Surf Report, Issue 3 (Free Edition)
6 Bullets, 4 Tweets, 1 Idea, 1 Longread, a Meme-BA, a Filecoin, + free events!
INTRODUCTION
October 18, 2020
Hi everyone! So glad to have you back. What a week.
I read something the other day from @arvidkahl that hit me in the brain feels:
“Successful businesses are built by solving critical problems for an audience that will pay for a solution to their issues. Not every problem is critical. Not every critical problem is interesting. Not every interesting problem is critical.”
A big reason I started Surf Report was to document my wily process of finding a valuable problem to solve. Businesses are nothing but trumped up solutions, and you can’t build a business without a problem to eradicate or alleviate.
If you want to connect dots you need to collect dots. I usually use this as an excuse to buy more books, but what I really mean is that it is only by reading and listening that we can gather building material. Hence this report, and everything on the cutting room floor.
As I listen to founders and scour earnings reports and perform technical analysis, I’m always asking myself two things:
What is this telling me about human beings?
What is this telling me about society?
Everything has something to teach us, problems are soluble, and insight comes from connecting seemingly unrelated sources. For me, that’s the 3-legged stool I stand on to keep steady these days. There’s not much to hold on to, but there are surely problems out there that need solving. Knowing that is as good as steady in my book.
Thanks again for coming along with me on this. Let’s go.
—Mark
“It has been said that man is a rational animal. All my life I have been searching for evidence which could support this.” —Bertrand Russell
Breaking 🌊
Twilio bought customer data startup Segment to create “the future of customer engagement.” Announced Monday, the deal is estimated to be worth between worth $3B - $4B. So What?: Their common thread is APIs (Application Layer Interfaces) and using them to give smaller businesses customer service superpowers. Direct access to individual customers and their data is ✨
AMD now claims to have “the world’s best gaming CPU”—a shot against Intel—and is in late-stage talks to acquire Xilinx for ~$30 billion. This means AMD is now the performance leader in both graphics processing units (GPU’s) and, with Xilinx, field-programmable gate arrays (FPGA’s). So What?: This has little to do with gaming. Data centers are the largest & fastest semiconductor customers in the world, so AMD is positioned to own even more of the cloud—storage, gaming, & more.
U.S. Auction Theory pioneers at Stanford win a Nobel. “Their discoveries have benefitted sellers, buyers and taxpayers around the world.” So What?: In 1994, US authorities first used one of their auction formats to sell radio frequencies to telecom operators—yet another case of seemingly unrelated industries benefiting from innovation elsewhere.
Disney reorgs around streaming, transforming itself “from a television and movie theater-driven distribution model to a direct-to-consumer business that would rival Netflix.”So What?: Investors love it, as content platforms ($FOX, $NFLX, etc.) are creating more and more of their own content themselves. Intellectual property builds deeper moats than streaming rights alone.
The biggest European digital bank looks to be applying for a banking license in California. Revolut, a fintech giant, boasts 13 million users, and this move would allow it to provide service across the U.S. So What?: As traditional institutions explore crypto solutions for this online era, tech firms smell blood and are pressing harder on the cracks forming from banking’s conservative approach to innovation.
The crypto march continues. Fidelity suggested investors allocate 1% - 5% into Bitcoin, and $10B asset manager Stone Ridge now owns $115M in Bitcoin. JPMorgan also called Square’s $50M Bitcoin investment a ‘strong vote of confidence.’ and see ‘modest headwind’ in its price in the short term. So What?: The logic cascade of “if it’s good enough for __ then it’s good enough for me” is gathering serious momentum now 🚅
From the Tweetbox 🐦
#6 is great: “Don't just take the money a customer is willing to give you. Work only with customers who believe the same things you believe and are also building for the long-term.”
“There are some things that take almost zero time that are incredibly valuable” If you've already heard of the 80/20 Pareto principle, you should still read this:
Sell shovels.
My most popular tweet of the year is about books 📚
Here’s An Idea 💡
See your career as a product.
“Every great product should have a moat, and careers are no different.”
Read about it over at Erik Torenberg’s Substack
Longread Of The Week
Audio’s Opportunity and Who Will Capture It, by Matthew Ball
“While the above might seem preoccupied with theory and philosophy, all analysis of the past and future of a given media category must start from the fact that media is technology.”
