Tag: Finance

Categories
Startups

Day 1047 and Risking Resets

Apparently the last year has been an “annus horribilus” for startups. Kate Clarke writes in The Information.

If 2022 was a year of shock and denial for tech founders and investors as stocks collapsed, 2023 was a year of acceptance of their harsh new reality.

Kate Clarke “Startups’ Annus Horribilis—and What Comes Next”

Maybe I never got over my skis, but I don’t feel like I went through shock or denial as capital markets tightened. I remember a world before interest rates were low. I remember bad times. I have memories of bankruptcies and struggles to raise capital.

I was a teenager watching my father when tech crashed the first time. I was living in San Francisco working for a venture backed company that had acquired my startup when Sequoia said RIP good times and the global financial crisis unfolded.

Maybe the elder millennial timing of my life wasn’t as shitty as we thought. The constant crises were the norm. Unlike Gen Xers I never had a fear of selling out. I was much more interested in finding a way to survive. And I was disappointed to learn that the institutions didn’t really offer that anymore.

When I had good luck I didn’t think my accomplishments were my own. I mostly thought of them as accidents of survival. Praying for exits was less of a joke and more of a bitter reality. And when they did come it was a surprise.

I have made my peace with the risk of resetting the chess board. My optimism has always been tempered by expectations of crisis and chaos. I might even believe it’s for the best.

Categories
Aesthetics Finance

Day 1040 and Easier To Be First

I was telling a friend of mine, only somewhat hyperbolically, that I’d watched “Margin Call” forty times just this year. The actual number is probably half a dozen (my blog’s search function tells me I’ve mentioned it fifteen times) but it’s still a lot for what was a niche drama about the financial crisis.

There is a speech given by Jeremy Irons that sums up perfectly why finance and fashion are fundamentally in the same business.

What have I told you since the first day you stepped into my office? There are three ways to make a living in this business: be first; be smarter; or cheat. Now, I don’t cheat. And although I like to think we have some pretty smart people in this building, it sure is a hell of a lot easier to just be first.

Being first is my game. I’ve taken it from a career in luxury fashion to a career to a career in venture capital. It’s the same fucking job.

It means I often look stupid as I see emerging trends long before the rest of the market gets there. There is a basic math to this which involves status signaling. If you are the type who must do the math to understand how status works as it’s not intuitive to you I recommend this piece.

Just remember that being first is the key to both. And your ability to be first is almost entirely a function of cool. And being cool means not giving a fuck. And if you don’t give a fuck its generally for one of two reasons. Its either because you have the status to do and can get away with it or or you genuinely don’t care.

Freedom is just another word for nothing left to lose.

Janis Joplin

Categories
Internet Culture Startups

Day 1036 and The Right Direction

I’ve been in Europe for the last month. My itinerary included Tallinn, Helsinki and Amsterdam. It was a personal trip with work overlayed on top as the digital nomad as become a regular part of my life.

I have said it before but I don’t take as much pleasure as you might imagine from these trips. Much of the reason I spend so much time outside of America is simply that the State department won’t let in the kind of rare weirdo digital grey tribe talent from the portions of the world the United States has labeled as “bad passports.”

I’ve written about it extensively if you are interested. We’ve reached a crisis point in the dysfunction of our immigration and travel visa system in America and it weighed heavily on me and mine. It’s the most concrete evidence I have that America simply isn’t serious about being competitive in the global economy.

As I head back home to the states, I want to be sure I’m heading in the right direction with my priorities. I’ve been committed to crypto for close to a decade now. I’ve added in more focus as it’s become clearer we can’t rely on fiat and the dollar system. I’ve become part of the artificial intelligence explosion over the last two years. Now that the Network State concept is more formalized and we have rallying movements like e/acc, I feel as if some optimism is cautiously warranted. All it will take is twenty or thirty years of work and surviving the geopolitical tumult. No big deal right?

Categories
Travel

Day 1004 and the Muses

I’m such a homebody that I sometimes thinks the joys of travel are lost on me. But then I go shopping and I remember that markets are muses. What sells tells you something about a place.

Now you may think crass commercialism is more of a vice than a virtue. But I think it’s wise to hear what works. A market can tell you about what’s popular. Being an American is a niche experience but we’ve got a bigger footprint than our mere population would suggest.

But also the spoils of capitalism have priorities that are about the efficiency of the market. And you see it in every large city of any density or wealth. The layers for consumption of good and services have a logic to them that defies too much local concern. The algorithms have trust and safety teams but scale takes you pretty far. And every city at a certain size needs market logics.

It’s just important to remember each market has a local gem. There are great performers that outclass by wide orders of magnitude. It’s usually some combination of what appeals locally but is also legible to the larger global cosmopolitan skill sets.

