What We’re Reading (Week Ending 09 October 2022) - 09 Oct 2022
Reading helps us learn about the world and it is a really important aspect of investing. The legendary Charlie Munger even goes so far as to say that “I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading.” We (the co-founders of Compounder Fund) read widely across a range of topics, including investing, business, technology, and the world in general. We want to regularly share the best articles we’ve come across recently. Here they are (for the week ending 09 October 2022):
1. 105-year-old party elder sends blunt message to Xi – Katsuji Nakazawa
At 105, Song Ping is the Chinese Communist Party’s oldest retired official. Famous for once pressing former President Jiang Zemin to fully retire, Song recently made a rare public appearance.
Due to his advanced age, it was only a video message. But it has caused a stir in Chinese political circles ahead of the party’s once-every-five-years national congress that begins on Oct. 16.
In a congratulatory message for an event on Sept. 12, the centenarian said that the policy of reform and opening-up “has been the only path to the development and progress of contemporary China and the only path to the realization of the Chinese dream.”
These are words that President Xi Jinping himself spoke nearly five years ago. Song cleverly used Xi’s own words to send a message to the top leader.
Xi originally made the remark during his New Year’s address that was released on Dec. 31, 2017, marking the 40th anniversary of the introduction of the reform and opening-up policy by former leader Deng Xiaoping. But Xi has rarely repeated the remark.
More recently, Xi has switched to his own economic policies, such as “common prosperity” and “the prevention of the disorderly expansion of capital.”
Entering his third term, Xi wants to show that he has overtaken Deng in terms of achievements. It is crucial to pave the way for a fourth term and possibly being leader for life.
Song has raised a red flag. Born in 1917, even before the Chinese Communist Party was established, the centenarian has signaled that Deng’s reform and opening-up policy is to be defended at all costs.
It is an undaunted and politically dangerous move.
Song served as a Politburo Standing Committee member under Deng after the 1989 Tiananmen Square crackdown. He also served as a secretary to former Premier Zhou Enlai.
He is well-versed in the finer points of intraparty struggles.
2. Why I Remain Bullish on the United States of America – Ben Carlson
Following the Great Financial Crisis of 2008 a number of macro doom-and-gloomers began predicting a collapse of the U.S. dollar. The Fed was “printing” trillions of dollars. Interest rates had never been that low before.
It was an appealing narrative if you were someone stuck in the negative feedback loop of the biggest economic crash since the Great Depression.
In recent years, it was the crypto maximalists who began predicting the end of the global reserve currency status of the dollar. Alas, the U.S. dollar is stronger than ever…
…Could the dollar be surpassed someday by some other currency or digital equivalent? Of course. But a total collapse of the U.S. dollar? This seems unlikely to me anytime soon.
Why?
Well, this country has an abundance of natural advantages over the rest of the world that help give us that global reserve currency status. Let’s count the ways:
There aren’t any natural heirs to the throne. In the 1980s it was Japan that was going to overtake the U.S. as a global power. That didn’t happen.
Now China is nipping at our heels. China has seen immense economic growth in recent decades and they have more than a billion people. But look at China’s demographic outlook:…
…Economic growth is basically a function of population growth and productivity. China might be in trouble in the decades ahead…
…People still want to live here. Our immigration policies aren’t perfect at the moment, but people from around the globe still want to live here. Immigrants have founded more than half of all start-ups that are valued at a billion dollars or more. Almost 80% of those start-ups either have an immigrant founder or an immigrant in a key C-suite role. As long as we don’t screw things up too bad in the years ahead people from other countries will still want to live here and start businesses.
3. David Senra – Polaroid: The Genius of Edwin Land – Patrick O’Shaughnessy and David Senra
[00:03:45] David: I’ve studied almost 300 of history’s greatest entrepreneurs in Founders podcast so far. I won’t shut up about Edwin Land. One of my goals in life is if you’re interested in entrepreneurship or doing anything difficult, please, please study this guy. I’m shocked at how so few people know who he was. Why is that important? You know who knew he was? Steve Jobs. Because Steve Jobs would not shut up about Edwin Land. He called Edwin Land his hero. Patterned much of what I thought were unique Steve Jobs’ ideas when I first encountered Steve Jobs and how he built Apple turns out, oh, he just literally copied those from Edwin Land building Polaroid. But Steve Jobs by the time he was 20 called Edwin Land, a national treasure and said he was just hero. And then he’s dying and he’s giving interviews to Walter Isaacson, who writes that biography of him and he’s still talking about the influence Edwin Land had over him. You could argue, most people would say, “Hey, Steve Jobs, if he’s not history’s greatest entrepreneur, he’s up there.” So, why the hell is this guy so obsessed with him? That sent me down the rabbit hole. I was like, “Okay, well, you’re talking about this guy all the time.” I went and tried to find every single book. And now, I’ve read five books on Edwin Land. I just spent the last two weeks rereading three of them. In the last two weeks, I read it another thousand pages on him. I think I’ve done seven episodes on him. That’s how important he is.
But I think to give the listener an idea of why he’s so special, I just want to read a paragraph that comes from this book. The book is published almost 40 years ago in the ’80s. It’s a quote that the writer, the writer of the book worked for Edwin Land for 30 years. He’s quoting his boss, which was Edwin Land’s right hand man and it’s just fantastic. And he says, “Why is Polaroid a nutty place?” And he says, “To start with it’s run by a man who has more brains than anyone has a right to. He doesn’t believe anything until he’s discovered it and proved it for himself. Because of that, he never looks at things the way you and I do. He has no small talk. He has no preconceived notions. He starts from the beginning with everything. That’s why we have a camera that takes pictures and develops them right away and no one else does or can’t.” That could lead to the next discussion. Why is Polaroid so important? Me and you were talking unrelated yesterday and I told you about my friend, John Coogan, who does really in-depth YouTube videos. He’s also a two-time YC Founder. John is only obsessed with technology companies, technology companies that have some patentable advantage. He texts me the other day. He’s like, “Hey, I’m doing research for a video. What are some good examples of technologies that enjoyed long periods of exclusivity?” I was like, “Oh, shit. That’s a really good question.”
