ryanrodenbaugh

[ryanrodenbaugh]

Post-COVID19 Predictions

Shopping:

Persistent adoption of mobile ordering platforms

As people are trying to avoid leaving their homes, mobile ordering apps (e.g., Instacart, Uber Eats) have had strong and cheap customer acquisition. As a result of COVID, people will realize that apps like Instacart are not too expensive when you consider time and effort saved and have great user-experiences. I expect a lot of the growth these apps experience during COVID will persist. In a 2017 blog post (Cntrl+F “Instacart”) I shared a map of cities that Instacart operated in at the time and it was very limited to the coasts and some large cities throughout the rest of the US. At this point, it seems like they’ve expanded to all 50 states. Instacart is serving a critical role for consumers during COVID and is attracting a lot of new ‘shoppers’ as Uber and Lyft drivers have seen their number of riders drop off a cliff. In the second bullet of my post on grocery stores, I talk about some of the additional accommodations stores should make for Instacart shoppers. 

I also believe that companies like Chipotle that have invested in building their own mobile ordering apps will do well during this period. I used the Chipotle mobile app and it had a surprisingly exceptional UI. Aftership created a Doordash API that companies can use to offer delivery to customers all within their own apps. Ubereats offers the same service so that restaurants can offer delivery in their own apps. This is great for large restaurant chains (Chipotle, McDonald’s, Starbucks, etc.) that want to own the user experience and data and can then outsource delivery without ever having to require a user to leave their mobile flow.

The rise of CloudGrocers:

I wrote a longer post talking about how grocery stores should react to COVID and how they might change in the future here. The question I keep asking is why are CloudKitchens coming to prominence but CloudGrocers are not? To borrow from my other post, the closest example of this idea is GoodEggs. GoodEggs has no physical storefronts and has an inventory of high-quality, organic, etc. products that you can have delivered to your home the same day. While they seem to be the only real player in this market, their products are too expensive and do not appeal to a mainstream audience. What I imagine is possible is that existing chains like Safeway (or a startup) could buy up cheap warehouse space, stock inventory Costco-style, and then allow people to place orders online. Over time, they could augment with robotics to make the packaging of items seamless and inexpensive. It seems like what GoodEggs doesn’t have is their own inventory though. I imagine a startup that creates its own private label products (e.g, Safeway’s “Signature Select” or Whole Foods “365 Everyday Value”) and supplements with other manufacturer brands so that they own the whole value chain. They could either start doing delivery via Instacart or have delivery be a key part of their own company from the start. I have to imagine that in many cases, consumers don’t actually care whether they are buying private labels or Clorox. Consumers want the highest quality at the lowest cost. A ‘CloudGrocer’ could be uniquely positioned to deliver this.

New Tools for Online Shopping

A lot of shopping has already moved online and in the same vein as the last two bullets, I expect to see more and more adoption of online shopping of all kinds across new demographics. With this, companies and startups will need to develop tools to make online shopping even simpler. A friend of mine put together an analysis (that I don’t have permission to share) that highlights some of the mobile e-commerce trends that happened in China during COVID. In China, e-commerce grocery shopping benefitted the most and net new adds to Chinese mobile e-commerce spiked the most for people 30+ in tier 3 and tier 4 cities. With more shopping moving online, it makes sense that tools will continue to emerge to make this process even easier. My friend runs a startup called Encarte which is an incredibly easy to use Chrome extension that allows for instant checkout on 10,000+ retail sites. Tools like Encarte (think of it as a simpler version of the “Pay with PayPal button”) that bring an “Amazon-like” shopping experience to other sites will be of tremendous benefit to shoppers and independent online retailers. 

Amazon Continues to Dominate

Inevitably, Amazon will continue to grow during COVID. The fact that they are still able to provide 2-day delivery on so many of their products, provide Amazon Fresh delivery via Whole Foods, keep their warehouses running, have a streaming video service, own Twitch (the largest live streaming service outside of China), have kept AWS running at full speed, and are now creating video games is baffling. The Financial Times wrote an article titled, "Amazon auditions to be ‘the new Red Cross’ in COVID-19 crisis” that perfectly sums up the point. 

Fitness and Health:

The Decline of In-Person Gyms

I predict that gyms will see a notable decline post-COVID. For long-time gym goers like myself, I am finding it surprisingly efficient to workout at home. With the exception of a squat rack/straight bar, I can do everything I would have done in a gym from the comfort of home. Right now, I suspended my gym membership, but given 1-2 more months of working out from home, I might not feel the need to resume my membership post-COVID. The rise of at-home fitness hardware will also make this transition easier for a lot of people. Besides expensive hardware providers like Peloton and Tonal, there are also less expensive options like doorframe pull bars, exercise balls, and kettlebells. For fitness studios, I could see a decrease in gym memberships going either way. For example, because I am no longer paying for a gym membership, I might be more open to paying for a monthly yoga membership or paying money to pick up a new physical hobby (e.g., Archery lessons), but still TBD.

Health (and masks) as Fashion Symbols

In Asia, it’s been the norm to wear masks for a long time. I believe this has largely been due to poor air quality. When I was living in Asia, I always appreciated how fashionable people looked in masks. I am excited to see how major brands can speed up this transition to mask-wearing becoming a norm in the US. I expect brands like Adidas/Yeezy or Nike to manufacture stylish, branded masks. You could own them in multiple colors to match your outfit for the day. As my friend Steve Weiner points out, “we’ll probably see this go further and be a big growth period for another layer of wearable / connected tech (heart rate, O2 capacity, temperature, embedded microphone, etc). This could even tie in with a personal health certificate / electronic medical record application on your phone or apple watch that can be scanned for “proof-of-health”. 

Renaissance of Cooking

I’ve discovered a new love of cooking during this quarantine. Most groups I am a part of have added channels for “quarantine cooking” where people can share their latest creations. From what I can see on Twitter of people making sourdough bread, it seems like a lot of people are enjoying cooking, possibly for the first time in a while. This could be a win for DTC companies that make high-quality ingredients. Companies like Kettle and Fire and Anthony’s Goods come to mind. I think this will spur a lot more opportunities for YouTubers and cooking websites to monetize as people are turning to the web to figure out how to cook new recipes. My friend Steve again points out that this could also be a win for live streaming likes like “Twitch and IG Live. Group cooking is very social and much lower barrier to entry since people are cooking and streaming themselves much more”

Generation Germaphobe

During COVID, I have found myself becoming extremely conscious of everything that I touch. I think it will be tough to rid myself of his consciousness. I can see a whole generation of people turning into permanent germaphobes. This could long-term be good for hand sanitizer and long-term bad for public places like gyms (as I touched on above). Steve points out that this could also manifest in some unexpected domains like dating, “The AIDS epidemic caused people to start practicing safe sex much more frequently and asking a partner about their history. That wasn't done before.”

Startups:

Digital Spaces Replace More Physical Spaces

I saw a stat that OnlyFans new registrations have spiked during COVID. Can websites like OnlyFans continue to grow and become ’the digital strip club’ post-COVID? According to a company spokesperson, "the platform had received 1.85 million new registrations (both content creators and consumers) since Feb. 29. Between March 6 and 17, there was a 75% increase in people signing up.” I���ve read the same is true for Patreon, YouTube, and Twitch. According to Wikipedia, "As of February 2020, [OnlyFans] [already] has 20 million registered users and claims to have paid out $400 million to its 200,000 content creators.” Given that OnlyFans splits rev 80% content creator / 20% only fans, this stat implies OnlyFans has made 100M in revenue in its 4 year existence. The OnlyFans take rate is notably more than Patreon (5-8%) and lower than YouTube ads fee (45%). 

While I was writing this post, I came across an article in the NYT titled “Inside the Strip Clubs of Instagram”. 

New Social Experiences

As people crave more social interaction, potentially long-term if remote work truly picks up, people will seek to create new social experiences from actions that previously weren’t social. I believe in the past there were social sites specifically curated for food. I could see a company like Tasty successfully launching an Instagram-like feed purely for photo foods + recipes. It would be great for them to insert their own content alongside user-generated content. They could add options like “Keto” or “Vegan” so you could curate your feed to your own dietary preferences. Chinese companies like Pinduoduo (summary video of the company) have succeeded with making shopping social and at least one US-company, Supergreat (notably, backed by Benchmark Capital) seems to be attempting to do something similar for beauty products and shopping. Video Games like Fortnite and Roblox have done a lot to create one new type of social experience, but there are still many untapped frontiers. 

Less Funding Towards Companies focused on the Physical World

One trend I have noticed in venture funding is a lot of money going towards companies operating in the physical world. I use companies like Uber and OpenDoor as examples of companies that are clearly technology companies, but that have a large physical presence. I’ve said to friends that there is a fine line between OpenDoor and WeWork, where OpenDoor is a tech company that tries to do things in the physical world and WeWork is a physical company that tries to be a tech company. Possibly due to the success of companies like Uber, scooter companies, etc. VCs have been keen to fund companies that dance on this line, but seeing as these companies are getting crushed the most in this COVID downturn, we may see VCs back away from companies going after these kinds of problems. 

