Hey everyone,
Welcome to my first weekly newsletter. One of my goals for 2021 is to write more consistently, so I am committing to putting out one of these newsletters every week. They will be a summary of what I'm enjoying right now, whether its articles or books I'm reading, podcasts or audiobooks that I'm listening to, or an interesting video that I've seen over the last week. I hope you enjoy it. If you have any feedback, hit reply!
What I'm reading
Billionaires Build by Paul Graham
Paul Graham is the cofounder of Y Combinator and one of the most popular venture capitalists in the US. In this essay he rebuffs a misconception that is portrayed by many politicians, that "the only way to become a billionaire is to exploit people."
Paul is uniquely qualified to give his opinion on this topic because he makes a living by trying to identify the next billionaire and invest in their company.
He argues that they place zero emphasis on whether or not a founder excels at exploitation. In fact, they actively reject those people because they have found that bad people make bad founders. This type of exploitative behavior does not succeed at a large scale because these type of people are always taking shortcuts.
Instead, they look for people that: 1. are focused on a large market, 2. understand a group of users, 3. can make what they want, and 4. that there is nothing else they would rather do.
In the end, becoming a billionaire is all about the users. The most reliable way to become a billionaire is to start a company that grows fast, and the way to grow fast is to make what users want.
Audio's Opportunity and Who Will Capture It by Matthew Ball
Audio's Opportunity and Who Will Capture It - MatthewBall.vc
I am fascinated by the future of audio. The distribution of audio has been changing my whole life. I had cassettes, CDs, Napster, iTunes, and now Spotify. I no longer listen to the radio. Instead, I stream music, podcasts, and audiobooks while driving. When I recently came across this exhaustive piece by Matthew Ball, I was excited to dig in.
In this essay, Matthew analyzes audio through the context of technology. He does this because he argues that media IS technology. Technology not only enables content categories, but it also defines their business models and shapes the content. And since technology is always changing, so is media.
In Chapter 1 (yes this essay has chapters), Matthew goes into how technology created recorded media and has continued to refine it over the years. Interestingly, the format and business model of music has changed the length of songs over the years. In the vinyl days, songs needed to be 3 minutes to fit. As CD's became popular, so too did the length of songs. Now, in the streaming era, songs are trending shorter again because artists are paid per stream. Shorter songs are more likely to be streamed over and over.
Chapter 2 compares audio to TV and gaming. Audio has underperformed both of these other categories over time. As more methods of distribution for TV and gaming have been added, the revenues each have been able to garner has compounded over the years. Whereas in music they have tended to cannibalize each other.
Chapter 3 takes a birds eye view at audio and where its headed. Radio still has a large share of non-concert audio-related revenues and listing time. This is an opportunity for a new set of content creators, production companies, and distributors online. Podcasting is beginning to grow rapidly. Digital concerts have been successful (Travis Scott had 28 million unique attendees for his April 2020 Fortnite concert.
Overall, after reading this article, it is hard not to be bullish on the opportunity for innovation and growth in audio of the next 5-10 years.
Disclosure: I own stock in Spotify.
What I'm listening to
Bitcoin & the Macro Backdrop - w/ Brent Johnson from Santiago Capital
We Study Billionaires - The Investor's Podcast Network
In mid December, Brent Johnson from Santiago Capital and Preston Pysh of The Investor's Podcast got into a little back and forth on Twitter about Bitcoin. Thankfully, they de-escalated the tension over the phone and recorded a podcast about Brent's views on the macro landscape.
Brent believes that the liquidity event we saw in 2020 combined with another in 2021, will eventually lead to solvency events. These solvency events are what will start the cascade of defaults and cause the BIG problems. It's a really good conversation that I recommend you checking out.
The Founder's Journal - Mr. Beast and the Balloon Effect
Mr. Beast and the Balloon Effect
Alex Lieberman analyzes the story of Mr. Beast, who is a YouTube megastar, and compares the growth of Mr. Beast on YouTube to his company, Morning Brew. The basic concept is that there is a certain pattern to growth that is defined by several years of hard work and grit complemented by slow, linear growth. And then...one day or month or quarter, everything changes. The business hits its tipping point. Gradual growth turns into exponential growth and the size of the brand explodes. Its like filling up a water balloon with water. In the beginning it’s like nothing is happening but eventually it explodes. Alex's podcast is great in general. It gives a behind the scenes look at what it’s like to run a startup media company. Give it a listen.
What I'm watching
Guys with a Traeger Grill by You Betcha
I got a Traeger grill for Christmas, and I love it. I'm just trying not to end up like this guy...
Tweet of the Week
