LP Vol. 36 - The Best of 2021
This newsletter, by and large, remains an intellectual exercise in curating and distilling the vastness of Internet weirdness, while also helping me process my own thinking about the emerging world we live in. As I took a look back through the stuff I consumed in 2021, the things that resonated most boiled down into 3 core and related themes:
1. The world is fundamentally stranger now than it was 2 years ago, and that has created a frontier of epic opportunities while potentially permanently de-valuing previously prized skills
2. The best way to understand what's happening now is to study what's happening in the markets. Market prices represent implicit bets on future performance, and by understanding how prices are moving you can better understand where the world's investor hive mind think the world is going
3. One specific area that is soaking up a ton of talent, funding and cultural cache web3/crypto. The technology and community being boostrapped across the ecosystem is real and inspiring, and you owe it to yoursle to start undersatnding what it is and how it is likely to affect your life over the next few decades
Navigating The Global Discordance
The cultural, political and economic norms that defined have more or less defined the rules governing success and power for the past few decades have been upended. This has implications on two axes: (1) how organizations respond and (2) how individuals respond.
By now, we are all familiar with how challenging work has been during COVID. Everyone's employer had to adapt to the realities of remote work - and some did better than others. I wanted to highlight a few things that resonated deeply with the changing nature of work and personal exploration in these trying and increasingly distributed times.
🎧The Knowledge Project - #100: Matt Mullenweg
Published in January of 2021 (not quite the mid-point of our current pandemic hellscape), this podcast stands out for how distributed, remote-first companies can thrive and empower their employees. Mullenweg is the Founder/CEO of Wordpress-parent Automattic, which has famously been a remote/distributed company well before COVID, but I think will see its culture and approach emulated in the years ahead:
Matt: Yeah, level five is nirvana. It’s somewhat unattainable but what you always want to aspire to. So, I think that we have glimpses of level five. Level five is where I believe that the organization in a distributed fashion is outperforming at every single level. Productivity, quality, employee happiness, everything, any in-person organization.
Because you’ve embraced all the power, all the special features of this asynchronous approach and everything’s better. I think if you add up all the things we just talked about, for example, the increased autonomy and asynchronicity might allow people to design the interaction between their work and their life a lot better. By the way, then they’re going to be happier. Right? Because they have a lot more control over their day. They’re able to spend their day in an environment which isn’t the lowest common denominator of fluorescent lights, and a cold temperature, and terrible food, and colleagues that talk on the phone too loud. All that sort of terrible environment, now they’re in an environment which they designed, which is creatively charging for them, which is filled with things which recharge their day. Maybe they do little mini exercises during the day, or they kiss their kids, or they walk their dog, whatever it is, and they bring that creativity to work. That work goes so much better and because their work’s going so much better they’re bringing that energy back to their life, and family, and the 18 hours outside of work.
Smart companies are going to realize a competitive advantage in attracting, growing and retaining talent that can deliver credible and nurturing distributed cultures as an alternative to commutes and in-person status games. It's going to be fascinating to watch the ongoing dance between employers and employees as geography is no longer going to be quite the bottleneck it has been on sourcing talent.
🎧 Tom Morgan on Infinite Loops
On the individual response, I enjoyed no two conversations more in 2021 than Tom Morgan's appearances on the Infinite Loops podcast:
No. 61: Curation in the Age of Information Abundance | Transcript
No. 74: All You Need is Love | Transcript
Perhaps these are overly self-indulgent pieces of content that resonate particulary deeply for myself, but in the post-COVID world we are all going to have to quickly update our mental models for the skills and signals that will drive success in "the new normal".
Natural selection of characteristics and skills that fueled and compounded success in the pre-COIVD world do not necessarily carry over in what comes next. The quicker you can shake loose an outdated model of the world for the new reality, the faster you will find your footing.
I'm a natural fan of Morgan's solution - which is to double down on one's own creativity and curiosity, so perhaps I'm just highlighting these out of a personal selection bias that may not actually matter in the world ahead (No. 74 also has a dope deconstruction of Interstellar, from the best director working today Christopher Nolan. Don't @ me)
Your mileage may vary on these.
Learning From Markets
The best way to understand the in-process transformation to the new normal, in my mind, is to pay very close attention to the signals embedded in global markets. COVID has been disruptive and perhaps an accelerant, but it hasn't fundamentally changed any of the macro trends that have been playing out over the past few decades.
Why Investing Feels Like Astrology
Markets turn financial capital into physical capital. Finance bridges the fact that people need to borrow from the future to work on something today which will result in physical capital in the future which acts as the collateral for the loan or equity upfront
- Albert Wenger
I wrote about this article back in Vol 20, but it's top of mind again as we are now seeing the other side of government stimulus and a potential return to higher interest rates to fight inflation. You are starting to see a return to a narrative dominated by company fundamentals, not necessarily company potential.
Raoul Pal's Macro Thesis
One of the broader themes I want to explore in 2022 is the overall state of western monetary policy, its impact on asset prices (stonks), and what it means for the dual threats of the Boomer generation retiring out of the workforce + the massive environmental investments that must be made to protect infrastructure from the effects of climate change. In my mind, they are all much more coupled than you may think, and how they play out will mean a great deal for the world my generation and my children will inherit.
