Tag: Finance

Categories
Internet Culture

Day 226 and Brain Prostitutes

When you sell your intellect for a living you cannot afford to have a stupid day. When I was younger I sold my time but as I got older I got paid for my ideas. Or as one of my favorite anonymous Twitter accounts Becoming Critter said I’m “a brain prostitute.”

There isn’t a union for idea whores so when your mind has a sick day you are fucked. Not idea fucked, no, because then you’d get paid. If you can’t produce a good idea you’ve got nothing to sell. I personally found this entire concept of knowledge worker as as brain prostitution to be pretty amusing. It kind of takes the wind out of your sails if you’ve decided being a “knowledge worker” makes you better than other types of labor.

We’ve decided that selling your mind is higher status than selling your time but I think it’s all just a a clever way for the capital class to move labor into categories that produce better returns. If someone has found it beneficial to employ you, either for your time or your ideas, it’s because it’s worth more than you are getting paid.

I like that the intelligentsia is lying to themselves about being bourgeois. Doing practical things like running a grocery was beneath them. So they had to invent some exciting distinction that convinced everyone that selling ideas made you a better class of person than selling lettuce. I’m not really sure how Marx would see all of this but it seems like if you aren’t capital then you are still labor.

But I guess now that we’ve got rid of hereditary aristocracy the need for more elaborate distinctions for how we determine our betters is clear. The market demanded a rebrand. Personally I like idea whore better but I can see why we went with knowledge worker.

Categories
Finance

Day 225 & Explaining DAOs to Moms

My mother is a sharp woman. She’s interested in economics but if you asked her to explain securities law she’d probably shrug. Not her expertise. She did survive our family bankruptcy during the tech IPO implosion she’s got a slight intuition of securities law in the context of consumer protection but that’s about it.

So I was impressed that she was able to sum up the recent infrastructure bill’s attempt to make crypto foot the bill very neatly.

“So they are trying to convince us that people who program computers to run math problems are actually bankers?”

That’s…actually not too far off. She seemed to grok that this was a misunderstanding of the basic technology, who builds it and it’s purpose. She was glad the amendment didn’t pass. Clearly people who build computer applications are not the same as the guy at Charles Schwab who looks after her retirement account.

We were discussing it, as I was trying to explaining PR DAO and why I wanted to help organize an activist group of folks whose purpose was execute public relations campaigns to tell stories about crypto. I explained to her that rather than having a bunch of executives who make decisions we would write a set of rules that automatically determine how we make decisions. Those rules would let all members of the organization vote on how we wanted to deploy our assets and pursue our agenda. She liked the tag line “rules not rulers” a lot. She’s pretty into freedom. A smart contract was pretty intuitive to my mom.

Where she got confused was the governance tokens. Not how they worked. Again it was intuitive to her that depending on what you contributed and how invested you were in the organization that you would a different say in what got done. Maybe each token represents one vote. Maybe some people have more votes because they are more invested. Presumably we figure that out in our smart contract. What she didn’t get was why the government thinks a voting mechanism is a security.

“So the government treats the way your group organizes decision making as if those little voting symbols were stock in IBM? That’s fucking stupid”

Now granted my mother probably can’t explain what a security is (she’s got the basic idea that they are like a type of money and Boomers like to own stocks). She gets why they are regulated the way they are in a general sense. She’s lost money on badly governed companies. So sure it’s fine that the government has some rules for that sort of thing.

But even to a lay person like my mom it seems pretty clear that something meant to represent ownership in a money making enterprise and something meant to help organize voting and decision making are separate ideas. She seemed to think maybe they ought to distinguish between the two ideas. Because you know the last time we came up with clever ideas like the corporation the whole world changed. Evolving them again to be autonomous could make for the same level of change. If my mom got that in a half an hour phone call seems like maybe the professionals at the SEC could work it out too.

Categories
Finance Internet Culture

Day 220 and Crypto’s Publicist Part 2

Yesterday I wrote about my proposal to create an activist DAO to engage in public relations for crypto. The goal of the organization would be to create a groundswell of support for the space, it’s values, and opportunities as well as engaging in support for a more positive regulatory environment.

If you would like to hear more about why I think it is time for the wider decentralized crypto community to engage in a public relations and media campaign please see my post yesterday. Today I am putting down further notes on what I think our values and priorities might be. As always, this blog is a work in progress so consider this my thoughts as of now that are open to being edited and changed.

