The previous post was getting long-winded, but I wanted to add one more quote from the Network movie.
After news anchor Howard Beale goes on air to rail against his TV station selling out to Saudi investors, the chairman of the board sits him down for a chat.
CHAIRMAN ARTHUR JENSEN: The Arabs have taken billions of dollars out of this country, and now they must put it back. It is ebb and flow, tidal gravity, it is ecological balance! You are an old man who thinks in terms of nations and peoples. There are no nations! There are no peoples! There are no Russians. There are no Arabs! There are no third worlds! There is no West! There is only one holistic system of systems, one vast and immane, interwoven, interacting, multi-variate, multi-national dominion of dollars! petro-dollars, electro-dollars, multi-dollars!, Reichmarks, rubles, rin, pounds and shekels! It is the international system of currency that determines the totality of life on this planet! That is the natural order of things today! That is the atomic, subatomic and galactic structure of things today!
You get up on your little twenty-one inch screen, and howl about America and democracy. There is no America. There is no democracy. There is only IBM and ITT and AT&T and Dupont, Dow, Union Carbide and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their councils of state -- Karl Marx? They pull out their linear programming charts, statistical decision theories and minimax solutions and compute the price-cost probabilities of their transactions and investments just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable by-laws of business.
Silicon Valley founders are worried about the source of their money. 75% of venture-backed startups fail, and it’s very sad when those sunk costs are financed by public pensions and other modest sources.
(ed. note: SpoonRocket filed for bankruptcy in 2016.)
Won’t somebody please think of the schoolteachers and firefighters?? Why are shady fund managers always pillaging their pensions??
That’s why it’s a relief to see Andreessen-Horowitz, Kleiner-Perkins, Y Combinator, Greylock, and other usual suspects raising money instead from Saudi Crown Prince Mohammed bin Salman! Not only can he afford to lose the money, he deserves to!
We love it when Bad Guys get ripped off! Remember how thrilled we were to find out Betsy DeVos lost $100 million on Theranos? Hahaha, that’s what you get for supporting school choice! What better way to stick it to a repressive regime than by selling its dollars for 75 cents??
At last, it feels like the tide has turned! The media will finally stop villainizing Silicon Valley and see tech founders as the great humanitarians they truly are.
Wait… what’s this? People think that taking Saudi money is… bad?
I guess… people are worried about the outside chance that a wildly successful long-shot could enrich Mohammed bin Salman and his sovereign wealth fund?
People are… reallyworried. In fact, some VCs are *so* worried that they’re only seeking investments from Good Guys, like nonprofit groups and children’s hospitals.
Only 5% of VC funds generate enough profit to justify the fees and illiquidity. Are nonprofits and children exempt from the usual 2-and-20? Didn’t think so.
Yes yes, every VC is convinced that his fund will be one of the 5%. This is the type of concern that could only arise in a place as delightfully Panglossian as Silicon Valley. My next moonshot is going to be so valuable, taking other people’s money is practically an act of charity — That’s why my seed round is only open to widows and orphans!
Or maybe the problem is Silicon Valley’s knack for knee-jerk reacting to whatever the media is raging about. Maybe it’s a side effect of being always plugged in; maybe tech people are just naïve. But maybe these founders should take a page from wizened Wall Street execs and stop worrying what others think.
Listen up Silicon Valley, it makes no difference whose money you take. You’re gonna get ripped on no matter what. In fact, there’s a whole class of people whose sole purpose in life is to run around afflicting the comfortable — They’re called journalists.
Me, on the other hand, I’m here to comfort the afflicted! Here we go:
No schoolteacher is gonna end up in the poorhouse due to bad VC investments. I asked a Sand Hill Road GP why he was gambling with teachers’ retirement money. He said that many pension funds follow a portfolio model that allocates a percentage to private equity, but assuming the fund manager isn’t completely irresponsible, the fraction that goes to venture capital is typically less than 0.5%.
As for enriching murderous regimes? Saudi Prince Mohammed Bin Salman is planning a $2 trillion IPO for Saudi Aramco. Trillion! If a billion-dollar company is a unicorn, then a trillion-dollar company must be a… chimera? Chupacabra? Either way, the Saudi fund’s $3.5 billion stake in Uber is chump change.
Remember Network? It’s a 1976 film where TV anchor Howard Beale realizes that getting viewers worked up into a frenzied rage is really good for ratings. The station gives him his own daily program to rant about America and the state of democracy, until Beale finds out that the network’s owners are about to close a funding deal with Saudi investors.