So, I go through my entire list. I want to help him as much as I can because I really do enjoy what he’s making. And I go through them like most of the people, if they started something that was patentable, other people realize, “Oh, this is really valuable. Let me have a team of lawyers find a weakness.” Somebody messed up somewhere along. They might have period of exclusivity for five years, maybe 10 years. I went through it. I was like, “It’s Edwin Land in Polaroid,” who had the instant photography field to themselves for three or four decades from mid-1940s to let’s say the very early 1980s. He literally built one of the world’s greatest technological monopolies. He had the field entirely to himself because he locked up all his patents, so by the time Land dies, the only people that have more patents than he does, I think Land had 535 of them was Thomas Edison, and I forgot the second guy. The crazy thing about that, that I was also talking about, is that Kodak who owned the vast majority. Polaroid had had 10% of the entire photography market, but they had basically 100% at the instant photography market. Kodak had the other, 88 to 90%. George Eastman was almost this Rockefeller type person, but he did it just in overall photography.
So, Kodak is like, “Oh, okay. We’ve let you get away with this for multiple decades. We’re going to try to jump in here.” They jumped in. The result of that is this patent infringement case went on for 15 years to get resolved. At the end of that, Polaroid is awarded the largest amount in damages out of any patent infringement case in history. I think it’s since been superseded. This is I think in the early 1990s. it was like a billion dollars. Not only did he lock it up for 40 years because of his technical brilliance, which he talked about. One thing I think entrepreneurs can learn from Edmond Land, his motto is fantastic. He’s like, “My motto is deeply personal and it may not apply to anybody else or any other company,” but he’s like, “Don’t do anything that somebody else can do.” When other people on his board or other managers is like, “Hey, yeah, we’re making a lot of money inventing instant photography,” Xerox is popping off because Xerox was on the up at this point in history. “Let’s make a copier or let’s make a printer or let’s do all this stuff.” He’s like, “We’re not diversifying for shit.”
He had a great analogy. He’s like, “We’re on the 90-yard line, the next closest guy is 30 yards behind and you want me to run around circles. We’re not diversifying. We’re all in on this.” That I think sets it up, which just like, “Okay, we’re dealing with an unusual person.” There’s all kinds of people. That’s like, “Okay. Yeah, you could be super determined and you can be super smart.” So, let’s say you’re 100-level determination, there’s definitely a ton of people like that. Then there’s a ton of people that are like 100 at a 100 level of intelligence. Edwin Land had both and he did it from 17 until 70. And he was a fully formed person. He’s extremely articulate. He was handsome. He was well-dressed. He could talk to you about art. He talked about history. He did all of the product presentations. The way you think about Edwin Land is okay, when there’s a new product, everybody knows when there’s a new Apple product when Apple was alive, Tim Cook is not getting on stage. It’s going to be Steve. Same thing. Edwin Land gets on stage and he had almost like P.T. Barnum levels of showmanship. The reason I won’t shut up about this guy, and I hope people listen to the podcast I made on him and read the books because they’re fantastic, it’s because there’s only one him. I haven’t come across anybody that’s even close to him…
…Let me give you another funny story. He drops out of Harvard twice. The first time he dropped out, he dropped out when he was 17 because he said his fellow classmates were unserious. They were not matching his intensity and his dedication. And that’s another thing when you read about him. They talk about his permanent intensity. He’s intense. There’s a quote I have in front of me, “From the first day I met him, he impressed me as a person who lived his life more intensely than the rest of us.” That’s a quote from his first employee. He was 17. People were still describing him like that at 70. He starts reading this textbook. Textbooks are not fun to read. He says, he’s sleeping with it under his pillow. He’s reading it nightly, “like our ancestors read the Bible,” I think is the quote he used. Religious study. Then he starts doing these experiments. He drops out of Harvard. He’s in New York city. He’s like, “Okay, I want experiment with light. What do I do?”
By the time he dropped out of Harvard, he had gone to the Harvard library and read every single book Harvard had on the science of light. So, then he goes, “Okay. Got that all done. That’s fine.” Moved into New York City. Gets this tiny little crappy apartment. It’s a bed and a lab. That’s his whole life. He’s like, “Okay, what time does the Newark York public library open? 9:00? I’m there at 8 55.” He goes there and reads every book on light. And then he is like, “Okay, now, I’m ready to begin my experiments.” He gets as far as he can. And then he realizes, “Hey, I need some equipment.” So, I think it’s Columbia University. This could be in the 1910s, maybe 1920s, where we’re at in history. So, he is like, “Okay, I’m trying to run experiments. I don’t have a lot of resources. Columbia University does. They’re not going to let me in because I don’t go to school there.” So, he waits till they close and then he breaks in every night and he runs his experiments.
This is who we’re dealing with. He’s 17. What is going on here? That is also something I’ve seen in his entrepreneurship. John Carmack, he went to juvie for Apple 2. Bill Gates and Paul Allen broke into a place to use a computer. George Lucas when he was a young filmmaker. This is very common. They’re not stealing things. “I’m just trying to learn and you guys have resources.” They’re so dedicated, they’d break the law to learn. It’s just another level of intensity. Starts when he was 17. By 19, he gets his first patent and it’s like a giant scientific discovery. He’s like a minor celebrity, really early. That helps him build his company. He does the patent. He makes the first synthetic polarizer. I’ve read what polarizers and all this stuff multiple times, I don’t even understand it…
…[00:43:02] Patrick: I think there’s probably something also to be learned about the aftermath of Polaroid after Land’s death. You said something before we went on mic, about the idea of Apple in the era when he was gone. Between his two stints at Apple and what happened to Apple and how similar that was to what happened to Polaroid. I’m thinking back to your enlightened despotism of some of these great entrepreneurial leaders. Talk a bit about what happened to Polaroid after he died and why. And what lessons we can glean from that, looking forward.
[00:43:31] David: There’s a human lesson here, too. This guy has been knocking it out of the park for six decades. You’re not only more driven than anybody else around you. Your record is, at this point now, he’s close to 70 years old. It’s just amazing. You’ve invented entire new industries. Every product you put out, people love it. Eventually, the problem is, of course, I’m right. I assume that I’m right. So, he invents something called the Polavision, which is maybe late 1970s, early 1980s, sometime around there. This is the rise like the home video camcorder thing. He actually is friends with Sony’s Founder, Akio Morita. Land does this great breakthrough, but he’s too late, so he makes, and people can Google Polavision. You can actually see this thing. It’s cool looking for the time. But it’s a handheld way to make videos. But the videos are only three minutes long and they have no sound and it had been development for decades.