Many of the food wars are just city tastes fighting country tastes. Some situations are more market based and transactional. Sometimes that is even good. I’m personally delighted that I can show up to a city and get food delivered. There is always orange soda brand in every market. And you can always get French fries.

Categories
Chronicle Media

Day 994 and Good Conversation

There are few pleasures in life as gratifying as having a good conversation with someone. I recorded a podcast with one of my absolute favorite Twitter mutuals and LP in chaotic.capital this morning. I don’t want to ruin the surprise (click here if you do) but it was a very good time and a very good conversation. I can’t wait to share it with everyone.

I’ve had the good fortune to be in a few deep dive podcasts recently if you want a preview of the kind that of thinking and conversations that bring me joy.

I was recently a guest of Frazer Rice’s podcast Wealth Actually to discuss how the venture asset class has changed over the course of the last fifteen years. I was also a guest of Stewart Alsop III on his podcast Crazy Wisdom where we discussed the complexity spectrum of bringing our present into our future.

One of the most challenging aspects of doing the earliest stage investing in technology, and startups in general, is that we simply have no idea what the future will bring us. We have our best guesses.

That doesn’t mean we are flying blind. Like Captain Kirk, I trust some people’s best guesses a lot more than other people’s facts. But the harsh truth is that we are all doing our best with heuristics and humility.

And it’s through conversations with others do we get to improve our best guesses. Sharing insights and history helps us refine our process and worldview such that our knowledge broadens and deepens.

In conversation we share what’s worked for us and what we’ve seen across our own experiences. A good conversation is a pleasure unto itself but it’s also a window into the world of someone else. And I cannot imagine a more joyful way of improving yourself.

Categories
Culture Emotional Work Politics

Day 972 and Falling Faster

I’m starting to feel like summer is losing its grip on me. I cannot even begin to express my relief that September is almost here. I loathe summer and this one has been particularly hot and horrifying.

Being in Montana for the summer has given me the nicest possible version of summer still possible on a warming planet. You wouldn’t imagine being a mile higher than sea level and in the Rocky Mountains would make for hot summers. But you’d be surprised. Thankfully it’s not a persistent condition like Houston.

I love being home. But I love winters in Montana about hundreds times more than summers. Ironic then that I usually find myself traveling for work during the times I most prefer to be at home. I struggle to remember the allure that travel once held before the Great Weirdening collided with the Pandemic Years. I remember yearning for Hong Kong and Dubai. Now I’m avidly negotiating Airbnb so I can stay put in a relatively centralized European city.

Can you imagine thinking that going abroad to do business was a sane use of time before say 2016? 2019 and onwards has given us closed borders to the lawful and state capacity collapse and immigration and visa panics. Hard to imagine that doesn’t feel like some kind of change to American idealism.

I truly pray if my writings are ever preserved for any kind of historical usage in some artificial intelligence that you will remember there was a time when New York and San Francisco were the gravity wells of an era. It’s been a long fifteen years since the Great Recession.

Whatever that time was it’s not the current moment. Maybe it comes back. I was a post 9/11 New Yorker who came from the country to do patriotic things like build businesses. Let’s not get into the war that happened in the process.

I’m glad I’ve gone home to the west. But I know you’ve got to journey from home to appreciate it too. I’ll keep my corner in the edge of the empire as renewal comes from the edges. Fall may turn into winter but you know in all seasons things turn.

Categories
Culture Medical Politics

Day 948 and Assigning Value

What does assigning value mean to you? How do you begin to investigate what is valuable? If someone asked you to value “object X” do you know what tools you would use first to make a measurement?

If I tell you determining value is a cultural problem, you may investigate the problem of value through religious or philosophical frameworks. If I tell you value is an artistic problem, you may use taste in finding value.

If I tell you that assigning value is primarily a computing problem, you may search for weightings, databases and referents to determine value.

So what happens when determining value has to account for multiple or even contradictory frameworks? Which framework assigns the ultimate value? And how do we align them?

Congratulations, you’ve known become an artificial intelligence alignment researcher. I bet you thought that required a doctorate but it doesn’t.

It’s not an entirely intractable problem. The Industrial Revolution found ways to align competing frameworks. We assigned labor value and made currencies to facilitate the exchange of different goods.

Markets can, and do, spring up for all kinds of previously impossible to value things. Capitalism done its best to make cultural value fungible and legible to an agreed upon value. Sure, artisans and artists complain we conclude incorrect values regularly. But we don’t always agree on value.

Generally we’ve found that what can pay for itself survives and what can profit for others thrives.

Not all people are motivated by profit, but we all are motivated to survive. And so we contribute what we believe has value to each other and hope the frameworks of value that others have will align with ours. The balance between the two has held together humanity for sometime.