BEALE (ON LIVE TV): We know the Arabs control more than sixteen billion dollars in this country! They own a chunk of Fifth Avenue, twenty downtown pieces of Boston, a part of the port of New Orleans, an industrial park in Salt Lake city. They own big hunks of the Atlanta Hilton, the Arizona Land and cattle Company, the Security National Bank in California, the Bank of the Commonwealth in Detroit! They control ARAMCO, so that puts them into Exxon, Texaco and Mobil oil! They're all over - New Jersey, Louisville, St.Louis, Missouri! And that's only what we know about! There's a hell of a lot more we don't know about because all those Arab petro-dollars are washed through Switzerland and Canada and the biggest banks in this country!
Right now, the Arabs have screwed us out of enough American dollars to come back and, with our own money, buy General Motors, IBM, ITT, AT&T, Dupont, U.S. Steel, and twenty other top American companies. Hell, they already own half of England.
Now, listen to me, goddammit! The Arabs are simply buying us! They're buying all our land, our whole economy, the press, the factories, financial institutions, the government! They're going to own us! A handful of agas, shahs and emirs who despise this country and everything it stands for -- democracy, freedom, the right for me to get up on television and tell you about it -- a couple of dozen medieval fanatics are going to own where you work, where you live, what you read, what you see, your cars, your bowling alleys, your mortgages, your schools, your churches, your libraries, your kids, your whole life!
That looks bad for the Saudi investment, so network execs put an end to Beale’s show. And everyone lived happily ever after.
I came across this Bloomberg Businessweek feature on Tractor Supply*. It reads like a curious anthropological study, where big city journalists make cultural learnings of a primitive society in which people trek to physical stores to buy things. Yuck, haven’t these savages heard of Amazon??
The article describes the customer base as Rural America, backwards folk who need gun safes and log splitters, who use lubricants in the garage instead of the bedroom. Wait a minute — I shop at Tractor Supply! I shopped there even when I lived in Mountain View, because there happens to be a store in Silicon Valley. Granted, it’s the ass-end of Silicon Valley (where 101 meets 152, the highway to Los Banos!), but rural American I am not.
I go there because because a 50-pound sack of chicken feed costs twelve dollars and a 20-pound sack of rabbit bedding costs five dollars. Both are available on Amazon, but shipping kills the deal. Even without animals I needed seed for my bird feeder, fertilizer for my lawn, buckets for storage -– stuff that might be relevant to anyone with a backyard, but city people wouldn’t know what one is.
Tractor Supply is good for stuff that’s too cheap to ship. Heck, I went there today to pick up a 6-foot folding table. It would seem that this is a market that’s immune to digital disruption, but all is not well. Says Bloomberg:
When Tractor Supply is confronted with risks, they tend to be tied to the macro economy. Its fortunes can rise and fall on farming operations in rural America and the fluctuating prices of corn, soybeans, and other crops…The escalating trade war with China is shaping up to be a mess for Tractor Supply’s customer base.
Will Beijing’s tariffs prevent soybean farmers from exporting their crop?? I don’t know, but production-scale farmers probably aren’t buying their seed tonnage from a retail store. Gimme a break. Tractor Supply customers are comfortable suburbanites who have the luxury of treating their livestock like pets and their pets like people.
There is another risk though: Whenever I flip through a Tractor Supply circular, I can’t help but notice how *unbearably white* it is. White people… baling hay. White people… mowing a lawn. White people… driving a tractor. It’s almost like opening an Abercrombie catalog, if Abercrombie was in the business of selling coveralls and tack gear. Come to think of it, has anyone heard from Abercrombie & Fitch since 2004? They were sued by the NAACP for discriminating against people of color, and had to pay $40 million to minorities. It’s only a matter of time before diversity warriors storm in and take up this cause; demand that Tractor Supply feature some damn minorities in their catalogs. People of color… pushing a wheelbarrow. People of color… raking muck. People of color… pick—-
Okay never mind.
Tractor Supply is good. Sometimes they send me a coupon for a free Coke from the store fridge.
*Yes, I realize the story is from 3 weeks ago. I’m a bit slow these days.
I often see Bitcoiners try to dispel criticism of its energy consumption by citing Bitcoin’s benefits as countervailing factors: “Electricity is expensive, but sound money is priceless!”
Never works. No matter what social good is cited, it’s never enough.
Bitcoiners are a well-meaning lot who genuinely seek to educate. Even though private energy consumption is a private matter and should be off-limits to public scrutiny, Bitcoiners routinely suspend this belief to reason with Nocoiners.
It’s a trap! Nocoiners don’t believe in private property. They don’t have much regard for economic or political liberty at all. Once you buy into their faulty assumptions, you can’t win. In a world where War is Peace, Freedom is Slavery, and Theft is Good, any attempt at rational debate is an exercise in futility.
So don’t do it. Never indulge a Nocoiner.
