Select Readings (week 5/2017)

Baupost’s 2016 Year-End Letter(Disclaimer: linking and may be unavailable soon)

Sequoia Fund’s 2016 Year-End Letter (The famed fund fathered by Warren Buffett leaving the Valeant Saga behind, swapped Walmart with Amazon in the fall)

Bronte Capital’s 2016 Year-End Letter  – (John Hempton is long Bayer, so is David Einhorn, and thinks U.S. stock market is expensive but not so pricey to imply imminent permanent capital loss)

The must-read semi-annual Graham & Doddsville Newsletter Winter 2017 from students at Columbia Business School

A good introduction to the NYC FinTech Community, with suggested newsletters to stay abreast of the continuously evolving landscape

Cliff Asness’s thoughts on the DOL Fiduciary Rule and unintended consequences(The Trump administration now wants to roll it back, many robo-advisor and robo-401K start-ups predicated their businesses on the fiduciary model and will make a stand, hear both sides. 40 years from now, we may see the robo-movement in the same light as the one John Bogle at Vanguard started 40 years ago )

An excellent overview of the Ocean Freight Shipping Industry from a VC perspective by Brian Laung Aoaeh at KCE Ventures, with great additional reference readings – (Publicly traded shipping stocks have been crushed in the past two years, time to look for contrarian bets?)

Start-ups, Wall Street wants your data! As always, a well-articulated post on alternative data business by Matt Turck at First Mark Capital

Helpful guide to SaaS entrepreneurs thinking of raising money in today’s environment SaaS Funding Napkin, the 2017 edition by Christoph Janz at Point Nine Capital

Snapchat IPO: Too Soon? – (Future Facebook or Twitter? Let the market be the judge)

 

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Continuous Learning: 28 Books I Read in 2016

Evolution, the natural movement toward better adaptation to reality, is one of the greatest forces in the universe. Evolution leads to improvement, improvement helps one get what he/she wants. Thus the desire to evolve is probably humanity’s most universal driving force, and continuous personal evolution is one of the greatest rewards by itself. In order to better adapt to reality, one has to have an accurate understanding of it. Reading and reflecting is a shortcut to gaining knowledge about how society and the universe work. Below are 28 books that I read in 2016 across a range of domains. I don’t think I am any smarter, but I am certainly more knowledgeable than a year ago, or rather more aware of my ignorance…
In 2017, I think I will slow down my pace of reading and instead devote more time to each book, and re-visit some books read in the past. After a year of voracious reading, I found my knowledge retention was not very satisfactory. Writing a book review is a good exercise but a bit too time-consuming and less economic given my slow speed of writing. A habit that I will start to form is to write down a few key unconventional ideas from each book. Peter Thiel asked an interesting and really hard question in the opening of his book “Zero to One”:

“What important truth do very few people agree with you on?”

I think that is a good filter to start with to select my key takeaways. Continue reading “Continuous Learning: 28 Books I Read in 2016”

Didi & Uber China: End of the Car Hailing War, End of Pride and Prejudice

China's TrailblazersOn the heels of Didi announcing the deal to acquire Uber China, The Economist reflected on some of Western media’s historical pride and prejudice against Chinese internet firms in its cover article – “China’s tech trailblazers”. China’s internet market has many unique characteristics – the Great Firewall, government censorship, unique and complex culture, and some local firm’s unconventional (or highly questionable) competitive tactics. To many Western media, it is easy to conclude that local firms flourished because of protectionism. To me, this inference is more level-one thinking. Would the competitive outcome be different without the above constraints against foreign firms? The answer is No. Let’s first tally the scores of some of the well-known internet wars: Continue reading “Didi & Uber China: End of the Car Hailing War, End of Pride and Prejudice”

A Mental Model for “Cold Launching” Start-ups (Four Launch Modes)