Extra credit: Ben Thompson’s ‘What is a Tech Company’ describes this better than I could hope to. 

New types of Online Learning

There has been a lot of talk about remote learning from a few different angles, but one that I find most interesting are companies focused on learning for practical skills (cooking, fitness, woodworking, pottery) that you pay for possibly on a monthly basis. Similar to wikihow, but where the video creators take home a large chunk of the revenue for the videos they create. An overly simplistic framework for a company doing this: 

Total monthly rev for the company is $1M

January has 10M total views across all videos

Ryan creates an archery tutorial that drives 1M views in a month (10% of total views)

Ryan makes 1M * 10% * 80% = $80,000 for the month of January

I recently came across Jumprope, a company that makes it easier for creators to create ‘how-to’ videos. 

Jen Yip makes the great point that there is a huge difference between watching a how-to video and thinking you understand doing something and then trying it and realizing how tough it is. A company that could bridge this gap by e.g,. Merging online instruction + real world practice (in the form of studios or take home kits) would be really interesting. 

Portable Benefits

Since 2017 when I started following some of the 2nd order impacts of the gig economy, I began to recognize the importance of portable benefits for 1099 workers. I wrote more about portable benefits in my post on the future of work (section 2.1). At the highest level, portable benefits allow 1099 workers, who may have multiple streams of income and no full-time employer to easily manage and contribute to their healthcare-related benefits. The idea here is that many people are working multiple contractor jobs that provide multiple income streams, but no fringe benefits and easy way to manage their benefits. Companies like Etsy have proposed ideas such as enabling tax withholding for 1099 employees, streamlining flexible spending accounts, or creating a “Federal Benefits Portal, which would tie all benefits (retirement, health insurance, paid leave, tax-advantaged savings accounts, disability, etc.) to the individual, providing a single marketplace to view, choose and pay for their benefits, regardless of where or how they earn income. Companies like Catch Benefits are working on this now and I expect to see them continue to grow or for additional players to pop up in this space. What I would be really impressed with would be seeing an association of companies with the largest gig workforces (Uber, Lyft, Instacart, Amazon, Etsy, etc. etc.) getting together to come up with an agreed-upon standard and then propose legislation for being able to also contribute directly to their workers’ portable benefits accounts. 

Remote Work: 

Tighter Spending Practices Accelerating Remote Work

Moving forward, a lot of companies will have much tighter rein on their spending. This could mean hiring CFO/VP Finance much earlier for many companies. Or it could mean a boom for outsourced tech/human in the loop firms. 

Companies are realizing (1) they have a lot of headcount they did not need (2) they pay a lot of money for talent and office space in SF/NYC/Boston/Seattle/LA. 

This, in combination with companies realizing how effective their workforce can be when remote could be the push that remote work needs to become the default for a lot of companies. There are many downstream impacts of remote work becoming the norm. 

Hire/Retain Talent: Competition for software engineers in the Bay Area is competitive and shows no signs of cooling off. This makes it harder to get candidates in the door and raises salaries. Even when you make a great hire, “San Francisco [has] the shortest average job tenure of any metro, and [is] well below the national average”. High turnover winds up costing companies a lot in the form of retraining, lost productivity, and decreases in morale that comes with turnover (especially for small companies).

Save Money: Besides high salaries, Silicon Valley also has some of the country’s highest office space prices, health care costs, corporate taxes, food prices, utility costs, and transportation costs.

Higher Quality of Life: Residents in the Bay Area also have higher taxes and general cost of living expenses (gas, food, etc.) than virtually anywhere else in America. If a company allows employees to work from less expensive geographies, it can become a competitive differentiator in the hiring process. This opens up the potential to hire experienced candidates who live in cheaper geographies because they want to raise a family, own a home, and save most of their income.

Reset of Commercial and Residential Real Estate Prices

In geographies like San Francisco, some other impacts that could have are a reset of commercial and residential real estate prices, making the Bay Area more affordable for the people and companies that do choose to stay in the area. Unfortunately, small businesses will likely be going out of business at alarming rates, this means even more commercial real estate opening up. As Steve points out, this could be a massive reallocation of CRE towards CloudKitchens, CloudXYZ, accelerating the trend toward a retail apocalypse.

Other Trends

Increase pace of Automation

Many manufacturing facilities that rely on large in-person staff are facing a lot of difficulties right now. While there may be skyrocketing demand for their products, they are stuck between keeping manufacturing running while also keeping their personnel healthy. I predict that post-COVID, many facilities will invest more in automation to prevent personnel issues in the future. In the first section of an older post I highlight data from Ark Invest that states, as the cost to manufacture robots has come, demand has steadily increased, and projections for future sales of industrial robots are steady across most, if not all, forecasts. This trend is already in motion, but I expect to see it sped up as companies want to preserve their resilience and decrease dependence on people in the future.

Tangent: In an older, unpublished post, I highlighted some of the other reasons why companies should invest in automation:

"In the warehouse environment, for example, one insurance professional said that in terms of cost and efficiency robots always beat humans (uh, duh). Some second-order effects invoked that I had not given consideration to are: 1) In a factory/warehouse environment where workers are subjected to dangerous work conditions are/or regularly lift heavy objects, the worker compensation costs are significant with humans, and are obviously 0 with machines. I am sure there are a number of other fringe benefits that robots eliminate. Also, if you've seen the Amazon machines moving through factories, their slim size can allow for smaller aisles and, in turn, better overall facility utilization.

People will Save more Money

Thanks to how my parents raised me, I am extremely cost-conscious and a big saver. Unfortunately, I notice many of my millennial peers like to spend basically all of the money they make. I predict that the shock that COVID sent through the system will turn saving into a more ubiquitous habit as people are now more conscious of downturns and layoffs. Saving money, investing money, and earmarking money for something other than short-term spending is a good habit that benefits people long-term. Apps like Acorns, Wealthfront, etc. that encourage savings and earmarking funds for e.g., trips will benefit from this change. My friend Charles Rubenfeld points out that interest rates could be zero for a very long time. This raises an interesting point of where people go to save money? This could lead to an inflow of dollars into passive and active investment strategies. It’s also a good argument for some of the crypto applications like Dharma that offer high (2-6%) interest rates in a “savings” account that takes advantage of crypto-lending on the backend. While the risk profile of an app like this isn’t == to a Wells Fargo savings account, it provides a consistent return on cash holdings.

2020 Presidential Election:

It’s easy to forget that this is a Presidential election year. I can’t see the democratic and republican national conventions taking place in person this August. A couple questions: which candidate benefits more? If Trump continues to dominate tv screens and Biden gets no coverage, it could benefit Trump. If Trump botches COVID, it could benefit Biden, etc.

As far as a quick search could tell me, US presidential elections have never before been delayed and there isn’t a process for trying to delay them.

If elections do take place, you know the results will be extremely contested.

[ryanrodenbaugh]

Making Tough Decisions

In high school, I was talking with a friend about Obama. My friend was critical of a decision Obama made (doesn’t matter which decision) and while I wasn’t well versed on the specific issue, I knew it was complex. I defended Obama on the basis that he probably had vastly more information than we did and I was fairly certain he didn’t come to the decision lightly. 

This week, I saw Trump address reports about 'reopening the economy’ in the face of COVID-19 and he called it the “Biggest Decision of his life” (2:33 in this video). I was really taken back by the clip and it felt like the most genuine clip of Trump I’d ever seen. Trump is many things, including an actor, of which he often seems to be using those talents. However, this clip felt like something different and reminded me of the appreciation I have for people who have to make tough decisions in the face of uncertainty. 

A New York Times article on the topic goes further and quotes Trump saying, 

“I’m going to have to make a decision, and I only hope to God that it’s the right decision,[…] but I would say without question it’s the biggest decision I’ve ever had to make.” 

In my own life, I’ve had to make decisions that feel tough, but many of them have been very “local” challenges where I am the one who will be most impacted by the outcome. 

I’ve made decisions that have impacted other people, but none so direct as taking away their livelihood or making a value judgment on their health and safety relative to other people. I have never even come close to making a decision that would directly lead to the loss of human life.

Whether Trump decides to promote the reopening of the economy or to promote extended quarantine will lead to death and misery either way. 

By reopening the economy without mass testing and a cure for COVID-19, it’s nearly certain that the virus will spread farther and wider, leading to increased casualty. 

By extending quarantine, more Americans will continue to lose their jobs which can have numerous unseen effects including increased rates of alcoholism and addiction, increased domestic abuse and violence, increased homelessness, and other negative externalities.

It’s a somber and incredibly difficult decision. Whichever path Trump chooses to promote, Americans will suffer, Americans will die, and critics will critique. 

I don’t care if you love Trump or hate Trump, we should all be aligned in hoping Trump listens to his advisors and makes the ‘best’ decision possible, given all the facts at his disposal. 