Because the challenge for Bitcoiners is to convince people that Bitcoin is a social good. So if you start your defense of the energy usage with the premise that Bitcoin is good, then you're just running back into the original problem.
By criticizing Bitcoin’s energy expenditure, Nocoiners are advancing the false premise that electricity usage is an unassailable Bad. The correct response is not to come up with an equal-and-opposite Good, but to say No.
No, we’re not going to play your stupid game.
No, we will not accept Nocoiner values as our own.
No, we refuse to normalize your communist anti-freedom orthodoxy.
Once we disabuse ourselves of Nocoiner fallacies, it becomes very easy to counter concern trolls. See:
FUD: Bitcoin uses more electricity than all of Denmark! ₿: Good! I sleep better at night knowing that my money is protected by obscene amounts of computational power. It’s a shame for Denmark; their GDP has been in steady decline for the last decade. I’m not sure it’s even fair to acknowledge them as a country anymore. The Danish krone? Total shitcoin.
kinda like how Motel 6’s slogan is “We’ll leave the light on for you” — No one ever says “That’s so wasteful!” We think, oh good, how convenient.
FUD: Bitcoin can be used to bypass sanctions! ₿: That’s great news! Sanctions punish innocent civilians, empowering terrible dictators as the population is reduced to poverty. UN sanctions should be considered a war crime and I am utterly ashamed of my country for promoting them.
FUD: Bitcoin is used for tax evasion! ₿: Excellent! Private individuals have the benefit of local knowledge and can allocate capital better than any central authority. If you prefer to have the government do your thinking for you, feel free to donate your savings to the Fed and become a ward of the state.
FUD: Bitcoin (all of crypto, really) is full of scammers! ₿: Indeed! Money flows to where it’s treated best. Bitcoin is doing God’s work.
FUD: Bitcoin’s price is entirely driven by speculation! ₿: Ah, what is speculation but hope? And how can anyone deny the value of hope??
FUD: Bitcoin is being used by neo-Nazis! ₿: Wonderful! I’m so glad we finally have a payment system that is impervious to bullying from the shakedown racket known as the SPLC.
FUD: North Korea is mining Bitcoin! ₿: Fantastic! This is so great. China’s concentration of mining power has long been one of the biggest threats to Bitcoin, and the entry of state-sponsored competitors would enhance miner decentralization. Jurisdictional diversity is Bitcoin’s greatest strength!
FUD: Bitcoin has a high Gini coefficient and massive wealth inequality! ₿: Yes! Economic inequality is something that happens when wealth is created, and a permissionless financial system democratizes wealth creation. Even though socioeconomic mobility has gone to shit in this country, Bitcoin is still the land of opportunity!
FUD: Bitcoin is being used to fund Terrorism! ₿: This one might be of legitimate concern. There’s a theory that Bitcoin was created by the CIA to fund extremist groups in the Middle East and effect a regime change in Syria and Iran. Well, the second part of that sentence isn’t just theory — the CIA is financing terrorism regardless of Bitcoin. Let’s abolish the CIA.
The local Tractor Supply Center is doing Chick Days. It’s a semiannual event where they have newly-hatched chickens and ducklings for sale, something like two dollars apiece. It’s cute.
Tractor Supply doesn’t make money off baby birds; it costs more than $2 to run heat lamps and clean all that duck poop. The event is sponsored by pet food manufacturers — Purina, MannaPro, Nutrena, &co. Because once you get the animal, you’re stuck buying animal food for the rest of its life. Come to think of it, my childhood kitten was “free” as well.
That’s how they get you.
It’s a good strategy. All those countries struggling with sub-replacement fertility rates – Japan, Germany, the US – why don’t they do this to rope in new parents?
I don’t mean handing out free babies; people much prefer to make their own. But baby food companies like Gerber and Similac should incentivize this sort of market expansion. Who’s gonna consume their products if the birth rate falls to zero? H-1B workers?
Childbirth subsidies might be a good start, but people don’t avoid kids only due to cost. People avoid kids due to the widespread perception that children are obnoxious little demons. It’s not wrong, but it’s not something that can’t be fixed with a bit of marketing.
You know what sucks? Homeownership. Owning a house is a heck of a lot of work with all sorts of potential liability. But thanks to a taxpayer-funded marketing campaign, the Federal Housing Administration convinced multiple generations of Americans that the quickest path to freedom is to mire yourself in debt.
Baby companies currently tailor their marketing to those who already have (or expect) kids. That kind of blinkered thinking is EXACTLY why Toys R Us went out of business! People with kids are hosed; they’re stuck buying your products whether they like it or not. Baby brands need to target the real untapped market: Those who don’t have kids.
Take a page from the FHA strategy book! Inspire your audience to keep up with the Joneses; instill a healthy sense of FOMO! Like this: