Weekend Briefing No. 412

Welcome to the weekend and welcome to 2022!

I’m back in home in Brooklyn. If you want to see some photos from my trip, follow me on instagram.

In case you missed it the last two weeks, I’m launching a new weekly email in January called Funding Fridays. My goal is to clearly and concisely communicate the state of venture funding from Pre-Seed through Series C in about two minutes. I hope that Funding Fridays will equip founders with accurate real-time market data to make smart decisions their next round of funding. If this sounds interesting, click here to sign up for Funding Fridays.  

This week, I’ve selected the top 21 stories of 2021. There’s so much great stuff here, and I hope you enjoy them. Happy New Year!

Did your brilliant friend forward this to you? Subscribe here.

Prime Numbers

100—Enjoy the 100 best songs of 2021.

18—Watch the 18 best documentaries of 2021.

10—Listen to the 10 best podcasts of 2021.

Normie’s Guide to Crypto

This is one of the best introductions to crypto I’ve ever seen. That’s probably because it’s less of an article and more of a jumping off point to a bunch of great content. If you’re skeptical of the whole crypto scene (who can really blame you) and you’ve come to the conclusion that this thing isn’t going away, you should at least get the basics. This is a perfect starting point. Plus, you can learn a little cryptospeak along the way. For instance: (1) FUD: “Fear, uncertainty, doubt,” a catchall phrase for any kind of negativity, criticism, or bad news about a crypto-currency (even if it happens to be true). (2) WAGMI: “We’re all gonna make it” is a rallying cry, an expression of camaraderie and optimism. (3) MOON: If a coin is mooning, that means its price is soaring. New York Magazine (21 minutes)

Algebra of Wealth

If you are a young person (relative term) and you’re looking to build wealth, what should you do? Scott Galloway’s observation is that there are four factors in the algebra of wealth: focus, stoicism, time and diversification. You can read the rest in his article, but I want to focus on focus. (1) Focus on your career positioning. Get certified: In a digital world, much of the corporate world decides whether to swipe right or left based on the logos (aspirational universities/firms, vocational certifications, etc.) on your LinkedIn page. Sector dynamics will trump your talent (I realize how awful that sounds). However, someone of average talent at Google has done better over the last decade than someone great at General Motors. Be thoughtful. Any opportunity you have when you are young to choose among different paths is a profound blessing. Look for the best wave to ride. (2) Focus on your relationships. Family and friends are essential to long-term happiness, and the most important relationship is your spouse. The most impactful economic decision you make will be who you decide to partner with or, more specifically, who you decide to have kids with. Married people grow their net worth 77% more than single people. Marry the right person, and then invest in that relationship every day. No Mercy No Malice (14 minutes)

What Is Ethereum?

Ethereum is so many things at once, all of which feed off of each other. Ethereum, the blockchain, is a world computer, the backbone of a decentralized internet (web3) and the settlement layer for web3. Its cryptocurrency, Ether (ETH), is a bunch of things, too: (1) Internet money. (2) Ownership of the Ethereum network. (3) The most commonly used token in the Great Online Game. (4) Yield-generating. (5) A Store of Value (SoV). (5) A bet on more on-chain activity or the web3 future. Because Ethereum is so much at once, it’s hard to understand. This post is an attempt to help Ethereum be understood. To a group like us, people interested in technology, businesses, finance and strategy, it’s much more fascinating than bitcoin, but that comes with a tradeoff. It’s much harder to intuitively understand than bitcoin, and because of that, it hasn’t gotten the mainstream or institutional attention that bitcoin has. Not Boring (25 minutes)

Language/Market Fit

Language/Market Fit (LMF) is when you find the exact right words to explain your product or service to prospective customers, words that resonate with goals and struggles that are already in their brains. Before LMF, growth feels like pushing on a string, a lot of work for incremental gains. Your Facebook ads barely pay for themselves, and your AdWords don’t. Your marketers struggle to deliver results despite success with previous companies. Your salespeople (other than your founder) struggle to sell your product. And your conversion rates hover between 0.5% and 3%. On the other side, companies with LMF normally get conversion rates from 8%–40%, which result in much stronger unit economics. Why the sudden jump? Visitors to your site or app store listing bring different levels of intent. It’s easy to convert high-intent users. But if you’re an unfamiliar start-up, most of your visitors will have low intent, more curious than desperate. As you tighten up your language, you’ll be able to cut through to that massive pool of low-intent traffic. In this article, learn why LMF should be “step zero” for start-ups, explaining the neurological basis for this phenomena and showing how start-ups can find it in his four-step framework. If you’re a pre-product/market fit founder, or a head of product or growth, his approach can save you a lot of time and wasted cycles. First Round Review (21 minutes)