[ryanrodenbaugh]

Grocery Stores

Going to the grocery store this morning (2020/03/29 8:30am PST) was a weird experience. I live near a Safeway and Whole Foods. I usually go to Safeway, which opens at 6:00 but the line was wrapped around the store by the time I arrived. I went over to Whole Foods which opens at 9:00 and I was the 4th person in line. By the time 9:00 came, the line was ~30 people long

Most people in the store were not wearing gloves or masks. Many people were acting as if it were a normal morning. This got me thinking about grocery stores.  

Some ideas for grocery stores during COVID19:

Grocery stores should not allow people who are not wearing gloves or masks to enter. They should consider selling single-use gloves and masks at the entrance. In urban areas, grocery stores are one of the last remaining businesses staying open (along with banks and pharmacies). It’s particularly hard to social distance from others in grocery stores given small aisles. Grocery stores seem to be particularly good for sharing disease given crowding, all of the items will be returning to your home and potentially touched many more times, some items like produce and meat will be ingested directly.

Similar to how stores now have senior hours, some should consider offering dedicated hours for Instacart shoppers. Instacart workers are efficient in that they can shop for multiple people at once. Allowing them to quickly go through the store shopping on behalf of multiple customers seem preferential to all of those people having to instead go to the store. Instacart could also easily pass the burden of sanitizer, masks, and gloves for Instacart shoppers onto purchasers via an extra $5-10 fee in the delivery checkout. I don’t think users would mind. There are, of course, logistical issues about how Instacart could get sanitizer, masks, and gloves to stores.

Why aren’t there more grocery store ‘CloudKitchens’ (err..‘CloudGrocers’)? The closest example of this idea is GoodEggs. GoodEggs no physical storefronts and has an inventory of high-quality, organic, etc. products that you can have delivered to your home the same day. They seem to be the only player in this market. What I imagine is possible is that existing chains like Safeway (or a startup) could buy up cheap warehouse space, stock inventory Costco-style, and then allow people to place orders online. Over time, they could augment with robotics to make the packaging of items seamless and inexpensive. It seems like what GoodEggs doesn’t have is their own inventory though. I could imagine a startup that creates its own private label products (e.g,. Safeway’s “Signature Select” or Whole Foods "365 Everyday Value”) and supplements with other manufacturer brands so that they own the whole value chain. They could either start doing delivery via Instacart or have delivery be a key part of their own company from the start. I have to imagine that in many cases, consumers don’t actually care whether they are buying private label or Clorox. Consumers want the highest quality at the lowest cost. A ‘CloudGrocer’ could be uniquely positioned to deliver this. 

[ryanrodenbaugh]

‘The Future of Work’

In a prior role, I was asked to write out what I thought were interesting areas of investment for a venture capital firm. For me, almost all of these ideas came down to the (broadly defined) ‘future of work’. A lot of change will come as a result of the nature of work shifting. I wrote out my beliefs at length here. The majority of that post was written in December 2017, with the last section (noted in the doc) being written in December 2018. 

Some of my additional areas of interest/investment can be found in this doc. These ideas are less crystallized and as a result, the format is more brain dump.

[ryanrodenbaugh]

Reflections on the Past 2 Decades & Predictions on the Decade Ahead

For many people, talk of the 1920s or 1970s brings immediate images to mind. Here’s my best attempt for those images of the 00s and 10s along with predictions for the 20s.   

The 2000s: Decade of Lies / The Last Decade of Trusted Institutions

Something that began in the 00s and has mostly come to fruition in the 10s is a distrust in authority and ’trusted institutions'. The US government lied about WMDs and it was corroborated by the New York Times. The banks lied to us about how safe their lending practices were and the government bailed them out at the expense of the American public. People rightfully began to lose trust in the institutions that they were told to trust.

The 2010s: Decade of the Internet

Even though GAFA (+Twitter) were all founded pre-2010, their impact and rise were really felt in the 2010s. Beginning with the Arab Springs, some alleged Russian election interference in the middle, and wrapping up the decade with the ongoing Hong Kong protests, many of the 2010s largest events could not have happened without the large internet platforms and smartphones. With the prominence of cheap smartphones, the developing world was also able to come online and people without a voice could be heard for the first time. 

With less trust in institutions, new sources of truth were able to emerge and because of large internet platforms (Facebook, Twitter) and new funding mechanisms (Patreon, Bitcoin) new voices were able to get their messages far and wide (e.g., at the time of banning, Alex Jones had 900,000 Twitter followers and his media company, Infowars had 430,000). Outsider politicians like Trump were also able to win elections because they were seen as being free of the very institutions (New York Times, DC, etc.) people grew to distrust over the prior decade.  The 2020s (Predictions): Decade of Rebellion

I predict the 2020s will be a decade of revolution. We are seeing the beginnings now in developed and developing economies around the world from Trump/Sanders & Warren, which are two sides of the same coin arguing for different kinds of revolutions, the yellow vests in France, Brexit, HK Protests and SO many more. The internet has allowed protestors to organize at scale in a way that was previously not possible (see: Telegram/Hong Kong, Arab Springs/Twitter). 

This short video from the BBC explaining the role the internet has had and how protestors around the world learn from each other is very good.   

The 2020s will also be categorized by governments trying to roll back the progress of the democratization of voice made during the 2010s. Countries like China have already sanctioned off “The Chinese Internet” with deep surveillance and censorship apparatuses. Other global superpower like Russia are now discussing doing the same. Hopefully “dissident tech” (a term I learned on Crypto twitter) like VPNs, cryptocurrencies, and anti-facial recognition clothing will be able to counteract the heavy hand of governments.

[ryanrodenbaugh]

Reflections on 2019

2019 was a good year and I am looking forward to a lot of change in 2020. Some lessons/reflections and random notes 

If I lived outside the US, I would live in Asia. I spent a good portion of 2019 (and late 2018) living in Asia full-time for work in Hong Kong, China, and Korea. For all of the handwaving about China, it’s a very enjoyable place to live. Things are relatively inexpensive, it’s easy to travel around the country, and it has a real fun wild-west vibe to it

While I was living abroad, I also spent a lot of time being a solo tourist and I have a newfound appreciation for being a lone traveler. I got to do all the weird things I wanted to do that no one else would be interested in.

Deep friendships > shallow friendships. When I moved back to SF this year, I realized one of the reasons why I think I had not liked the city at first was because I had a lot of shallow and fleeting friendships. I am making an effort to spend more time with a few people, while still being open to meeting many people. Some tradeoffs there.

“Poor distribution is the number one cause of failure.” is a lesson from Peter Thiel’s Zero to One, which I read but had not internalized. I will never make the mistake of overlooking this again

If you are lucky, the best kind of business to be in is one where you really love your customers and the people you are selling to/building products. There were many times this year when I felt that and it was a great feeling.

Writing, both in public (blog, etc.) and in private (internal company docs), is one of the most powerful ways to convey your thinking, 10x your ability, and get in front of a broad audience who might not otherwise see your thoughts

Dedicating time to think is a good use of time. Work-wise, I am guilty of often being very in the weeds and not spending time to sit back and think about things at the “3,000-mile high level”. As a practice, I have found that when I spend dedicated time doing this that I am able to generalize and share my thoughts at a much higher level.

A lesson I am always relearning in different ways… keeping great care of your health is super important. Dieting well, working out, having healthy relationships, etc.

It’s useful to connect people you know to each other and see how they can benefit each other. Being recognized as a person who can make good connections is a nice place to be in

Being decisive is important and it’s good to recognize when you’re avoiding making tough decisions  

Random…

Favorite Movie: Parasite 

Favorite Book I read this Year: Cable Cowboy: John Malone and the Rise of the Modern Cable Business

Favorite Book I read this year (that was written in 2019): Dignity by Chris Arnade 

Favorite New Podcast: The Portal by Eric Weinstein 

Favorite TV Show: It’s not necessarily a TV show, but with the lines now blurred, my favorite new ‘show’ was Netflix’s Love, Death & Robots, an “adult animated science fiction anthology web television”

Favorite place I visited: Shanghai x3 (doesn’t have the same tourist value as e.g., Beijing, but super comfortable, fun, and beautiful city to live)

Favorite music video: Bop by DaBaby

Favorite musical artists that I discovered this year: Four Tet / Tourist / Peggy Gou

[ryanrodenbaugh]

How I Use Twitter

When used with intent, Twitter can be one of the best learning and growth tools on the internet. I had a semi-pseudonymous Twitter in middle school (~2008) that I mostly used to follow friends, shit post, and make jokes. I deleted that one when I went to college and started over with my current account @RyanRodenbaugh. When I started following people, I followed aspirational peers rather than only people I knew IRL.

If I were remaking my Twitter today, I would begin by following active Tweeters in field(s) interesting to me. In my case, this would be:

People in the field I work in tech/crypto (e.g., @Balajis, @Naval, @Jack, @PaulG, @ElonMusk)

People in health fields I am interested in (e.g., @foundmyfitness, @PeterAttiaMD, @DominicDAgosti2)

People in finance (e.g,. @Raydalio, @lloydblankfein, @mjmauboussin)

Authors/Bloggers/Podcasters I like (e.g,. @vgr, @waitbutwhy, @tferriss, @SamHarrisOrg, @EricRWeinstein)

Odds are that from here, these people will retweet or interact with other people who have interesting views, who you’ve heard of and want to follow, or Twitter will make good suggestions (as they often do) based on who you follow.