Investor Raoul Pal lays out a plausible thesis contextualizing the markets of 2021 through the lens of history, from post-world war 2 reconstruction up to the present day. I don't necessarily agree with all of it, but it's a helpful frame to leverage in thinking about what comes next.
Grant Williams Interviews Tony Deden
This interview is 3 years old, but serves as a good counterweight to Pal's thesis articulating the concerns of the present day. This sit-down conversation between two expert investors focuses much more on the timeless qualities of good investments, great businesses, and trustworthy partnerships.
This whole discussion reminds me of my favorite Jeff Bezos quote:
“I very frequently get the question: 'What's going to change in the next 10 years?' And that is a very interesting question; it's a very common one. I almost never get the question: 'What's not going to change in the next 10 years?' And I submit to you that that second question is actually the more important of the two–because you can build a business strategy around the things that are stable in time. ... [I]n our retail business, we know that customers want low prices, and I know that's going to be true 10 years from now. They want fast delivery; they want vast selection. It's impossible to imagine a future 10 years from now where a customer comes up and says, 'Jeff I love Amazon; I just wish the prices were a little higher,' or 'I love Amazon; I just wish you'd deliver a little more slowly.' Impossible. And so the effort we put into those things, spinning those things up, we know the energy we put into it today will still be paying off dividends for our customers 10 years from now. When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.”
The Web3 Revolution
I've steered clear of crypto in these missives, but that will change in 2022. Asset prices take 95% of the headline glory, but the primitives being built and talent flooding into the space are very real and will change commerce, and potentially the concept of money itself, irrevocably.
I'm getting more and more questions from friends and family about crypto/web3/NFTs, and so wanted to highlight a few of my favorites with the hopes of diving deeper over the next year.
🎧Chris Dixon and Naval Ravikant on the Tim Ferriss Show | Transcript
This has so far been the most approachable discussion on the origins, mechanics and potentail of web3 technologies:
Why tokens are so important is they now provide a mechanism by which value and control can be given to users and builders, as opposed to simply to centralized companies. So you can build today a version of Facebook. So there’s two things. One is, remember before I said the functionality wasn’t quite there for the open side and Web2, it’s now there.
You can now build something that looks and feels like Facebook or Twitter using open protocols and using this new kind of philosophy where the value and control accrue to the users of the network, not to a company, because there is no company, right? You’re going to see more and more things, products launched like this, where there is initially there’ll be some kind of R&D organization that helps create these protocols, but over time they go away in the same way that there is no Bitcoin company, Ethereum has a nonprofit foundation that supports R&D, but there is no Ethereum company.
This is how I believe the most important internet products will be created in the future is through this kind of new means. Why will it be done this way? One, it is better because isn’t it better to have — wouldn’t it be better if the drivers on the Uber network owned Uber and got to the value and got to participate more in the value creation and also in the control and governance of that system? I think that’s clearly a better thing for society.
I also think it’s just going to be a winning product because people love, if you look at people in these Web3 communities, they like no Web3 company, no crypto company has ever spent a dollar on marketing, including Coinbase. I was on the board for years, no marketing. Why? because tokens are self-marketing. When somebody owns something and feels skin in the game, they want to go talk about it. They want to evangelize it.
So, I think Web3 is not only better for the world, but it’s also going to beat Web2 because it’s going to be more popular because the people get really excited when they actually get to participate.
Or if you prefer the Tweetstorm summary of the same ideas:
Sc3nius
Packy McCormick has built a thriving 7-figure/year newsletter + solo GP venture fund during COVID, and has published a number of articulate essays on the cultural milleu swirling around the web3/crypto community/communities online.
Sc3nius is synthesis as to why companies/projects/movements in the web3 space are naturally positioned to benefit most from the post-COVID reality of distributed work for technically-minded individuals that build/support software products:
Part of the magic of the Silicon Valley Scenius is that whenever a company has a good exit, that company’s founders, employees, and investors usually take their gains and invest in other startups. As good things happen for some, they help good things happen for others.
That happens on steroids in web3.
Cycles are shorter, people are getting rich faster, and they’re plowing their money back into new projects, mainly to make even more money, but often because they’ve quickly become the internet’s philanthropists and want to allocate resources to new art, culture, and governance that they want to see in the world.
Further, done right, tokens align incentives in such a way that network effects of success are baked in. That’s true on a local level–a project’s builders and users do well when that project does well -- and on a more macro level. What’s good for the web3 ecosystem is often good for all of its participants, financially and emotionally. Even people who don’t own CryptoPunks celebrate when Punks sell for record prices; it means they were right about this whole NFT thing, after all.
Honorable mention goes to The Great Online Game for including this tweet, which is a good zen koan to think deeply about over as you question your life choices late at night:
I hope your 2022 is off to a decent start.
XO,
W
P.S. One last honorable mention for 2021 that fits no theme but I found incredibly enjoyable was Miracle and Wonder, an "audiobook" from Malcolm Gladwell. It’s essentially a narrative podcast crafted from ~30 hours of interviews with Paul Simon into ~6 hours of actual listening time, and is really really good. You can buy directly from Pushkin.fm (you get a private podcast URL to load into your player of choice), or it now seems to be on Audible as well.