What I’ve Been Reading (September 2021)

I’ve been as busy as ever and thus delinquent in sharing some highlights from recent books.

1. The Institute by Stephen King. Totally gripping and addictive novel. Outstanding plot premise from a master of the craft. Expect to stay up late while reading.

2. The Outlaw Ocean: Journeys Across the Last Untamed Frontier by Ian Urbina

Really well researched and well told stories from the lawless high seas. You learn about the brutal human rights violations of the people who work aboard fishing boats for literally years on end without seeing their families; piracy; ship stealing; and the terrible animal abuse of all types of fish.

My Kindle highlights are pasted below; all Urbina’s words.

Also known as icefish, the toothfish can grow to over six feet long and gets its name from a sharklike double row of steel-sharp teeth. Among Antarctica’s largest predators, the grisly gray-black creature can prowl at depths of more than two miles, and its heart beats unusually slowly—once per six seconds—to preserve energy in the frigid depths. Its eyes are the size of billiard balls that grotesquely bulge from their sockets when fishermen pull them up to shallower depths with lower pressures. The fish is also a favorite entrée in upscale restaurants in the United States and Europe, costing about $30 a fillet. But diners won’t find “toothfish” on menus. There, it is sold under a more palatable name: Chilean sea bass. Demand soared in the 1980s and 1990s after a Los Angeles fish wholesaler with a flair for marketing renamed the fish.

To avoid wasting space and contaminating more valuable catch, deckhands usually throw the rest of the shark back into the water after they cut off the fins, which can sell for a hundred times the cost of the rest of the meat. It is a slow death: the sharks, alive but unable to swim without their fins, sink to the seafloor, where they starve, drown, or are slowly eaten by other fish.

By 2017, roughly a third of all shark species were nearing extinction.

By 2015, about ninety-four million tons of fish were caught each year, more than the weight of the entire human population.

As the size and strength of nets increased, so too did the amount of bycatch that was inadvertently killed and thrown back. More than half the global catch is now tossed overboard dead, or it is ground up and pelletized to feed pigs, poultry, and farmed fish. For instance, feeding a single “ranched” tuna can require catching and pelletizing over thirty times the weight of that tuna in fish pulled from the sea. These technological advances, as well as the industrialization of fishing, are a big reason why catches from the high seas rose 700 percent in the last half a century. They also partly explain why many of the world’s fish stocks are at the brink of collapse.

So-called pescetarians, indignant over the suffering of farm cows and chickens, frequently include wild fish in their diets, he said.

“No one has ever asked about us before,” said Purwanto, who had been working on the ship for a year. “Why do you want to know about life on the ship?” he asked. The investigator and the union inspector responded that they were simply checking for labor violations. Purwanto said that even if there were violations, it didn’t matter—he needed the job, so he would not say anything more. There was nothing else for him back in Indonesia, he said. “This is the best we can get.”

The Dutch doctor and founder of Women on Waves traverses the globe in a converted medical ship carrying an international team of volunteer doctors that provides abortions in places where it has been criminalized. Running these often-clandestine missions since the early years of the twenty-first century, Gomperts has repeatedly visited the coasts of Guatemala, Ireland, Poland, Morocco, and a half dozen other countries, dangerously skating the edge of federal and international law.

Over a thousand stowaways are caught each year hiding on ships. Hundreds of thousands more are sea migrants, like those desperately fleeing North Africa and the Middle East on boats crossing the Mediterranean.

after the September 11 attacks, when antiterrorism laws in the United States and much of Europe restricted crews’ access to ports. Crews were required to park no closer than half a mile from shore as they waited for a call from ship operators informing them of their next destination. On board, a crewman can sit, sometimes for months, within sight but out of reach of sending his wife an email, eating a decent meal, having a doctor check the toothache that keeps him up at night, or hearing his daughter’s voice on her birthday. In many ports, dockside brothels adjusted their business models to these new norms. “Love boats,” or floating bordellos, began shuttling women or girls, along with drugs and alcohol, out to the parked ships. But the longer the men were stuck, the less such boats came calling. Everyone knew that a stranded seafarer is soon a penniless seafarer.

