The Diff - Longreads + Open Thread

Longreads

• Dan Luu argues that Steve Ballmer is an underrated CEO. Under his tenure, Microsoft (disclosure: long) grew revenue and earnings, and launched many of the big bets that have since paid off—Azure, moving to a subscription model for its application business, and launching Bing. (I somewhat disagree with Luu on Bing's economics, because one of Bing's advantages is distribution through Microsoft, not standalone demand. But these things are always hard to puzzle out; in that model, maybe Google's search business is also less profitable than it looks because adjacent money-losing products subsidize it.) One of Ballmer's problems is that he took control of Microsoft at a very bad time, when the stock was high and the government was paying attention. But he doesn't have to be graded on a curve: the company's performance was objectively good under his tenure, he made investments that have paid off well over time, and he had enough confidence in the company to continue holding stock after he left, which is one reason he ended up making more from Microsoft than anyone else.
• Jay at the Datastream Substack tells the story of an educational failure to make it big in the ticket-scalping business. Any time there's a visible arbitrage, like tickets instantly selling for a 10x markup on face value, the natural question is to ask why it isn't exploited. And there turn out to be many good answers: it's hard to get past CAPTCHAs, it's hard to predict which shows will sell out, and sometimes getting it right means accidentally predicting that the band in question will add another last-minute performance, crushing returns. It's a good story about markets, but also a fun story about scraping: "I discovered an open Ticketmaster endpoint that revealed the exact number of tickets remaining for any show." A long-term data advantage is just the dividend of a shorter-term instinct to hustle.
• Kevin Gee has a speech by YouTube cofounder Jawed Karim explaining what YouTube got right in 2006. There's a lot to enjoy here, particularly YouTube's place in the history of social media—Karim runs through a list of other sites (LiveJournal, HotOrNot, Wikipedia, Friendster, del.icio.us, Flickr) that demonstrated, one by one, that many-to-many communication could work online, and would be the likely default. Knowing that, seeing how much time people spend watching TV, and tracking the rate of broadband penetration made a service like YouTube inevitable, and the service itself executed quite well. One fun detail, from Kevin Gee rather than Karim, is the comparison of YouTube's current metrics to the ones almost twenty decades ago. The ratios are surprisingly consistent: total daily views are up 50x, and videos uploaded per day are up 52x, so if anything YouTube is even more of a user-generated site than it was when it first took off.
  
  For an earlier Diff look at YouTube, see this review of Like, Comment, Subscribe ($).
• Mark Zachary Taylor on the controversy over this year's economics quasi-Nobel, which is a bit more quasi- than usual. Acemoglu, Johnson, and Robinson have a model that aptly explains why the US and Western Europe are so rich, but the model also implies that India should be a lot richer than Japan or Korea. They do have answers for these criticisms, but those answers also make their model fuzzier. Institutions clearly matter, but it's hard to impose them, and even maintaining them is a struggle—every big dysfunctional organization is descended from some organization that got big because it worked. This piece argues that there is something that can lead to technology-driven economic growth: some sort of terrifying existential threat. US economic growth is a good argument for this: it was higher at the peak of the Cold War, and even since then a big share of US growth comes from the deployment of transistors whose first applications were mostly defense.
• Tyler Austin Harper pays a visit to Haverford College to judge whether or not ChatGPT is the end of English majors, and concludes that the picture is not that bleak: "I’m an English major,” one told me. “I want to write.” Another added: “Chat doesn’t write well anyway. It sucks.” A third chimed in, “What’s the point of being an English major if you don’t want to write?” They all murmured in agreement." The right reality check for students is one level higher: if you can get a degree by using a tool that costs $20/month, the job it qualifies you for pays $19.99/month or less.
• In this week's Capital Gains, we look at why the Internet didn't usher in an era of going direct and eliminating the middleman, and, instead, led to a world where some of the most valuable companies on earth are middlemen. Having a more efficient way to search for goods and services reduces the minimum market needed to make those goods and services viable, so it makes the potential search space impossibly vast, and the rewards for finding a good match correspondingly higher.
• And in this week's episode of The Riff, Erik and I talk about heresy, contrarianism, whether or not you have to use the stock market to bet on AI, and the election. Don't miss my wildly incorrect speculation about polling errors (we recorded Tuesday afternoon). Listen with Twitter/Spotify/Apple/YouTube.

Open Thread

• Drop in any links or comments of interest to Diff readers.
• The YouTube story partly traces the same trend being expressed in different media—social started out text-only, then added images, then video. Generative AI is just now getting to the point where video will be widely available, so it's interesting to speculate on how closely value creation will follow the path it took in social.

Diff Jobs

Companies in the Diff network are actively looking for talent. See a sampling of current open roles below:

• Ex-Ramp founder and team are hiring a high energy, junior full-stack engineer to help build the automation layer for the US healthcare payor-provider eco-system. 0-2 years experience. (NYC)
• An AI startup building tools to help automate compliance for companies in highly regulated industries is looking for legal engineers with financial regulatory experience (SEC, FINRA marketing review, Reg Z, UDAAP. JD required; top law firm experience preferred. If you are a lawyer trying to leave law, please reach out. (NYC)
• A hyper-growth startup that’s turning customers’ sales and marketing data into revenue is looking for a product engineer with a track record of building, shipping, and owning customer delivery at high velocity. (NYC)
• A well funded Google Ventures backed startup founded by SpaceX engineers that’s building data infrastructure and tooling for hardware companies is looking for a staff product manager with 5+ years experience, ideally with AI and data intensive products. (LA, Hybrid)
• A well-funded startup that’s building the universal electronic cash system by taking stablecoins from edge cases to the mainstream is looking for a senior full-stack engineer. Experience with information dense front-ends is a strong plus. (NYC, London, Singapore)

Even if you don't see an exact match for your skills and interests right now, we're happy to talk early so we can let you know if a good opportunity comes up.

If you’re at a company that's looking for talent, we should talk! Diff Jobs works with companies across fintech, hard tech, consumer software, enterprise software, and other areas—any company where finding unusually effective people is a top priority.