No. 255 – Thursday Reads

Source: Niche and Realtor.com

Pittsburgh-Based Niche Secures $35M For School Search Platform After 100% ARR Growth In 2019 – niche is a platform that allows parents to search for schools ranging from kindergarten all the way up to college. what concerns me about this platform is just where we’re headed more broadly in education. A tool like this is more beneficial to the wealthy family that has options in terms of where they can send their children to school. I worry that platforms like this further inequities in education. Look at the map above from Niche’s site where they’ve graded the schools across DC. Guess where the majority of the multimillion dollar homes are?

Another thing that comes to mind is this pandemic has shed more light on our education system – areas where it’s weak, the ability of kids to study from home, the stress kids are under in school, and more. Over the next ten years, where does Niche see its growth coming from to justify a $35M raise? They’re a lot more bullish than I am.

‘Burn. It. The. F#&!. Down.’: The metamorphosis of former hedge fund manager and Epsilon Theory founder Ben Hunt – My buddy Myles Wynn introduced me to Ben Hunt a month or so ago when he wrote a provocative piece questioning the numbers China was reporting on deaths due to COVID-19. This piece does a nice job profiling him. He’s definitely somebody I’m going to be paying more attention to moving forward.

Why Hip-Hop and Gaming are Still Scratching the Surface – Per usual, Dan Runcie does a nice job teasing out opportunities for hip hop artists. In this piece he looks at gaming and how hip hop artists could find an additional revenue stream through partnerships with game development companies in order to put on concerts. He qualifies his analysis by saying that these platforms will need to effectively reach a broader demographic than they currently do in order for artists to maximize the opportunity. Unfortunately, the game development industry is quite monolithic—very white and male. Delane Parnell has built a nice platform on top of the gaming industry facilitating competition through PlayVS, but what black entrepreneurs out there are building new game development businesses?

Ghana’s economy resilient enough to fund healthcare infrastructure – Minister – Earlier this week, I shared my concern with how Ghana was paying for the 88 hotels it planned to start construction on this year. Sure enough, the country is betting on the Sinohydro deal in which China will construct infrastructure in the country in exchange for bauxite. I can’t say that I’m a fan.

Oil Slump, Coronavirus Create a Perfect Storm for Nigeria’s Economy – Back in 2014 or 2015, then Central Bank of Nigeria governor Sanido Lamido Sanusi caused a lot of commotion by claiming that Nigeria’s National Petroleum Corporation had $20B unaccounted for. He eventually lost his job. Around the same time, then finance minister Dr. Ngozi Okonjo-Iweala highlighted how Nigeria needed to meaningfully wean itself off of oil dependence and was ridiculed for her stance. It’s unfortunate to see the tough situation the country is in right now due to this mix of oil prices bottoming out because folks are not moving around. Hopefully, the country emerges from this with a focus on reinventing itself.

No. 238 – A New Poor People’s Campaign

Source: YouTube and CNBC

In typical fashion, Chamath Palihapitiya went on CNBC last week and shook things up by saying that corporations and hedge funds should be allowed to lose their shirts as this recession continues to set in:

This is a lie that has been purported by Wall Street. When a company fails, it does not fire their employees. It goes through a package bankruptcy. Right? If anything, what happens is, the people who have the pensions within those companies, the employees of these companies, end up owning more of the company. The people that get wiped out are the speculators who own the unsecured tranches of debt, the folks that own the equity, and by the way, those are the rules of the game because these are the people who purport to be the most sophisticated investors in the world. They deserve to get wiped out. But the employees don’t get wiped out. The pensions don’t typically get wiped out.

He keeps going. 

Just to be clear on who we are talking about. We’re talking about a hedge fund that serves a bunch of billionaire family offices. Who cares? Let them get wiped out. They don’t get to summer in the Hamptons? Who cares?

Chamath did a nice job here calling out the double standard we’ve kept alive in this country. Over 16 million people have filed unemployment claims in less than a month. These folks have to figure out their next move. Yet, a number of corporations don’t want to have to go through the same struggle.  To their advantage, these corporations have the tools to finesse the situation and get the capital they need to get those resources.

Martin Luther King’s Poor People’s Campaign was an effort to ensure poor folks had a job, unemployment insurance, healthcare, and more. He sought to address an economic system in which poor folks are dispensable. Now, Dr. King was not a capitalist. Chamath is a thorough one. I think there is an overlap though. Capitalists need to lose the double standard for how they’re treated when hard times come, so that when folks follow the formula for advancing in society according to capitalist standards, they don’t wind up grasping at a mirage. Corporations can’t tell folks to follow a capitalist path while they operate with selective socialism.

Dr. King saw that there needed to be a mass movement to shift the needle on this issue—put pressure on the powerful to see the importance of being straight with how the economy is structured. The people have to be paying attention and applying pressure to ensure our system operates well for us. This passage from a letter Thomas Jefferson wrote to British minister Richard Price comes to mind:

“I did not at first believe that 11. states out of 13. would have consented to a plan consolidating them so much into one. A change in their dispositions, which had taken place since I left them, had rendered this consolidation necessary, that is to say, had called for a federal government which could walk upon it’s own legs, without leaning for support on the state legislatures. A sense of this necessity, and a submission to it, is to me a new and consolatory proof that wherever the people are well informed they can be trusted with their own government; that whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights.”

In order to set things right, regular people need political machines working on their behalf to ensure the Business Roundtable members stick to their promise to stakeholders and go toe-to-toe with entities like the Managed Funds Association. I’m not sure that we have machines like that right now. What organizations come to mind for you that could get the job done?

No. 65: Marc Andreessen and Jean-Yves Ollivier Could Have a Lot in Common

Marc Andreessen’s frenetic pace on Twitter has fascinated me for the past year. He seems to devour a ton of information and makes nice connections between the current technology landscape and the history and theory that got us to this point. The New Yorker did a helpful profile on him – the kind that makes more human a titan some may worship.

Jean-Yves Ollivier is a new name to me, but one that I will be keeping track of after reading this Bloomberg piece on his energy sector dealmaking in the Republic of Congo. Apparently, he is trying to shape his brand through the media. Perhaps he should get on Twitter and fire off some Tweetstorms like Mr. Andreessen.

There’s a BBC piece on a lake in Mongolia made up of extremely toxic waste from rare earth minerals largely used in our smartphones and renewable energy sources like wind turbine engines and electric vehicle batteries. While the majority of these minerals are mined in Asia, some African countries like Malawi are exploring their potential to produce these minerals. South Africa was a leading producer half a century ago.

The unicorns (companies with $1 billion valuations) for which Marc Andreessen spends his time looking, largely rely on the smartphone. In defending against concerns that we are in a bubble due to the massive amount of money going into funding startups, he points out that the technology sector of 2000 did not have a conductor like the smart phone to enable the growth of the industry, hence the bust. We have the smartphone now and he believes that the software on those phones is eating the world, and the technology industry’s growth is here to stay for quite some time.

The robots that Mr. Andreessen envisions taking over menial jobs, freeing us up to do what we want, will most likely need parts from minerals in parts of the world like Mongolia and Malawi. Unless we come up with clean ways to source these materials, we could see lakes like the one in Baotou pop up in southern Malawi. Brokers like Mr. Ollivier are helping make these deals happen, enabling the creation of the smartphones, robots, and other tools that people like Mr. Andreessen believe will drive our future world. Two men. Two different worlds. Perhaps.