Whole Fish and Banku, Ghanaian Style

December 29, 2022

They say it’s not what you know, it’s who you know. As I dug into the whole tilapia’s succulent flesh, I couldn’t have agreed more.

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Delicious as it is, Ghanaian food is little known in the United States. Even in the New York City area, a Google search reveals just a couple of options.

“Ghanaian food is a whole process.”
Anonymous pal

Fortunately, I had a connection. A Ghanaian friend of mine buys homecooked meals from a woman who runs a restaurant out of her house.

Turns out Travis Kalanick didn’t invent ghost kitchens!

We popped open the warm clamshell containers to reveal a massive, whole fish. The tilapia was marinated and served with two spicy sauces.

The flesh was moist and succulent. I always thought I hated tilapia, but cooked whole like this, it’s wonderful!

Alongside our plates: a massive and scrumptious-looking dumpling. These are called banku.

Banku are a staple of Ghanaian food. They’re made of fermented corn.

Banku’s mild flavor is a perfect match for spicy sauces. It’s kind of like chips and salsa.

The only downside: they’re sticky! My friend dug in with her hand, but I soon switched to a fork.

I guess I can only become so Ghanaian in one day. 🙂

Cooking fish whole as they do in Ghana yields a more tender and flavorful flesh. And never forget to eat the meat from the head — it’s the best part!

I saved the fish bones for a stock I’ll be making soon. Never let anything go to waste!

If you haven’t tried Ghanaian food, I strongly recommend it! It’s flavorful and relatively healthy — mostly protein and vegetables with a modest amount of starch.

What were your most interesting meals this year? Leave a comment at the bottom and let me know!

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Is SBF Laundering Money As We Speak?

December 28, 2022

Sam Bankman-Fried is accused of committing one of the largest frauds in history. Now out on bail, he may be siphoning off what little money his bankrupt empire has left.

ALERT: Alameda wallets are currently swapping shitcoins for BTC. They are using mixers FixedFloat and ChangeNow so seems unlikely to be liquidators. https://t.co/KAQFIO07P6
— Autism Capital 🧩 (@AutismCapital) December 28, 2022

Out this morning from Bitcoinist:

A few hours ago, former Alameda Research wallets came to life, as noted by several on-chain analysts. Oddly enough, the transfers of altcoins come just shortly after Bankman-Fried was allowed to make himself comfortable in his parents’ home, equipped with an Internet connection.

The transactions totaled about $200,000.

Whoever moved the money used tools called mixers to mix the coins with other tokens. This makes them harder to trace.

A liquidator put in charge of the Alameda assets by a court would not use a mixer. This points to the transfers being initiated by a hacker, or by SBF himself.

Shockingly, the terms of SBF’s bail don’t stop him from using the internet.

If SBF is in fact looting the last of Alameda’s assets, he’s committing another crime. This would be ample cause to revoke his bail, putting him in jail until his trial ends.

Since the bail is secured by SBF’s parents’ house in Palo Alto, his parents would also lose their home.

Most people would never consider committing fraud while on bail. They’d be worried about going back to jail, not to mention their parents’ losing their home.

But SBF isn’t most people. If he did this, the level of arrogant stupidity is astounding.

What do you think is going on with these mysterious transfers? Leave a comment at the bottom and let me know!

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Photo: FTX CEO Sam Bankman-Fried

My 2022 Reading List

December 27, 2022

Whenever I walk into the library, I think “How can I ever read all these books?”

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For me, finding the right books is hard. And something tells me you might be struggling too!

So here’s a quick review of everything I read this year! If something piques your interest, pick up a copy!

Top Pick: Nonfiction

The Power Law by Sebastian Mallaby. This is on every VC’s list this year for a reason.

Mallaby does an amazing job recounting key moments in the history of venture capital. I found the story about Accel staking out Facebook headquarters to win its Series A fascinating.