But deciding on value isn’t the same thing as a thing driving a profit and we have to remember that truth. Between the gaps in the models of what we value is the epsilon of what cannot be calculated.

If you’d like to read a horror story on how assigning fungible value in a database can end up assigning a value to something we humans generally don’t consider interchangeable at all, then I’d go read this piece on how public hospice care’s incentives have been perverted by private equity profit motive.

I don’t always agree with the author of the piece Cory Doctorow. But I think he’s raising a powerful point on how we are assigning value when we overlay competing frameworks.

This is the true “AI Safety” risk. It’s not that a chatbot will become sentient and take over the world – it’s that the original artificial lifeform, the limited liability company, will use “AI” to accelerate its murderous shell-game until we can’t spot the trick

If you aren’t familiar with Doctorow, he’s a powerful voice in right to repair circles, a classical hacker opposed to corporate oligopoly, and a bit of a anarcho-syndicaticalist in his preferred solutions.

I like markets more than governments for most things. More of us can contribute to markets than we can contribute to specialist bureaucracies

But we have assigned value to end of life care inside the convoluted system of profit motives and medical ethics and it’s not the value most of us share on life.

And that’s going to happen a lot more as we get further and further abstracted away from the existing models of value that govern our lives. So remain skeptical when someone tells you that they know what you value. How they assign value might be different than you.

Categories
Finance Startups

Day 906 and Resilience Tech

I enjoyed a little moment in the sun yesterday when Axios’ Pro Rata featured my pre-seed venture fund chaotic.capital as part of a deep dive on resiliency technology investing. Or if you prefer disaster tech. It was a proud moment for me.

Because I’ve been trained to never miss an opportunity for reasserting who you are and what you stand for I thought I’d publish a portion of the market insights section of my investor letter for the fund. If you want to see the bets, the behind the scenes (hands on is an understatement), and the founders we back I’d welcome accredited investors to see if we’d make sense for you. Slide into my DMs or for the time conserving decisive HNI hop onto AngelList and apply to be an LP in 2 minutes flat.

What is Chaotic Capital?

In an era of institutional distrust, social change, and global instability, we invest in ideas that adapt humanity to our new chaotic era. What does that mean? We like things that help small groups have the impact of big groups and big groups have the agility of small groups. Enabling resilience in the face of unexpected & rapid change is our lodestar.

I publish an investor letter every quarter and you can always visit jfredrickson.com, where I write every single day about whatever I’m thinking about. You are also welcome to DM me on Twitter @AlmostMedia or text me on Signal. My email is julie at chaotic dot capital.

Market Insights on Q223

The rise of cryptography, machine learning, and artificial general intelligence are overlaid onto a geopolitical reality of resource competition in an increasingly multi-polar world. To use an entirely different metaphor, chaos is a ladder that we are here to climb.

Our thesis at chaotic.capital centered on identifying, investing in, and supporting companies that adapt our lives, businesses & systems to the opportunities and challenges that chaos brings. We call it resilience technology.

We believe these companies will generate outsized returns over the next decade as individuals, companies, and societies look to become more flexible, independent, and sustainable. But it’s bigger than that.  

Most builders remain deeply skeptical of Noble Lies, “for your own good” safetyism, regulatory capture, oligopoly control, and the centralized nation state control as the most effective methodology of innovation for a dynamic pluralistic human future. We are having cultural and financial reformations at a frightening speed. It’s beyond future shock now. 

Twitter critics can stroke their chin with practiced skepticism, but if you believe in American Dynamism as I do, you know that our history has shown that it is resilient, flexible, brilliant individuals coming together which defeats the totalitarian and slays the no-win scenario. You have to enable the brilliant weirdos and trust them to solve problems.

Like Captain Kirk once said to Spock, we must make the best guesses we can.

Spock: Mr. Scott cannot give me exact figures, Admiral, so… I will make a guess.

James T. Kirk: A guess? You, Spock? That’s extraordinary.

Spock: [to McCoy] I don’t think he understands.

Leonard McCoy: No, Spock. He means that he feels safer about your guesses than most other people’s facts.

Spock: Then you’re saying… it is a compliment?

Leonard McCoy: It is.

Spock: Ah. Then I will try to make the best guess I can.

Star Trek IV: The Voyage Home

My best guess? As your chosen doomer-optimist, crypto-libertarian. American-patriot, dynamic futurist, pre-seed emerging fund manager, who has plenty of facts but still has the responsibility of making decisions without full information? Tools for everyone wins the future.

It will take all of us coordinating in freedom to defeat Moloch from sacrificing more of us. Uncle Screwtape wants our egos to believe we can deliver safety and control, we know it is a lie. The Ring of Power tempts us to consider “why not me? Don’t I deserve this power?”