Starting by following 20-100 people you already know to be interesting and growing from there is probably the best way to have a well-filtered feed.

Some tips:

I would avoid following Newspaper accounts (@NYTimes, @WSJ) and instead whenever I come across an article I really like follow the journalist who wrote it.

I would avoid following people who are perpetually angry about nothing. You will mostly run into these types in politic or journalist Twitter.

If you follow someone and find that their Tweets don’t line up with why you find them interesting, unfollow them. @sacca is a luminary in the tech industry and I followed him for that reason, however, he basically only tweets about politics, so I unfollowed him.

In general, you should be fast and loose with unfollowing people. There are no consequences to doing this as you can always re-follow them

Muting

You should also liberally use the mute words feature. People you like will have opinions on topics you are really uninterested in. For example, there are a lot of people in tech who, for every 3 interesting tweets about company building have a very uninteresting opinion about politics. You can filter these uninteresting Tweets on mobile by going to Settings —> Content Preferences —> Muted —> Muted Words. Here, you can mute words so that they won’t appear in your timeline. For example, I’ve muted words like “AOC”, “Facebook”, “Mueller”, “AR-15”. So now, if people I like want to talk about the Mueller hearings or get angry about AOC’s new proposal, that’s fine, but I don’t have to read their tweet about it. This is your information diet and you should be able to edit it however you like. You should be unapologetic about the content you don’t want to interact with.

The Favorites (Likes) Button

One of my favorite things about Twitter is how favoriting works. When you’re scrolling your timeline, you can interact with Tweets by replying, retweeting, or favoriting. I use the favorite button not as a way to show approval, but as a “save for later”. As far as I know, Twitter is the only social network that makes it easy to view your favorites. I can easily go to my homepage and see all of my “likes”. Every few days or so I will go scroll through my likes and either:

Unlike it (meaning I don’t need to interact with it anymore),

Read the article or blog associated with the Tweet (and then unlike, once done)

Pocket if it’s long and I am confident I will want to read it later

Capture it in Evernote (covered in a later section)

Or leave it, in case it’s an idea I think I will want to come across again when I am going through my likes but I am not sure what to do with it yet.

An example of each from my actual likes right now:

Unlike: Here was a Tweet commenting on and linking to Grubhub’s most recent letter to the Shareholders. As interesting as I might find this, I am not going to actually get around to reading this

Read: This article about Japan trying to attract foreign entrepreneurs. It was a short article and was something I could skim. It also fits with interests I have about cities becoming more competitive with each other

Pocket: Patrick Collison tweeted an article about “The Rising Thread of Digital Nationalism” that I know I wanted to read, but didn’t want to read right now so I saved it to my Pocket where I can save articles for offline reading.

Catalog: @Patio11 Tweeted a blog post called "The ‘Marker’ Guide to Content Marketing for Non-Hucksters”. This isn’t relevant to me right now, but could be relevant to me in the future if I am working on marketing projects so I save it to an Evernote file.

Leave: I came across this interesting photo of how a restaurant in Bangkok deals with square foot constraints. I have no idea what I will do with this knowledge, but it’s interesting enough that I kind of wanted to have it engrained in my mind

Capturing

For a while, the regret I had with using Twitter was that I would be reading a lot of great content and advice, but it would be fleeting. For every 100 tweets I read, maybe I would remember 1. 

So, over the past year, when I find individual tweets that contain interesting ideas on specific topics that I want to come back to, I move them over to Evernote and tag them so that I can easily find and return to them. In my case, most of these tweets and tags are related to company building functions (marketing, hiring, etc.)

My most used Evernote file is one called “Startup Tweets” and it has sections like “Choosing a Founding Team”, “Culture”, “Sales/Marketing” and under each there are tweets I’ve seen with interesting tidbits of advice or ideas.

Some that I have cataloged that I come back to often:

On radical transparency (link)

Thinking about startup culture as a set of sliders (link)

BigCos and distribution (link)

How I Use Other Social Networks

I use other social media platforms pretty scarcely.

Facebook and LinkedIn are both utilities to me. LinkedIn acts as my online resume and a way to be notified when friends move roles. Facebook is for being reminded of people’s birthdays and the groups features. On Facebook my newsfeed is completely blank because I went in and unfollowed every group and person I am friends with on Facebook. This was so that I never get distracted by the Facebook newsfeed when I go to check birthdays. I learned afterward that there are also Chrome extensions that do this. I still like my method best because even though it took ~2 hours upfront, it’s basically impossible to walk the decision back, whereas it is easy to disable a chrome extension.

Instagram I recently made while I was living in Asia because I was taking a lot of cool pictures that I wanted to easily share with friends and family. I do not follow anyone on Instagram for the same reason as blank newsfeed on Facebook…. I don’t need more distractions.

Oddly, my 2nd most used social network is probably WeChat. They have a feature called “Moments” which is like a Twitter feed among your contacts. From my time living and working in Asia, I have a lot of friends where Moments is their primary posting channel.

[ryanrodenbaugh]

Tolerance

There is a paragraph in Timur Kuran’s “Private Truth, Public Lies” which reads:

Secret balloting would serve no purpose if everyone were willing to put up with every offensive idea. Under such conditions of exemplarary tolerance, no one would ever seek punitive actions against others for their political views. By this account, to show tolerance is to object to an idea without objecting to its expression. It is to be prepared, more over, to live with the consequent inner tensions. Perfectly tolerant individuals would not even frown at a speaker promoting the most repulsive ideas. They might, of course, express reservations and offer alternatives. Tolerance is not apathy, indifference, or diffidence. What it requires is acceptance of the principle that no political lend, however noble, justified the suppression of an idea.

The line, "to show tolerance is to object to an idea without objecting to its expression” reminds me of one of my all-time favorite quotes, from John Staurt Mill:

“The peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.” 

We’d all do well to show some more tolerance in our daily interactions, especially with people we disagree with. Imagine our political climate if instead of agreeing/disagreeing with ideas because of the party that proposes it, politicians were able to debate (civilly) and arrive at balanced decisions. This lack of tolerance has stalled America on key issues like immigration reform, infrastructure spending, technology investment, healthcare reform, and countless other initiatives. 

Subconsciously, one of the things I look for most in people I associate with is a high degree of tolerance. I like people who are able to listen and propose crazy ideas while understanding that these are ideas for the sake of ideas. I crave people who “would not even frown at a speaker promoting the most repulsive ideas. They might, of course, express reservations and offer alternatives.“ This balance and back and forth is what drives discussions forward. If we can’t tolerate things that feel taboo, we wind up not addressing them, which can do more harm than ‘daring’ to speak of them ever would. 

[ryanrodenbaugh]

Calendar Auditing

I listened to Keith Rabois’s “How to Operate” (Video, Transcript) a while back and learned about the simple concept of a “Calendar Audit”.   

Keith Rabois: 

Actually, what I would recommend is doing what I call a calendar audit. And track what you spend your time on in a month. How much is editing, how much is writing, etc. And optimize it over time.

I ask them to write them out on paper and specify whatever they are. Then I ask them to pull out their calendar and see if it matches. And it never matches. Never. Recruiting is the one that is usually the most often awry. Half the CEOs will say recruiting is their number one priority. It's almost never the biggest block of time on anyone's calendar. So that is what you are trying to do is match resources to priorities in the calendar audit. And there is no software that does this really well for you. It would be great, right now we pull up someone's Google calendar and hand count up the hours. Which is insane. But that is the best way, just ask about their priorities. Priorities are raising money, you don't want to allocate most of your time recruiting. 

I thought it was a cool idea and originally started doing it manually myself, transcribing all of my calendar items into a Google Sheet, but then realized that you could do it using Zapier. Every time you add a new item to your Google Calendar, Zapier will add that as a new line in a Google Sheet. Easy as that. (TEMPLATE) 

In the Zapier free plan, you can get up to 100 items added per month, otherwise, you will need to pay $20/month to get 1,000 zaps/month. If you’re doing more than 1,000 meetings/month, you should maybe re-evaluate. 

When I started this, I was remote in Asia for over half a year doing BD for the startup I work at. I usually only spoke with my boss 1x/week so this Google Sheet along with really detailed weekly updates from me to him was the best way to stay in sync. I also shared my calendar download with the company more broadly so that if anyone wants to see if I’ve already spoken with a potential partner, they can do a quick Cntrl+F. I think this is probably the kind of thing that if you boss asked you to provide it to them might feel micro-manage-y, but if you provide it to them, can really increase the level of trust they put in you. 

