Author: Julie

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Finance Startups

Day 152 and Running The Play

I’m going to put $5,000 into liquidity mining and yield farming to fuck around and, hopefully, find out.

If the last year has been about laying out the primitives of decentralized finance, this summer is going to be the Layer 2 land grab and I need to learn how to stake some claims. I don’t have a clue if it is going to work but I need to start learning how to play the game by tossing the ball around. I doubt I’m going to be whatever the equivalent of a professional player but I want to learn some muscle memory. You can’t very well buy an NFL team without having ever handled a football can you? Yes I am torturing a metaphor.

On a personal psychological note, I wanted to start with a $1,000 but then I realized the difference between losing $1,000 and $5,000 isn’t material to me (which blows my mind but such is the compounded benefit of my various privileges). However, the difference between 10xing $1,000 to $10,000 and 10xing $5,000 to $50,000 is extremely material to me. $50,000 is a a material seed stage check for a company that I may want to place a long bet on.

That is roughly the cost of my medical care for an entire year (not including drugs which roughly doubles it). That is a down payment on a parcel of land to develop over the coming decades. This is a moment to learn and leverage for the benefit of my future self and family if shit goes well. And if it doesn’t no big deal. The real money is better managed than me deciding I want to toss around a ball

My Chaos thesis says it’s time to run the play on the future more generally. It’s hard to argue that I can make good puts on a chaotic future without fully experiencing some of it myself in visceral fashion. I fully expect to lose all of it trying to liquidity mine and yield farm on my own but if I don’t well then I’ve proved something to myself about the future of capital.

I need to remind myself that this isn’t representative of how I allocate capital in a diversified portfolio to preserve my future security nor is it how I’d allocate capital even in a seed stage private venture stage portfolio. But it is a worthwhile amount to put on a 100% risk basis to learn how the fuck the future of capital allocation might work.

Honestly $5,000 is a pretty cheap tuition for a fancy credentialed college class so this seems like a good deal. I will write my way through the learnings and call it an independent study.

Categories
Finance Internet Culture Startups

Day 151 and The New Capital Networks

A lack of network has generally meant capital constraints if you were an entrepreneur. Being hooked up with capital allocators was crucial to being a good operator. Access tended to compound over time like interest. Which is why we make “funny because it’s true” jokes about how successful founders usually had a head start in a few areas. I’m not saying that is going away, but decentralized finance is fucking with some of the consensus knowledge around how capital gets raised and deployed.

And what convinced me we are moving towards an inflection point, over the next decade, where capital allocators and operators decouple, wasn’t my tony Silicon Valley network. No, I’ve had access to the minds of those players for years. What clicked my mind into a position to take action? I spent an hour and a half getting a tutorial from one of my anon reply crypto friends on yield farming and liquidity mining. I don’t want to blow up their spot but Alpha Ketchum dropped a lot of knowledge on me today. And it shifted my energy from belief into understanding. From there action will be seen in my investments.

I’m still chewing through a lot of the details but I’m going to make a bet that scaling DeFi is going to require significant institutional capital and the support of experienced operators to realize its full potential. Thats why I’m invested in folks like Cambrian and Martin Green and would love to get my dollars into Arca and David Nage. That’s why, of my four thesis areas I’m pursuing in my own fund Chaotic Capital, two are explicitly dedicated to both organizational and systemic flexibility and how it plays out across new business opportunities.

We’ve seen capital decoupling from traditional centralized authority systems and trust based networks. The perpetual fundraising machine of tokens, coins and market making techniques like yield farming, are funding everything from esoteric art projects and to the next generation of insurance. Thing about that, the innovative companies that drive growth won’t have their capital needs met just on Wall Street or Sand Hill Road. If you don’t believe me look at what has already been built

Exchanges → SushiSwap, Uniswap, Bancor, 

Insurance → NexusMutual, Cover

Derivatives → Perp Protocol, Opyn,

Credit Markets → Aave, Compound, Maker

Middleware → Chainlink, Grt, 

Asset Management → Enzyme, Yearn Finance

Aggregators → 1inch and Matcha 

Categories
Aesthetics Finance Internet Culture

Day 150 and Hypersigils

In the beginning there was the word……or the command line. Naming a thing used to be the literal path to power. Now we are pretty meh about the whole thing. Ritual magic is kind of a satanic panic middle brow thing in America even though we have a history of throwing in with prosperity theology. We’ve got entire evangelical communities dedicated to naming and belief with the expectation it will generate wealth and manifest prosperity. The meme magic folks who wished Trump into office were really just regurgitating Norman Vincent Peale prayers. Plenty of folks like to blame this kind of magic on like Max Weber with his Protestant Work Ethic but I’m mixed on it as I don’t think he envisioned Pentecostals when he said hard work was a moral good.