The biggest change, though, I felt in my stomach. During several years of reporting at sea, I grappled with a worsening case of what some mariners called sway. Others referred to it as dock rock, land sickness, reverse seasickness, or mal de débarquement (French for “disembarkation sickness”).

An impatient raconteur, Hardberger listened as if he was eager for you to finish your story so he could start telling his (which was invariably better).

More than 90 percent of the world’s goods, from fuel to food to merchandise, is carried to market by sea,

If a chase starts on the high seas, it’s even more fraught. Except under special circumstances, a ship may only be stopped in international waters by a warship of its own flag or with permission granted from the fleeing ship’s flag state. Liberia, the country with the most vessels sailing under its flag—more than forty-one hundred—has no warships.

Whenever possible, Hardberger preferred to talk his way on board, using the collection of fake uniforms and official-sounding business cards he maintains. Among them: “Port Inspector,” “Proctor in Admiralty,” “Marine Surveyor,” “Internal Auditor,” and “Buyer’s Representative.” If he could win himself a formal tour from the ship’s crew, Hardberger wears glasses with a built-in video camera.

Over 56 million people globally work at sea on fishing boats. Another 1.6 million people work in shipping on freighters, tankers, container ships, and other types of merchant vessels. For the most part, both kinds of workers get their jobs through employment firms called manning agencies.

Over the past decade, no country has exported more seafarers annually than the Philippines, which provided roughly a quarter of the crews on merchant ships globally, despite comprising less than 2 percent of the world’s population.

American territories like Guam, Samoa, Puerto Rico, the American Virgin Islands, and the Northern Marianas may be tiny islands, but they add huge swaths of ocean to U.S. jurisdiction. As a result, no country has a bigger maritime domain than the United States.

I learned that corals are masterful hunters. They use minute poisonous barbs to spear tiny planktonic prey or deploy nets made of mucus to nab their victims. I learned that corals are also densely populated microcosms with more marine species living in a two-acre area than there are different species of birds in all of North America.

Long said he often considered jumping overboard to escape. He told a doctor who later treated him that he never once saw land during his three years at sea.

My nose nearly brushed the swinging hindquarters of the boy above me. Being that close to a complete stranger and breathing in his funk felt like an invasion of his privacy and a self-inflicted assault on mine.

Other officers offered more helpful tips [for not drowning]: Wear a headlamp and bright colors when on deck. If the water is cold when you fall in, clench your jaw and resist taking that first panicked gasp because it’s usually the one that drowns you. Limit heat loss by keeping your knees to your chest, they told me. Never swim against the current. Kick off heavy boots or shoes. If it’s not too cold, remove and tie off the ends of your pants or shirt to capture air in them and to use them as floatation devices.

The nonchalance on his face reminded me of a saying that truly dangerous men are not of a certain size but of a certain look.

Cruise liners, like most large ships, burn massive amounts of the dirtiest fuel on the market.

Their engines groaned when turned on or off, like an old man bending down to pick up a dropped cane.

Essentially waterborne dormitories for guards, these armories double as depots for their weapons, and they allow maritime security companies to avoid moving their guards on and off shore with every new assignment. Private security firms pay the armories as little as $25 per night for room and board for each guard, who tends to deploy for six to nine months or longer at sea.

Orcas are the largest apex predators on earth, meaning they sit at the top of the food chain and are not prey to any animals, except humans.

 

3. Working Backwards: Insights, Stories, and Secrets from Inside Amazon by Colin Bryar and Bill Carr

Some good nuggets about Amazon’s practices and policies that have contributed to years of innovation.