When you ‘zap’ the info from GCal to Sheets, you can port over any of the GCal properties, so I will ‘zap’ meeting name into Column A and then go in and fill in Company, Category, Ranking, and Location. Things like location might not matter to everyone, but for me, as I am trying to make the decision whether I should stay in Asia or return to SF, it’s been nice to track the number of in-person meetings I am doing vs. phone calls. 

  You can slice and dice the sheet however you want. I’ve been ranking my meets, but have not really found it useful so I will probably stop doing that. You can also add more different levels of categories for example: ‘Recruiting’, ‘Business Development’, ’Fundraising’ and then a separate column something like: ‘Recruiting - Engineers’, ‘Recruiting - Executives’, etc. depending on how granular you would like to get.

[ryanrodenbaugh]

Brief Thoughts on Jordan Peterson

I recently read Jordan Peterson’s best-seller “12 Rules for Life”, which was on the Amazon Most Sold and Most Read lists for 52+ weeks each. I have enjoyed thinking about Jordan Peterson’s opinions since I first came across him when I was still in college thanks to a well-shared video of him debating with students outside of the University of Toronto (Link). 

I heard him say in a podcast a while back (I forget which) that 12 Rules for Life (his 2nd book) could be thought of as a summary, a more accessible version of ”Maps of Meaning” (his 1st book). I found this funny because 12 Rules for Life is not the most accessible book. And ultimately, I think this is JPs greatest strength and greatest weakness. 

  Jordan Peterson could never be mainstream because he isn’t easy to understand (his detractors would say, illegible). As a result, if you aren’t predisposed to liking him or to being open-minded to his views (said another way, if you’re predisposed to dislike him because of what you’ve read in the media), you will likely think he’s a lunatic. It’s a lot easier to watch 5-minute clips of him where he’s taken out of context, rather than working to decipher his 3-hour video lectures on themes from the Bible.

  In some ways, you could describe Jordan Peterson as sort of a more real, more intellectual, and (thanks to Youtube) more accessible version of Tony Robbins.

I was speaking to a friend who is not a Jordan Peterson fan about JP and as I was trying to explain his views, I found how challenging he was to summarize. But I think the reason that people find Dr. Peterson so refreshing is that his views are not easy to summarize. He is nuanced and filled with stories and analogies, not to confuse the reader, but to really try and find the core of his own beliefs. 

  As a testimony to the positive impact that he has had on people (specifically, young men) scroll down to the "third letter writer” (Control+F “third”) section -https://jordanbpeterson.com/political-correctness/letters/

[ryanrodenbaugh]

Yang 2020

Planting this flag. June 2, 2019 -- I think Andrew Yang is the most likely candidate who can beat Trump. I don’t think he’s most likely to win the Dem Primary, but I think he’s most likely to beat Trump. 

From what I can see today, if Yang runs against Trump in 2020, I would gladly vote for him. If any other candidate runs against Trump, I am not sure who I would vote for. 

My reasoning:

Does not seem to play into identity politics. I think this awful tendency has infected many Dems and I know to many voters, this is automatically disqualifying. e.g,. Kristen Gillibrand

I don’t think America is ready to elect a female Democratic President. There was all the talk about ‘white women voting for Trump in 2016’ and frankly, I don’t have great data to back this, but it’s my gut feeling. However, I think America is ready to elect a female Republic President. I could see Nikki Haley taking the (R) nom in 2024.

Yang is willing to engage on both sides of the aisle. He is the first Dem I’ve ever seen go on Ben Shapiro. I’ve also seen him speak on Fox News. You have to take YT comments with a grain of salt but look at the comments on his Ben Shapiro and Laura Ingraham videos.

He’s an entrepreneur. I am tired of the professional political class and am encouraged by people with non-traditional backgrounds (i.e., those who have actually achieved things in life) entering politics. I said the same thing about Trump in 2015 

As one of the most upvoted comments on the Ben Shapiro video said: "Andrew Yang seems more like a person than a presidential candidate.” I’d agree. His Twitter feed seems genuinely real with what seems like actual dad jokes (not something being written by a staff). Other candidates need to manufacture humanity, whereas I think Yang is actually a human (which is maybe ironic since he spends the most time talking about robots). Examples of non-humans: Kamala Harris, Elizabeth Warren, anything Beto does

He has the memes ON HIS SIDE. It seems like every other democratic candidate has the memes working against them (e.g., Beto is a Furry, Elizabeth Warren / Pocahontas, Creepy Joe) — whereas Yang has: “The opposite of Donald Trump is an Asian man who likes math” (source), #YangGang, the Freedom Dividend is itself very meme-able 

On the same note as above, I think Andrew Yang is a very Internet-First candidate. He was the first announced candidate to go on Joe Rogan (fwiw, Tulsi Gabbard went on JRE once before announcing for President) and I am sure that by the time the campaign is done he will have gone on more podcasts than any other candidate. Could you ever see Beto or Kamala Harris on e.g., Sam Harris, Joe Rogan, David Rubin, etc. etc. Podcasts that have diverse political listeners (you may disagree with this). Even though 2016 election proved that you have to move to new communication channels to win, I think most 2020 Dems will still focus on legacy media like ‘Good Morning America’ and not give proper attention to niche podcasts. 

Besides being articulate and human, Yang also has many in-depth policy proposals (site) and has frankly introduced the most unique and bold proposal I’ve ever seen a candidate introduce, the Freedom Dividend. I think once he hits the debate stage and starts getting more press that he’s a shoo-in.

Yang is willing to bring in groups other candidates might not touch e.g., crypto people (seriously, which other candidates could you see speaking at the Consensus Conference??)

Yang is the first candidate to truly talk about issues that will afflict us in the future. A 2nd Geoffrey Miller feature (source). Andrew Yang is thinking past 2050. 

[ryanrodenbaugh]

Get Up and Move

1 year ago I graduated from Arizona State University with a degree in Finance and no job. It was not until the weekend before graduation that the woman I had been working for the past few months texted me and told me she could guarantee to pay me 3 months of salary and she would support me and help me move out to San Francisco (thank you Michelle!). So within the span of 2 weeks, I sold all my belongings in Arizona, found a 1-month sublet on Craigslist for a cheap apartment in SF, and headed out to the Bay with a few boxes of belongings. My first few months there were extremely tough and in my first 4 months I SF I lived in 3 different apartments as I tried to keep paying under market rent prices so that I could save some of the money I was making.

Now, 1 year later:

I work at an incredible startup as one of the first 10 employees and wake up every day excited to go work with incredibly smart people and work on tough problems, I am going to be living with a group of amazing friends, I am saving enough money to be proud of, and I am finally adjusting to a new city

The message that I want to share here and that I have shared with several friends recently is that if you are not satisfied with your current status in life (whether because you are lonely, not being challenged, or whatever it may be), GET UP AND MOVE. I have two friends right now who are, on a bit of a whim, moving to new cities with no jobs. I am sure they are both a bit nervous, but for their own reasons they have both become bored with their current geographies and they are looking for new challenges. If you have the ability to (e.g., no crushing debt, no spouse, and no kids) and you are unhappy, just move.

When I moved to San Francisco 1 year ago, I was terrified. As I was writing this note, I scrolled through Evernote and found something I had written to myself before my first day of work in SF. It is a bit embarrassing but I am attaching it here anyway. I hope it convinces someone else contemplating taking a big risk right now, to just do it!

“11:25 PM on 06/02/2017

I'm nervous. For the first time in a long time, I am scared. It's all set in. I haven't felt this kind of fear in a little under 4 years. The last time I felt this scared I had just had my final dinner with my family before they were leaving me at college 3,000 miles from home. That was different though. It was always possible that I would not like Arizona State and that I could just transfer. It was never possible that I would fail.

Now, it's possible that I may fail. I moved to a new, expensive, competitive city with a guaranteed job for only 3 months. Tomorrow is the first day.

But fortune favors the bold. I am excited, scared, all the above. Regardless, I am going to wake up at 5:30 AM tomorrow, kick ass at the gym, take the train down to Palo Alto, and figure out the rest of my life.

-Ryan"

[ryanrodenbaugh]

Strength in Small Networks

Recently, I have been on a mission to shrink my network. When I first made a Facebook (8 years ago in 2010) I went out of my way to friend request any and every distant connection that I came across. I would friend request friends of friends from different towns, people I barely knew, and all sorts of people. Then, it got to a point one day in 2015 where I was looking at my newsfeed and I realized that 70%+ of all the posts I was looking at came from people that I did not care about. It was a bunch of useless B.S. from distant acquaintances. Reading insufferable Facebook posts from friends is bad enough, but reading awful posts from people you barely know is almost a bad as watching Keeping up with the Kardashians. Since making that realization, I got into the great habit of deleting Facebook friends on their birthdays (i.e., if I don’t feel the urge to at the very least wish the person a “Happy Birthday”, I delete them). It’s worked great and I have now shrunk my friend list from over 2,000 to close to 800. This got me thinking about the strength that comes from having small, trusted networks. This runs contrary to many of the best (most highly valued) companies in the world (e.g., Facebook, Instagram, Uber, AirBNB) that derive their value from network effects

“[...] in which the value of a service to a user increases as others use it. [...] Defensibility may, however, arise through the growth of service that gets more valuable, and more interesting, with each new participant. One nice example of this is Twitter, which is so potentially valuable because put simply, that's where the Tweets, as well as the personal follower/following relationships, reside. The value of these businesses tends to be composed of the very networks they have created.” Source

My theory is that network effects will continue to be defensible business models moving forward, especially when based on large proprietary datasets, but will begin to lose popularity in environments that are based on person-person engagement.

