Weekend Briefing No. 454

Welcome to the weekend.

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Prime Numbers

1.2 billion—The Bill and Melinda Gates Foundation says it will commit $1.2 billion to the effort to end polio worldwide.

9%—A small amount (9%) of Americans believe US democracy is working “extremely” or “very well.”

3—All Ben & Jerry’s employees are able to take home three pints of ice cream every single day.

Convertible Notes

The convertible note is a loan (debt) from an investor which, under certain circumstances, may be converted into stock in the company (equity). Convertible notes are a popular instrument for several reasons. Based on my experience negotiating convertible notes for startups, I’ve made a short YouTube video about the convertible note. In the video I cover (1) the pros / cons of the convertible note, (2) how it differs from a SAFE, (3) how it converts to equity, (4) valuation cap and discount (5) diversity rider and more. The goal is to help founders understand if the convertible note is right for them and get a basic understanding of the deal points. Check it out. While you’re on YouTube, don’t forget to like the video and subscribe to the channel. We’ve got more good content queued up this Fall. YouTube (6 minutes)

Deeper Dive: If you want to want to dive deeper into convertible notes, check out my free Founder’s Guide to Convertible Notes where I go into much more detail than the video.

Optimism and Pessimism

Optimism and pessimism can coexist. If you look hard enough, you’ll see them next to each other in virtually every successful company and successful career. They seem like opposites, but they work together to keep everything in balance. You can only be an optimist in the long run if you’re pessimistic enough to survive the short run. The best way for most people to apply that is: Save like a pessimist, invest like an optimist. Save like a pessimist means you acknowledge the cold statistics of how common bad news is. It’s common at the global, national, local, business and personal level. Save heavily, knowing with certainty that you’ll need a cushion to deal with the next banana peel. Be a little bit paranoid, knowing the assumptions you hold today could break tomorrow, and you’ll need enough room for error to make it to the next round. Investing like an optimist means that since progress is cumulative (we don’t forget past innovations) but setbacks are temporary (we rebuild), the long-term odds tilt toward growth. Once the odds are in our favor, then you start to see compounding returns on your investment. All good investing comes down to surviving an inevitable chain of short-term setbacks and disappointments in order to enjoy long-term progress and compounding. Collaborative Fund (6 minutes)

Solid First Impressions

Your website is often your company’s first impression for a potential client, and it’s the only member of your sales team working 24/7—validating your value proposition and educating each prospect. Would you keep a salesperson not functioning at full capacity or who simply couldn’t tell your story effectively? Eighty-eight percent of online consumers are less likely to return to a site after a bad experience. It’s time to take a look at your website performance. As a long-term web partner for Westaway and the Weekend Briefing, GruffyGoat delivers high-end design and functionality for an affordable price. They’re also great to work with. GruffyGoat (Sponsored)

Restaurants Post-Pandemic

While we’re all familiar with the bigger developments (higher prices, fewer workers, no more late-night feasts), some more specific, surprising changes have taken hold in the restaurant world. Here are some of the pandemic pivots that look like they’ll stick around as long as COVID-19 itself, which is to say they’re here for good. (1) Thursday is the new Friday. Owners say that they’ve seen a noticeable uptick in activity on Thursday nights—a phenomenon they attribute to work-from-home policies. (2) Casual restaurants want commitment. While cancellation fees were already common at fine-dining restaurants, reservation requirements and penalties for no-shows have become increasingly common at cocktail bars and more neighborhood-focused spots. (3) Recipes are designed to be more malleable. At many restaurants, menus are getting simpler because of high labor turnover, fewer available cooks and the rising costs of ingredients. Chefs are also designing their dishes to be less rigid, which is less about creative expression and more about necessity in the time of supply-chain disruptions. Grubstreet (6 minutes)

Berkshire Hathaway’s Holdings

This animated video highlights three decades of Warren Buffett’s investments. It shows what his holding company, Berkshire Hathaway, has been invested in since 1994, using data from the company’s financial reports. It owns 62 different companies outright, including big names like GEICO, Dairy Queen, Kraft Heinz and Duracell, and also has large investments in companies like Apple, Wells Fargo and Coca-Cola. However, as this animation shows, the exact composition of its portfolio has certainly evolved over the years. Visual Capitalist (1 minute)

The Stockdale Paradox

The Stockdale Paradox is the blazing determination inside Admiral James Stockdale that allowed him to believe that, despite his imprisonment and torture, he would not only survive but thrive because of his experience. He believed that he would find a way through no matter what happens, but he was also realistic. He did not depend on things outside of his control. When asked who fared worse in the North Vietnamese prison camp, Stockdale singled out one group: the optimists. They were convinced they’d be rescued soon. They were convinced it was going to be over any day now. We cannot be so naive or excessively optimistic or wishful as to place our fate in the hands of others. We must never expect, hope or believe that anyone is coming to save us. Why? It’s the expectation, the entitlement, the naivete that crushes us. Daily Stoic (5 minutes)

Lion City Rising

When we pass by landscapes, they appear fixed in time. However, they change around us constantly. Singapore has gone through an incredible change over the past eight years, and this videographer has done some amazing timelapse work to capture this rapid growth. There were no permanent cameras used in this film; it required regular site visits over 988 shoot days and over 3300 matched shots. It’s super impressive. Vimeo (5 minutes)

Move Fast. Don’t Break Things.

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 1-on-1 call with me.

Weekend Wisdom

Everybody needs beauty as well as bread, places to play in and pray in, where nature may heal and give strength to body and soul. John Muir

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