What kind of values are crucial in a PR or communication DAO or interest group?

  • Open
  • Participatory
  • Trustless

It’s important that whatever we do on behalf of crypt it must be done in the spirit of the space and why so many disparate types of people believe in its values. While there may be structures like executive teams, core teams, board members and studios and contractors to execute on our mission we want to use the tools and transparency of crypto.

But to what purpose are we organizing? We will create content and engage in conversations to shape media narratives and public sentiment aimed at promoting the positive elements, potential, and impact of crypto.

How will we do this? We will hire publicists to promote our stories in mainstream media along with commissioning content meme-ers and creators to share opinions. We will engage with spokespersons to share talking points created from the priorities of the community. We will place our content, from memes to editorials, on our own properties as well as in supporting communities and member publications.

I expect I’ll be doing quite a bit more note taking and research. If you want to be a part of this effort I’ve started a shared Google doc for collaboration. Email me Julie @ chaotic dot capital or DM me @ AlmostMedia. This won’t be built in a day but together we can push it forward.

Categories
Finance Internet Culture Media Politics

Day 219 and Crypto’s Publicist

Most industries have interest groups. Publicists, lobbyists, and spokespeople weave together stories, talking points and preferred legislative agendas. Anyone or any group is free to discuss why their preferred business or issue is worthwhile and convince others of their view. We have a marketplace of ideas. Sure, not all interests are good but anyone is free to promote what they believe in. So why aren’t we doing anything for our cause in the crypto community? I say it’s time crypto had a publicist.

Not every country allows for this. The crypto community has an obligation to recognize that when we fight for our own interests it isn’t just we who benefit. The entire world benefits from open, decentralized and permission-less systems. What we do benefits everyone who wants to live in a freer world. It’s time crypto had our own activist DAO to protect and promote our values.

I am proposing the formation of an activist DAO promoting the use of crypto. Our goal is to advocate for positive popular culture narratives about crypto. We vote on our issues, stories and key initiatives through the DAO’s native governance tokens. The DAO will hire publicists and communication professionals to promote our stories in mainstream media along with commissioning content meme-ers and creators to share opinions. Policy is crucial but public perception is faster and pushes the right policy down the right.

As place holder I’ve purchased CryptoCommsCoalition.org. The Crypto Communication Coalition. I am working on a shared collaboration doc in Google Sheets to collect input, feedback, and priorities. Anyone who is interested can participate in our effort. Email me Julie @ crypto comms coalition dot org or DM me on Twitter.

We need DAO creation specialists, legal experts, memers, streamers, Reddidters, governance folks, publicists, lobbyists, fundraisers and a thousand other specialists I haven’t thought of yet. This won’t be easy but it’s an eating our own dog food moment for crypto. We can use our own tools to advocate in a participatory, transparent and open way for our own interests. If banking and big oil can can afford publicists then so can we. gmi.

Categories
Startups

Day 190 and Neutrality

One of the more influential pieces of art on my worldview is the science fiction comedy Men in Black. Yes you read that right. My philosophy is underpinned by a speech by Tommy Lee Jones.

1500 years ago everybody knew the Earth was the center of the Universe. 500 years ago everybody knew the Earth was flat and 15 minutes ago you knew people were alone on this planet. Imagine what you’ll know tomorrow

I don’t really know shit. I know enough to know I don’t know shit. My mother had a favorite bumper sticker “ask your teenager while they still know everything” which at the time as a teen I found a bit insulting and now as an adult think was quite astute. The more I know the less I know for sure.

Because I’ve slowly come to realize that knowing can be a crap shoot I keep odd company. Arguably bad company. I follow some truly outrageous people on Twitter. I follow hard right partisans and tankie left wing socialists. I follow folks with deep convictions on the irredeemable evils of technology and the most ebullient techno-optimists. It’s hard to talk me into not keeping an eye on all view points. Sure I think some folks are dead wrong but how do I know I’m not one of them?

Not knowing things for certain as saved my life. Medicine has a tendency to interpret data as absolute. Biometric markers and test results can for some doctors have as much authority as a papal decree. Anyone who has been told “well your test results are normal” while still feeling like absolute shit will know how frustrating this can be. Plenty of data points look absolutely normal before a system cascades into failure.