One of the first cases where I noticed this trend was via the company Casa, “The world's first open-source home sharing protocol.” You can watch a video detailing their current platform here, but essentially they are building a “trusted network inventory” of homes. You can think of them as Airbnb for friends and family. Rather than going on Airbnb, picking a city, “paying Airbnb to ensure trust”, and then staying at a stranger’s home, I would go on Casa, find a 1st, 2nd, or 3rd, degree connection and then stay at their home, ultimately paying less because I am staying within my network and I do not have to pay for trust (more on the idea of “paying for trust” here) since I am already connected to this person in some degree.

Another area in which I have seen this effect of limited networks play out has been in dating apps. When you think about the evolution of dating apps it went from eharmony and Match.com on desktop → Tinder (2012) → Hinge (2011/2012) →  Bumble (2014) → The League (2014). At each step of this evolution, the pool and criteria to pick people from has gotten more and more exclusive and detailed.

Eharmony uses it’s “matchmaking algorithm” to match you to people it thinks you would fit well with

Tinder then used the double opt-in method in which they did not play matchmaker, but only allowed people to talk after the man and woman both “swiped right” (liked) each other.

Hinge took this a level deeper and had people answer questions on their profile such as “what is your dream vacation?”, “what is something about you no one else knows?”, “what do you look for in a partner?” so that people would go a level deeper than the often “vain” approach Tinder used based on just looks.

Bumble made the process even more exclusive as only women were allowed to send the first message.

The League has now taken it to the farthest extreme by adding prospective members to a waitlist to join (whether real or false scarcity, I am unsure).

In social media, Snapchat has gone out of their way to maintain exclusivity in their platform. Snap’s original product was a non-public messaging platform for a smaller circle of trusted friends. And it is extremely popular especially amongst young Americans (source) that opted not to become members on Facebook (anecdotally, my two little sisters have Snap, Twitter, Instagram, but no Facebook).  I think the rise in popularity of FB groups is also evidence of this trend. People want smaller communities, not larger ones. **I would also like to compare the frequency of posting between Snapchat and Instagram stories. (I.e., I know Instagram stories are growing, BUT I would maybe argue that Snap users post more often because Instagram stories are still inherently way more open than Snap stories). **

One of the reasons that Snap flourished was because, as Evan Spiegel has talked about, the product is focused on authentic user content and tried (for as long as it could before going public and having to answer to Wall Street) to keep advertisers and “Influencers” off/limited on the platform.

When you first make these social media sites you are excited and want to grow them fast, but now myself and others go and unfriend people. I am going out of my way to shrink my network and create a personal environment. I feel that a lot of people (unless they are trying to become “social media influencers”) follow the same trend. Patrick Collison (CEO, Stripe) noticed a similar trend (image below).

Another example of this idea of limited networks comes from 21.co (now, earn.com). 21.co enables users to email list of subject matter experts 21.co/lists - rather than blasting giant mailing campaigns, paying an agency to survey dozens of households,  you can instead survey hundreds of SMEs on topics and receive answers directly from them.

The question that arises as an investor, is what are the underlying causes of this shift? Do people want more privacy? Do people want small niche groups for all their interests? Are people becoming more introverted and in turn, don’t want to interact with the masses?

Additionally, what are the consequences of this change? The one that immediately comes to mind is larger filter bubbles and less experience with diverse views.  

[ryanrodenbaugh]

Roadblocks for Autonomous Vehicles

When thinking about the rise of autonomous vehicles (”AV”) in the United States, there are several speed bumps that need to be addressed. I believe most concerns fall into three main buckets:

Consumer adoption — outside of tech hubs and urban areas, what are everyday people saying about autonomous cars? How are other factors like trends in car ownership impacting autonomous vehicles potential?

Government regulation — Government regulation and standard-setting for autonomous vehicles are inevitable (and needed), but as it currently stands there is a “Us vs. Them” mentality amongst tech entrepreneurs that is not conducive to the environment they want to create.

Technology overlap — It is tempting to picture a world where every car operates with both level 5 autonomy (see image below) and perfect vehicle-to-X communication, but what about in the period between now and then? How does a Tesla talk to a drunk driver? At a four-way intersection, how does a human driver signal to a fully autonomous vehicle that it is their (its) turn to go?

Source

Consumer Adoption

In a room of Silicon Valley technology entrepreneurs, the overriding sentiment was 10/10 that we are going to see autonomous vehicles on the road, in significant quantities, in our lifetime, but there were a lot of clarifying questions around what exactly that looks like. Within the consumer space, how we make this move depends on a handful of factors with one of the most prevalent being what automobile ownership looks like moving forward. It has been hypothesized that many people living in cities are already passing on car ownership due to factors such as increasing traffic times and high parking costs. These non-car owners utilize public transportation, walking, and Transport Network Companies (”TNC”— Companies like Lyft and Uber). For many people, the decision not to own a car makes a lot of sense, as Dan Neil of the Wall Street Journal points out below:

The absurdity of our century-old, ad hoc approach to mobility is captured in one statistic: The utilization rate of automobiles in the U.S. is about 5%. For the remaining 95% of the time (23 hours), our cars just sit there, a slow, awful cash burn, like condos at the beach. 

With cars sitting idly for nearly the entire day (traffic spikes occurring during morning and late afternoon commute times on weekdays), it makes sense that Americans would choose to pass on ownership and all the costs associated with it (insurance, maintenance, gas) in exchange for less expensive (public transport), less committal (TNCs), and free (walking) forms of transportation.

However, contrary to observations of many in urban environments, IHS Markit reports that as of January 1, 2016:

More people own vehicles than in previous years — “registrations for light vehicles in operation in the U.S. hit a record 264 million, an increase of more than 6.2 million, or 2.4 percent [over the previous year].”

Age of vehicles are increasing — “The average age of light vehicles is now 11.6 years, based on a snapshot of vehicles in operation on Jan. 1, 2016”

Consumers are keeping their vehicles for longer — “As of the end of 2015, the average length of ownership was 79.3 months — a record — up 1.5 months from the previous year”

It largely appears ride-sharing services are growing complementary to car ownership rather than as an outright replacement. Outside of urban areas where the supermarket is in walking distance, delivery services like Instacart are common practice (see the map of Instacart markets below), or there are established and dependable public transportation systems, car ownership is still a necessity.

Source: Instacart Service Areas. I use an Instacart as an example here for a greater trend. Most of the tech-enabled services that are common to the readers of this article are concentrated in urban hubs. There is a good chunk of the country that has never heard of Instacart (and similar services for laundry, house cleaning, dog walking, etc.) 

In regards to car ownership, I concede that it difficult to break down. In my research, a lot of the studies I come across that specifically analyze trends in urban areas are from 2013 or earlier (and in my opinion don’t capture the impact of TNCs that really took off in 2014-2015). If any readers have research they could share regarding urban v. suburban v. rural car ownership trends, that would be appreciated. Overall, my opinion is that in urban areas and areas just outside of urban areas, it is logical to see a decrease in car ownership, while in suburban and rural areas, a lot more needs to happen besides just TNCs to have an impact on car ownership.

There is a hypothetical situation where I can see the ownership trend being reversed, but it involves at least two difficult factors (miracles) to line up. For me, the thought of a $5 Lyft to Safeway and a $5 Lyft home from Safeway seems like an avoidable double-digit added tax on top of my grocery bill. However, if that ride was only $1 — $3 each way, I would be more open-minded. That’s where autonomous vehicles come in. As Industrial Innovation Analyst, Tasha Keeney of Ark Investment Management states:

Source: Driverless cars could cost 35 cents per mile for the Uber consumer

The first assumption here is that we get to a point where regulators allow TNCs to have fleets of AVs on the road or that enough people own autonomous vehicles and loan them out to provide rides when they are not in use (it would have to be a critical mass to drive down ride prices). The second assumption that I believe is critical to the first assumption is that TNCs own their own fleets of autonomous vehicles. The cost to have a fleet of AVs capable of meeting the demand for an entire city would be astronomical.

On the average weekday, San Francisco gains about 160,000 more bodies in the form of workers who commute in from various Bay Area counties

Estimates from the San Francisco Examiner, in conjunction with the San Francisco Treasurer’s Office, say that as of November 2016, as many as 45,000Uber and Lyft drivers are operating in San Francisco. 160,000–45,000 = BIG GAP.