If you’re in the technology industry, this is a must read! I wrote a series of posts about it here:

THE POWER LAW (PART ONE)
THE POWER LAW (PART TWO)
THE POWER LAW (PART THREE): ANGELS AND VC’S
THE POWER LAW (PART FOUR): THE FIRST VENTURE DEAL

Top Pick: Fiction

Howl and Other Poems by Allen Ginsberg. Ginsberg is my favorite poet, so a friend gave me this slim volume as a very thoughtful gift!

I find the Sunflower Sutra particularly beautiful. Ginsberg tells us “we’re all beautiful golden sunflowers inside.” This reminds us to value ourselves and not get too caught up in the day to day!

The Rest of the List

Playing for Keeps by David Halberstam. An excellent account of how Michael Jordan came to dominate the NBA.

Jordan was intensely competitive and hard working. But he was also unusually coachable.

I’m never going to rival Jordan on the court, but his example is instructive in any field.

The Lean Startup by Eric Ries. The classic text on launching an MVP and iterating your way to success.

Little did I know that later in the year, Eric and I would wind up co-investors in the same startup!

More on The Lean Startup in this post.

Amp it Up by Frank Slootman. The Snowflake CEO provides great insights on leadership in this engaging and brief volume.

He includes tricks for increasing intensity like asking why a task can’t be completed tomorrow instead of next week. More in this post.

The Founders by Jimmy Soni. A deep dive into the founding of PayPal, one of the most iconic tech companies of our time.

Soni includes fascinating tidbits like how PayPal was originally designed to beam money between Palm Pilots. More in this post.

Hunting the Unabomber by Lis Wiehl. Ted Kaczynski is the mirror image of many of the successful founders profiled on this list.

Like many of them, he was precocious and Harvard educated. But he despised technology and its effects on society.

He also showed early signs of being disturbed, laughing as he tried to scald his mother with spaghetti sauce as a child. Perhaps some people are just born with problems.

Into the MIrror by Norman Mailer and Lawrence Schiller. Robert Hanssen was the highest ranking US official ever to become a spy for the Soviet Union.

This is the fascinating story on how he went wrong, and how the government caught him.

Founder by Amos Elon.

Mayer Amschel Rothschild founded the Rothschild banking dynasty. It became one of the most powerful families in Europe.

But the first Rothschild was born in a dank Jewish ghetto. He was orphaned at 13 and faced extreme discrimination throughout his life.

Rothschild grew his business by going out and finding customers, unlike most bankers. Once he had them, he was a loyal partner, always putting their needs first.

I’ve read this book four times now — it never gets old!

Revolutions: A Very Short Introduction by Jack Goldstone. This book covers revolutions from the ancient world to today, digging deep into their causes.

One surprising insight was that poverty alone doesn’t produce revolutions. A destitute populace is no match for a government’s armaments.

Elites also need to withdraw their support from the regime.

Zero to One by Peter Thiel. In contrast to The Lean Startup, Thiel advises founders to create a highly differentiated product 10x better than alternatives rather than a barebones MVP.

I’m not sure who I agree with. But Thiel’s book is a must for any entrepreneur or investor.

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Photo: Author Sebastian Mallaby

Christmas Camping in New Jersey

December 23, 2022

As Christmas drew near and the mercury fell, most people huddled inside with a warm mug of cocoa. Not us.

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On Tuesday, my friend Tom and I cruised down the highway, headed to the wilderness. Already by 3pm, the sun hung low in the sky.

I couldn’t wait to spend time around friends free of distractions. But I also wondered if we could stay warm.

“Land really is the best art.”
Andy Warhol

We pulled up to the little lean-to that would be our home for the next two days. We were utterly alone, every other site deserted.

Surrounding us was Stokes State Forest, a wonderful natural spot in northwestern New Jersey. We settled and in Tom whipped up a Brunswick stew as I warmed myself by the stove.

This delicious dish is easy to make and great for a campsite. Just empty some cans of beans and corn into a pot along with onion and pre-cooked pulled pork, and you’ve got yourself a beautiful hot meal!

Our little woodstove didn’t look like much, but it threw incredible heat! Soon, I was shedding layers down to a light sweater.