Choose your franchise my fellow nerds and chosen ones; because you know the crown is heavy, the ring perverts, and absolute power corrupts absolutely. So what do we do? We band together. And we enable more of us to join our merry band of future builders.

To balance out centralizing forces, institutional preservation and “we had no choice” moralizing malfeasance, we must give the people tools to build because sometimes our best guesses are demonstrably better than other people’s “facts”

Categories
Media

Day 905 and Shilling Myself

I should be shilling myself in today’s installment of writing everyday. But I’m a little tired to pull off the full bragging I’d like. One of my favorite financial news and analysis sources, Axios Pro-Rata, featured my little pre-seed fund chaotic.capital with an in-depth look at resiliency technology.

It’s a big deal to me because in-depth trade reporting is where the nuts and bolts of an industry are discussed. Anytime I’ve built something of value it was always the beat reporters who recognized it first.

Women’s Wear Daily was my big break in e-commerce and social media for my first startup Coutorture. Beauty Packaging’s company of the year award was a huge win for my cosmetics brand Stowaway. CoinDesk recognized my work on corporate governance structures and financing coordination. The trades matter more to outcome than glossies in the early days.

I’d like to think the LPs who will appreciate me as an emerging fund manager will find me from Axios Pro-Rata. And I sure would like for them to see my expanded viewpoint on the space right here on my daily essay.

I even had the good luck of preparing my quarterly investor update the day before this article hit everyone’s newsletter inboxes. So I’ve got all the materials ready to go.

Alas I’m wiped from a week of life happening (a death in the family) and the general excitement of the global summer solstice mania that’s gripping all the timelines.

So I don’t want to shill and flak myself right now. I just want to enjoy the feeling of pride that comes from seeing your work recognized with a proof-point all your peers respect. I’ll make sure to copy over the investor letter tomorrow. Stretch out my own little news cycle.

Categories
Aesthetics Community Finance

Day 863 Abstract The Pain Away

When I was a small child I attended meditation retreats with my parents. Hippies amirite? The particular branch practiced was some variant of Kashmir Shivaism, but I’ve got to imagine it was heavily edited for the consumption of white Boomers.

Who else would take a vacation to sit in silence, chant the Bhagavata Gita at 5am and practice sevā, all while having six year old children? Silicon Valley’s syncretic culture produces some weird hybrids. Seventies counter culture gave us some of the best religious revivals in American history.

If you didn’t catch the word sevā earlier it’s actually going to be the anchor of the post. Sevā as it was explained to me as a child at the ashram is selfless service. It’s work you do without expectation of reward. It is a dedication to others.

Practically it meant that anytime we lived at the ashram everyone contributed some set of work, mostly unskilled labor but not always, in the form of sevā. I did everything from food preparation and dish washing (working a commercial kitchen dishwasher is actually fun) to caring for some donated horses. I had fun summers as a child.

But the point was that everyone participated in some way to the functions of the ashram no matter who you were. And we did have some weird celebrities but that’s not the point. Sevā applied to us all. Though I’m sure glad I never looked too hard at the politics of finances of these ashtrays. Childhood innocence. As a child I just thought it was fun to contribute to the adult world.

But what I remember now is a sense of connection. That no aspect of these retreats was ever abstracted to far from me. The service was meant to bond you to an experience of a world bigger than yourself. And by recognizing that, you’d somehow connect more with others.

I try to remember that now when I am in lonely cities where every aspect of living with others is transaction. A food delivery service whisks you a meal in an hour in a country where you are an outsider without ties, bonds or service beyond the basic civilizational contract of capital markets.

The global cosmopolitan gloss of mobile applications have abstracted service away to the point where we can have an entire day of discourse about a man being sad a house cleaner washed a cast iron skillet but we can’t admit that we all pay for service as it cracks the facade.

We’ve got no sevā because that’s an expectation too great to hear. We can barely manage to pay a fee for service anymore. Imagine if we had to operate without intangibles. We can barely make Uber Eats function with taxes, tips, and services fees. Bless the markets for this freedom and curse it in the same breath.

Fuck the pain away? No, we abstract the pain away. No need to see who contributes anything. You can complain to a faceless chatbot cum customer service artificial intelligence about how some man on a bicycle didn’t deliver your order on time. The service lives below the machine now and has patience for frailty.

And yes I’m writing this because my Korean fried chicken and kimchi order got lost in a side street in Frankfurt for an hour or two.

Don’t worry the corporate entities that intermediated between me, the restaurant and the courier decided in my favor. The customer is always right as long as they have paid the fees to pretend that are lords.

All pain in the above transaction was abstracted away into some governance structure that decided it was worth 25 euro or so. One presumes some public market agreed on the price. I guess I did too. We all did.