Alvin's Newsletter: No. 17
Weekly newsletter on what I saw interesting in tech, venture capital and business.
📰 News
Roam, a note-taking app, last week raised $9M on a $200M valuation 😱. A note-taking app! Whilst this sounds incredulous at first read, being an avid user of the service, my view is that the valuation is entirely justified if we look a few years out at what the opportunity for Roam might be. It is a huge bet - but that is the VC game right. Make bets on ideas that if they succeed will be massive. Even whilst the chance of success is small. The data on the matter validates this.
Why do I think it’s huge? Because we haven’t seen any winners in the note-taking space. And the space continually gets new entrants because it is used or should be used by everyone. How else does someone keep knowledge they encounter day to day on tap? The services that have made it the furthest in the space have been Evernote - they have languished for years doing folly endeavours such as merchandising. The other service that comes to mind is Microsoft Note - an afterthought for Microsoft really.
Generally, all the existing players take a similar approach on the main issue at hand that vexes these products and users - how to organise notes. (The other concerns are generally solved like that act of note-taking, mobility etc). They either give a rigid structure to the user to organise or allow the user create a structure that suits them via tools such as books/topics, bookmarks, linking etc.
Ultimately what ends up happening is that the user spends more time thinking about how and where to organise their note than the act of note taking itself. A ludicrous proposition. And hence the churn on this category I suspect is likely close to 100%. Disastrous.
Roam solves this problem in a novel way by taking away the cognitive load of having to organise your note. Just write the note, the structure is formed within the note itself. And hence - one can focus on writing. It seems like a small shift but it is profound (from experience). There are other aspects that make Roam great to use - hats off to the team that has been toiling on this for years. Link
p.s. this newsletter is built off the notes I take in Roam.
Regardless of whether you think this is a smart or foolish investment, I think we can all take a step back and admire the sheer improbability of this event. I mean, just imagine toiling for years in obscurity, living in a van, getting rejected by Y Combinator five times, building a note-taking app that’s supposed to “fit everyone’s brains better” but being told over and over again that people don’t understand it, that it’s too complicated, then — seemingly in an instant — getting noticed by a small set of folks who love it, then a slightly larger group, then becoming a cult on Twitter, raising a proper seed round, launching paid plans, hitting $1m ARR within weeks, and, finally, raising a monster round from a who’s-who of Silicon Valley investors at an astronomical valuation.
The Ruby Princess incident was a major event in NSW and Australia. More details have emerged as a result of the inquiry into what happened. This is this the most detailed account of that that I have read. It’s a series of mistakes that in totality, when looked from the outside, has a very low chance of occurring. It’s tragic and of particular importance for Governments and companies when designing checks and balances + communication protocols into systems. The Victorian situation looks to share some of the characteristics. My early read on that is that it was poor decision making and poor choice of decision makers - for whatever reason. That inquiry is continuing. Link
Snowflake had a blockbuster IPO last week. Most people would not have heard of the company prior, let alone what they do. Even less known, relatively. is their Chairman and CEO - Frank Slootman. He was formerly the CEO of Data Domain and ServiceNow, two companies that were incredibly successful in their respective fields. Frank wrote an essay on the culture he drives at these companies. His TLDR below. The full article is a must read. Link
There is room up in organizations to boost performance by amping up the pace and intensity. Considerable slack naturally exists in organizations to perform at much higher levels. The role of leadership is to convert that lingering potential into superlative results. The opportunity is right under our noses but for some reason it does not enter the consciousness. This notion is not limited to business enterprises. We see in professional sports all the time how teams go almost overnight from losing to winning with basically the same roster, but different leadership. Call it what you want, the X factor, whatever, it is real. Anybody can dial into this, but not many do.