The next day, our friend Paulie joined us for a lively hike. We took in streams, a frozen pond, and even an abandoned silver mine!

Winter is a great time to hike. You have the trails to yourself, letting you really focus on nature’s beauty.

We wrapped up the day eating Beyond Meat burgers by the fire — our one nod to healthy eating on this trip!

If you go camping this time of year, be sure to get a cabin with a woodstove. Bring lighter fluid and a mix of kiln-dried and regular wood.

The kiln-dried wood and lighter fluid make it easy to get the fire started. Once it’s blazing, the regular wood can burn more slowly, providing lasting heat.

You’ll also want good sleeping pads and a 0 degree sleeping bag. This is the one I own — it’s amazing!.

Don’t be afraid to enjoy the woods even in winter!

Nature has a special, spare beauty this time of year. And with the right equipment, you’ll be snug as a bug in a rug.

Would you go camping in winter? Why or why not?

Leave a comment at the bottom and let me know.

There will be no blog on Monday for the holiday. See you on Tuesday.

Merry Christmas everyone! 🎅❄️☃️

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Why Crypto is Still Massively Overvalued

December 20, 2022

Cryptocurrencies have had a painful year. But you ain’t seen nothin’ yet.

The promise of many major protocols like Ethereum is that they can power useful apps. But despite their giant valuations, almost no one is actually building anything.

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From a new report on the Swiss crypto site Blockzeit:

…according to the data from December 2022, Ethereum (ETH +2.21%) has 183 active developers each day, which is the most among all blockchain protocols and dapps. Cosmos (ATOM +1.41%) and Cardano (ADA +0.18%) came in second and third, respectively, with 145 and 142 active developers. A total of 18 active engineers are presently working on Bitcoin (BTC +0.44%), the most valuable cryptocurrency by market capitalization.

Ethereum has a fully diluted market cap of $148 billion. That’s after dropping by two thirds this year.

That puts the value of Ethereum at over $800 million per developer. This valuation is absurd.

Consider that Microsoft employs about 100,000 of the best coders on earth. And yet, each is worth just $18 million of market cap.

Microsoft carefully screens engineers and hires the best of the best. Almost all of them work full time.

Can every random person who writes a single line of code on Ethereum be worth 40 times as much?

The numbers for other cryptocurrencies are even more stark. Bitcoin has just a handful of engineers, despite a fully diluted market cap of $356 billion.

If we follow Microsoft’s developer to market cap multiple of $18 million, Ethereum is worth just $3.3 billion. That’s 98% less than its current value.

There are real use cases for crypto. But enthusiasm, and prices, got way ahead of reality.

“There’s the signal and the noise. In crypto, 99% of it was noise. But there’s real value and signal there.”
Mark Cuban

I’ll be avoiding this market until I see some real products.

What do you think of crypto valuations? Leave a comment at the bottom and let me know.

The next blog will be on Friday — I’m going camping!

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Photo: Ethereum founder Vitalik Buterin “593513273GS308_TechCrunch_D” by TechCrunch is licensed under CC BY 2.0.

Zero to One

December 19, 2022

Founders should launch an MVP as soon as possible and iterate their way to success…right? Wrong, according to billionaire Peter Thiel.

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The controversial venture capitalist and co-founder of PayPal lays out a very different view in his book Zero to One. As I headed off on vacation last week, I dug into this classic.

Thiel is fundamentally opposed to the Lean Startup framework. Iterating on a minimum viable product (MVP) would never have produced the iPhone, Thiel notes.

Instead, we should create a fundamental innovation. Our new product should be 10x better than alternatives.

And forget about big markets. Thiel’s approach is to completely dominate a small market, then branch out.

“No sector will ever be so important that merely participating in it will be enough to build a great company.”
Peter Thiel

I find Thiel’s approach compelling. Total domination of a small market is a stronger indicator of product-market fit than a tiny slice of a big one.

A monopoly, even in a small area, means you have pricing power. This avoids a race to the bottom with margins headed to zero.