Millennial Lifestyle Subsidy

There was a golden era when young urban professionals were living kings and queens on the Millennial Lifestyle Subsidy, which is what I like to call the period from roughly 2012 through early 2020, when many of the daily activities of big-city 20- and 30-somethings were being quietly underwritten by Silicon Valley venture capitalists. For years, these subsidies allowed us to live Balenciaga lifestyles on Banana Republic budgets. These companies’ investors didn’t set out to bankroll our decadence. They were just trying to get traction for their start-ups, all of which needed to attract customers quickly to establish a dominant market position, elbow out competitors and justify their soaring valuations. So they flooded these companies with cash, which often got passed on to users in the form of artificially low prices and generous incentives. Now, users are noticing that for the first time—whether because of disappearing subsidies or merely an end-of-pandemic demand surge—their luxury habits actually carry luxury price tags. Some of these companies have been tightening their belts for years. But the pandemic seems to have emptied what was left of the bargain bin. The average Uber and Lyft ride costs 40% more than it did a year ago, according to Rakuten Intelligence, and food delivery apps like DoorDash and Grubhub have been steadily increasing their fees over the past year. The average daily rate of an Airbnb rental increased 35% in the first quarter of 2021, compared with the same quarter the year before, according to the company’s financial filings. New York Times (9 minutes)

Zapier

I’m also a huge fan of Zapier. (I just counted, and I currently have 71 zaps running.) They have been a key driver of efficiency in our firm, but they haven’t played the typical Silicon Valley game. Just because Zapier hasn’t played the game—raising just $1.3 million in funding, going fully remote long before the pandemic made it commonplace, and targeting a customer set left overlooked by many software companies—doesn’t mean it hasn’t built a big business. Last summer, Zapier reached $100 million in annualized recurring revenue; it’s passed $140 million by now. And in January, investors found a way into the business, just not through Foster. Sequoia and Steadfast Financial bought shares at a $5 billion valuation from some of Zapier’s original investors. Zapier also set up a $1 million small business assistance fund for struggling customers a year ago as the pandemic spread. Foster predicts that coming out of COVID-19, a new wave of mom-and-pop style small businesses of $5 million to $10 million in revenues will flourish, having made the digital jump. Zapier’s hiring and expanding software tools are also a rarity in that they’re fueled entirely by the company’s sales. Employees are eligible to receive bonuses from the company’s profits should they hit certain milestones twice a year. “We’ve never felt like our balance sheet has been the thing that was holding us back from reaching our goal,” says Foster. The company announced its first acquisition of a no-code education business called Makerpad on Monday. Forbes (9 minutes)

All-You-Can-Eat Economics

Few things epitomize America more than the all-you-can-eat buffet. For a small fee, you’re granted unencumbered access to a wonderland of gluttony. But one has to wonder: How does an industry that encourages its customers to maximize consumption stay in business? Each bite incurs an extra marginal cost to the restaurant, but no extra cost to you. Like most restaurants, buffets operate on extremely thin margins: For every $20 in revenue, $19 might go toward overhead, leaving $1 (5%) in net profit. (1) Buffets often break even on food and eke out a profit by minimizing the cost of labor. Self-service allows a buffet to bypass a wait staff, and all-you-can-eat dishes (which are generally less complex and prepped in enormous batches) can be made by a “skeleton crew” of line cooks. A single buffet cook might be able to prep food for 200 people in the time it takes a normal restaurant to prep 25 meals. (2) Because margins are so slim, buffets rely on high foot traffic: At Golden Corral, a buffet chain with 498 locations in 42 states, dining floors are 5K square feet and seat 475 people. On a typical Saturday, it’s not uncommon for 900 diners to come through the door. Each year, Ovation Brands, the owner of multiple major buffet chains, serves up 85 million dinner rolls, 47 million pounds of chicken and 6 million pounds of steak—49.3 billion calories in total. It is estimated that between 5% and 25% of any given dish will be wasted, either through the buffet’s miscalculation of demand or the diner’s overzealousness. Waste reduction is a key focus of any successful buffet and a frequent tactic is reusing food. (3) Decision Architecture. They put the cheap, filling stuff at the front of the buffet line: (Study: There are 75% of buffet customers who select whatever food is in the first tray—and 66% of all the food they consume comes from the first three trays.) They use smaller plates. (Study: Smaller plate sizes reduce the amount of food consumed.) They use larger-than-average serving spoons for things like potatoes and smaller-than-average tongs for meats. They frequently refill water and use extra-large glasses. The Hustle (13 minutes)