We don’t know as much as we need to believe we know. Our craving for certainty as humans is a significant weakness. The venture capitalist who insists that some metric will determine a crucial outcome is a favorite trope of mine. As if favorable CAC/LTV ratio functions as a warding spell or an attractive margin structure offers protection against a changing consumer preferences. Knowledge isn’t magic. Superstition can just as easily apply to P&Ls as poltergeists.

I find it best to remind myself to take a neutral when approaching entrepreneurs. Maybe I don’t know. Maybe everything I’ve ever known was particular to my circumstances, bias, education quirks or just plain randomness. Maybe one small insight will shift the grounds underneath me and reveal entirely new frameworks for interpreting reality. The unknown unknowns have a habit of springing themselves when you least expect.

It’s often tempting to throw opposing viewpoints into buckets that are easy to dismiss. Venture investors are notorious for this. We dismiss folks for any error we spot. We deride their data. We applaud ourselves for spotting cracks in their plans. Resist this tendency. We must always retain the neutrality of perspective that allows us to change our mental models. What we know to be true might be a lie. We may lack a key piece of context that would unlock a cascade of understanding that changes our entire perspective.

This is why the adage “strong beliefs weakly held” can be so key to success. Changing our minds is a strength. It’s hard to admit to ourselves we’ve gotten something wrong especially if we sunk a lot of time, money and reputation into it. But would you rather be right or successful? Feeling superior can be a delight but not if it gets in the way of what we want in life.

Categories
Finance Startups

Day 181 and Thesis Trends

As I was putting down scratch notes for Chaotic.Capital’s thesis yesterday on the types of businesses we like I thought I’d do a bit more stream of consciousness writing to discuss some of the mega-trends that I see driving returns over the next decade.

Embedded Functionality

We think more and more businesses will be born of the embedded functionality inside protocol layers or data sets. Many protocols have functionality embedded across different layers of utility and functionality. For instance, the new consumer bank is an API at heart. The protocol layer is the API and the embedded functionality is the financial services layers enabled through the protocol or application layer. Need another example. Retail sales data and demand trends give rise to fashion retailers. Think of StitchFix, the clothing brand is the embedded functionality of its aggregate trend, recommendation and demand data set.


Unbundling Trust

Trust based networks rule businesses like insurance, retail banking, law and financing. But what if trust was unbundled from institutional nexuses of power. What if we built trust from value creation instead of value extraction. DeFi wants to build permission-less trust based on a protocol. Its entirely possible we bundle trust back into the wisdom of crowds and markets. Wall Street Bets is an aggregate source of unbundled trust. Figuring out what layers can be stripped away for more efficiency and what layers we need for safety and peace of mind are unsolved problems.


Data Ingestion Is Value Creation. The more capacity we have for data collection the more demand we will have for data ingestion and processing. While we can say sure businesses rely on the protocol and data and that unbundles trust, that’s not the full picture. We will need people who make sense of the chaos for the muggles. Ordered systems give the impression of serendipity for their users (an introduction on a social network, a recommendation for a loan, an outfit customized for you) but the work required to intake and order the data to create value for users is a big hairy problem. And there is a lot money to be made in those. Centralization may come at this layer especially in user experience.

Flexible Asset Weighting.

We are also interested in businesses that know where they stand with capital needs for their business. If you are executional business you need a thin layer of assets to succeed. To quote Roy Bahat “hot swap” startups are executional businesses. A slim horizontal physical layer to take advantage of low financing costs means return on equity is greater for these asset light businesses. If it’s deep innovation then you can be asset heavy. We like those just fine too. But knowing where you stand and anchoring your business case on your asset weighting can give you an edge. That lets you be capabilities based and find opportunities, particularly as debt as is in a commoditization cycle.


All of this is to say we are thinking across a number of system level problems to unearth startups that will give flexibility to individuals, organizations, industries and hopefully the entire economy. Incumbents won’t see who is coming to beat them because they won’t recognize the new predators. They prioritize value systems that at won’t remain true as systemic chaos erodes inefficient businesses and institutions.

Categories
Finance Startups

Day 180 and Thesis

As I see more pitches and work with more entrepreneurs I am finding it helpful to have my thoughts codified on paper. That way if you are interested in working with me you have a chance to vet me. Knowing what I want to see in a deal and what just isn’t a fit saves entrepreneurs time. So I’m going to doodle a bit on what I do and don’t like.

Chaotic.Capital has 4 key investment areas. But they are really just different levels of working with an uncertain future: at the individual level, the organization level, the systems level and the planetary level.