A friend of mine who knows my interest in both capitalism and its underlying energy in culture suggested I watch an old talk from illustrator and comic book author Grant Morrison.

Honestly you should pop it out and watch the whole thing if you have any interest in creation. But especially if you are interested in chaos. He discusses a term he coined called a Hyper Sigil. He is building on contemporary chaos magic which isn’t too far off from manifestation theology. He contends that bodies of art but really any form of creative work can be turned into collective signs of meaning with willpower and force. He literally means they are magic and if this interests you go read Ray Sherwin and Peter J Carroll. If that doesn’t no biggie the following point still stands. We have sigils in America that are pretty literally manifestations of power.

Corporate sigils are super-breeders. They attack unbranded imaginative space. They invade Red Square, they infest the cranky streets of Tibet, they etch themselves into hairstyles. They breed across clothing, turning people into advertising hoardings… The logo or brand, like any sigil, is a condensation, a compressed, symbolic summoning up of the world of desire which the corporation intends to represent… Walt Disney died long ago but his sigil, that familiar, cartoonish signature, persists, carrying its own vast weight of meanings, associations, nostalgia and significance.

I’ve completely fallen down a Grant Morrison hole as this kind of thinking is crucial to work in attention economy trades like communications, public relations and marketing. But I’m frankly a lot more interested in the practical aspects of how he conceives of himself as a chaos magician and how he we can all affect the reality around us. I’ve purchased his Invisibles comic. When he says imagination is the fifth dimension he literally means it. Multiversity is rad.

Categories
Finance Startups

Day 149 and Optimizing for Outcome

I came across a thread today by Sahil Bloom on human goal setting and the mental models we manipulate. He introduced me to Goodhart’s Law

When a measure becomes a target, it ceases to be a good measure. If a measure of performance becomes a stated goal, humans tend to optimize for it, regardless of any associated consequences. The measure loses its value as a measure! Goodhart’s Law is states “Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” But the concept was popularized by anthropologist Marilyn Strathern. She generalized the thinking and called it Goodhart’s Law. “When a measure becomes a target, it ceases to be a good measure.”

I am fascinated by this tendency humans have of fixating on the things we think symbolize progress instead of the actual outcome. Sahil names a number of instances in which this has led to bad business outcomes. CEOs managing to short-term stock goals has been one that has long frustrated me.

Startup land is immune from this tendency either. I’ve seen product teams fixate on OKRs such that they never miss a single metric but fail to launch their product on time. Or a venture capitalist will toss out something like an ARR goal for a Series A only to have a founder chase that number for a year and still not get funded when they hit it. We think these goals are the goals in and of themselves. But really launching the product on time and closing the series A are the only thing that matters. As long as we hit our goals who cares what metrics we used?

This is of course set against the classic “what gets measured get managed” which is an apocryphal quote from business theorist Peter Drucker. It may in fact be total bullshit. It may be that measurement actually hinders management. Said rather well by Simon Caulkin

Measures set up incentives that drive people’s behaviour. And woe to the organisation when that behaviour is at odds with its purpose.

Lest you worry this is just a business problem when I was single in my twenties I made a spreadsheet of the various gentlemen I was dating. I felt like I needed a way to make the process more efficient so I starting weighting categories of characteristics that was most important to me. I like intelligent men so I started listing their college degrees. I liked men who were into quantitative thinking so I started noting if they worked in banking or academics. And well you can imagine how this took a turn for the worst. Instead of meeting smart men that likes to look at the world through numbers I met a lot of bankers that went to Harvard. I was optimizing for the wrong outcome.

Next time someone tells you that some metrics or goal is the only thing that matters stop and question if it makes sense for the long term objectives. I’m not saying bankers from Harvard aren’t smart but I’m also not saying that all smart men are bankers from Harvard. And that turns out to be a pretty crucial difference.

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Categories
Emotional Work

Day 148 and Ted Lasso

As I’ve written about before, I like shibboleths and secret codes. And Ted Lasso is my go to show for the language of emotional empathy.

It’s touched a nerve for a certain corner of the internet. The folks yearning for positivity. It shouldn’t have worked. And yet the show’s curiosity opens up your heart. It was a tonic for a tough year. So much of its magic is about learning to accept others as they are and love yourself for you.

Jamie Tartt: “Coach, I’m me. Why would I want to be anything else?”
Ted Lasso: “I’m not sure you realize how psychologically that is

I’ve written about the concept of psychological safety in building partnerships, most recently in venture capital. If you have a desire to improve your bonds with others try Ted Lasso. It will teach you much about feelings you never knew you had.