From that strong position, we can branch out to adjacent markets. For example, PayPal was able to move from enabling eBay payments for top sellers to sending money for any reason.

Thiel also includes a great trick for investors: ask founders what they pay themselves.

A reasonable salary of no more than $150,000 ($194,000 in current dollars) strongly correlates with success. This is one of the clearest patterns Thiel has observed from investing in hundreds of startups including Facebook.

I’m going to steal this one! It may lead to some awkward silences on Zoom, but ya gotta break some eggs to make an omelette.

I found Thiel’s take on entrepreneurship refreshing. Zero to One turns the standard startup playbook on its head, and it makes a lot of sense!

I’m going to look more closely at companies dominating an initial small market. And if I ask you your salary, blame Peter.

What do you think of Zero to One? Leave a comment at the bottom and let me know!

Glad to be back!

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Photo: “Peter Thiel” by jdlasica is licensed under CC BY 2.0.

Seedscout: Where Underestimated Founders Win

December 2, 2022

Every morning, I have dozens of new LinkedIn messages from founders. I seldom have time to reply. But what if there were a better way for founders and investors to meet?

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Enter my latest investment, Seedscout. Seedscout is an awesome new platform for founders to meet investors.

The magic of Seedscout is that there’s a monthly fee. This filters off people who aren’t serious.

What’s left? Awesome founders I want to meet!

I find myself meeting with almost every Seedscout founder who asks. Meanwhile, my LinkedIn requests languish in digital limbo.

I recently met an amazing founder on Seedscout whose startup is growing revenue at 70% a month. Once I wiped the drool off my chin, I reached for my checkbook!

When a platform gives me deal flow like that, I pay attention to their next intro. Meanwhile, since I rarely find solid deals via cold messages, I often don’t have time to respond to those messages.

For founders without a strong network in venture capital, Seedscout is a super power. You can buy your way in.

With plans starting at $100/month, a scrappy young founder can drive Uber for a few hours and pay for a membership.

Seedscout Founder & CEO Mat Sherman is fanatical about opening up venture capital to all great entrepreneurs. In an industry where just 2% of funding goes to women and just 0.4% to black founders, Seedscout is changing the rules of the game.

In time, Seedscout may replace LinkedIn and AngelList. For me, it already has.

I’m delighted to be an investor in innovative startup. Best of luck to this scrappy team as they take Sand Hill Road by storm!

I’m on vacation for the next two weeks. I’ll see you again on Monday, December 19th!

Until then, please enjoy some classic posts from the archives:

The Startup Pitch Checklist

Mark Twain: Venture Capitalist

North Jersey’s Secret Campground

The Swami Who Taught Me About Politics

The Ultimate Score: Turning $300k into $2.4 Billion on Coinbase

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If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog!

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Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

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Why I Just Invested in Rilla, the Killer App for Outside Sales

December 1, 2022

Every day, sales reps go to meetings across America to land that big deal.

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Their managers hope they absorbed the lessons of training and can bring in the sale. Unfortunately, they rarely have the time to go along.

But with cutting edge AI, sales managers can now analyze every customer meeting without ever leaving their office!

Rilla records sales meetings and tags the most important moments. You’ll know if reps are following the script, what customer objections are, and a lot more.

Other platforms like Gong or Chorus may work for inside sales with its clean audio. But for outside sales in the noisy, chaotic world, Rilla is king.

You just press record on a phone or tablet and that’s it! Rilla takes care of everything else.

No wonder sales teams are adopting Rilla at an incredible rate.

Sales managers see a 20-30x productivity increase. Reps get the feedback to make their pitch better than ever, meaning more commissions.

I’m delighted to be an investor in Rilla’s recent seed round. The founder, Sebastian Jimenez, is tenacious and laser-focused on his customers.

If you’re in outside sales, book a demo with Rilla and see what it can do for you!

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Photo: Sebastián Jiménez, Founder & CEO of Rilla

New Report: AMC Fails to Deliver Hit 4.3 Million

November 30, 2022

Fails to deliver in shares of AMC Entertainment Holdings reached extraordinary levels in November. 4.3 million shares have failed to clear by November 14th, the latest data available.