Polaroid writes off. I think the official write off they do is $68 million on this project. But they’re like, the accounting is funny. Highly likely it was $500 million. He’s not trying to make money. He’s just like, “Oh, yeah, I got the money. Let’s throw that back in.” He just wants to make great products. When that happens, the board starts to try to push him out. He was CEO, President, Chairman, Head of Research and Science. He’d get like 17 titles. And they’re like, “Edwin, you got to give Bill, this guy, Bill McCune, presidency. You got to give him one of your things.” The stock was having trouble at that time, so he felt pressure and he did that. Bill was more like a John Sculley person. He was way more technical than Sculley, so it’s not a perfect analogy, but his whole thing is, “Let’s diversify.” And that’s where Edwin has that quote, where I just said earlier, it’s like, “We’re on the 90 yard line, the next guy is 30 yards back, and you tell us to diversify.”
This is what Steve Jobs noticed, because Sculley and Jobs met Land. After Land left Polaroid, he had this thing called the Roland Institute of Science. That’s where Jobs and Sculley met him. And they’re leaving and Jobs is like, “That’s the stupidest thing I ever heard of.” They took a company of a truly great man away for blowing a lousy couple of million dollars. Not realizing that three years after Jobs saying that, that Sculley is going to do that to him. The analogy there is we all know that Jobs gets kicked out of 30, has his wilderness years for 12 or 13 years, comes back. When he comes back to Apple, it’s on the precipice of bankruptcy. It’s not doing well. I’ve read 12 books about Jobs. Some people say that was overstated. Some saying, “No, it would happen in a few weeks.” But it’s not doing well. We know that for a fact.
What happened to Polaroid is Land leaves. They try to diversify and it’s also like they started to have digital cameras and they started having camcorders. His main innovation was that, “You can get the picture right away and it looks good.” Now, you’re having, why would you need a Polaroid camera? I mean, you don’t use Polaroid cameras. We take picture every day with our iPhone. What’s crazy in the 1970s, there’s a video you can find. And I’ve read the entire script where Land just sits there unscripted and just goes, “Eventually, the camera is going to be something,” he holds up something that looks like an iPhone, but it’s not an iPhone, “It’s going to be something you carry on you. You can put into your pocket. You’re going to keep it all day long. You’re not going to take two pictures. You’re going to take hundreds every day.”
He is describing in 1970, the smartphone. So, what happens is he has another idea after Polavision fails. But now, he has to go to Bill to get funding. I forgot what it was, maybe $50 million. “I have a project. I want to do it.” Bill is like, “I’m not funding it.” And Edwin is like, “If you don’t fund it, I’ll leave.” And Bill says, “That’s fine.” Edwin Land leaves his company. It’s heartbreaking. He gave his entire life to it. If that happened to me, I’d probably jump off our bridge next day. He continues. He’s still in poor health and he lives for another 7, 8 years. Bill isn’t a product genius., so he’s just like, “Okay, we’ll build printers or we’ll build Xerox or we’ll build film or we’ll do all this other stuff that we have really no advantage.” Exactly Apple after Steve Jobs left. You go look at their very confused product line. It’s like, “Oh, what’s that technology company doing? Okay. We’ll just do that, to but in a slightly different way.” It goes down rapidly.
So, you have the loss of the in-house genius and you have this rise of digital cameras and everything, and it was fast. Less than a decade, I think. Even if they’re not bankrupt, they’re starving off bankruptcy. And then they’re selling off factories. Remember, they also had a huge physical infrastructure. It’s not like a lot of the companies that exist in America today. They were making their own film. They had this huge campus they had to pay for. And that’s just one by one, “Okay. I’ll sell off your foot and maybe that will work. No, that didn’t work? Okay, I need the leg. Give me the leg.” It’s like that old Monty Python thing where it’s like, then you just have a torso. They just cut it off. And by that time it was over, but they have a cult following. So, that’s why the book that I’m holding my hand, The Story of Polaroid, it talks about the impossible project. Essentially, people had bought the assets of Polaroid, try to keep it alive and then they resold it. It’s gone through all these different manifestations today. It is still a brand that exists today, but it’s half of 1% of what it was.
[00:48:05] Patrick: If you were to affix that picture that we talked about earlier of Land’s first demonstration of the Polaroid process in your office, above your desk, whatever. And you were to see it, first thing each morning, what’s going through your head as you see that picture? If we had to sum up this discussion on Land and Polaroid, what boiled down? Does he and the story most represent to you that you find useful for your life and you think other founders might find useful for theirs?
[00:48:34] David: He changes the direction of my life. I was working on two things at that time. I was working on Founders podcast and I had this other idea. It was podcast news for entrepreneurs. We all listen to a lot of same podcasts. There’s a lot of valuable information in these podcasts. There’s no possible way you can listen to all of them. We should hire somebody to take notes and then we’re just on a giant email list. And it’s like, there’s 10 podcasts we listen to. Here’s the 10 notes. It’s still a good idea so much so that people were paying me do it every year.
But when I heard Edwin Land said, “Don’t do anything somebody else can do,” I realized somebody else can do that, but nobody can do Founders the way I can do it. The second thing is this guy will not shut up about the importance of focus and concentration. There’s a line that says among all of Land’s intellectual arsenal, which was huge, the chief asset seems to just be simple concentration. He would go around saying, “Hey, my whole life has been spent trying to teach people that intense concentration for hour after hour can bring out in people resources they didn’t know they had.”
So, I was like, “Okay, I’m going to only do what I can do. I’m going to concentrate completely on it. And then he’s got another great line. “There’s something they don’t teach you at Harvard business school and that’s anything worth doing is worth overdoing.” But even those three ideas is just, “Don’t do something anybody else can do. Do something that’s uniquely you. Make sure your personality is in it.” Edwin Land’s personality is Polaroid writ large. Concentrate on it and then take it further than anybody else possibly would. And if you do that over a long period of time, you’ll get everything out of life that you want.
4. Harley Finkelstein – Building the Entrepreneurship Company – Patrick O’Shaughnessy and Harley Finkelstein
[00:05:49] Patrick: One of the things that really animates me is people who are distinctive, wacky, different, clearly not similar to other people that I’ve met, something just totally unique about them, often these two categories intersect or overlap, where because they’re doing something they care so deeply about, they don’t really give a crap whether or not they’re doing it in a conventional way or they appear in a conventional way or they communicate in a conventional way. You have this great idea of a river stone, the average polished executive. I’d love you to tell that story of the river stone and what you’ve learned about that and being distinctive and how that relates to potentially big outcomes versus being well-rounded and good at a lot of things.
