Moontower #1

Friends,

Let me begin with a quick story from my week.

So Lambda is an online coding school (not necessary but here’s a write up I did about them if interested). I volunteered to mentor students figuring they could use some guidance from a finance veteran who is skeptical of financial sales practices. The majority of the grads’ income will jump a full standard deviation in just one year and in many cases doubling from the median to top quintile of income. This week, the program coordinator asked me how I would guide these students in dealing with “imposter syndrome”. This got me thinking about code schools’ success being symptomatic of this week’s primary theme.

Fragmentation.

Understanding fragmentation holds the key to dealing with imposter syndrome. The recognition that credentials and ability is less correlated than previously assumed. Luck, opportunity, and talent will always be unevenly distributed. But the merit of your output will increasingly carry more weight in a decentralized world where people may very well become at least outwardly — interchangeable avatars. Connectivity means the forum of ideas and output is a transparent online multiplayer game. A black, gay teenage girl who has chops can pwn the credentialed fake whose parents bought the Yale degree. All this in plain view of all the players. Respect will flow from those who can’t to those who can. Entrenched incumbents will try to fight this.

But If you consistently produce, the hive will recognize it. Don’t let imposter syndrome hold you back.

Dave Perell uses business and media trends to articulate what we all feel happening around us. In this week’s favorite read, he answers the question, “What the hell is going on?”.

For a version with my highlights, click here

If you like this topic, here’s my related bookmarks:

Y Combinator founder Paul Graham’s Refragmentation
Link to my excerpts and the original series by Venkat Rao Breaking Smart

College Scandal

Lots of hot takes out there. My own is that it was inevitable and unconcerning. It’s a self-correcting problem that fragmentation will remedy without any intervention.

I will also include this take from finance’s best writer Matt Levine. He says the case is closer to insider trading in that the university was harmed as opposed to the students who lost spots. The issue from the university’s pov is those spots were going to be lost anyway. For a much higher price!

“It is not about fairness; it is about theft. Selective colleges have admissions spots that they want to award in particular ways. They want to award some based on academic factors; they want to award others based on athletic skill; they want to award others in exchange for cash, but—and this is crucial—really a whole lot of cash. Buildings are not cheap. The bribery scheme devalued the asset not only by stealing it and re-selling it for less than it was worth, but also by being so explicitly commercial.”

Fyi, his daily email is free and often the best thing I read each day. He’s funny, a great writer, and was a Latin teacher, lawyer and derivatives structurer. He makes high finance amusing and illuminating. Sign up here for it.

Fwiw, I suspect peak education cost inflation is behind us.

Elizabeth Warren’s Proposal to Reign In Big Tech

Suppose I manage a school cafeteria and notice all the kids who order the burger get sick. I gotta do something. So I outlaw buns. Well I was directionally correct but by not understanding the sickness’ root transmission I’ve created new problems. Hot dog eaters are pissed now. We need to take a loved item off the menu. This is clearly a forced analogy but tech strategy grandmaster Ben Thompson deconstructs Warren’s proposal and in the process teaches you tech history and a more nuanced view of big tech’s market power. Hint: Amazon, Facebook, Microsoft, Google, and Apple derive their power according to different mechanisms. The answer is not one-size-fits-all. Don’t give chemo when you should just remove the mole.

The link with my highlights is here.

Elizabeth Warren’s Proposal to Reign In Big Tech

The link with my highlights is here.

Last Call

A non-profit is 3-D printing homes for the needy
On the other side of the spectrum, Financial Samurai takes the contrarian view that the slate of upcoming SF IPOs will not have a material impact on local real estate. Walk thru the numbers.
Wanna feel old? Overheard in this article in reference to how your kids pass notes in class., “Chatting on Google Docs is very reminiscent of when we were younger”
Yang was at SXSW this week and saw some interesting AI demo’d. Check out how this site can erase elements of photos. Even upload your own.
It’s science fair season for the kiddos. Screen for ideas and see the science behind the experiments
In honor of science fairs and this week’s pi here’s a favorite blog using sour patch kids to visualize grains of sands and ants in the world and Avogadro’s number which you can’t remember to any decimal places. It was a bad beat for that guy to not just be named Avocado.
Your favorite news anchor Ron Burgundy has a podcast.