Weekend Briefing No. 475
A Saturday morning briefing on innovation and society.
Welcome to the weekend.
Prime Numbers
$1,200,000,000 —Vinyl sales have grown for the past 16 years, up 17% year over year to $1.2 billion in 2022, outselling CDs on a unit basis to become the single most popular format of physical media as of last year.
2—Scientists captured the first images of two city-sized icebergs that broke free from Antarctica's Brunt ice shelf since 2021.
548,000—Scientists complete the first map of an insect brain. The model includes 3,016 neurons and 548,000 neural connections. Nature is complex and beautiful.
Silicon Valley Small Business
The startup world divides businesses into either “silicon-valley style” startups or “lifestyle businesses.” The main differentiator between the two is whether the company seeks to grow off other people’s money (and maybe one day become profitable) or grow off your own profits. This week, I read about a new category of business called the Silicon Valley Small Business. It’s a hybrid of sorts, combining small business discipline with Silicon Valley ambition and tactics. The founding teams may look like a typical Silicon Valley startup on the webpage, but under the surface the ethos is different. This team values autonomy and flexibility and sees a range of possible good outcomes, not the binary all-or-nothing outcomes. The companies run lean—generally under 20 people—but have used tech to punch above their weight. They want to scale, but they want to do so efficiently and profitably. Maybe one of the reasons why I love this category is because this is how I’ve been building my business for the last 15 years. This year, however, may be a breakout year for Silicon Valley Small Businesses for a number of reasons. 1) Decreasing technology costs and complexity. 2) Democratized go-to-market channels. 3) Venture capital pull back. Working Theories (14 minutes)
I know that over half of you have started a company at some point in your life. If you’re a founder, what category would your business fall into? If you could start a new company today, what would you change?
Series A
I recently posted a video on Series A funding, and I can’t wait for you to check it out. The goal of this video is to equip founders with some understanding of key terms, including: 1) How the option pool impacts your company’s valuation. 2) Why a participating liquidation preference is bad for founders (and how to avoid it). 3) What is important to negotiate in a drag-along provision. 4) How to structure your board of directors. This video will help you make sure that you are getting the best possible Series A investment deal. While you’re on my YouTube channel, drop a comment and subscribe for more quality content. Thanks! YouTube (9 minutes)
No More Shootings
One hundred and ten Americans die each day by gun violence. Easy access to firearms and weak regulations result in firearm-related deaths as the leading cause of death of children ages 19 and younger. Our schools are suffering, and our neighborhoods live in fear. Advance Peace, a DRK Foundation portfolio organization, provides transformative opportunities to those at the center of gun violence through its signature strategy The Peacemaker Fellowship. Selected and enrolled Peacemaker Fellows are active firearm offenders who have avoided criminal prosecution and remain involved in recurrent gun violence. The opportunities provided by the Fellowship have proven to help change the trajectory of the Fellows’ lives, thus changing the trajectory of the neighborhoods where they live. In a recent New York Times article “California Today: A Project to Reduce Gun Violence,” founder and CEO DeVone Boggan provides a sneak peak into the intricacies of the Peacemaker Fellowship strategy and how supporting a targeted group of individuals at the core of gun hostilities bridges the gap between anti-violence programming and those at the center of gun violence. It’s a revolution in stopping needless deaths while altering the trajectory of these men’s lives. DRK Foundation (Sponsored)
Enough Raw Materials
Powering the world with renewable energy will take a lot of raw materials. The good news is when it comes to aluminum, steel and rare-earth metals, there’s plenty to go around. A new analysis shows that there are enough raw materials like aluminum, steel and rare-earth metals to power the world with renewable energy, even in the most ambitious scenarios. However, mining and processing these materials can cause environmental harm and human rights violations. The study estimates that emissions impacts from mining and processing these materials could reach a total of up to 29 gigatons of carbon dioxide between now and 2050, but this is still less than a year's worth of global emissions from fossil fuels. The challenge is to get these materials sustainably and responsibly, which should be a major focus of the renewable energy transition moving forward. MIT Technology Review (8 minutes)