All the rage right now are SPACs - especially as IPO season is in full heat. Chamath’s second SPAC bought Opendoor last week to take them public. He has a third SPAC waiting in the wings. His first SPAC bought Virgin Galactic a few years ago and Chamath is the chairman. Last week, he filed three more SPACs with the SEC. Chamath is truly a beast. At only 44 years of age. Link Link1
📚 Reading
Livestream shopping has been growing in China for the last few years (I talked about Viya a few newsletters back). Western markets haven’t really seen any break-outs. With Covid’s tailwinds pushing tech themes forward a decade, we are starting to see these emerge. My take is that we will see much innovation in online shopping over the next few years - primarily in the way shopping happens. Compare the current experience to the physical - it is extremely ‘low fidelity’ by comparison. How it manifest - who knows - but these are where some of the current tides are going. Link [Paywall] Link1
The VCs are stocked with Stanford and Harvard graduates. Insight into this phenomenon and what the future looks like. Link
The acclaimed hedge fund manager, Ray Dalio, hasn’t been doing so well (at the current moment) in Covid. He’s made some bold predictions and has sat on the sidelines as the markets have come back. As a result, his returns are negative and withdrawals increasing. [Paywall] Link
The new Dune movie hit the internet this last week. I’m an avid fan of the original games and the importance they represent in game history. The Dune games created a whole new genre of gaming and lead to some of the largest gaming hits in history - Command and Conquer, Starcraft and Warcraft to name a few. The making of the games is quite peculiar. Link
Sometimes landmark titles are born of multi-million dollar budgets, huge teams, vast levels of processing power and endless overtime. Other times, hugely significant games are a combination of the right people, right idea and right time. That’s Dune II for you.
🦖 Entertaining & Interesting things
Everybody gets to a stage in life when they start looking at what makes them happy and/or what success means to them. Some good notes and thoughts on the matter here. Link
On a similar note - Sam Altman talks about his ‘theory of impact’. Link
This excerpt from a book, ‘Blood and Oil: Mohammed bin Salman's Ruthless Quest for Global Power’. This story is about how the Saudi’s infiltrated Twitter to do some of their bidding. Great book if you want to understand how the middle-east works. Many reasons why that’s important. Couple of reasons below. Link
Aramco, the worlds largest company is Saudi oil.
The Saudi’s are huge investors via their sovereign wealth funds, e.g. into Softbank and hence, some of the largest tech companies (and their valuations) in the world.
I try and watch the Tour de France every year, although I mostly fall asleep, so probably see 20% of it. The current and historical economics underlying the great race are interesting. Tidbit - the race was started by a French newspaper as a way to create exclusive content to increase readership. Link
An upstart Chinese broker is bigger than Credit Suisse. [Paywall] Link
How big are the tech unicorns? Huge huge. Link
🎧 Podcasts
The best podcast episodes last week according to Bosco Tan:
Why Tiktok is such a game changer (a16z Podcast) - 37 mins: As the Tiktok and Oracle deal gets hashed out, a16z here breaks down why Tiktok is such a cultural gamechanger. Discussed here is the difference between social-graph and interest-graph, the history of recommendation algorithms and the cost of replicating Tiktok’s algo from scratch. Link
The story of LVMH vs Tiffany (The Journal) - 16 mins: Pre-pandemic, a blockbuster deal was being negotiated in the luxury retail segment - LVMH was set to buy the historically important US brand Tiffany & Co. Due to the changing retail landscape, LVMH has since attempted to back out of its binding deal, using various tactics including leveraging the growing US-France trade tensions. Meanwhile, Tiffany is holding on for dear life. Link
Tim Sweeney on the battle with Apple (Planet Money) - 21 mins: We now know much of the detail behind the AppStore battle between the Epic Games-led coalition and Apple. However here we get the insider view from Epic CEO Tim Sweeney - we get to know where he came from, who he is and the personal philosophy that drove him to make the historic move on Apple. Link
Crypto and the fan-economy (a16z Podcast) - 33 mins: No specific pod for the cultural interest slot this week. Instead, it’s a 2nd offering from a16z. The premises here is quite interesting. What if being an early fan could mean you benefit financially from the artist’s rise. The analogue is the early fans that bought Basquiat paintings in the 80s. Tomorrow, Crypto and fan platforms could approximate this. Link
📹 TikToks
Byron border security. Link
What watching rally driving up-close looks/feels like. Link
Casey Neistat on creating ads for Nike. Link
Another beautiful spot. South America? Link