[00:06:29] Harley: One of the cool parts of leading a large company is that I get to meet a lot of other people leading large companies. First of all, there were big differences between founder-led companies that are at scale and non-founder-led companies. It’s not that one is better, one is worse, it’s just the culture is absolutely unequivocally different. Tobi started the company and still is the CEO of the company. He’s at the helm. So we are definitely a founder-led company. What I’ve noticed, however, the founder versus non-founder-led companies, most large companies, when a leader comes in and that leader has a particular skill or a better way to put it, a particular edge in one category, one area of the business, over time, that leader and those leaders end up becoming fairly well-rounded leaders. You put a sharp stone in a riverbed over many, many thousands of years, it’ll become a well-rounded beautiful river stone. It’ll be smooth and it’ll be round in all sides. There won’t be any spikes.
That is not how we think about leaders growing at Shopify. What we really try to do instead is find people who have these spikes, these edges, and allow them to sharpen those edges even further. The caveat to this whole thing is they have to have enough self-awareness and they have to have enough capacity to realize that, “Hey, I’m really good at this thing and I think there’s a chance that I could be world class at it, but these other things I’m just not that good at,” and then to put up their hand proverbially or literally and say, “I need help on these things because this is not where I’m going to excel.” So at Shopify, we want our leaders, and I think if you look at Tobi and I in particular, we’ve tried to do that, sharpen our edges so we can be really, really great and eventually potentially even world class, but mitigate our weaknesses by hiring people that are better, smarter, faster than we are at those sort of things also.
I think that actually provides for a much more enjoyable pursuit of life’s work. I’ve been at Shopify now for a third of my life, and I think that’s really quite unique. I mean, I’m 38. A third of my life is a long time relative to how many years I’ve been on the planet, but I think the reason that it is unique is because it has created an environment where people can come, they can bring their potential life’s work with them, their potential life’s work pursuit, and they can get really, really good at it in a way that at other companies they would get good at it, but they’d also get other things at the cost of that particular spike getting dulled over time.
[00:08:36] Patrick: One of my friends, Graham Duncan, has this amazing essay where he talks about someone that may be building a new investment platform. His business was backing other investors. There’s just really simple idea in there, which is figure out what your compulsion is, the thing you literally cannot help but do all the time, and figure out a way to put that at the center of your platform or of your job or of your role or whatever. I think it’s the same concept of spikiness. Forget exceptionalism. You can get more and more exceptional over time, but even deeper than that, it’s like what are you compulsive about? What can you not stop doing almost no matter what beyond your control? If you had to apply that to yourself, what is that compulsion? What is the thing you can’t help but do?
[00:09:18] Harley: There’s a couple terms that I use. One is the ground state. What is your ground state? A silly way to think about is, what do you think about in the shower in the morning? You’re not checking your phone, and you’re about as present as you possibly can because there’s really nothing else to distract you in the shower. What are you thinking about? I’m really lucky because the thing that I’ve been thinking about for most of my life in the shower is a thing that I get to do every day at Shopify. When I was a kid, I’m Jewish, so when you’re 13 years old and you’re Jewish, you go to a lot of these bar mitzvahs, bat mitzvahs for girls. One of the things that is fairly common at these bar mitzvahs is that there’s a DJ there. I became somewhat, not obsessed, but certainly really interested by these DJs I was encountering basically every weekend for a year period during that bar mitzvah period, first in Montreal where I lived, where I grew up, and then I moved to South Florida, so then in South Florida. The reason I thought the DJs were so compelling was not because of the music. I still DJ because I like to DJ, but I wasn’t really into the music itself. I just loved the idea that there was this combination of words and sounds. There was a formula that they used to take the entire group of people that were sitting down at tables eating rubber chicken, and within three minutes, there was like a mosh pit on the dance floor or there was a Congo line happening. That idea of they can do things, it’s almost like writing code. With these three or four steps, I can actually change the entire energy of a room of three or four hundred people. So I really want to be a DJ. I was 13. No one would hire me.
So my dad, he’s an entrepreneur, he never was very successful at it, but he was always entrepreneurial, encouraged me to start my own DJ company. I started my own DJ company, hired myself, ended up DJing 500 bar and bat mitzvahs, which was really quite fun. Actually, just a total aside, but one of the things my dad did because he couldn’t give me money to start these silly businesses with all throughout my adolescence was he would make me a business card for pretty much every single silly business I had, which in hindsight was his way of saying, “You can do this.” He couldn’t give me $1,000 or $5,000 to start because he didn’t have the money, but he was basically endorsing that all these crazy ideas may lead to something. I tell that story not because DJing was that important to me in my life. The problem that I had was I wanted to DJ, no one hired me. So I used this tool in my toolbelt called entrepreneurship, and that entrepreneurship tool allowed me to start my DJ company. Years later, I ended up moving back to Canada from South Florida to go to McGill for undergrad. My parents went through a really tough time. My father was not around anymore. My parents had no money. One thing, and I pulled out this tool out of my toolbelt called entrepreneurship and I started selling T-shirts to universities all across Canada. The problem was whatever it was, but the solution was use this tool called entrepreneurship. In 2005, I met Tobi I moved to Ottawa because a mentor of mine was teaching law here and I wanted to go to law school, become a better entrepreneur. That was his advice. Met Tobi, and Tobi had just written this piece of software to sell a snowboard, a Snow Devil. Very quickly realized that other people may want to use the software to sell their own products.
I became one of the first merchants on Shopify. I started selling T-shirts. Law school didn’t allow me to run the business the way I did in undergrad because you actually have to show up to class. You didn’t have to do that undergrad, but again, I needed to make money and I had to be in class. Attendance mattered in law school. I started this T-shirt shop on Shopify and I was able to support myself. These three stories in themselves are unique and interesting. The main thing for me was that entrepreneurship was a way to solve problems in my entire life. The reason I became so obsessed with what Shopify was doing, what Tobi was doing was because it felt like he was making something that was previously not possible possible. My ground state has always been, how can we actually make people’s lives better through entrepreneurship? What are people’s unique individual ideas of success are? Is it putting food on the table? Is it to make a billion dollars? Is it to change an industry? Is it to go to space? Whatever those things might be, one of the common solves of those things is to use an entrepreneurial vehicle in which to do so. The fact that every minute a new entrepreneur gets the first sale on Shopify, it means that my Venn diagram of my personal interest, which is this obsession that entrepreneurship is this great tool and the fact that Shopify makes that tool even better and more accessible, the Venn diagram entirely overlaps…
…[00:25:08] Patrick: Yeah, fortune cookie advice. Oftentimes, the best sounding advice is very fortune cookie and then it’s, “Well, now what?” I’m really curious what you’ve learned personally about how to select the ideas and the mentors and the people in the first place and then how to operationalize that advice in a productive way that’s not just wheel spinning.