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This new report, out today from the SEC, shows the highest levels of fails to deliver in months. This is particularly striking given the much lower fails to deliver in the largest stocks.

Let’s see how many fails to deliver some of the largest stocks in the market had on November 14th:

Amazon: 253

Apple: 0

Google: 0

Microsoft: 11,553

These companies are hundreds of times larger than AMC. But somehow, a little theater chain dwarfs them all in failed stock trades.

Fails to deliver can happen for benign reasons. But a long and persistent pattern of fails to deliver, as in AMC stock, can point to something more nefarious.

Huge numbers of failed trades can indicate naked short selling. This is the illegal practice of selling short shares you never borrowed.

It’s a potent way to crush a stock’s price. After all, if you don’t have to borrow a stock, you can sell short all you want!

Increasing failed trades may be related to higher borrowing costs for AMC shares. With fees going from 20% to up to 100% a year, borrowing shares is more expensive than ever.

It’s a lot cheaper to naked short sell. Unfortunately, it’s also against the law.

I urge the SEC to investigate the long term pattern of chaos in AMC shares. Only a full investigation can restore confidence in markets.

What do you think of this huge fails to deliver number? Leave a comment at the bottom and let me know!

Today is the blog’s second birthday! Thank you guys for a great two years! 🙏

There’s a lot more to come!

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Seeing Through SBF: How One VC Found the Truth

November 29, 2022

The best venture firms in the world stand to lose billions in the FTX collapse. But one man saw through Sam Bankman-Fried.

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His name is Alexander Pack. Pack planned to invest millions in FTX, until the red flags started to mount.

Pack, managing partner of Dragonfly Capital at the time and currently of Hack.vc, was bewitched by SBF at first. From a new report in Fortune:

“He seemed like one of the smartest people I’ve ever met…He looks different from everybody else; he thinks different from them. So yeah, I was very taken with him. We all were. That’s why we spent so much time and were so interested in it.”

For all SBF’s charisma, warning signs began to appear. The profits of his trading firm, Alameda Research, were dropping bit by bit.

It turned out SBF wasn’t focused on the business he was pitching Pack. Instead, he was working on a new crypto exchange called FTX.

[Pack] was interested in SBF’s new exchange, but Bankman-Fried balked and supposedly told Pack he couldn’t invest in the separate business. Bankman-Fried, he says, haggled, telling Pack he would have to pay more if he wanted exposure. “And that was a big red flag, obviously for our investment,” Pack said.

Pack was right to take this as a huge red flag. A founder who’s distracted from day one isn’t a good bet.

SBF also became increasingly secretive:

“He wouldn’t tell us who [the investors] were because he didn’t want us to talk to them,” Pack said.

Bankman-Fried thought if the seed investors knew he was considering taking venture funding, the seed investors might redeem their money, Pack said.

Pack asked him how he would deal with the situation. “And Sam said, ‘Oh, I probably just won’t tell them at all. You know, we’ll keep it secret. We’ll figure out some way to keep it secret.’”

Pack realized that the FTX founder could easily keep valuable information from him as well. “That was definitely one of the flags,” he said.

Pack is 100% right that if SBF will deceive his existing investors, he’ll deceive Pack too.

What’s more, existing investors should be your biggest cheerleaders! You should be begging prospective investors to talk to them and find out how great you are.

And why would those early investors want to sell if the company was doing well?

In all, we have a picture of a distracted, unscrupulous founder. With hundreds of deals available at any given time, why choose this one?

Pack was considering investing just a couple of million dollars. But he appears to have done more diligence than the giant firms that put in hundreds of millions!

Those big firms have huge teams to diligence a company backward and forward. But they were outmaneuvered by little old Pack.

The lessons for founders and investors are clear.

Founders must be focused and keep their financials tight. And investors should be wary of distracted, secretive, and unscrupulous entrepreneurs.

What do you think of the FTX collapse? Leave a comment below and let me know!

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Photo: FTX CEO Sam Bankman-Fried