TNCs would need to make a fundamental business model shift from transportation network companies to fleet providers for this to become a reality. It should not be understated how big of a shift this would be. While no TNC company slide decks are leaked online, one can imagine what a key investment point into a company like Uber or Lyft is… capital efficiency! I will not attempt the math here (maybe a project for another time), but if there are currently 45,000 Uber and Lyft drivers in SF, let’s assume (naively) 50/50 for each company and that at bare minimum an AV would be $20K (again a naïve estimate), that means each company would have to shell out $450 M just to get an AV market built out in SF. This estimate doesn’t even include other ancillary costs of car ownership like insurance, parking, gas (people often interpret the rise in AVs as a simultaneous rise in electric and battery-powered vehicles, but that isn’t true in a 1:1 sense)

Okay. So, there’s a lot of difficulties surrounding bringing TNCs to market as the leading form of autonomous transportation. For non-autonomous cars to lead the way in the transportation-as-a-service (”TAAS”) market, a lot of people still need to own cars to be able to provide service to those that don’t. In the autonomous realm, TNCs need to be willing to make HUGE capital investments to bring large autonomous fleets to consumers. Then there’s a third scenario (not yet explored) in which a % of consumers own AVs and have them drive people around (TAAS-style) during the 95% of the day when they’d otherwise be sitting idly. Elon Musk has spoken the most about this and it sounds like a huge incentive to own a Tesla. If your Tesla earned you $50/day chauffeuring others around for the 23 hours you aren’t using it, you could pay the car off in 2 years flat (assuming you drove a no-frills Tesla Model 3). Obviously, there are some factors in there that still need to be worked out, but in theory, it is kind of the perfect hybrid model between pure TNC market domination, car ownership, and the rise of AVs. For similar reasons mentioned above when discussing how difficult it would be for TNCs to transition to fleet owners, a lot of current automobile OEMs are extremely well-positioned to take advantage of this possible shift. Example: If Toyota could retrofit the Prius to be autonomous and then set up a TAAS network (maybe in partnership with other OEMs), they could take advantage of their production facilities and all the cars they already own to beat TNCs to the market.

Government Regulation

In a lot of ways, the media has painted a classic, “Us vs. Them”, “Government vs. Innovation” story surrounding the development of autonomous vehicles. In my research, this seems to be an inaccurate description of the actual actions taken by the government. While the Uber story of December 2016 where the California DMV revoked registration for self-driving cars due to lack of permits got a lot of attention, it is contrary to the experience other groups have gotten while working with government officials.

We envision in the future, you can take your hands off the wheel, and your commute becomes restful or productive instead of frustrating and exhausting, said Jeffrey Zients, director of the National Economic Council, adding that highly automated vehicles “will save time, money and lives.” Source

One study from AAA points out another instance in which governments can support the consumer adoption of autonomous vehicles:

Half (54%) of U.S. drivers feel less safe at the prospect of sharing the road with a self-driving vehicle, while one-third (34%) feel it wouldn’t make a differenceand only 10 percent say they would feel safer.

and that

Three-quarters (78%) of Americans are afraid to ride in a self-driving vehicle.

In many ways, support from the government can provide legitimacy to the claims that AV companies are making surrounding improved safety in their vehicles. For that to happen though, developers of autonomous vehicle technology need to be willing to share data with governments.

This support from the government towards companies developing autonomous cars is not to say that government involvement and regulation are not needed for the industry to be successful long-term. Towards the end of his presidency, speaking to a room of technology entrepreneurs, Barack Obama described the difference between running a tech company and running a country:

The final thing I’ll say is that government will never run the way Silicon Valley runs because, by definition, democracy is messy. This is a big, diverse country with a lot of interests and a lot of disparate points of view. And part of government’s job, by the way, is dealing with problems that nobody else wants to deal with. […]

Like with most disruptive technologies, there are those who lose amidst the change and find themselves in a worse position. While it’s easy for groups like Lyft or Uber to continuously think about the longevity of their products and the positive effects that will come from increased adoption and use, it is less plausible that these companies will dedicate time towards highlighting the potential negative consequences that someone less bullish on the product would consider. Without government regulation in place to tax TNC rides, it is not unreasonable to assume a couple things:

For many, the idea of taking a taxi or black car to work seems ridiculous, but Uber/Lyft change that. The ease and low cost of requesting a ride through a TNC have made this once implausible scenario, possible. Instead of walking 10 blocks or taking public transportation, more people are now using TNCs to travel.

With the ease of requesting a TNC ride to work, it becomes easier for people to live farther from their offices and outside of cities. Many chose to live in cities or suburbs because the thought of spending time commuting in and out of the city each day or using public transportation is worse than high city rent prices. With the rise of TNCs, it becomes much less of a hassle for someone to endure a long commute to work. Commuters can use their time traveling to and from work to read, nap, catch up on e-mails on mobile, or work locally on a laptop. In a lot of ways, human-operated TNCs provide some foreshadowing into what an AV-enabled future could look like. It’s less painful to spend an hour in the car when your hands are free to do whatever you choose because someone else is driving.

The net effect of these hypothetical scenarios is highlighted in a recent study out of NYC showing that with the rise of TNCs, there are more cars on the road. Some highlights from the February 2017 report, “Unsustainable? The Growth of App-Based Ride Services and Traffic, Travel and the Future of New York City”:

“After accounting for declines in yellow cab, black car, and car service ridership, TNCs have generated net increases of 31 million trips and 52 million passengers since 2013.

[…] TNC mileage nonetheless continues to grow rapidly because exclusive-ride trips still predominate, and because most TNC customers are coming from transit, walking, and biking. Migration from public transit translates to increased mileage even if the trips are shared.

In 2015 and to an even greater extent in 2016, growth in taxi and for-hire ridership outpaced growth in transit (subway and bus) ridership and is now the leading source of growth in non-auto travel in New York City. This marks a reversal from the transit-oriented growth that lasted from 1990 to 2014.

TNCs accounted for the addition of 600 million miles of vehicular travel to the city’s roadway network over the past three years

Trip growth in Manhattan has been concentrated during the morning and evening peak periods when yellow cab shift changes produced a shortage of cab availability, and late evenings and weekends when passengers may prefer the comfort and convenience of TNCs over yellow cabs or transit services”

I encourage everyone reading this to read the entire report as it covers a lot more than my select highlights above. However, the 5 points above summarize the message that I am trying to convey here and are a demonstration of some of the reasons government regulation is needed. In the summer of 2015, Uber announced:

With UberPOOL, our goal is simple: take 1 million cars off the road in New York City and help eliminate our city’s congestion problem for good. We want to do our part and invest in creating a less congested, greener future for New York City.

1.5 years later, the aforementioned NYC report has shown the exact opposite. Bullets 1–4 above demonstrate that more rides are being taken, people are switching from public transport and walking/biking to TNCs, and TNC usage is outpacing public transportation growth. Bullet 5 speaks directly to the second point that I make above. There are peak hours where the number of TNCs on the road can’t meet the number of requests coming in. Surge charges aside, what this also means is that people who used to walk and use public transport are now using TNCs and in turn, there is more traffic during hours that were already the most crowded no the roads (morning commute, evening commute, and weekend bar hours)

Technology Overlap

*Disclaimer: I am not a technical expert on AVs so if something is blatantly wrong here, please flag it to me*

“There is a presumption that autonomous vehicles will decrease the number of accidents on the road, is that true?” To many this claim raises eyebrows.

There are a lot of moving parts when it comes to safe and successful implementation of AVs on the road. As I alluded to in my opening, it is easy to imagine two Tesla Model 3s communicating with each other, but it’s a lot tougher to imagine a Tesla Model 3 communicating with a drunk driver. It’s getting a lot of buzz, but as I am writing this article, (and just down the street from me at ASU) an Uber self-driving car was t-boned by a manually operated vehicle that failed to yield. “Police were called to a crash at approximately 6:25 p.m. Friday [March 24, 2017] to find that the Uber SUV had been hit when another vehicle failed to yield, according to the Tempe Police Department. No serious injuries were reported.”

Source: Twitter (You can see the LIDAR on top of the Volvo)

From what I can see, there is no fault to Uber in this incident, but in an indirect way it contributes to the point I am trying to make here: while AVs may objectively be safer than human drivers on a test track or in an AV-only world, how much safer are they in a world of human drivers and AVs?

The other issue that makes AV implementation difficult at scale is that in the current ecosystem, there is limited communication between developers of the technology. This leads to a lack of industry standards and does not create a clear path for inter-company vehicle communication. Again, this is a role that the government may need to fill. As much as it will come off as slowing innovation, governments may need to come in and set standards for vehicle-to-vehicle communication and another AV regulations to ensure the safest experience for pedestrians and others on the road.

Prior to typing this post, I was very bullish on the speed at which autonomous vehicles would be on road, in bulk. Now, I am a bit more skeptical of the speed at which we will see AVs as the norm.

[ryanrodenbaugh]

Do Bubbles Have to Burst?