Green Hydrogen
Perhaps one of the most important science experiments on the planet is happening in a remote stretch of the Australian outback, 100 miles away from the nearest town. A consortium of energy companies led by BP plans to cover an expanse of land eight times as large as New York City with as many as 1,743 wind turbines, each nearly as tall as the Empire State Building, along with 10 million or so solar panels and more than a thousand miles of access roads to connect them all. But none of the 26 gigawatts of energy the site expects to produce, equivalent to a third of what Australia’s grid currently requires, will go toward public use. Instead, it will be used to manufacture a novel kind of industrial fuel: green hydrogen. Green hydrogen is made by using renewable electricity to split water’s molecules. (Currently most hydrogen is made by using natural gas, a fossil fuel.) The hydrogen is then burned to power vehicles or do other work. Because burning hydrogen emits only water vapor, green hydrogen avoids carbon dioxide emissions from beginning to end. It is widely seen as a potential solution to reduce carbon emissions in heavy industries like steel making, shipping and cement. New York Times (22 minutes)
New Music
Larry Jackson, former global creative director of Apple Music, has launched Gamma, a one-stop-shop media company that creates, distributes and markets content, from music to podcasts to films. With more than $1 billion in capital from investors that include Apple, gamma is registered with a lowercase "g" and is the best capitalized music company competing with the major labels and signing superstars. Gamma is based on a different model where artists retain ownership of their copyrights and enter into long-term licenses with gamma. Gamma has acquired distributor Vydia and signed stars such as Usher and Snoop Dogg. It is hoping to become the new radio, where it can break records and sell an array of other goods, including concert tickets to beauty products. Billboard (8 minutes)
The College Opt-Out
A generation of jaded young people are opting out of college. The pandemic has caused a decline in college enrollment in the U.S., with many young people opting for hourly jobs or careers that don't require a degree. This is driven by high tuition costs and a desire to avoid student debt (not the worst idea in the world). Economists warn that this could lead to labor shortages in professional fields and lower lifetime earnings, especially for low-income and minority students. However, some experts see a bright spot in the growing demand for apprenticeships and education programs other than a four-year degree. AP (11 minutes)
Should We Work Together?
Hi! I’m Kyle. This newsletter is my passion project. When I’m not writing, I run a law firm that helps startups move fast without breaking things. Most founders want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a flat, monthly fee so you can control your costs and focus on scaling your business. If you’re interested, let’s jump on a call to see if you’re a good fit for the firm. Click here to schedule a one-on-one call with me.
Check out my other briefings: Founder Fridays and Web3 Impact.
Weekend Wisdom
Give me a lever long enough and a fulcrum on which to place it, and I shall move the world. -Archimedes
I think its more complex than that - first the article starts by talking about startups, but later on makes it clear it only means TECH startups, which is a small subset of all startups. I do mostly mentoring of technology (not "tech") startups with an impact focus - that's a whole other category. In the startup mentoring space we often use the terms SME (Small to Medium Enterprise) - current size ~2 success is doubling in size; versus SGB - current size ~2, success is 10x or 100x. These could be what the author has rediscovered an called Silicon Valley Small. With the VCs increasingly chasing mythical unicorns i.e. very low likelyhood of success, but billion+ exit, there are of course a bunch of startups chasing that. The risk from a startup entrepreneur perspective look much worse. The VC gets to spread their risk across multiple potential unicorns, the entrepreneur only gets one chance and most will fail with a zero (or negative) return. With VCs focused on potential unicorns, there are lot of good, very investable, SGBs that are not getting funding, even though they have the a high likelihood of delivering the 10x return previously sought by VCs. Most of my mentees (and my previous companies) fall in that category.
I suffered three Silicon Valley style, we're was difficult to differentiate ambition from greed, passion from obsession, effort from toil.