Family Feud

This time last year, Admiral Brett Giroir, then an assistant secretary for health at the Department of Health and Human Services, had been put in charge of COVID-19 testing. He was mostly concerned about one essential component of the testing process: swabs. Specifically, the particular 6-inch swab was flexible enough to sweep the depths of the nasopharynx where the coronavirus replicates, the one now known as the brain tickler and the only one approved for testing for such respiratory viruses. One of his aids had to inform him, “Sir, I’m sorry to inform you [that] what we initially thought were 10 to 15 swab producers are in fact only distributors.” Giroir was further told that only two companies in the world make the swabs: Copan Diagnostics Inc. in northern Italy, an area then being ravaged by COVID-19, and a small, family-owned business in Maine called Puritan Medical Products Co. Never before had Puritan, founded a century ago in the tiny town of Guilford, been more important. And never before had it been so dysfunctional. A yearslong feud between the two owners, Templet and his cousin John Cartwright left the business in a management crisis. Three weeks before the pandemic hit, Templet filed a lawsuit in Cumberland County Superior Court to dissolve their joint ownership of Puritan and its other business because of “major, longstanding and irreconcilable disagreements” between him and his cousin. The rift resulted in delayed investments to modernize manufacturing lines, stagnant wages for a dwindling workforce and an outdated back-office information technology system. “The general partners’ deadlock has created a dangerous situation, leaving the companies close to a point where something is going to break,” the lawsuit read. “Cartwright and Templet no longer speak, no longer make joint decisions, and are essentially unable even to be in the same room together.” This is the story of how the pandemic brought the business opportunity of a lifetime to Puritan. But even a $250 million infusion from the U.S. government has done little to quell an epic family feud. Bloomberg (21 minutes)

UAP

This interview of U.S. Navy pilots discussing Unidentified Ariel Phenomenon (UAP), commonly known as UFOs, is the most factually compelling evidence I’ve seen that there may be some extraterrestrial activity off the East and West Coast of the United States. The U.S. military has observed some sort of technology that can pull 600–700 G Forces; fly at 13,000 miles per hour; evade radar; and seemingly fly through both air and water with no obvious signs of propulsion and no wings. For many years, the Pentagon has had a group called Advanced Aerospace Threat Identification Program (AATIP) to document and analyze the data from UAPs sightings. In some cases, there are simple explanations for these phenomena. But in many cases, there just aren’t. 60 Minutes (14 minutes)

Two Worlds

A hard thing to wrap your head around in economics is the idea that two opposite things can be true at once. For instance, as we begin 2021, household finances might be in the best shape they’ve ever been in. That might sound crazy, and it’s easy to overlook because of the second story: COVID-19 has dumped kerosene on wealth inequality in ways we’ve yet to fully grasp. (1) Household finances. Last year was the best year for income in American history. By far. It’s not even close. What do you do when you get a giant stimulus check, and you can’t use it to travel because everything’s locked down? Or, you can’t go shopping because the malls are closed or eat out because the restaurants aren’t open? Millions of Americans used it to pay off debt. There is no precedent for credit card balances falling more than 10% in one year. But it just happened. The personal savings rate averaged 7% in the quarter-century before 2020. Then COVID-19 hit, and overnight it went to 34%. It’s since dropped to about 14%, which would have been a 50-year high before COVID-19. The result is that the amount of cash that households have in the bank has absolutely exploded. For perspective, Americans held $800 billion in checking accounts a year ago. Today it’s more than doubled in one year. (2) Income inequality. Rising income inequality has been one of the most important stories of the last four decades. Then COVID-19 hit, and the trend was fed rocket fuel. Take two recent CNBC headlines: (a) The U.S. savings rate hits a record 33% as coronavirus causes Americans to stockpile cash. (b) There are 61% of Americans who will run out of emergency savings by the end of the year. Or these two: (a) Household wealth surged to a record high during the pandemic. (b) More Americans are shoplifting food as aid runs out during the pandemic. That’s the story. There are 9 million fewer jobs today than a year ago, a decline of around 6%. But for those earning more than $28 per hour, the job market has fully recovered, like the recession never happened. For those earning less than $16 per hour, one-quarter of the jobs are still gone, which is on par with the 1930s. Collaborative Fund (13 minutes)