Look, when this guy writes, I listen. With my eyes.
This essay clocks in at something like 8,000 words so I can’t really summarize it for you here, but it does break down into the following sections if you want to Search your way to the points that most interest you:
Chapter 1: How Technology Created Recorded Media, Then Continually Redefined It
Chapter 2: Sisyphus’ Soundtrack
1. TV Outgrew the Radio Star
2. Video Game On
Chapter 3: Zooming Out on Audio
1. Audiobooks, Podcasts, And Audio-Only Stories
2. The New Concerts
3. Going Virtual
PNG 🖼
I’m thinking of creating an entire MBA program out of memes. Lesson 1:
The beginnings of all things are small. —Cicero
Groms 🐣
Filecoin finally has liftoff. I remember learning about this back in 2017 and being excited at the idea. “Filecoin was originally intended to be on Ethereum and as I have it they couldn't make that fit. It is truly a complex system from a team who has been building real software for a long time.” —@SchalkDormehl
“Filecoin, developed by Protocol Labs, is a decentralized storage network. It is meant to enable users to buy and sell unused storage on the network using FIL. The project has been under development for three years. In 2017, Protocol Labs raised $200 million in just 30 minutes via an initial coin offering or ICO.”
“Don’t tell me what you think, tell me what you have in your portfolio.” —Nassim Nicholas Taleb
Drop Ins 🏄
My latest investments & trades
Buy & Hold Investments (I will hold these forever)
This section is only available for contributing subscribers. If you’d like to trade and invest along with me, consider one of the paid tiers!
Swing Trades (1-3 month time horizon)
This section is only available for contributing subscribers. If you’d like to trade and invest along with me, consider one of the paid tiers!
Barrels 🎯
Winning trades of the week
Scaled out some profits from $UPRO (S&P 3x leveraged fund) for a ~15% gain
Pods & Schools 🐬🐠
Upcoming (Free!) Conference: On 11/6,9,10:Reboot 2020 on Some great speakers I admire including @tylercowen, @nayafia, @eriktorenberg, and @rivatez
Upcoming (Free!) Lecture: On 10/31:Risk & Credit 500 Years Before Modern Finance, with Professor Francesca Trivellato. Hosted by the Institute for Advanced Study in Princeton.
Article Reco:Accountable to Darwin vs. Accountable to Newton. Things change, so rules sometimes need revising:
“Compounding reports to Newton. […] Incentives are Newtonian too. […] But Darwin is in control most of the time.”
Podcast Reco: $40B in Startup Value (Initialized Capital) | Garry Tan on That Creative Life with Sara Dietschy
“If you don’t have technology as a key part of what your business is, you might not have future cash flows”
Tools of the Trade ⚒
Products I use to make money
Wealthfront. ~25% of my portfolio is in Wealthfront, which since 2016 has netted me a time-weighted return of ~39% (~35% money-weighted), all while harvesting tax losses like the pros do.
Use this special link to get your first $5,000 managed for free: https://wlth.fr/2ephpyb
StockCharts. I easily make back the small monthly subscription fee with the superpowers it gives me. If you want to trade smart, you’ll need it.
Carrd. I used it to create markmulvey.com, surfreport.email, and I’m using it now to build websites for paying clients. Use this link or referral code 892PYX69 to start your own web empire.
Cointracker Track your coins like you track your stocks, complete with all-time return (absolute & percentage) by coin and cost-basis.
Hypefury. I use Twitter to connect with people who eventually become friends, colleagues, and customers. Hypefury is easily the best tool out their for growing a quality Twitter following.
SPONSOR
Sforzo Audace is my own company—the lifestyle brand for renaissance men. (I’m an advocate of ‘being your own sponsor,’ but if you want to advertise on here too my DMs are open)
I was tired of needing to own a different bag for work and weekends, so I created a “renaissance bag”: the one men's everyday carry that dresses up, dresses down, and will never go out of style. It’s half the price of designer brands and gets twice the usage.
Surf Report subscribers get an extra 20% off with the discount code SURFREPORT at checkout
Disclaimer
Nothing in this email is intended to serve as financial advice. Do your own research.