  • Personal Flexibility is critical when it’s harder to make long term lifestyle decisions (housing, health, children) – how do we allow people to make those decisions without anchoring themselves to place or time horizons that limit optionality. Businesses like marketplaces, preparedness, personal safety, service & product exchanges, health tech, longevity, and alternative credentials.
  • Organizational Agility is a differentiator for businesses in rapidly changing landscapes, so we invest in software and tooling that provides leverage for small teams to have a bigger impact or bigger teams to act more discretely and independently. Businesses like software as a service, cloud infrastructure, collaboration & coordination software, DAOS (decentralized autonomous organizations), automation software, and memetic and organizational aids.
  • Systemic Arbitrage opportunities are even greater in chaos. Working through systems level chaos helps individual and organizations protect against cascade and systemic collapse risk, mitigate political chaos, regulatory uncertainty, memetic crowd and mob behaviors, or medical chaos, just to name a few. Businesses like intelligence, decentralized finance tooling and exchanges, cryptocurrencies, bots & analytics.
  • Climate or planetary risk is an existential risk that is already fucking with our world – we like companies mitigate the chaos of climate change while profiting on the risk. Businesses like mobility, insurance, green tech.

What I don’t like to hear are pitches for things that are tangentially related or a forced connection. Sometimes folks will try to get us excited about a problem they’ve already solved and are scaling but we are looking for longer time horizons. There are plenty of amazing startups that have great returns but aren’t a fit for us. We really do want the crazy weird stuff that is going to take a while.

We don’t need you to know where you are going. We want to see ten or twenty year out timelines. What would life look like without school? How about a world where we didn’t pay taxes based on our geographic location. How about a world where we automate how our attention is allocated. Or a world where our financial power isn’t rooted through centralized trusted powers. We want 1000x leverage on change.

I’ll write more later this week about the types of companies I don’t want to invest in. Not because I don’t like them but because they just don’t match what this fund is meant to do.

Categories
Aesthetics Internet Culture

Day 167 and the Naughties

I arrived in New York City in January of 2006. The aughts were an interesting time to be in New York. The recovery from 9/11 gave the city a sense of resilience but the Great Recession hadn’t reshaped the financial landscape of the country just yet.

I moved to Manhattan because I wanted to work in fashion. I didn’t have any relevant experience. I’d studied economics. But I was a blogger and that turned out to be enough to find a way in.

I met a man in the comments section of our respective fashion blogs as back then back links were an acceptable form of socializing. We both moved to the city the same week. He would become my cofounder on a fashion media startup and also my boyfriend. Yes it’s as dysfunctional as it sounds. Don’t worry we are still friends.

We’ve got a lot of fond memories of the Aughts. New media was just coming into its own. The possibility that it might change industries like fashion seemed exciting and democratic for style. No one had figured out how to grift by “influencing” yet. Which meant actual influence was still possible.

That first generation of bloggers was more influential in moving industries like culture than the commercial milieu we have now. Less lucrative certainly but the impact was significant. Good stuff actually emerged from living instead of someone imitating living.

My friend (the ex and cofounder) are considering writing a chronicle of our time. Partially it’s an exercise in nostalgia. It was a lot of fun. Maybe it’s a bit of an ego trip to think we could’ve even write some fiction that ties together the ethos and the aesthetics of that moment.

Back then we hadn’t cracked up the media industrial complex into algorithms and big automated ads dollars. A lot more got done in restaurants, bars and parties. The city itself hadn’t turned over into the complete plutocracy that dominates now. The kleptocrats needed the financial industry to implode and get bailed out for that kind of real estate takeover. Before the bailouts maybe the rest of us good maintain the delusion that we too could strike it rich. Now the distance is too great.

It was an era when Condé Nast mattered. Finance was a thing the cute guys with ambitions for money did, not yet a space that was entirely populated by Hedge Fund guys set on moving to Planet Billionaire.

And holy fuck the parties were great. Classes mingled more without the stratification that came out of the Great Recession. You could be someone even if you lived in a shitty barely heated no hot water squat loft on Bowery. It still cost $1600 but better than the 16K a month I saw it go for recently. You could get into club if you had some style. Instead of convincing people you mattered because you had a bunch of followers you had to convince someone you were cool.