[00:25:26] Harley: I don’t think there is one mentor or one person, frankly, even one company that any one listening should try to emulate entirely. That was a huge learning for me. When I was younger, particular in my early 20s, I would meet these people, I’d be incredibly impressed with them, and I would just want to do everything that they were doing. The problem is you were only seeing one side, one particular perspective of their life. One of the things I began to do in the last five or six years are to actually categorize these mentors, these advisors in my life. Everyone would think that the reason that Seth Godin is a great mentor and a friend is because he’s the greatest marketer on the planet. A lot of what I do is marketing. I have learned far more from Seth about marriage and about parenting than I have about marketing. He may listen to this, and I’ve learned a lot about marketing. If you want, I’ll tell you some of my favorite Seth Godin going stories, one of which I think is probably relevant, and I’ll bring it up in just a minute, but his relationship with Helene and with his sons is incredible, and I don’t just mean he calls them a lot. Just he is there for them in a way that I don’t know a lot of husbands or fathers are.
When Lindsay and I got married, I was looking for some relationship role models, and when we had our first child, Bailey, I was looking for parenting role models. When Shopify went public, I started looking for public company executive role models. I think you actually have to have a bunch of these different ones and then aggregate them and aggregate their information. I think you also have to have this asterisks in your mind constantly saying, “I still probably don’t know the whole story and I can take one thing or I can take this tactic that they use, but I also have to understand they’re maybe in a very different circumstance than I am.” Maybe Seth’s able to be a better husband than I am because he’s at home more than I do. I travel a ton. He tends not to travel as much, but creating this personal board of directors where you have these categories of different mentors I think is important. Then I think what’s even more important is to swap them out over time. It doesn’t mean that they become bad mentors, it means that you and your circumstances are going to change, you’re going to grow, your life is going to evolve and as your life evolves, so should the people in your life that you’re taking advice from or that are influencing you.
By the way, the story that I was going to mention that is one of my favorite Seth Godin stories, which actually is a wonderful story for any entrepreneur listening. He tells the story. I’m going to butcher this quite a bit, but he was in Momofuku, I think it was David Chang’s opening or something like that in New York City at the new Momofuku. He was sitting down, he was ordering Brussels sprouts, which is now a famous dish in the Momofuku menu, and he said, “I don’t want the bacon.” The server said, “I’m sorry. It comes with bacon.” Seth says, “I can’t eat bacon, and it’s cheaper for you if you don’t add the bacon, so just remove it.” The server said, “I’m sorry. We can’t do that.” David Chang came out or some manager came out and said, “Mr. Godin, I’m sorry but this is how we serve it,” and they went back and forth, and eventually the manager said, “This place is probably not for you,” and that’s when Seth knew that David Chang was going to be a huge success.
The reason that story is important is because it’s such a great way to story tell an idea about you can’t be everything to everyone. Pick your niche. Going back to Kevin Kelly, pick your niche. So I pick up these stories, these anecdotes, and I put them into my pocket from all these amazing people that I get to meet and over time, I’m really fortunate I get to meet more of these people and I combine them all into a plan. I can pull on these stories and these anecdotes and this advice all the time. What’s really neat is I’ve been doing this personal board of directors thing since I was a kid, since I was 16 years old. The mentor of mine who convinced me to go to law school, he’s been my mentor since I was 16 years old. He just took a liking to me and I liked him and I learned a lot from him. He’ll probably listen too. By the way, he’s on his second or third marriage. He’s not a relationship role model and he knows it, but the way that he thinks about investing, for example, very, very long term focus on investing. Multi-generational compounding is something that I had not encountered from anyone else. So I put that lesson in my pocket, but I would never take advice from him on marriage. I think discerning those things I think is really important.
[00:29:06] Patrick: Is there a piece of fortune cookie advice that is as ubiquitous as possible that you think is terrible?
[00:29:13] Harley: This is a bit of recency bias, but one thing we’re talking a lot about right now is this weird strange thing about micromanagement being bad. I think that is bad fortune cookie advice. I think that the best leaders that I know, they’re up here and they’re thinking about the big picture and the big strategy and the big vision, but man, every single great leader I know running companies is also in the weeds and the details. Whether that’s writing code or that’s tweaking a press release or that is putting a deal together like the contract together themself, I think the micromanagement thing is total crock of shit, if I can say that. I don’t know anyone incredibly great at what they do who’s not sometimes in the details. Micromanagement is used by people to say, “Well, my boss is micromanaging me,” or “This person is micromanaging me.” Often, not always, but in some cases because someone’s not doing their job properly, someone’s not doing it at the level of quality of execution that probably it should be, that would be one fortune cookie.
I think right now there’s a huge hate on education. Forget school. Who needs school? Go learn it yourself on podcasts and YouTube. That’s becoming, certainly in my tech world, that’s becoming a lot more prevalent of a fortune cookie advice. I think that’s also bullshit. I don’t think school is for everybody. If you don’t want to go to school, don’t go, but I think there is a way for you to be incredibly selfish about school, meaning you go, you pay your tuition and you demand that that university gives you the requisite proportionate amount of skills back in return, and if they don’t, that’s bad. That’s the pendulum swinging. Everyone should go to university and no one should go to university. There are some people that can go to school to the right programs. Law school for me was incredibly important, impactful way more than business school was, and I never really was a lawyer. I learned how to write in law school. That in itself was worth the tuition.
[00:30:47] Patrick: My personal interest in business has always been this pendulum that swings between product and distribution back and forth. I’m in one of these phases where I’m getting more and more interested in distribution again. I actually have a book right in front of me called How Brands Grow by an Australian professor. Last name is Sharp, I think. It was one of these first books on marketing that was very quantitative, and it was very counterintuitive in many ways. His conclusion basically was if you look at the data, there is no such thing as delighted customers and brand loyalty. There is just habit and what he calls mental and physical availability of the product, how easily can I call it to mine, understand it, and get it when I want something that it solves the problem. I’m curious what your philosophy of marketing and distribution is since you’ve done so much of it. I think the romantic notion would be that there is nice loyalty to a brand based on the quality of its product or something. Always will certainly be true in niche markets, but this book is really about big companies, big markets that when you get to that scale, it really isn’t that. It’s just how often are you in front of the person and available in their habit flow. What do you think about that angle on marketing, which I view as not romantic but maybe very pragmatic and right?
