Alvin's Newsletter: No. 3
Weekly newsletter on what I saw interesting in tech, venture capital and business.
📰 News
Apple moves Macs to in-house CPUs: Apple has changed the CPU architecture of its Mac product only twice in history. Speculation is mounting (and looking very likely) that Apple will announce a move to in-house built chips in a weeks time at WWDC. Why is this moment important? The implications can be linked backed to the decision to use ARM based CPUs in its iPhones and iPads 15 years ago. These CPUs are still generations ahead of the competition in terms of performance and one of the factors leading to the success of the iPhone and iPad. More importantly though, that decision has been pushing the whole industry forward at a blistering pace, similar to what we are seeing with Tesla and EVs. The alternatives 15 years ago, had Apple chosen a different route, lead to the mobile and app led revolution delayed by over half decade or more. Link
TikTok in it’s ascendancy : By almost any measure, TikTok’s rise in tech is astounding. Here are a few of those measures: In private markets, TikTok is rumoured to be valued at $140B - 4.8x that of SnapChat and almost as much as Tesla. It launched internationally on Aug 2018 - 22 months ago. Has 1.5B monthly active users - on-par/more popular than Instagram. And makes more ad-revenue than Youtube - $17B to Youtube’s $15.1B. There is a lot of magic happening at TikTok - amongst other things, new behaviours and models being created. e.g. TikTok doesn’t rely on a social graph to work out what to show you like the other social giants do, Facebook, Instagram, Snapchat and WhatsApp. Instead, it uses data, starting with your location. Then as you start watching, it analyses the faces, voices, music, and objects in videos you watch the longest to make sure the next TikTok you watch is just right for you. It means the feedback loops are even shorter and every user signing up is ‘activated’ almost straight away. This is why it is like wildfire. Link
📚 Reading
Facebook is setting up a venturing arm named Scoop. Link
The last place to be connected to the NBN will occur this week. Here is a look back at the NBN. Link
Uber lost the GrubHub deal. Link
What is ZIRP and an excellent take on its impact on yield, risk, capital and market distortions. Link
ASX’s first tech index and as a result, it’s first tech-focused ETF from BetaShares. Link
🦖 Entertaining & Interesting things
Snapchat held its yearly conference, virtually. And it was excellent as far as virtual conferences go. Link
A look into the recovery of the Apollo 12 computer code. Link
This history of chairs since the 1800’s to today. Link
A discussion with legendary investor, Bill Ackman. Link
🎧 Podcasts
The best podcast episodes last week according to Bosco Tan:
Aggregation Theory 101 (Invest Like the Best) - 77 mins: Fact - Ben Thompson of Stratechery is the best business analyst of this internet age. Fact - Ben’s “Aggregation Theory” is the seminal piece of thought leadership for today’s tech business leaders. Here he reminds us what it is, why it’s so important and riffs on Spotify vs Netflix, Shopify vs Amazon and much more. Link
Steaks From the Lab (Wild Hearts) - 62 mins: The food revolution, and specifically the protein production revolution is well and truely in full swing with the likes of Beyond and Impossible grabbing global headlines. Here, my old colleague Mason Yates of Blackbird sits down with the Australian founders at Vow to talk about their lab grown “cultured meat” startup. This is a bio-science lesson complete with the obligatory Galapagos anecdote. Link
It’s 2020, LSD is Hip Again (Business Casual) - 48 mins: On the back of the cannabis legalisation wave, there’s an increasing move to re-examine the therapeutic properties of psychedelics. I first heard about this via Tim Ferriss’ podcast. Then there was Axe’s hustle for the ayahuasca investment on Billions the TV show. Here’s the detail - the opportunity, where things are today and how hard it might be to make money. It’s another not-yet-legal but fast approaching wave. Link
How Hertz Failed (The Journal) - 17 mins: The global car rental giant Hertz filed for bankruptcy recently. This is a thick plotted story of inability to innovate, private equity led debt financing, asset backed securities and demand destruction. The nuance is that it’s not that demand in car rentals falling off a cliff that ultimately killed Hertz, it’s the demand in the used car resell market. Link