I know this all sounds like bullshit old person nonsense mumbling about past good times. So if we do write about the Aughts it will take a lot better writing to make it compelling. I think it’s possible as I still retain a sense of place that I think is worth sharing. I’ve got ridiculous stories that could make for a fun read. So I’m putting the energy into the universe that I’ll capture those moments and share.

Categories
Finance

Day 163 and Favors

Some professional arenas are driven by the favor trading of social capital.

I’ve got a gut sense that this is true on the two poles of commodity products and services. The middle ground has a lot more nuance and is thus less susceptible to favor trading, as it’s clear what drives price and value of service. With complete commodities (identical replacement value) and the non-fungible (not interchangeable or replaceable) there are not simple price or value anchors. This makes it more likely your purchase or choice will be driven by the perception of social capital. We will do favors for those with higher status or by the recommendation of those we trust.

Interchangeable commodity products trade on price, which means favors from across the ecosystem act as the grease in otherwise equivalent deals. Think suppliers of everything from lumber to textiles. If the price is the same maybe you buy from someone you like who took you out to dinner. Or you buy because that person has a good reputation in the community so you use the person your neighbor recommended. This seems intuitively true of commodity services like accounting, plumbing or roofing. Within certain bounds of quality, a 2×4 or a roofing bid should fall into the same bucket so it’s ok to pick whoever feels best. That’s why it’s susceptible to favors and social capital exchange.

On the other end, extremely differentiated non commodity products are equally prone to being tipped by favors. Think professional services like public relations that are very hard to compare. A publicist with favors to trade gets their clients the best coverage. A reporter who has a lot of sources can trade them in to get a quote for a story. Venture capital is one of the least commodified types of capital, a founder will pick one firm over another not just based on the price of a term sheet but whether others recommend them. Reputation matters a lot. Social capital is what gets a deal done, a nudge to consider someone will push you into a cap table.

Not convinced? Think about a product that exists in the middle like clothing from a brand you know but isn’t connected to you in any other way. This is the least susceptible to favor trading or the pressures of social capital.

We can intuit a dress made from quality fabrics and a recognizable brand has a set cost because the brand of the designer is not interchangeable (maybe with others in their category but Prada isn’t the same as Old Navy) and the cost of the fabric is transparent. A silk blouse can’t ever get too cheap on a one off basis. Both the brand and the fabrics set the bounds of the prices.

I didn’t really have a point in writing this other than being curious about what impacts how we pick what to purchase and what sets the bounds of our pricing. We are in a narrative cycle around inflation and work shortages which is having an impact on how willingness to to spend or hire.

So be careful if something seems too expensive but comes highly recommended. Be equally wary if something is particularly cheap even if a friend likes it. Look for the sweet spot of pricing and reputation that is based on market price beyond your in-group.

Categories
Finance

Day 160 and Starting with Money

The best articulation of why anyone gives a shit about currencies in crypto (as opposed to just focusing on bigger structural problems of macroeconomics) is that you need foundational layers to build a new economy. You need a currency before you can have an economy. Ryan Sean Adams at Bankless gave me an aha moment with this quote. You need money.

The bankless model is simple: you hold the majority of your crypto wealth in crypto money. Specifically crypto commodity money. Today that means ETH and BTC.

Wealth is different than money. And crypto wealth should be in crypto money. Like yes, we get it, assets get tokenized. Crypto folks are wild for tokens. But that’s more of a DeFi problem. Financialization has allowed us to buy so many cool kinds of financial products that we forget that shit like derivatives were invented by normal dudes who traded soybeans for a living in the 70s.

But we needed soybeans to be traded first. There is an order of operations to setting up an economy. That means a system where folks grow soybeans and sell them, or turn them into another product like oil, or sell their labor as an accountant to the oil company that buys the soybeans. Because we don’t trade soybeans for steak. We trade it for dollars and then we buy a steak to enjoy at home with our spouse and kids. Circle of life! Circle of trade.

So first things first (I’m the realist) we to understand that understand that currency is crucial to the functioning of but also the first step in an economy expanding. We need to read up a bit on the history of money. PBS has a NOVA series that is pretty comprehensive. If you like stories Thomas Levenson’s Money for Nothing is a not-actually-tall tale about how the scientific revolution lead to a financial revolution (plus it has boats). Or learn how Kublai Khan invented paper money which seemed even crazier than a digital currency at the time.

If we start with a digital currency who knows what we can build from there. Balaji believes (and I agree) that it’s the first step in forming a digital country. But money comes first.