[00:32:01] Harley: I think it’s right. There’s this incredible romance around customer affinity and brand loyalty, and I think most of it is masking what is really happening. For the vast majority of the entrepreneurs and merchants on Shopify, they spend most of their day in Shopify, in the admin. When they say they’re going to work in the morning, what they really mean is they’re opening up their laptop or going to their desktop or their mobile phone if they’re on the go, and they’re running their business through Shopify. That’s great. That is an enviable position for us to be in, but in order for us to maintain that position in their lives, it means that over time as their business expands or as they think about expanding their business, they’re going to need more from Shopify. That’s really challenging. The relationship we have with our millions of stores is basically different on a store-to-store basis. For some people, we’re their inventory management system. For others, we’re their eCommerce provider. For others, we’re their bank because we have a four billion dollar capital loans business. We’re their shipper and fulfillment provider in other cases.
One of the things we believe that Shopify is it needs to make the important things really easy and everything else possible. So when you’re just getting started and you’re at your mom’s kitchen table and you’re thinking about starting a business, let me see what happens here. It has to be so easy to get up and running. If you have success, over time you’re going to need cross-border tax compliance and you’re going to need distribution, marketing ad campaigns. You’re going to want analytics. Maybe you’re going to want to be able to cross-sell across a bunch of different channels like Instagram and TikTok because that’s where your target consumers are spending their time. The complexity of Shopify has to reveal itself over time, but only at the right time. If it reveals itself at the wrong time, we intimidate you. If it doesn’t reveal itself at all or reveals itself too late, you feel like Shopify is not scaling with the size of your business. That challenge is one of the things we obsess over. The people that are on Shopify, for the most part, the people that I speak to really love Shopify. They love Shopify not because Shopify is their friend or it’s someone that they like. They like Shopify because Shopify is their partner. That is conditional. It is not unconditional. They will drop us from being their partner the moment that they think either we are not scaling with them or when we’re not future-proofing their business. We went public in 2015.
We did a dual listing on New York Stock Exchange and the Toronto Stock Exchange. When we were going public, you do the road show. I think we met 93 investors on the road. It was one of my favorite couple of weeks of my life. I love telling Shopify’s story and it was really fun for me. On the road, we kept hearing that, “You guys are eCommerce, stick to eCommerce. What are you guys focusing on payments for? What are you thinking? Why are you doing physical retail? You are eCommerce. eCommerce is where it’s at.” Of course, we explain that what we’re trying to build here is this retail operating system, but ultimately, I didn’t have this term then and I wish I did, but ultimately, what we’ve been trying to do is future-proof our merchant’s businesses, so that when you select Shopify, you know that if in five years from now AR and VR or mixed reality is going to be the greatest sales channel, there’s a pretty good chance Shopify will be in that. That’s the reason why you see me yesterday or two days ago tweeting about AR and VR commerce. It’s not to say the millions of stores are going to use it today, it’s to let them know and remind them that at some point they may want to do this. When they do, it will be available to them. I believe that is how you build brand loyalty. It’s not because they like the logo or Shopify is sending them Christmas gifts, it’s because they believe we’re their partner and we have to requalify to be their partner every single year. The second we don’t, we don’t deserve their business anymore.
5. No One Knows What’s Inside the Smallpox Vaccine – Sarah Zhang
At the heart of history’s most successful eradication campaign is a mystery. The smallpox vaccine—now also being deployed against monkeypox—contains a live virus that confers immunity against multiple poxviruses. But it is not smallpox or a weakened version thereof. Nor is it monkeypox. Nor is it cowpox, as suggested by the vaccine’s famous origin story involving pus taken from an infected milkmaid to immunize an 8-year-old boy.
It is something else entirely: a unique poxvirus whose origins have been lost, or perhaps never known at all. Scientists call it vaccinia, and it is pretty much found only in the vaccines. No one knows where vaccinia came from in nature. No one has ever found its animal reservoir. No one knows quite what vaccinia is—even as it has been used to inoculate billions of people and saved hundreds of millions of lives. It is a ghost of a virus that has survived by being turned into a vaccine.
José Esparza first began wondering about vaccinia in the 1980s, when he was assigned an office at the World Health Organization next to the smallpox archives. By then, the disease had already been eradicated, and people had, he says, “little interest in understanding the origins of the vaccine.” He went on to have a long career working on HIV and other viruses at the WHO and the Bill & Melinda Gates Foundation, but in retirement, he has returned to solving the mystery of vaccinia. It is a “hobby,” but also a bit of an obsession. For years now, he has been scouring museums and eBay for old vials of smallpox vaccine, scoring a couple every year. (“EBay—you can find anything you can imagine!” he says.) These vials no longer contain live virus, but the technology now exists to sequence the fragments of viral DNA that remain.
This DNA has revealed tantalizing if perplexing clues. Vaccinia turns out to be most genetically similar to another poxvirus called horsepox. But scientists have only ever sequenced one horsepox sample in the world, and they may never find another; the disease largely disappeared in the early 20th century. If horsepox really is the progenitor of vaccinia, how did that happen? And how did it then become lost to time?
The best-known version of the smallpox-vaccine story goes like this: In 1796, the British doctor Edward Jenner noticed that milkmaids exposed to a mild disease called cowpox were unusually protected from smallpox. He found a young woman with fresh cowpox lesions and scratched material from one into the arm of a boy—the son of Jenner’s gardener, no less—who became mildly ill but survived. He indeed became immune to smallpox. The first vaccine was born.
Jenner was not really the first doctor to make this observation about cowpox. But he did document his experiments in a now seminal book. Intriguingly, he mentions horses in the book’s introduction. On the second page, in fact, he speculates that cowpox originated as “grease,” a horse disease that may have spread from equines to farmworkers to cows to dairy maids. He couldn’t prove this, though; it would take several more decades for scientists to understand that diseases are caused by invisible microbes that spread among people and animals. This brief allusion to horses gets forgotten in favor of a “beautiful tale of the milkmaids,” Esparza says…
…Nineteenth-century vaccines were a far cry from the standardized pharmaceutical products we’re used to today. Preservation of the material on glass or thread was unreliable, so the smallpox vaccine was maintained in the bodies of young children: Liquid from a pox on one child would be transferred into the arm of another, resulting in a pox whose contents could be transferred to another, and so on. And it had to be children, because adults tended to already have immunity to smallpox. In 1803, Spain sent 22 orphan boys on a Royal Philanthropic Vaccine Expedition to bring the smallpox vaccine to its colonies. The number of boys was chosen precisely to span the length of the transatlantic voyage: Every nine or 10 days at sea, doctors would transfer the vaccine to the arms of two new boys—two in case one did not take, so that the ship would arrive in the Americas with the last set of boys still having sores.
