⏭ 2nd and 3rd order effects
#6 Best of BUSINESS this week
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What you need to know
⏭ 2nd and 3rd order effects
🍻 Drunk ideas are back
🦄 Launching multiple startups
🙅♀️ The entrepreneur test
Consequences have their own consequences
All-In, Episode 76.5, Food shortage, China’s grand plan, inflation, French election plus an All-In Summit preview
3 min read vs 37 mins listening
Famine is a real possibility in 2022. Why? Because synthetic fertilisers are used to grow crops that feed almost half of the world’s population. And the cost of synthetic fertiliser is skyrocketing. When you add high oil prices into the mix, many farmers find it uneconomical to grow crops. Yields decrease, prices increase, and poorer countries reliant on food imports suffer the most.
What they say
We’re seeing this around the world where acres are being taken out of production which means less food is being made
This is a titanic into the iceberg that we’re watching right now and it’s going to continue for 9 to 18 months
How are we going to feed nations that are almost entirely dependent on imports that are running out of food?
The whole world runs on a 90 day food supply but that’s not the case uniformly
Some countries like Tunisia, Somalia and Ethiopia have close to 0 calories in storage
The United States have 30-40% of annual consumed calories sitting in storage
China is a complete outlier. For years China has been stockpiling food. China has 150% of their annual consumption of food in storage
We will see over the next year an incredible amount of leverage and power being accumulated by China
China is going to end up gaining influence, military presence and establishing a more permanent presence in the Horn of Africa because of the position of strength they’re in with of all of these calories and the need in these regions
It’s not just there, Sri Lanka, other parts of South East Asia, even Western and Northern Africa, China is gonna show up
David Friedberg
What I say
Why it matters: I’m not a geopolitical expert. I’m not going to argue that China is taking the United States’ crown for global influence. What I am going to do is to get you thinking about 2nd and 3rd order effects.
We’re only now coming out of Covid and realising the amazing opportunities it created. Stock picks (Zoom, Moderna, Fiverr), product lines (Covid tests, sanitiser, face masks) and behavioural change (work from home, telemedicine, D2C) are just a few. Actions have consequences, known as 2nd order effects. These consequences have their own consequences, known as 3rd order effects.
Between the lines: Hindsight is a wonderful thing. Russia’s invasion of Ukraine will invariably have 2nd, 3rd and 4th order effects. They’ll be clear as day when you look back at this moment in a couple of years.
Are there any opportunities you can think of, either as a new business or at your current company? A few ideas spring to mind:
Food shortages > Focus on local supply chains > Rise in vertical farming
Oil and gas prices > People default on rent and mortgages > Crypto financial services
Oil and gas shortages > Focus on conservation and usage > Expansion of sharing economy
Ukrainian refugees > Migrate to new countries > Build new companies
Can you think of others? I’m compiling a list so please email your ideas.
Listen here:
All-In with Chamath, Jason, Sacks & Friedberg: E76.5: Food shortage, China's grand plan, inf...
Ideas to get your cogs turning
My First Million, Episode 304, How to Interact with Famous People, The In-Person Event Playbook, and More
4 min read vs 57 mins listening
Shaan’s drunk idea segment is back. I’ve shortlisted the top 3 ideas for you to riff off and get those gears turning.
What they say
In third place 🥉
My idea is the B2B version of Spencer’s
It’s just shit for you to put around the office that’s gonna make your office more fun and interesting
It’s like Botox for injecting personality into your company
It takes all of the common items of an any office (bathroom door sign, emergency exit sign, meeting room things, office toilet paper)
There’s opportunity everywhere in your office to demonstrate a bit of personality
Shaan Puri
In second place 🥈
Milo is a company that got started back in the day by Jack Abraham
Milo was a search engine for finding where you can buy a specific product in person
It took where you are and it knew all of the store's inventory and it just told you if the product is in stock right there
The world is moving toward e-commerce, yes, but there’s still a very healthy slice of people who want something now, today, and don’t want to wait for it to be delivered
Milo got bought by eBay for $75M and like many acquisitions it faded away and disappeared inside of eBay
This idea is still a great idea
You’d need to build integrations with the major backend inventory systems
You have a really strong reason for them to give you that access, you’re like: Hey dude I’m going to send you foot traffic to your store
Shaan Puri
In first place 🥇
There’s a tonne of Discords, especially in the crypto world, that are just noisy, there’s spammers and scammers, there’s confusion all around
I think someone should build the best property management company for your Discords
You’d be like: We are the best at managing Discords. We will manage your Discord for this flat fee
I’d just build a brand for being an amazing property manager for your digital property, for your digital spaces
Shaan Puri
What I say
Why it matters: Ask yourself: What other startups have been acquired and shutdown? In a lot of cases, those ideas would still work today. They may have been acquired for the talent or to prevent competition. Or maybe it was a timing issue. Either way, a short history lesson could seed your next billion dollar idea. Take Twitter’s acquisition of short-form video platform Vine. What company took its place by replicating the idea a few years later? You got it, TikTok.
Between the lines: Even if you’re not looking to start a business right now, these ideas help you to embrace change. We all put up with things that are inefficient, don’t make sense, and are being done because of dogma. We should challenge the status quo and adapt to new trends, platforms, and behaviours.
One example is how corporate America is forcing people back into the office. I get it, they’ve got 9 figures invested in real estate that’s sitting there doing nothing. But, does it make sense to force people in 3 days a week when they’ve vocalised a preference to WFH?