My kindle highlights are pasted below; all Bryar and Carr’s words:

When ranking candidates: There are only four options—strongly inclined to hire, inclined to hire, not inclined to hire, or strongly not inclined to hire.

One question that often gets a telling response [in reference checks] is, “If given the chance, would you hire this person again?”

Amazon’s SVP of Devices, Dave Limp, summed up nicely what might happen next: “The best way to fail at inventing something is by making it somebody’s part-time job.”

Tufte offered wise advice on how to get started. “Making this transition in large organizations requires a straightforward executive order: From now on your presentation software is Microsoft Word, not PowerPoint. Get used to it.” That is essentially what we did.

“Let me orally walk you through the document.” Resist that temptation; it will likely be a waste of time. The whole point of the written document is to clearly present the reasoning and to avoid the hazards of live presentation. The attendees have already walked themselves through the argument.

Watch what happens when we improve customer experience: Better customer experience leads to more traffic. More traffic attracts more sellers seeking those buyers. More sellers lead to wider selection. Wider selection enhances customer experience, completing the circle.

In the same 2015 shareholder letter, Jeff wrote, “Some decisions are consequential and irreversible or nearly irreversible—one-way doors—and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that—they are changeable, reversible—they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long.

Put another way, if the average discount of a free shipping promotion was 10 percent, we’d see significantly more demand lift (called elasticity) by offering free shipping than by discounting product prices by 10 percent. It wasn’t even close. Free shipping drove sales. We just had to figure out a sustainable way to offer free shipping.

 

4. The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is lying to you by Rob Fitzpatrick

A rare business book that I found original and super helpful. I’ve recommended it to several of our founders at Village Global who are engaged in customer development. The premise is that most potential customers will lie to you about how they perceive the value of your product, so you need to be really smart in how you frame and phrase questions to elicit honest responses.

My kindle highlights are pasted below; all Fitzpatrick’s words.

It’s not anyone else’s responsibility to show us the truth. It’s our responsibility to find it. We do that by asking good questions. The Mom Test is a set of simple rules for crafting good questions that even your mom can’t lie to you about.

Eventually you do need to mention what you’re building and take people’s money for it. However, the big mistake is almost always to mention your idea too soon rather than too late.

Talk about their life instead of your idea

Ask about specifics in the past instead of generics or opinions about the future

Talk less and listen more

How to fix it: Just like the others, fix it by asking about their life as it already is. How much does the problem cost them? How much do they currently pay to solve it? How big is the budget they’ve allocated? I hope you’re noticing a trend here.

Rule of thumb: Watching someone do a task will show you where the problems and inefficiencies really are, not where the customer thinks they are.

“Did you google around for any other ways to solve it?” He seemed a little bit like he’d been caught stealing from the cookie jar and said, “No… I didn’t really think to. It’s something I’m used to dealing with, you know?” In the abstract, it’s something he would “definitely” pay to solve. Once we got specific, he didn’t even care enough to search for a solution (which do exist, incidentally).

Rule of thumb: If they haven’t looked for ways of solving it already, they’re not going to look for (or buy) yours.

Rule of thumb: People stop lying when you ask them for money.

Rule of thumb: While it’s rare for someone to tell you precisely what they’ll pay you, they’ll often show you what it’s worth to them.

The first startup I worked at fell for the “I would definitely buy that” trap and subsequently lost about 10 million bucks. They mistook fluffy future promises and excited compliments for commitment. They incorrectly believed they had proven themselves right and wildly over-invested.

You: “When’s the last time that happened?” We use The Mom Test and ask for a concrete example in the past. Them: “Two weekends ago.” We’ve successfully anchored the fluff and are now ready to get real facts instead of generics and hypotheticals.

While using generics, people describe themselves as who they want to be, not who they actually are. You need to get specific to bring out the edge cases.

“How are you coping without it?” “Do you think we should push back the launch to add that feature, or is it something we could add later?” “How would that fit into your day?”

