw interesting in tech, venture capital and business.
📰 News
TikTok and the fast, furious flurry of news this week: It seems every newsletter has some TikTok news, this week was no exception. A flurry of activity on the company. After being banned by India, Pompeo had flagged that US might go down the same route. Trump made that quasi-official on the weekend saying he was about to sign an executive order. VC’s were already looking at options pre-empting Trump’s moves - giving the company a $50B valuation late last week. Almost immediately it was reported Microsoft was in talks to acquire TikTok. Trump’s latest statements put a spanner in the works but it looks like they are still talking.
Very troubling for future rising Chinese companies coming to the west. From one lens - you can view Trump’s moves as corporate raiding - helping western companies and investors at the expense of the Chinese. From another lens - this is just a form of protectionism similar to what the Chinese have been employing for decades with foreign companies looking to enter the Chinese market - a 50% JV with a locally owned company requirement. The guise of security and data-sovereignty gives good cover for the west.
This is all part of the geo-political games that are at play with China’s rise to becoming the #1 super-power. There are certain levers the west can pull to help moderate and adjust its course to getting there (or at least try) - this is just one of those.
And btw I’m not all too sure if its a bad thing necessarily that the local sovereigns ensure that local companies/people/investors take part in the value creation that happens from its own people.
Nvidia looking to buy ARM: With Intel faltering on its 7nm process putting it behind a couple of years and Apple moving to ARM chips starting late this year - there is an opportunity to become the #1 chipmaker in the world and take the mantle from Intel within the next decade. Both Nvidia and ARM have been on the rise for the last decade as Intel missed the mobile chip and low-power revolution. This tie-up will strengthen the lead they have in the chips being used in the industries of the future - think autonomous cars, AI based hardware and possibly the future desktop (if it’s still around 🙂). Link
Anti-trust summary: Quite boring and nothing really insightful or explosive from the hearings. Or nothing we haven’t heard before. Both sides of politics mostly wanting to grand-stand as is the case with public hearings. Rather than specific items - more general themes came out. Link
The hearing was billed as an investigation into online competition. And much of the evidence laid out before Bezos, who owns The Washington Post, speaks to ruthless business practices. Zuckerberg still doesn’t quite grasp the impact of Facebook on civic life. And most of those on the subcommittee weren’t really up to the task of questioning Cook on Apple’s business practices. Still, the voices of small-business owners whose livelihoods had been upended by Amazon were at least piped into the room.
Amazon looking at launching its own ‘StarLink like’ network: Amazon obtained FCC approval to throw up some low-altitude satellites to deliver broadband. Bezo’s doesn’t want to miss out on the future which looks like it is increasingly being paved by Elon. SpaceX -> Blue Origin. Tesla -> Zoox. StarLink -> This. Link
📚 Reading
A big thing is about to happen - Tesla might enter the S&P. It’s big because we have never seen a company the size of Tesla enter the S&P - it would be the 30th largest company on the S&P if it were to enter. If it did - there would be a flurry of trading activity the sizes of which would be huge as the indices start to rebalance to include Tesla. Meaning selling down others and buying up Tesla. Likely traders are already anticipating and hence the price-movements in the Tesla stock. [Paywall] Link
Live-stream shopping is already big in China. It looks to be gaining some steam in western markets now - especially amongst luxury brands. Link
Along the same trends, ‘F-commerce’ (Facebook commerce) is big in Bangladesh. Could be starting to see what the next wave of e-commerce looks like. Typically, these things look like toys in the beginning. Until its not. Link
How the Luckin coffee fraud was uncovered by a short seller, Carlson Block. 1,000 investigators, 25,000 receipts and video recording of transactions will get you the data you need. [Paywall] Link
What’s happening with the breakdown of the USD, and the breaking up of AUD and gold. Link
🦖 Entertaining & Interesting things
Dan Rose on building the Kindle with Bezos. Link
How the Casio F91W became the de-facto ‘terrorist’s watch’. Link
The Starship Citizen vapourware saga continues. Gamers are getting upset after dropping $500M into the game with no game insight. Link
Killing the Bloomberg terminal and why it would be/is extremely difficult. Link
Where do business mafia’s come from. Link
🎧 Podcasts
The best podcast episodes last week according to Bosco Tan:
Dissect the Tech Hearing (The Vergecast) – 67 mins: The last week, the virtually held US Congress hearing with the CEOs of Amazon, Apple, Google and Facebook was the big news in tech. At the core, it’s a debate whether these companies are acting in ways which abuse their market power. Plenty of intrigue with email transcripts discussed, performance art from the political parties and some skilled maneuvering from the CEOs. The guys here cover it company by company. Link
Lessons From Working for Zuckerberg (Noah Kagan Presents) – 19 mins: Speaking of Zuck, here’s some lessons Noah learnt from him over the months he worked at Facebook. Despite getting fired and losing $170m in the process, Noah has taken a lot of these lesson to his other businesses since. I recall chatting to Noah in a Sydney pub as we started Pocketbook. (He was the first marketer at Mint.com - a company which we had wanted to emulate). From then, I’ve been a follower of his insights since - so it’s great to know the linage of these lessons come, in part, all the way from Zuck. Link
How a 1,000 Employee Company Works From Home (Founder Real Talk) – 50 mins: As we trend towards remote working, many companies are still trying to figure it out. Here’s one that’s leaps and bounds ahead. HashiCorp is a cloud-infrastructure automation software company that’s valued at over $5b and has close to 1,000 staff. All remote! Here their CTO goes through all the pillars of how they made it work from day zero, from early fails, the learned cultural practices and business processes, and most importantly, how they see compensation. It’s probably the blueprint. Link
Netflix’s Unfair Financing Advantage (Land of Giants) – 27 mins: Netflix is in a unique position where the market doesn’t punish them for content failures and taking on high levels of debt. This huge advantage has propelled their growth to date. The question however is whether this seemingly loophole is closing or will they be able to push on indefinitely. Link
📹 TikToks
How to take photos of the space-station. 🛰 Link
Premier Andrews press conference - TikTok style. Link
Covid updates from around the world. Link
These potholes make your car do hops. Link