The Bet

On March 6, 1995, WIRED’s executive editor and resident techno-optimist Kevin Kelly went to the Greenwich Village apartment of the author Kirkpatrick Sale. Sale had just written a book called Rebels Against the Future. It told the story of the 19th-century Luddites, a movement of workers opposed to the machinery of the Industrial Revolution. Sale predicted society would collapse by 2020. It seemed like a good, round number. Kelly then asked how, in a quarter century, one might determine whether Sale was right. Sale extemporaneously cited three factors: an economic disaster that would render the dollar worthless, causing a depression worse than the one in 1930; a rebellion of the poor against the monied; and a significant number of environmental catastrophes. “Would you be willing to bet on your view?” Kelly asked. “Sure,” Sale said. Then Kelly sprung his trap. He went to Sale’s apartment with a $1,000 check drawn on his joint account with this wife. Now he handed it to his startled interview subject. “I bet you $1,000 that in the year 2020, we’re not even close to the kind of disaster you describe,” he said. Sale barely had $1,000 in his bank account. But he figured that if he lost, $1,000 would be worth much less in 2020 anyway. He agreed. Kelly suggested they both send their checks for safekeeping to William Patrick, the editor who had handled both Sale’s Luddite book and Kelly’s recent tome on robots and artificial life; Sale agreed. “Oh, boy,” Kelly said after Sale wrote out the check. “This is easy money.” Twenty-five years later, the once distant deadline is here. Who won the bet? WIRED (31 minutes)

Personal Monopoly

The Internet rewards unique people. Find your unique combination of skills, interests and personality traits—your “Personal Monopoly.” Become the only person in the world who does what you do. Then, tell the world by sharing your knowledge. A Personal Monopoly is a unique intersection of skills, knowledge and personality that nobody else can compete with. Personal monopolies aren’t found; they’re made. Global markets increase the upside of having a Personal Monopoly but also make it harder to create one. The process of building a Personal Monopoly is the process of becoming yourself. The sweet spot is finding an idea that looks specific to others, but is still diverse enough to express the many shades of who you are, where you excel and what you want to achieve. We are often blind to our own Personal Monopolies. Like fish in water, we don’t know how to explain what we do, so we depend on others to define our work for us. Listen to others describe your work. Then, double down on the best summaries. David Perell (9 minutes)

How Wokeness Ends

David Brooks wrote an interesting opinion piece entitled How Wokeness Ends, which basically makes the argument that once mainstream corporate America co-opts a movement, it dilutes it. Thus “wokeness” will end not in a bang, but in a whimper. I was going to run that story in this section, but then my editor  Shamontiel L. Vaughn read it and it irritated her enough to write a response piece. I thought her response was better than the original piece. So, I wanted to share her piece instead. She says: “By the time I got to the end of the NYT post, I was trying my damnedest not to be irritated. Although not intentional, the post is draining to read—and the truth hurts. Truth be told, white people can stop participating in every single Black Lives Matter march or Stop Asian Hate march or native or Latino cause and go back to life as usual. They’re doing it voluntarily; black folks are doing it to figure out how to survive. The purpose behind wokeness will never die out for POCs and black people. The whole time I read the post about Corporate America, intersectionality, patriarchy and diversity in the workplace, I kept thinking one thing: ‘I still wake up black—even when you lose interest.’” I Do See Color (4 minutes)

Psychology of Human Misjudgment

Man’s—often wrong but generally useful—psychological tendencies are quite numerous and quite different. The natural consequence of this profusion of tendencies is the grand general principle of social psychology: Cognition is ordinarily situation-dependent so that different situations often cause different conclusions, even when the same person is thinking in the same general subject area. In this iconic essay, Charlie Munger also addresses the importance of recognizing patterns to determine how humans behave, both rationally and irrationally. He shares with us his checklist of 25 standard causes of human misjudgment, which contains observations that are ingenious, counterintuitive and important—values Charlie treasures in the work of other great thinkers throughout history. Farnam Street (55 minutes)

Micro Habits

Success is a few simple disciplines practiced every day while failure is simply a few errors in judgment repeated every day. This article has 25 micro habits that can improve many areas of your life. Each action can help you build a sustainable habit over time—a consistent system that can deliver incremental results. Here are a few of my favorites: (1) Make time for a few minutes of quiet time to think about the good day ahead or prepare yourself for the day. (2) Don’t get straight to your email just yet. Take the morning in (sunrise and the peace of the morning). (3) Limit the number of decisions you make in the morning. Too many decisions exhaust the brain and cause fatigue. One way to manage your energy is to do your high-priority work in the a.m. (4) When you start work, remove all distractions from your work environment before starting actual work—noise, notifications, email tabs, etc. Assume focus or productive mode with calming music. (5) Use your to-do list from the night before to start a productive day. Personal Growth (4 minutes)