Or, in shorter form: Vision / Framing / Weakness / Pedestal / Ask The mnemonic is “Very Few Wizards Properly Ask [for help].”

Phone calls end up sounding more like scripted interviews than natural conversations, because they are. It’s a constraint of the medium.

Collecting compliments instead of facts and commitments. “We’re getting a lot of positive feedback.” “Everybody I’ve talked to loves the idea.”

Are Covid Restrictions the New TSA?

Richard Hanania, always provocative and interesting, has a great piece up on the TSA and Covid restrictions. If we’re not careful, the overreaction to 9/11 that led to an insane, ineffective, permanent security theater that we deal with to this day — the same could happen with masking, lockdowns, and other restrictions related to Covid. What would enable this possibility is our illiteracy with risk & statistics and our collective PTSD from the worst chapter of the pandemic (within the U.S.).

***

On a related topic, I recently tweeted: “Obviously the pandemic has caused mental health problems. But our pre-existing mental health problems have also caused bad responses to the pandemic. America leads the world by # of people who suffer from anxiety disorders. People with anxiety issues can’t think clearly about risk.”

The Future of VC and Lessons from Village Global

I was delighted to chat with Samir Kaji on his podcast Venture Unlocked about the history and strategy of Village Global, and a range of other inside baseball VC topics like portfolio construction. We launched the firm a few years ago; it’s been an amazing journey. Here’s the Spotify link or in Apple Podcasts. And embedded below.

By the way, if you’re starting a company this summer, apply to our Accelerator for a personalized, white glove experience alongside our investment. And also: A few months ago, we announced a $125 million Fund II.

Disclaimer: This presentation does not constitute an offer to sell or the solicitation of an offer to buy any security. No representation is being made that any investor or portfolio will, or is likely to, achieve profits or losses similar to those discussed. Targets discussed have been established based on several assumptions that may vary depending on the type of investment.  There is no guarantee that the conditions on which such assumptions are based will materialize as anticipated and will be applicable to Village Global’s portfolio investments.

Brad Feld on Nietzsche and Entrepreneurship

I spoke to Brad Feld for an hour about Nietzsche and his new book (co-authored with Dave Jilk) of The Entrepreneur’s Weekly Nietzsche.

The audio version is on the Village Global podcast here or YouTube version here.

My favorite part of the conversation was about how difficult it is to “see the world clearly.” We covered a bunch of interesting entrepreneurial topics.

The Code Breakers

I read and enjoyed Walter Isaacson’s new book The Code Breaker, about Jennifer Daudna, mRNA, and gene editing. Here’s Isaacson’s claim about the importance of this topic:

The invention of CRISPR and the plague of COVID will hasten our transition to the third great revolution of modern times. These revolutions arose from the discovery, beginning just over a century ago, of the three fundamental kernels of our existence: the atom, the bit, and the gene. The first half of the twentieth century, beginning with Albert Einstein’s 1905 papers on relativity and quantum theory, featured a revolution driven by physics. In the five decades following his miracle year, his theories led to atom bombs and nuclear power, transistors and spaceships, lasers and radar.

The second half of the twentieth century was an information-technology era, based on the idea that all information could be encoded by binary digits—known as bits—and all logical processes could be performed by circuits with on-off switches. In the 1950s, this led to the development of the microchip, the computer, and the internet. When these three innovations were combined, the digital revolution was born.

Now we have entered a third and even more momentous era, a life-science revolution. Children who study digital coding will be joined by those who study genetic code.

Since reading the book, I’ve been thinking about whether I should invest more time and energy to understand biology (and related life sciences trends) more thoroughly.

Isaacson does a fine job explaining the basics of mRNA in this book, but there’s at least another 30-40 hours of reading/studying that I could do would likely be both accessible to a novice and beneficial. And if this is truly a third and “even more momentous” era as the physics and computer revolutions, then it may well be worth it.

So many topics, so little time…