Whenever someone special is going through something in their life or if I just really love them I’ll rewatch Ted Lasso. I’m having an afternoon off and doing just that.

Categories
Chronic Disease Emotional Work

Day 147 and Over My Skis

For a Colorado native (let’s ignore that I was born in Silicon Valley) a number of our most cherished pastimes are kinda “meh” for me. Skiing is a sport that I can take or leave. That apres ski life is much more appealing than cutting it up on the slopes. But one key metaphor from ski culture gets used lot. “I’m over my skis.”

To be over one’s skis is to risk crashing. Being over ones skis happens out of enthusiasm. An inexperienced or unfocused skier lets their center of gravity tilt forward over their knees. Best case scenario, you are simply going too fast and you better “pizza” your skis to slow down. It’s a endearing but slightly awkward experience which is what makes the metaphor so appealing. It’s never a bad faith metaphor merely a goofy oops.

I got over my skis this week. I’ve been so excited for my workload (new investments, new startups to advise) and some new structures forming in my life (chaotic.capital is coming into focus) that I’m leaning in and finding myself going too fast. A friend of mine, who is my favorite person to “over do it” with, was on the phone with me a lot. I was excited to talk to her. But all this added up.

I realized oh shit I need to slow down. I haven’t crashed yet but I’m french frying. There is still time for me to “pizza” or in the immortal words of South Park’s ski instructor Thumper

If you french fry when you should pizza, you’re gonna have a bad time

I love french frying, the food, the ski position and the metaphor for speed. I want get over my skis. But if I don’t pizza “I’m going to have a bad time.” So with true Colorado wisdom it is time to kick back, get some THC and pizza. May this edition of Rocky Mountain wisdom aid you in finding balance on the slopes and off.

Categories
Finance Startups

Day 146 and Gossip

Gossip drive the world. The stories we tell about other people reflect a lot. Even if we claim we don’t care what others think what others think moves the world around us. And I would posit that this actually isn’t a bad thing. It can drive closer bonds and increased connection.

There is a concept in evolutionary psychology called indirect reciprocity. Natural selection favors strategies that base the decision to help on the reputation of the recipient. Social interactions in which one actor helps another and is then benefited by a third party are key to cooperative reputations.

This isn’t just a systemic population level issue either. People who are more helpful are more likely to receive help. It’s uneven obviously and people can obscure their reputation. Depending on if you are up or downstream of helping or being helped, you make different calculations. Some people help more but they feel it’s worth the cost. They are downstream. Others accept more help because they are upstream. We are all making trades based on our position and arguably they are fair market trades.

How we decide to cooperate and with whom is driven considerably by reputations and shared value beliefs. Relaying reputation signals to bolster your capacity to connect to others is actually a key part of empathy. We need to establish psychological safety to partner with each other. Gossip helps us find suitable relationships. This is especially true in disciplines which require creativity. Quoting myself on the topic of psychological safety in venture capital.

If entrepreneurs are solving entirely new problems with high chances of failure feeling like they can trust their financial partners should be a top priority. Yet the atmosphere of distrust is pervasive. Venture capitalist and entrepreneur are constantly managing the information flow between each other.

Managing the information flow is a key component of gossip. Showing you understand their context, their fears and their reputations concerns helps you. An act we denigrate in popular culture actually helps you to deepen the relationships as each signifier breaks down space between two people and builds trust. So don’t knock gossip. It has evolutionary, societal and individual benefit. Just remember the ultimate outcome is about bringing people closer.

Categories
Finance

Day 145 and HODL

If I like something I want to commit. I don’t get folks who get panicked at bumps in the road. Hype cycles for cryptocurrency trading have been unappealing to me. I’ve never been one to watch things like FOREX trades so why would I want to do it but with Bitcoin? Like I have fantasies about being a trader but I am absolutely not. If I believe in an opportunity I am not a short term thinker or investor. I want to see where it goes.

The real excitement to me in crypto is the potential to impact larger more broad based systems. Changes that occur over time and with significant collaboration are more interesting than any narrative blip. A libertarian monetary policy implications was obviously particularly exciting. As business person the potential to change the middle man fee structure that makes financialization and banking a scourge was equally appealing. As a technologist the possibility of building applications on an entire new protocol is enticing.

The bigger picture is the only thing that matters. Go in the right direction over time and ignore the noise. That’s why we’ve slowly moved up our allocation into Bitcoin over the years. And that’s why I’m excited for my husband Alex to be working as the new COO for Hiro.