To retain top talent, more flexibility is needed. I’ve given people the opportunity to work for a month in India, Thailand, Indonesia, and France. Hell, I’ve worked remotely in the States for weeks at a time. The outcome? Happier employees and more productivity. So what should you do? Embrace. Change.
Listen here:
My First Million: How to Interact with Famous People, The In-Person Event Playbook, and More on ...
Building a company builder
What’s Your Problem?, Episode 6, Building a Company that Builds Companies
3 min read vs 25 mins listening
The most important things for startups to do is to focus. This is one of the most famous quotes from Paul Graham, co-founder of Y Combinator. So, how can a company that builds companies be a trailblazing success? Surely, it goes directly against Graham’s commonly accepted belief?
Noubar Afeyan is the founder of Flagship Pioneering, the venture studio that spun out Moderna. That’s right. The Moderna. The company responsible for 37% of the Covid vaccines in the US. Flagship Pioneering is refining the process for building new companies, specifically bioplatforms.
What they say
What is a protocompany?
We iterate and iterate and iterate internally until we say: You know what? We’re going to make a go of this because we think we have a good sense of the range of things that have to be right for this to work
That’s a process of a couple of months. It’s 3-4 people
We still don’t start the company. We start what we call a protocompany. That’s the first phase
A protocompany is a prototype of a company. A prototype of a company is where, just like in a regular product, you get to beat it up and try to kill it
Protocompanies for us are a $1M to $2M investment, 6 to 12 months
It is not a license to hunt for the next 3 years. That’s a very important discipline
Noubar Afeyan
Use numbers to name ideas
LS18 is the name of the entity that got incorporated to become Moderna
It’s the 18th such thing we did. Today we’re up to number 90
When you’re trying to create an institution and set of behaviours, one of the things I knew from day one was that people hang onto their ideas and they emotionally and romantically connect to them and can never kill them
Noubar Afeyan
Resource constraints are a good thing
You have to keep the resistance up, resistance meaning pressure, in order for the team to conclude that they’re going through more and more complicated rationalisations to justify whether they should stay alive
One of the biggest misunderstood things in the startup world is that more and more money leads to better companies
The pressure that comes from raising capital and being challenged is really important to produce the end the result of deciding not to go forward
Noubar Afeyan
What I say
Why it matters: I’d argue that Afeyan and Graham are actually very closely aligned. Flagship Pioneering are meticulously focused on testing a few key experiments before A) killing it or B) creating a protocompany.
They have a set of processes that are equivalent to innocent until proven guilty, but in their case a company is dead until proven alive. This allows them to focus on what matters before getting carried away on problems that are not important.
Between the lines: We’re not all starting new companies within companies. But, we’re still starting new things at a smaller scale. Whether it be launching a new product or service, building a new feature, or testing a new channel, you should be focused in your approach and solicit learnings ASAP. Expand minimal viable product to minimal viable feature or minimal viable channel. The concept stays true.
Listen here:
What's Your Problem?: Building a Company that Builds Companies on Apple Podcasts
Show What's Your Problem?, Ep Building a Company that Builds Companies - 13 Apr 2022
Choose your lane
My First Million, Episode 303, How to Get Famous on Twitter and Other Listener Questions
3 min read vs 54 mins listening
This segment is for aspiring entrepreneurs. If you’ve always wanted to start your own business but never found the right idea, time, or funding to do it, then this is for you.
What they say
Stop doing Twitter wrong
The way that people use Twitter and podcasts is they get on every day and they just watch other people cook eggs
You read advice from every investor and founder tweeting out “the 3 mistakes I made before 30, a thread”
If you read that everyday you’d think you’re leaning how to cook eggs but you have no idea how to cook eggs
Go crack some eggs, make a bunch of mistakes, and come back to Twitter and podcasts like this for your just-in-time learning to give you a tweak on the thing you’re actually doing
Shaan Puri
Start by choosing your lane
Listener question: “What would you say to a lawyer to motivate me to leave my cushy but soul sucking job and jump into entrepreneurship”
Don’t jump into entrepreneurship and get happy with your job
If you’re someone that needs another person to give you motivation to bail, you shouldn’t bail
I don’t think that you’re the personality type that will be happy doing this if you need someone to motivate you
Shaan: Exactly. Btw there’s a trick there. If that pisses you off and makes you want to do it, cool, you are an entrepreneur
Sam Parr
What I say
Why it matters: The best way to use Twitter is to already be doing something. It doesn’t matter what. Just follow people with insights and ideas that will help you solve a problem or apply a new skill at work. That way, you’re able to practice and apply what you’re learning.
Between the lines: Wantapreneurs get a bad rep. I’ve had a 6 year gap between my last business and Podup. It’s a lot easier for people who already have an audience to dish out the ‘go and start something’ advice. In reality, you have responsibilities and dependencies that can’t always budge right away.
I do agree with Sam’s view that if you have an idea, you shouldn’t need motivation from others to get started. If you don’t do it now, you may as well choose a different lane. That’s ok. You just need to be aware of it. If you do want to get your hands dirty, tinker with it on weekends. Start experimenting. You don’t always have to leave your job and the stability it brings to become an entrepreneur.
Listen here:
My First Million: How to Get Famous on Twitter and Other Listener Questions on Apple Podcasts
Show My First Million, Ep How to Get Famous on Twitter and Other Listener Questions - 19 Apr 2022
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