Longreads- In The New Yorker, Clare Malone profiles investigative journalism/short-selling startup Hunterbrook Capital. This is a model that is legal but doable in more or less ethical ways, and Hunterbrook is, so far, doing it in an ethical way: they investigate companies based on publicly-available data, track their sources carefully so they can link everything they say to public documents, and publish a story. Also, right before they publish, they’ll occasionally trade shares of the companies involved (which they disclose when they publish). The Diff covered this in more detail a few months ago ($). The article talks to a few people in the world of traditional journalism who are worried about this model. For example, one critic said, "[Y]ou’re not primarily serving any particular audience that you want to develop a relationship with or that you feel needs the truth to be exposed... You’re primarily serving your investors in your hedge fund." Which makes sense, because one thing people really dislike is when you make the incentives in their profession (e.g. journalism) salient by having a more legible set of incentives. Hunterbrook can actually measure whether they're doing a good job of finding compelling examples of undiscovered corporate malfeasance; if your job is to serve a particular audience or expose the truth, what's your metric for knowing that you haven't accidentally gotten good at pandering to an audience that shares your unspoken biases, and further specialized in ratcheting up the confirmation bias? This feels just like serving an audience and seeking the truth; adding market discipline turns it into a measurable outcome.
- Sridhar Natarajan, Ava Benny-Morrison, and Katherine Burton profile Bill Hwang, of the notorious $36bn Archegos collapse, in Bloomberg. Some financial scandals happen when someone starts out with the intent to defraud, but those are usually small. The bigger scandals start out with good intentions, cut a few corners, cut more corners to deal with the consequences, and eventually spiral out of control. In Hwang's case, there just isn't much evidence of that: in objective terms, he took a lot of money off the table through his foundation, which holds $500m in assets, with his personal net worth pegged at "less than $100 million.” (Relatable.) But that compares to a peak net worth of $36bn. In short: the biggest outlier risks come from true believers—though they're also a source of the most extreme upside.
- Timothy B. Lee in Asterisk on "Debugging Tech Journalism." There's some good material about two kinds of incentive problems: stories about scandals and risks play better than straightforward stories about gradual improvements, and many of the writers best equipped to dive into technical subjects can make more money elsewhere. And there are some harrowing examples of specific stories that simply didn't get much coverage. Who wants to read about a technology being deployed today that could save tens of thousands of lives annually when you could instead read a story about how LinkedIn's A/B tests might ruin the career prospects of someone who's in the bucket for the test that underperforms?
- James Pogue has a fantastic Granta piece about visiting the Central African Republic, which is partly controlled by Russia's Wagner Group. There used to be more stories of international travel in dangerous places where an American passport might not keep you safe. (It's been a long time since P.J. O'Rourke could rack up frequent flyer miles and near-death experiences around the globe.) A running theme in this piece is the blurry boundary between nominally different entities: Wagner was ostensibly a private company, but took subsidies from Russia and did Russia's bidding; the Central African Republic has been nominally independent, but France retained influence through its own plausibly-deniable private military contractors; and when such a government treats an American journalist as a potential spy, they display a sophisticated understanding of the pipeline from media coverage to policy changes.
- Lastly, here's 20,000 words on why not to use Rust for game development. I found this piece very fun for a few reasons: I've written a little Rust, but am still at the point where the problems are with me rather than the language. And it's just delightful to read someone talking in depth about how specific tools help or hinder their craft. As a piece about Rust itself, it's more likely to just lead to more debate than to resolve anything. But as a piece about the attractions and perils of technologies that have a dogmatic view of the right way to solve and reason about problems, it's great. The dogma may be right in the end, but dogmatism slows down cycle times, and in some fields it's just better to ship fast.
- This week in Capital Gains, we take on the question of capital allocation to moonshot research projects. Their long-term payoff is always uncertain, but in the short term they actually give companies more operational flexibility by giving them a reason to keep talent engaged so they can rapidly respond when the core business is threatened.
- And in this week's episode of The Riff: AI in education, media economics, why it's hard to build an email ad network, and 24-hour markets. Listen with Twitter/Substack/Spotify/YouTube/Apple.
BooksThe Reformation: A History: one of the complaints people sometimes have about history is that it's just a bunch of dates, but an equally valid complaint is that for the reall important phenomena, it's frustratingly hard to put a specific date on it. The Reformation, for example, is easy to date: 95 theses, 1517. But, as with lots of other striking events, there was plenty of buildup to it, and the consequences clearly mattered past 1648. This book does exactly what a good history book should: it puts an event in context so it's hard to imagine a different world where it hadn't happened, and then forces the reader to consider how much that they take for granted that turns out to be cost by that same event. Part of the pressure building ahead of the Reformation was between governments and the church (as the book notes, things like the purchase of indulgences were a local phenomenon—much more common in the places that aligned themselves with Luther! The oldest English document printed on paper, for example, is a form for recording an indulgence). And within the church, there was a long-simmering conflict between local priests and traveling friars: the priests knew their community, but weren't well-educated, and the friars tended to add a bit of showmanship to their sermons. Meanwhile, places where the Reformation didn't catch on had a few different factors: in Spain, there was already a recent history of religious conflict with both Muslims and Jews—Spanish Catholics had plenty of heathens to worry about and didn't have time for heresy. In Habsburg territories, the government saw Catholicism as a way to bolster their own legitimacy (something they had in common with Reformation participants—Henry VIII and various German princes saw a break with Rome as a way to solidify their own power). Back when I was attending a Jesuit high school, our history teacher emphasized that the Catholic church changed after the Reformation, and for the better (but that this didn't mean Martin Luther had a good excuse!). And that's true; things like taking communion more than a few times a year, praying the rosary, or having lots of religious-affiliated early education options were much more common in Catholicism as a direct response to the Reformation. The Jesuits themselves amassed influence by teaching kids, advising rulers, and pushing back against Protestants. Given how many modern beliefs share roots in either literally Christian thinking or at least a milieu where Christianity was the default framework for understanding the world, it's very helpful to look at how it's changed over time. Open Thread- Drop in any links or comments of interest to Diff readers.
- What are some other good cases where some ostensibly surprising event happened all at once and there turns out to be a long buildup that made it inevitable?
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