The chain of arm-to-arm transfer did sometimes fail, however. When an established source of vaccine wasn’t available, doctors who’d heard about Jenner’s experiment went back to the animals. Cows were used, as were horses. The physician Luigi Sacco, for example, who popularized vaccination in northern Italy, successfully inoculated patients with vaccines derived from grease-infected horses. As doctors such as Sacco experimented with new sources, multiple vaccines probably came into circulation. There was no single canonical vaccine.
Not until the mid-19th century, when scientists figured out how to maintain the smallpox vaccine in calves, did it become a mass-manufactured product. The use of horses faded from living memory. Vaccinia and cowpox eventually became interchangeable names for the virus in the vaccine. In fact, the words vaccine and vaccinia both derive from vacca, which is Latin for cow.
6. RWH014: The Resilient Investor w/ Matthew McLennan – William Green and Matthew McLennan
William Green (00:06:53):
I remember you telling me once that he said you are an idealist and you believe in an absolute truth and you need to learn that there’s only relative truth. Can you talk about that? It seems like an interesting insight to have been given early on as an investor.
Matthew McLennan (00:07:08):
It was as a child. I always liked puzzles and trying to crack the code on whatever it was, solving a Rubik’s cube or figuring out how to win at any given game. I think he could see very clearly that I like to get to an absolute truth like the proof of a mathematical equation. He introduced me to this notion that life is actually more complex than the simple games or truths that I was trying to unravel, and that much of truth is unapproachable. In fact, it wasn’t until I was in college and many years later reading other works that I realized that this was a whole field scientific methodology and I became pretty interested in Karl Popper, who wrote about the notion of falsification. Karl Popper had a term for this. He said that things aren’t true, they just have very similar truth, the appearance of truth.
Matthew McLennan (00:08:04):
But I think having had that notion instilled to me early on was useful because it sow the seed for becoming at peace with the notion. There are certain forms of uncertainty that you just can’t unravel and you need to respect those spaces a little bit. I think it has informed how I’ve approached investing in later years. It’s also popped up in different forms of work. I mentioned Karl Popper, but I remember Fish’s work when he talked about the difference between risk and uncertainty. Risk being something that you can narrowly quantify with statistics and uncertainty being where you don’t even know what the range of distribution possibilities are. Going on to folks like Steve Wolfram in the field of complexity, which we can no doubt talk about later, but having that seed planted by my grandfather, that metaphysical source of angst, if you will, was actually a good thing with the passage of time, however disappointing it was for me at the time to realize that I couldn’t learn all of these absolute truths…
…William Green (00:15:57):
Do you think it helped in a sense that you had had such an unconventional childhood? You weren’t naturally someone who was part of the tribe, you were probably by your own wiring, but also by your own conditioning, you were outside the herd, and so maybe it was easier to think for yourself than it have been for many other people?
Matthew McLennan (00:16:18):
I think there’s some truth to that, William. I think that I definitely came in with an outside perspective. I think as well, I take comfort in the purity of ideas. I think the combination of coming at something from the outside and seeking purity and ideas, even if you, I’d recognize by that point there weren’t any absolute truth. I think it was those two things that were very helpful in enduring an environment like that. Indeed, when I spoke to Jean Marie who hired me to First Eagle many years later, he said one of the things that gave him comfort about hiring someone like me was that I had enjoyed an experience like the late 1990s, was almost like a condition precedent to feel uncomfortable that you’d have the stamina to do it again.
William Green (00:17:08):
Yeah, and that period had been such hell for him. I write about this in my book, Richer Wiser Happier, the degree to which he was at war with the world, at war with the market, at war with his bosses who were like, “Why don’t you get this new paradigm and by dotcom stuff?” He said this will roll with themselves.
Matthew McLennan (00:17:33):
I definitely had to face those pressures. I was dragged in front of one of the partners for lunch and he’s like, “Why aren’t you buying these hot IPOs, it’s free money?” I tried to explain the fact that it’s a sucker’s game, the IPO market, because you spend all of your time researching businesses that haven’t proven their incumbency. Secondly, you tend to get the smallest allocations of the best businesses. There’s a lot of adverse selection in that market. I’d spent a lot of time thinking about why I didn’t want to spend my time focused on that, but it seemed like there was free money to be had. I remember a conversation with the retirement committee at Goldman Sachs where they were questioning whether there would be any mean reversion in this dotcom era, whether everything had changed.
Matthew McLennan (00:18:21):
I recall back then saying that, “Look, you can look at enterprise value to cashflow or revenues, and yes, some businesses will live into high valuations,” but one of the metrics I couldn’t get around was the enterprise value per employee. Some of these newly-listed companies was quite large. In fact, I said to the partner at the time, I said, “Would you pay 30 times as much per human for this business as the market cap of Goldman Sachs?” You feel like you’ve got good people, would you pay 30 times as much? By the way, in a labor market where unemployment rates were below 4%, how are they going to hire the people to live into that valuation even if they can find the best people? Yeah, I guess looking at strange things like that gave me the conviction to stick it out, but it was a trying time.
William Green (00:19:10):
You mentioned before that you found solace in the purity of ideas. Were there particular ideas that you were clinging to? Particular principles that you’d learned maybe because Paul Farrell had introduced you to the writings of Buffett or Munger? What were the main tenets that you’d figured out that protected you from the craziness and irrationality of the late 90s?
Matthew McLennan (00:19:33):
Well, it’s interesting. If you’re a bond buyer, you know that you’ve got a contractual principle that’s due to you in five years time or whenever the bond matures, and I think that gives bond buyers a lot of peace of mind that they can endure a short-terms vicissitudes and quarterly reports and the like. I think it’s difficult as an equity buyer because what you’re buying is ostensibly a perpetuity. But I think, what gave me the conviction the more I thought about it was that ultimately you’re buying access to a cashflow stream. If the business were cashflow generative and it was stewarded by management teams that were willing to distribute the lion’s share of those cashflows to you, then ultimately arithmetic would work. That sentiment could shift around the multiple relative to that cashflow a lot in the short term, but ultimately the math would converge upon the arithmetic of the cashflow.