I compare the feeling of waiting for an economic bubble to burst to being on a long plane ride without any idea of what time it is. A non-stop flight from SFO to China is 13 hours and if you doze off for a short period of time, read for a while, doze off, but have no clock, it would be very easy to think you are much closer or farther to your destination than you actually are. That’s how I feel about the current crypto currency space. except, I feel like in this case, our plane might be flying into an interdimensional vortex, and may never land where we expect it to. Hell, if it does land, it might land on the same island that Oceanic Flight 815 did. 

I find it hard to read anything from anyone that doesn’t believe we are in a bubble of some sort (whether good because it’s bringing attention to the space or bad because a lot of people are going to get hurt badly if/when it burst). And with that, I agree. We are in the run-up period (potentially in the very early run-up) of a cryptocurrency bubble. 

The aspect of the argument that does differ from person to person is when (if ever) exactly the bubble is going to pop. You have some people like Chris Burniske saying that we are only about 15% of the way to the true start of the bubble 

And then you have others like Preston Byrne giving the impression that we are much closer to a bursting bubble than many would believe. 

To be explicitly clear, I don’t totally agree with either of them. 

Per Investopedia: 

“A bubble is an economic cycle characterized by rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive selloff occurs, causing the bubble to deflate."

I agree that there has been a rapid escalation of asset prices in the crypto market. As the two charts below shows, the amount of money raised via ICO in 2017 and the increase in the cryptocurrency market cap in the past year has been staggering. 

Chart 1 Source. Chart 2 Source

However, I don’t believe that the contraction to be associated with this bubble will be that large and I especially don’t believe that investors who have been conservative (as conservative as you can be when investing in a volatile asset class, that is) will be hit too badly, if at all. Over the past weekend, we saw a hit to basically every crypto currency when China unilaterally banned ICOs, however, as many noted on Twitter, it only (temporarily) erased gains from the previous week or month. If you are an investor who heard from your friends how much money they made over the past year in cryptos and then decide to plunge a large % of your personal wealth into cryptos, you are signing on for a lot of risks. If you have been conservatively investing early-on in projects over time, you will probably be in a good place, even if there is a bursting of this bubble. I say that because, for many ICO/Pre-ICO investments, you can invest at 20% - 50% of what the token actually starts trading at (Olaf talks about this in regards to capped ICOs in this podcast around the 39:45 mark). An example being 0x (ZRX token) which priced it’s (effectively 2x capped) ICO at ~$0.05, peaked a couple days after listing at $0.50 (10x) and now sits comfortably around $0.25 (5x). For investors in 0x to lose money, the token would have to effectively hit 0. For many investors (myself included) who tends to only invest at this super early stage, you are playing in an unfair game that has (effectively) unlimited upside and minimal downside (you can lose nothing but your initial investment). 

The other argument for why we are either a) Not close to the bubble bursting yet or b) the bubble will never burst is because as Ian (and then Ryan and “Moonlaunch James”) said on Twitter, cryptocurrencies still constitute such a small fraction of global “Money” (loosely defined):

Or as this chart points out: 

Cryptocurrencies, plain and simple, just aren’t touching as many people as the internet bubble did or as the housing bubble did. For all of the hype that cryptocurrencies have received this year, they are still a very fringe investment class, they are small (relative to other investment classes), and they are not "too big to fail” in the way that the banks were in the 2008 financial crisis. If the crypto currency market went to ZERO tomorrow with no sign of recovery: I speculate that the people who would be most hurt would be (in this order): Hedge funds and other institutional investors who made big bets (or bet the farm) on the industry, people who work directly in the industry, big time speculators, small time speculators, and then the few “mom and pop” types who invested a chunk of their savings because their kid told them it would be a smart idea . Unlike the housing crisis, the first, second, and third order effects of crypto currencies will not threaten “everyday Americans” in a widespread sense. Don’t get me wrong, if/when this crypto bubble burst, people are going to lose their shirts. However, it won’t be people we usually feel bad for in an economic downturn. 

My other conclusion, that I am still thinking through, is why does this bubble ever have to burst? Of course, projects will fail (and that will be a great thing when the scammy ones do), but the idea that the whole market will fall all at once (or that Bitcoin will tank and bring the whole ship down with it) seems unlikely. It’s easy to compare the crypto currency market to other historical asset crises, but cryptocurrencies are different than any other asset class before them and in turn, might not follow the same overall rise and fall trajectory. Compared to other assets, crypto currencies are global, by default, and in turn, have a lot of parties (who would not normally deal with each other) all rooting for the same (or similar) outcomes. The present global success Bitcoin is feeling could be the first successful round of an iterated game between many global parties (Japanese speculators, U.S. investors and academics, and Chinese miners) in which multiple currencies and blockchains will flourish. 

Time will tell on this one, but avoiding the markets altogether right now, is a mistake. 

[ryanrodenbaugh]

Invisible Hands in Everyday Life

When you understand even part of one side of it, it’s easy to see that that particular part works. And clearly the ecosystem works. But how do the other parts (the ones you don’t understand) work? Some sort of sorcery. Magic. Just like an Ouija board, it seems controlled by a mysterious mind. Adam Smith called this the Invisible hand. If you trust in Bitcoin you don’t need to trust all of the thieves and liars using it. I.e. instead of humans you trust the invisible hand. The blockchain gives you the truth. In a way very resemblant of holy scriptures. Just like with religion, the truth offered by the blockchain is very different from the truth offered by the nation state governments, and the conflict between bitcoin and the state will be similar to the conflict between the religion and the state.

Source

The concept of the Invisible Hand comes from Adam Smith in his 1776 piece of writing “An Inquiry into the Nature and Causes of the Wealth of Nations” (“The Wealth of Nations”). Nearly 250 years after Smith coined the phrase, it is still regularly used by politicians, businesspeople, and cryptocurrency enthusiasts (see block quote above). “The term “invisible hand” is a metaphor for how, in a free market economy, self-interested individuals operate through a system of mutual interdependence to promote the general benefit of society at large.” It is now regularly used by small government enthusiasts who believe that all of society’s problems can be solved by people doing what is best for themselves.

Reading the quote above about Bitcoin got me thinking about the idea of the invisible hand in a different way, in what Hayek would refer to as, “spontaneous order”.  How many systems are there in our daily lives that we go through that “just work” that we regularly take for granted? The one that initially comes to mind for me is driving. I’ve been fortunate enough to never be in a serious accident, but I also consider myself to be a very cautious driver, usually opting on the side of caution, letting others go first, not speeding through yellow lights, etc. Having been a passenger in many other people’s cares, however, I know that not everyone drives this way, yet by and large driving works all around the world (yes 10K deaths and 1M+ injuried from autho every year, but generally it works). What are other systems that require the indepedent action of millions of people that just work? (not necessarily market or finance related) 

[ryanrodenbaugh]

Copy - Modify - Paste

There was a comment I read on Producthunt.com a while back, that really stuck with me.

This comment was in reference to a product that showed you the morning routines of successful people (think: Bill Gates, Michelle Obama, etc.) and then allowed users to model their own routines off of these other people’s. 

As someone who is a big listener/reader of Tim Ferriss, I must admit that a lot of my daily routines are modeled off of the routines of already successful people and I have found this to be a very effective way to built new and improve upon old habits.  That is, for many, we enter the real world (which is a different point for many, but usually the point at which we move out of our parents’ house) without a good sense of routine. 

In high school, I was up early everyday because I had to catch the bus at 7:30. This carried over into the weekends and in turn, my senior yearbook quote was “early to bed, early to rise, makes a man healthy, wealthy, and wise.” What I did not realize though was that this was not my routine, this was the routine that school had set for me. When I went away to college the next year and didn’t have a class before noon, I realized that I was a bit lazier than I thought. I quickly learned that this routine wasn’t great for me (I find something about starting the day around noon to be extremely depressing). I turned to the routines of successful people to help me craft a routine. I took bits and pieces of different routines I liked (maybe some from Naval Ravikant, some from Arnold Schwarzenegger, etc.) and made one that worked for me. At no point did I ever think that by just cut and pasting someone else’s routine onto my own life, I would become like them, but I did think it would help to point me in the right direction. 

I think the same goes for topics like dieting, workouts, book recommendations, etc. When I re-fell in love with reading, I read recommendations from really successful people, which lead to me finding really interesting books on my own. My old fraternity President and friend (Alex Mallison) summed this idea up very nicely once. He was speaking to the chapter about the fraternity values (friendship, knowledge, service, morality, excellence). He encouraged us all to follow them in our decision making, but added an important caveat, which was that if we already had a firm set of values instilled in us, to follow those instead. The lesson was to follow whichever values felt more natural and worked for us. He added that, coming into college, a lot of young men are looking for guidance and are at this coming of age point and that the 5 fraternity values served as a great placeholder as we set out to discover the values that truly mattered to us. I have carried that same lesson into how I think about other parts of my life. I’ve tried many different diets, workout plans, reading habits, and sleep schedules all molded off of the “greats” and not one of them has worked 100% perfectly for me, but I have taken bits and pieces of each and crafted my own unique set of habits. Hopefully, one day someone will be able to use my habits as a part of their own!