Friendship Recession

After a prolonged period of social isolation, Americans are dusting off their social calendars. But as Americans try to rebuild and reconnect, a new survey conducted by the Survey Center on American Life finds that the social landscape is far less favorable than it once was. Over the past three decades, the number of close friends Americans have has plummeted. This friendship recession is particularly bad for men. The percentage of men with at least six close friends fell by half since 1990, from 55% to 27%. The study also found the percentage of men without any close friends jumped from 3% to 15%, a fivefold increase. The bad news doesn’t end there. Not only do men have smaller friendship circles, but they report being less emotionally connected to the friends they do have. Both men and women benefit from developing strong emotional bonds with their friends, but women are more successful in establishing these types of relationships. The study finds that women report far higher rates of emotional engagement with and support from their friends. This type of intimacy matters. Americans who receive regular emotional support from their friends are far less likely to report feeling anxious or alone than those who do not, and this is true independent of how many friends they have. National Review (7 minutes)

Joy Generator

Although some people are starting to test the waters of public life again, planning vacations and socializing more, others may still have lingering signs of what psychologists call languishing. They may feel an emptiness or dissatisfaction in day-to-day life. Or, they feel like they’re stuck in weariness or stagnation. Feeling blah? Science shows you can boost happiness by taking time for small moments of delight. NPR has created a Joy Generator. So let’s play! NPR (12 minutes)

Scorpions

It’s 1990. The Berlin Wall has just come down. The Soviet Union is on the verge of collapse. A heavy metal band from West Germany, the Scorpions, releases a power ballad, “Wind of Change.” The song becomes the soundtrack to the peaceful revolution sweeping Europe—and one of the biggest rock singles ever. According to some fans, it’s the song that ended the Cold War. Decades later, New Yorker writer Patrick Radden Keefe hears a rumor from a source: the Scorpions didn’t actually write “Wind of Change.” The CIA did. This is Patrick’s journey to find the truth. Among former operatives and leather-clad rockers, from Moscow to Kiev to a GI Joe convention in Ohio, it’s a story about spies doing the unthinkable, about propaganda hidden in pop music and a maze of government secrets. The story behind “Wind of Change” became an offbeat, eight-part investigation. I’m totally captivated by the story. I’m going on the record with this prediction: “Wind of Change” will be the best podcast series of 2021. Crooked Media (41 minutes)

The Ultimate Run

The Ultimate Run is a video of the best ski run ever. It kicks off on the lofty extremities of Zermatt as Markus Eder drops into a sheer expanse of powder, before shredding his way through glacial blocks the size of buses, jumping off ice cliffs and then slips into the belly of the glacier, only to reappear above his home resort of Klausberg. Carving fields of fresh powder, he joins a session with his buddies at his local snow park, before boosting back off into the backcountry for some more face shots. The firecrackers keep on popping as he enters the snow-covered architecture of Taufer castle and a mining museum. As the sun sets over the mountains, Markus slides out onto the valley floor, six years of dream skiing condensed into 10 minutes of pure joy and adrenaline. With the first snow falling in the Alps, The Ultimate Run is a must watch for all winter sports enthusiasts. It will reignite the passion for winter in even the most laid-back snow fans for the coming season. YouTube (10 minutes)

Canals

This is a captivating 4K time-lapse video of a boat navigating the canals and waterways of the Netherlands. Infrastructure nerds will appreciate all of the bridges, locks, piers, signals, etc. Kottke (11 minutes)

Tiny

This is simply a video of a man parking his tiny car in a tiny garage with 3 centimeters on either side. But it’s perfect. I’ve watched it a number of times. Watch it all the way to the end. YouTube (2 minutes)

About the Weekend Briefing

This is a Saturday morning briefing on innovation and society by Kyle Westaway—Managing Partner of Westaway and author of Profit & Purpose. Photo by Arno Senoner.

Should We Work Together?

This newsletter is my passion project. When I’m not writing, I run a law firm for startups. Most entrepreneurs want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a fixed-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 call.

Weekend Wisdom

Don’t live the same year 75 times and call it a life.Robin Sharma

Did your brilliant friend forward this to you? Subscribe here.