Alvin’s Newsletter: No. 6
Weekly newsletter on what I saw interesting in tech, venture capital and business.
📰 News
Luckin Coffee Fraud: Seems like it is the season for accounting fraud. This week we have a Chinese company named Luckin Coffee, listed on the NASDAQ, reporting a $310M accounting scandal. Their CEO and COO, at least, had been inflating revenue numbers shortly after IPO’ing. The fallout has been swift. CEO & COO gone. Chairman and CEO defaulting on margin loans secured by Luckin Coffee shares. Shares down 90% - subsequently delisted from the NASDAQ. Out of this has come something more wide reaching. Foreign companies listed in the US, currently do not have accounting oversight to bodies in the US and don’t have to adhere to US accounting laws such as Sarbanes Oxley. That is all about to change with the Holding Foreign Companies Accountable Act’ that has passed the US Senate. This will force foreign companies to the above and also mandate that they are not owned or controlled by foreign governments. Link
How police hacked Encrochat and its underground criminal network: If you like crime shows like Startup or The Ozarks, this is an entertaining read. Also interesting is how you go about cracking the strong encryption, especially in software and apps, that is being employed these days. The Europeans have the answer - you don’t. Instead you target the weaker entry-points around the target. In this case, the device itself and loading malware to watch keystrokes as criminals type in the details of hits and drug-deals into their keyboards. No cracking required! Link
📚 Reading
New York Times pulled out of Apple News. Link
How TikTok’s parent, Bytedance came to be. Link
A 28yo with no degree is on the Fed. Reserve’s must read list. Link
BetaShares on its tech ETF covering Australia’s growing tech companies. Link
🦖 Entertaining & Interesting things
MKBHD talked to Craig Federighi on Mac OS Big Sur’s design and iconography. Link
How Google’s display advertising business works. Link
A curated list of some great early-stage resources. Link
Marcus Padley gives a run through of his fund and the approach it takes. Link
🎧 Podcasts
The best podcast episodes last week according to Bosco Tan:
Classic Disruption Case Study; Blockbuster vs Netflix (Land of the Giants) - 37 mins: Episode 2 of the Netflix origin story tells of the Blockbuster vs Netflix battle. It’s a back and forth tug of war that’s almost as compelling as Dan Carlin’s (Hardcore History Podcast) tale of the Battle of the Marne. Quite often we remember disruption as a foregone conclusion when looking back. However, the reminder here is how close Blockbuster actually came to destroying the pesky disruptor. Link
Picking Ideas and Evaluating Markets (Venture Stories) - 53 mins: As I reflect on what’s next, I constantly ask “what should I spend my time on?”. As an investor, I constantly ask “what should I put my money to?” Here are some good mental models to help me quickly cull great ideas from the good. It’s a case of spend 53 minutes here to save weeks and months of time later. Link
Think Through the Next Stage of Growth (The Breakout Growth Podcast) - 52 mins: Finder has been a successful Australian company in the online finance space for a long while now. However, they’re not resting on their laurels. Here, their charismatic co-CEO Fred Schebesta sits down with growth guru Sean Ellis to break down the ingredients for the next stage of growth. Key here are the cultural and structural foundations of the organisation that’s already in place. Link
All About Gross Margins (a16z) - 36 mins: The truest of truisms is that startups should ultimately make money. The question is when this ‘ultimately’ kicks in. This episode takes an evolutionary view on how to develop, project and manage margins. It’s a primer on the topic, for founders and investors alike, complete with talk of benchmarks. Link
📹 TikToks
Steve Jobs on why most people give up. Link
Tilt your phone. Link
Drew Houston on how to learn. Link