Matthew McLennan (00:20:25):
I think that gave me a lot of comfort. But even so, it wasn’t absolute because you saw companies that had highly inflated valuations that were able to use that currency to go and acquire other businesses that were cashflow generative, so they could turn hope into reality. That’s always a bit distressing when you see that as a value investor. I think, by and large, it was just the nature of the fact that if you bought a real business and it had a real cashflow stream and you had a long enough time horizon, arithmetic was pretty powerful. It’s almost like a law of gravity that if you had the right time horizon, things would shine through…
…Matthew McLennan (00:24:06):
The things that attracted me tended to be longer term variables. If I’m true to myself, I was less good at trying to pick up on the short term scatter pattern and mosaic and predict near-term earning surprise. I went to where I felt most comfortable. If you’ll permit me one digression here. I mentioned that my grandfather was a gardener and he passed that skill on to my mother and this little home that we built, she was an ardent gardener in this home. As a child, I always wondered why she went to the effort because there was always some issue. There were drought conditions or the bamboo root would spread to somewhere where it wasn’t meant to be or there was some weird fungus or virus. She was always having troubles.
Matthew McLennan (00:24:58):
Whereas, there’s a gentleman who lived next to us who mow his lawn every week and it just looked pristine and clean. We had another house behind us at the bottom of the rainforest where he just lived amidst the rainforest. I didn’t realized the wisdom of my mother’s long-term strategy when I came back to the house some 20 years later with children, my children. The garden had really grown into this resplendent beautiful space. It had been selectively curated over time. Whereas, the house next to me was still being mowed. The lawn was still being mowed every week. But there was nothing to show for all of this activity. He was like the active manager turning over the portfolio once a week.
Matthew McLennan (00:25:43):
The gentleman who’d had his house down the hill behind us had some fire damage I heard at some point. The passive strategy of just letting the forest go around you wasn’t necessarily the safe strategy my mother had worked in all of these fire buffers and things. Selectively curating something and letting time take its course is something that doesn’t seem like a very well-rewarded activity in the short term. When you step back and let time play out, it can be very rewarding.
William Green (00:26:15):
Yeah, it’s interesting, because it’s not sexy and it doesn’t appeal to our yearning for instant gratification. But because of that, there’s so little competition and it has the virtue that it actually works…
…William Green (00:31:01):
I think we should talk in some depth about how to be a resilient investor, and how to succeed over many decades. But it seems like we should mention first this idea that in a way from the intellectual backdrop of your approach, which is just a respect for entropy and the fact that we live in a world where things fall apart, the center cannot hold, as Yates said. Can you talk about your fundamental respect for entropy as an ironclad law of life and how that shapes your approach to looking for things that are likely to endure in a world where not much does endure?
Matthew McLennan (00:31:37):
No, it’s a good question, William. Entropy is probably one of the few absolute truths. It’s a second law of the thermodynamics that any form of order is essentially transient. And perhaps it’s the fight against entropy that’s sort of gotten me interested in old master art or great wine that can survive for generations, from vineyards that have been planted for generations, or a business that has a slow fade rate relative to the typical business. But if you think about the economy as an ecosystem, rather than as machine, productivity happens every year, productivity growth, and over the last century, we’ve grown productivity close to 2% a year. But the dark symmetry of productivity is that the existing pool of companies won’t control a future profit pool in perpetuity. New businesses get created that chip away at the margins at existing incumbency. And so entropy is a fundamental principle and investing. And when you go through business school and learn about asset pricing, you’re really only taught to think about beta risk or systemic risk. But idiosyncratic risk is interesting to think about as well.
Matthew McLennan (00:32:53):
And in fact, entropy is a form of systemic risk because change in the economy and the overall improvement in the economy imputes that existing companies will grab a smaller share of the future pie given enough time. And so I’ve focused a lot on this question. And the paradox of it is that buying businesses that have been around for a long period of time, that have demonstrated persistence, in some ways, can be a safer strategy than trying to buy a business that’s growing a lot today because many of the businesses that are growing a lot today are in industry verticals where market share positions move around a lot. And so by definition, your ability to capitalize their terminal earnings at any given period of time is low because easy come, easy go, as it would relate to market share shifts.
Matthew McLennan (00:33:44):
And so we do like to try and focus on businesses that have a stickiness to their market share over time, high customer retention rates, to try and slow the curve of entropy. And we approach it with a great deal of humility and respect, and we recognize that even our favorite ideas are going to get disrupted at some point or another.
William Green (00:34:09):
So in a way…
Matthew McLennan (00:34:09):
And I think it’s important because when people think about a growing business, they tend to think, “Well, if the business is growing revenues 10% a year, I’m growing my intrinsic value 10% a year.” And it’s not actually the case because trees don’t grow to the sky. So that rate of growth will fade and markets become penetrated. And secondly, even if you dominate a market, substitutes get created. And so you have to recognize the fact that as a business matures, it will trade at a lower multiple than it does when it’s growing. And so the fact that there’s fade rates to growth and that the ultimate multiple of the mature business is going to be less than a growing one, means that the growth in intrinsic value is going to be a lot less than the growth in revenues today.
7. Expectations (Five Short Stories) – Morgan Housel
Apollo 11 was the first time in history humans visited another celestial body.
You’d think that would be an overwhelming experience – literally the coolest thing any human had ever done. But as the spacecraft hovered over the moon, Michael Collins turned to Neil Armstrong and Buzz Aldrin and said:
It’s amazing how quickly you adapt. It doesn’t seem weird at all to me to look out there and see the moon going by, you know?
Three months later, after Al Bean walked on the moon during Apollo 12, he turned to astronaut Pete Conrad and said, “It’s kind of like the song: Is that all there is?” Conrad was relieved, because he secretly felt the same, describing his moonwalk as spectacular but not momentous.
Most mental upside comes from the thrill of anticipation – actual experiences tend to fall flat, and your mind quickly moves on to anticipating the next event. That’s how dopamine works.
If walking on the moon left astronauts underwhelmed, what does it say about our own earthly goals and expectations?…
…When the Black Death plague entered England in 1348, the Scots laughed at their good fortune. With the English crippled by disease, now was a perfect time for Scotland to stage an attack on its neighbor.
The Scots huddled together thousands of troops in preparation for battle. Which, of course, is the worst possible move during a pandemic.
“Before they could move, the savage mortality fell upon them too, scattering some in death and the rest in panic,” historian Barbara Tuchman writes in her book A Distant Mirror.
There’s a powerful urge to think risk is something that happens to other people. Other people get unlucky, other people make dumb decisions, other people get swayed by the seduction of greed and fear. But you? Me? No, never us. False confidence makes the eventual reality all the more shocking.
Some are more susceptible to risk than others, but no one is exempt from being humbled.
Disclaimer: None of the information or analysis presented is intended to form the basis for any offer or recommendation. Of all the companies mentioned, we currently have a vested interest in Apple and Shopify. Holdings are subject to change at any time.
