Alvin's Newsletter: No. 25
Weekly newsletter on what I saw interesting in tech, venture capital and business.
📰 News
Apple unleashes M1 into the world: In my 3rd newsletter I talked about the speculation Apple was moving to ARM based chips. Last week, that was realised as Apple released to the world their new ARM based machines. And they are glorious.
Single thread performance is the best of any Intel machine Apple sells. To put it another way - their M1 MacBook Air - their entry level laptop - beats out the 10-core Intel iMac and their Mac Pro’s!! 🔥 But even more astounding is that it does this at 1/3 of the power!@!# 🤯
Intel should be worried. They have been under disruption since the early 2000’s. This is the latest salvo in the chip wars. But is one of the most significant developments for Intel because it encroaches on the desktop and server markets. Link
Singles day 2020 and Alibaba: Singles day again was huge - almost twice as big as last year. Alibaba did $74B in 11 days compared to $38Bn last year. For reference, in 2011 they day $820M. Epic. Link
This is what live-streaming shopping looked like on the day. No doubt it will hit western shores at some point. Link
VW’s shift to electric: As car-makers shift to electric cars, not all will make the cut. As is always when large shifts happen - there will be winners and losers. Mr Diess, CEO of VW, to his credit, acknowledges this and is working to shift.
“Many of our differentiators, all our knowledge, our actual capabilities, will not be as important any more,”
There are so many factors working against the incumbents. Take just two rather large hurdles VW faces:
Cars today are more software than mechanical. VW is not a software house. Trying to shift to that type of model is fraught with danger for anyone or company coming from non-tech. Tesla on the other hand has a software engineer at the helm.
Modern vehicles contain more lines of code than a smartphone, but Volkswagen relies on suppliers for 90 per cent of its models’ software. Unlike rivals such as Daimler, which has partnered with tech giant Nvidia, VW is ploughing €7bn into building a subsidiary with 5,000 staff, tasked with increasing the amount of proprietary software in VW cars six-fold.
Incumbents within the company. Trying to convince everyone and bring them along for the ride is exhaustive. And ultimately, compromised. Can be done - just difficult. Apple did it. Only because it had what others would call a ‘tyrant’ leading the charge.
“We have to prove that governance is working” he added. “Is it still hard work to convince all stakeholders; to take them along? Yes, because it’s complex. It’s very unionised. There are different interests within the group.”
[Paywall] Link
McDonalds plant based burgers: Like EV, the world is swimming towards plant based meats. McDonalds has been testing Beyond based burgers since last year. McDonalds now moving to ‘plant-ise’ chicken. Link
📚 Reading
What are bubbles: Interesting post on what the author calls bubbles but I think there is a better term for it. A bubble implies it will burst in a blaze of glory/doom and is somewhat negative. In hindsight, sometimes, what could be described as a bubble at the time is just the forward investment into new fields which may or may not ultimately work out. And more interestingly, relies on ‘bubbles’ in other tangental areas to succeed - sometimes a few horizons out. Link
Every financial mania requires suspension of disbelief, but sometimes that’s entirely rational. Early twentieth century progress in cars and late twentieth century progress in computers were both literally unbelievable to anyone who watched them happen at the time. As it turns out, sometimes the intersection of finance and technology implies a double negative: when two industries producing complementary products embrace a shared irrational delusion, the delusion comes true.
How the US mortgage market came to be: You likely have heard of Fannie Mae and Freddie Mac from the 2008. You might not know how and why they came to be. You also might not know that the US consumer enjoys fixed rate home-loans of 30 year terms. Seen nowhere else in the world. Enjoy. Link
All the characteristics that make it terrific for the consumer make it terrible for a traditional lender. Thirty years is a long time to have something sitting on your balance sheet, watching the credit risk compound. Especially something that’s loaded with as much interest rate risk as this. If it’s win/win for the consumer, somebody has to be on the other side of that trade.
The chip wars - controlling the fab: Perfect timing given the Apple news. This is akin to the space race and large geo-political ramifications. It’s why China is developing its own chips - even if they are vastly vastly inferior. They will get better overtime just as Korean cars did. Link
Controlling advanced chip manufacturing in the 21st century may well prove to be like controlling the oil supply in the 20th. The country that controls this manufacturing can throttle the military and economic power of others.
Game theory and how it applies to tech culture: Interesting observations on how tech’s ‘helpful’ culture is game-theory in practice. Link
But look at the industry through the lens of human evolution and game theory. Our underlying behavior when interacting with fellow humans has evolved over millions of years. Humans are successful because these foundations work. And the tech industry has created enormous success by building on top of these evolutionary foundations better than any other industry.
🦖 Entertaining & Interesting things
Some nostalgia: For the old people that read this - some nostalgia for you. Windows XP in the browser. With a working Winamp. Great. Link
Schmidt applies for Cyprus citizenship: Quite curious and unknown what his motivations are. Some are speculating taxation, others, free pass out of the US if things go further south. Link
A look at ARMs first chip: You might be chipped out but one more. Worth it. Link
Blackhole information paradox was solved: All nerds love anything to do with black holes. Link
Tiny bubbles reducing friction for ships: Improvements here can lead to huge cost savings for shipping companies. Link
🎧 Podcasts
The best podcast episodes last week according to Bosco Tan:
Mark Cuban on various topics (Decoder) - 54 mins: This was an interview from the cusp of the US election. Mark Cuban - owner of NBA’s Dallas Mavericks, tech investor and self-fancied potential future US Presidential candidate talks about all these topics. His perspective of where the world is going is always enlightening. Link
Amazon’s trucks and Apple’s back office (The Information’s 411) - 20 mins: Discussion on two big-tech companies. With the holiday season looming and Amazon getting into its busy period, this episode discuss Amazon’s plan to own the “middle miles” in their delivery infrastructure. Meanwhile, apple on the other hand looks to keep the Foxconn status quo despite fraying relationships. Link
Gene editing and a cure for HIV (For Your Innovation) - 41 mins: Modern day gene editing technology seems to have opened the door for a proof-of-concept cure for HIV in animals. The CEO of the company involved Excision BioTherapeutics is interviewed on this. While the episode is a bit of a deep dive, it provides a good overview to the techniques. The guys also touch on Covid vaccine. Link
Vaccine news and the stock market (What Goes Up) - 30 mins: The Pfizer vaccine news seem to have triggered some wild moves in the stock market - “from growth to growth”. This episode breaks down why and how investors should approach the post-Covid world. Link
📹 TikToks
The great ‘black mamba’ putting down a $500K bet on the floor. Link
Spying on the scammers. Link
Welcome to the gulag Lewis. Link
How’s this place for paradise. Link
Single ladies with Timberlake and Beyonce. Link