Disclaimer: I cannot claim originality to the framework used here but owe it to Cao Zheng, a former core member of Baidu’s business analysis group, 4399.com chief architect, and a current gaming entrepreneur from China. He is an avid thinker/ blogger on the internet business, from whom I have learned much (link to Cao Zheng’s public account on WeChat “caoz的梦呓”)

After more than half a year in incubation, a friend recently launched the beta version of his marketplace app for people to rent or buy things from people nearby, yes, the old “neighborhood sharing economy” concept again (aka. using app to borrow a power drill from your neighbor). I have served as an adviser to him prior to the launch. During our conversations, one counterfactual I constantly used to push the discussion was all the neighborhood sharing apps that have struggled to gain traction before, which is well documented by this article on FastCompany – The “Sharing Economy” is Dead, and We Killed It.

“Everything made sense except that nobody gives a sh**. They go buy [a drill]. Or they just bang a screwdriver through the wall.”

Continue reading “A Mental Model for “Cold Launching” Start-ups (Four Launch Modes)”

Finding Mindfulness in Art

New York had one of the worst winter storms over the past weekend. Trapped inside the house gave me a unique opportunity to do something I had not done in a long while – drawing. Notwithstanding my passion for start-ups and investing, nothing else gives me more satisfaction and a sense of tranquility like art creation. An hour and a half of complete focus produced this drawing of Miyamoto Musashi, the famous Japanese swordsman and author of “The Book of Five Rings,” a text on martial arts and strategy. The drawing is based on the original artwork of Inuoe Takehiko’s masterpiece “Vagabond,” which was done with ink and brush. I guess my attempt at replicating Inuoe Sensei’s expressionism with a pencil was not a complete failure. Continue reading “Finding Mindfulness in Art”

Demystifying Bitcoin/Blockchain: How it Actually Works

Note: This my second blog post on Bitcoin/Blockchain. My previous postprovided an overview of Bitcoin/Blockchain and some brief commentary on the evolution of its applications, as well as its implications on securities trading. Of course, the potential impact is beyond just payment or exchanging non-physical assets. However, in order to truly appreciate the potential and shortcomings of Blockchain, one has to go back to the origin (Bitcoin and Blockchain were born together as one) and understand how the Bitcoin system works, ACTUALLY.  Only then can one cut through the fog and begin to tell what is truth and what is myth, and start to appreciate the complexities. Inevitably, this Blog runs the risk of oversimplifying things and may appear naive to the true Bitcoin experts. But for the novice and non-techies, this is where we start diving into the rabbit hole… Continue reading “Demystifying Bitcoin/Blockchain: How it Actually Works”

Prologue to “Demystifying Bitcoin/Blockchain”

Note: This is a prologue to my next post “Demystifying Bitcoin/Blockchain: How it Actually Works.” I will also be exploring the brilliance and short-comings of Bitcoin/Blockchain, from the perspective of someone who did not understand it three months ago. Special thanks to Andreas Antonopoulos,Pascal Bouvier, Vitalik Buterin, and Simon Taylor, whom I have not met but whose intellectual generosity has accelerated and deepened my understanding of the subject.

The post could also be found on Linkedin Pulse.

Overview of Bitcoin/Blockchain – Where it All Began:

Invented in 2008, Bitcoin is not just a currency or a payment system. Andreas Antonopoulos, author of “Mastering Bitcoin: Unlocking Digital Cryptocurrency,” provided a well articulated definition:

It is “a network-centric protocol and platform for recording [and transferring] ownership and trust on a peer-to-peer basis.”

Blockchain is quite topical recently given hyped up interests by financial institutions; it was also featured on the October 31st cover of The Economist. However, Blockchain by itself is just a boring ledger distributed or replicated among all the participants in a P2P network, it is only with the protocol/incentives (in purely mathematical forms) integrated into the Bitcoin system that Blockchain becomes a powerful trust machine. One cannot understand Blockchain and its full potential without understanding how Bitcoin system as a whole works – Blockchain is Bitcoin. Continue reading “Prologue to “Demystifying Bitcoin/Blockchain””