Yet more history was made in the month of July. The compounding of human knowledge is moving progress at exponentially faster rates. Venture capitalists are deploying cash at a record rate too, and why e-commerce is just getting started.
What if the world just gets crazier?
From Not Boring, by Packy McCormick
July has been a crazy month. Axie Infinity closed with $190 million in revenue (a 16x MoM increase), Google’s quantum computer was used by physicists to demonstrate a new phase of matter, scientists figured out how to create mirror images of DNA, Tiger Global spent $6.7 billion in 3 months, and of course billionaires have been flying off to space.
“You have to remember something about what it’s like to stand on a time-series graph: you can’t see what’s to your right.” - Tim Urban
It may be easy to shrug this all off as “COVID-bordem-induced-adventure-seeking” and act as the sensible, skeptical adult but, whether we like it or not, our world will only keep getting exponentially crazier. The speed of progress keeps increasing and our brains have to evolve to keep up.
📈 It’s really hard to recognize a graph that is moments from going vertical. Showing someone from 1750 the world of today would be VASTLY more challenging than showing someone from 1500 the world of 1750. Zooming into the present we see progress happens in S-curves but zoom out enough and all the S’s are sitting on an exponential curve racing upwards.
🧠 Thanks to the internet, any person can have access to all human knowledge and the compounding of human knowledge is what keeps progress moving faster (The Law of Accelerating Returns).
💲 While things could completely fall apart, if the past is a guide, we'll wake up in 10 years to a market filled with numbers so much higher than we could even begin to wrap our heads around today.
🌎 Compounding is not an easy game to play. There are timing risks and macro and tail risks. What is the future of the US Dollar, climate change and wealth disparity?
How to deal with this all? Open-mindedness and reading some sci-fi to make the crazy more familiar.
Mo money, mo speed
From Next Big Thing, by Nikhil Basu Trivedi
The venture capital market is moving FAST and while speed can benefit both founders and investors there are also costs to consider. But, first, what has caused the increase?
💰 There is more capital to invest in private companies.
⚔️ Venture firms are experiencing greater competition from outsiders and new firms.
🏦 Investors are bolstered by the extent of recent liquidity via IPO and M&As and so are more inclined to invest in new companies.
💻 Virtual fundraising, without travel or in-person meetings holding up timelines, has allowed investment decisions to speed up.
⏩ Some venture firms have very speedy decision-making processes in place and so others in the industry must follow suit to win deals since speed is valued by founders.
⭐ Potentially, the quality of businesses is rising.
There are downsides too: How can you be sure after a few days if there is a true founder-investor fit? You want to create relationships that are human and not transactional. Additionally, a slower, more painful fundraising process can push new companies to improve the way they work and become a lot more streamlined. Feedback from fundraising can be extremely useful.
Remittance payments: saved by crypto
From 1729, by Murtaza Hussain
Remittance payments, sent by millions of foreign workers around the globe to their family and friends still living in their home countries, are an economic necessity for ascending-world countries. Unfortunately, small wages make the cost of sending these payments extremely challenging. An answer to this problem, which has been discussed for the last decade, is crypto remittances.
In 2020, remittance payments to middle-income countries were around $540 billion. These payments are a big business. Financial institutions can collect large fees on remittance money. Trying to lower the average fee towards the UN goal of 3% has historically been extremely difficult.
💸 Crypto is removing the middleman due to smartphone ownership. Instead of being charged $10 per $200, Bitso, a Mexican crypto exchange, charges only $1 per $1,000.
🇸🇻 Costs will also continue to fall thanks to DeFi. El Salvador has already announced Bitcoin as legal tender. The country currently relies on remittance payments for around a 5th of its GDP.
If you want to beat Amazon, be memorable
From Late Checkout, by Greg Isenberg
Spending time online has drastically changed over the years and online spaces are becoming more “spontaneous, social and raw.” Designers are creating virtual spaces that resemble physical ones. Yet the shopping mall has not yet been successfully brought online.
Sure, Instagram has a ‘shop’ option, but what made the shopping mall memorable was the experience. The whole space was social — filled with people from all walks of life, and store employees offered personalized service.
The feeling of spontaneity, the bustling energy and the social warmth of a mall is what is missing in ecommerce — currently, it’s purely transactional. This is slowly starting to change. Here’s how to stand out:
🏩 Create digital spaces. You can curate something truly unique. The spaces should offer a place to be with others online. Imagine going on a shopping trip with your friends virtually.
🚶♀️ Create digital avatars. Allowing users to embody a virtual character and physically take up space will make shopping more fun and memorable. Regardless of how realistic they look, users can add personality to them and be themselves online.
🎥 Ecommerce can be live. Shopping can once again be in the moment and brands could even create shop opening and closing times. (Whatnot is already using this feature with live auctions for niche goods).
🥳 The ecommerce experience has to be fun. Unlike with physical stores, virtual spaces have no restraints on creativity when it comes to user experience. Ecommerce can sell goods as a by-product of the online event.
💳 Sell digital goods. Ecommerce can also branch out to digital goods which can be used elsewhere online.
The supply shock
From The Pomp Letter, by Anthony Pompliano & Will Clemente
This week’s key takeaways in Bitcoin developments:
Very strong outflows from exchanges
Continued miner accumulation
Continued accumulation from “strong hands” (entities with little selling history)
Every major cohort adding except for 100-1K BTC (sideways)
Some profits taken during the rally over the last few days, young coins mostly
On chain activity (active addresses, transfer volume, etc.) is still overall flat
Will Clemente further expands on a metric which tracks the wider context of cumulation in the Bitcoin market. He created an indicator which runs a 365-day stoch RSI over the 30-day net change of illiquid supply to follow the wave of ‘supply shock’ unfolding under the market (see green arrows. It has started printing a buy signal and the rate of change from the sell signal is pretty impressive, highlighting that the momentum from the wave of supply shock is strong.
Extra Reading:
Writing effective headlines that convert (Marketing Examined, Alex Garcia)
Lessons from China’s consumer internet innovation (Digital Native, Rex Woodbury)
Selling the first 1000 Nikes (First 1000, Ali Abouelatta)
How to painlessly find your best ideas (Personal Brand Brief, Joel Hansen)
Trends and insight into online courses (Trends.vc, Dru Riley)
Ad tech data and the ousting of a senior priest (The Pull Request, Antonio García Martínez)