Any angle you take on the big picture implications for building new systems is an opportunity for innovation and wealth creation. That’s why I’m HODL. HODL is a mindset. Sure it came out of a misspelling of “hold” when someone was drunk but who can’t relate to the desire to really commit to a bigger vision? Participation in the creation of something bigger is the ultimate HODL value. Hold on for dear life or just hold on. Either way you are in for the long haul.

Categories
Startups

Day 144 and Scars

I have significant e-commerce, direct to consumer and retail business experience. I’ve managed multi-million dollar P&Ls, worked on iconic billion dollar brands and started my own direct to consumer cosmetics line. You’d think with that experience I would be deeply bullish on my ability to pick up and coming startups in the space. But I don’t particularly want to invest in digital brands or online retail. And I think it’s scar tissue.

I’m not saying flat out“no” I won’t ever invest in a DTC business or an e-commerce startup (I have and I will again) but a little bit of knowledge can make it hard to preserve creativity and imagination. Many founders can come out of a space where they have dedicated years of their lives and simply want space away from their expertise. They know too much. They’ve seen things. The scar tissue that forms to keep you working during the long dark soul of startup pain is still tender.

When I mentioned this lingering pain others pointed me to other areas they struggled to hear pitches or invest because of experience. Rental businesses and neobanks from Maia Bittner, certain e-commerce verticals from Lee Edwards, fitness from Jason Jacobs. It’s a common phenomenon among founders.

I’ve got lots of opinions why certain kinds of businesses won’t thrive or have business models that won’t make the kind of return my own personal investing thesis demands. But the truth is that I now have enough expertise to simply know more than is good for me. Ironically this means I should spend more time as an advisor or consultant on certain kinds of businesses but it takes a special founder to coax it out of me. Because I do have valuable insights and I want to share them.

But the last thing I want to do is pass on the trauma of my own experiences. Founders deserve to have their psychological safety preserved so they can build the company of their dreams. Some painful insights from a founder that came before them might help them avoid some pitfalls, but if they take our traumas too seriously they may never find their own path. And that kind of backward looking “it will never work” or “trust me kid I’ve been around the block” attitude can really bring creativity down. So I will always share my honest experience with anyone who asks but I’m hesitant to ever let anyone take my lessons to close to heart. You very well may be the one that breaks through where no one has before.

So when someone pitches me their new retail startup or DTC brand or cosmetics concept I try to be honest that I may nit be the best fit. I’ve got scar tissue. And if a founder insists that I can help I will try. But remember not all skepticism, fear, distrust or dislike is about you. Sometimes it’s all about the trauma of having lived it before. Asking someone to live it again is the ultimate act of trust. And maybe just maybe we get to firm new scar tissue together.

Categories
Reading

Day 143 and Fiction

I like to read stories more than I like to read any other form of writing. I just can’t seem to get into non-fiction. History, self help, how-to just doesn’t grab me. I’ve got a particularly intense allergy to business books of which my aversion is so strong I would rather pulp a “helpful” book than crack it open.

Some of this may be because of how I perceive rest. If I have any indication that something is bettering me in any capacity it’s just not relaxing. Deliberate learning reads too much as work. It’s not that I mind edifying content, not at all, it’s that if it’s meant as some kind of life and skill improving text I’m indignant that I didn’t spend the time doing something restorative.

I happen to think that this preferences for fiction has actually made me a better thinker. Stories and hypotheticals force us to expand our mental models. If I’m being instructed in a useful topic like venture deals or better management I am learning something specific with a perspective on how things should be done. If I’m reading a story about anti-memetic weapons I’m being forced to consider entirely alien ways the world might work. There is no expectation that I find utility in the thing or that I put into practice what I’ve learned. It’s purely an expansion of my reality.

Not being pressured to accept something makes it’s eventually welcoming all the more pleasurable. You’ve simply lived your way into this new mode of being. It’s a little bit like forcing an orgasm, sure we can all do it, but is it really necessary? And yes I just compared sex to reading but that probably tells you a lot about me.

Everytime I try to integrate more utility driven books into my routine I reject the habit. I make time in the day to sit up and do the edifying books. And then I put it off for other activities. But I never put aside fiction. Every night I read for an hour before I sleep. It’s a habit so engrained it’s more necessary to my day than brushing my teeth or my morning coffee.

And so I stay with stories. I look for the most strange and different works I can find. I preference science fiction as it tends to meet that criteria but in truth I will read all genres and types. I’ve loved tight family dramas as much as a thriller. As long as something about it alters my mind even just a little I’m game. Remaking the metaphors I use is ironically the best use of both my leisure and work time. Creativity comes from the hard work of changing who you are to ever truer and more honest forms.