Longreads- Chad Nauseam on the annoying complications of writing a calculator app: computers are great at operating on smallish integers, or on numbers that can be represented this way, but once you start dealing with very large numbers, very small fractions, or irrationals, you have to start making compromises. And it turns out that these compromises come with compromises of their own: you can use recursive real arithmetic to represent arbitrarily precise numbers—but only if you're comfortable with equality between two numbers being undecidable! This piece does two things well: first, it's a good reminder that computers are always working with representations of the real world, and second, even fairly trivial applications require a lot of work to get just right.
- Anton Troynikov has a Larry Ellison primer in Not Boring. One thing Ellison's career illustrates is that staying healthy is a great way to move up on the Forbes 400. Oracle has been a big, important company for a long time, but Ellison accumulated three quarters of his net worth in his seventies. Oracle also benefits from being big enough to have a cloud business, but different enough from the other big cloud providers that it's often #1 on the list of cloud providers who aren't also serious direct competitors.
- And on that note: Dwarkesh Patel interviews Satya Nadella, in a triumph of cold emails and the surprisingly quick email response times of important people. One point he makes is that consumer tech is more prone to monopolies, but enterprises just won't allow that—they'll insist on having multiple suppliers because they don't want their growth strategy to be entirely dependent on a single company. The piece is interesting throughout, especially some of the negative points on AI capex: "I'm so excited to be a leaser, because, by the way; I build a lot, I lease a lot. I am thrilled that I'm going to be leasing a lot of capacity in '27, '28 because I look at the builds, and I'm saying, "This is fantastic.""
- Carla Lalli Music on the economics of YouTube: she started a cooking channel to promote her cookbooks, and found that the economics just didn't work. Like many other media projects, there's a mix of revenue: she got an ad split from YouTube, and also did direct deals with sponsors. The YouTube ad split revenue wasn't enough to cut costs, but apparently direct deals with brands made up that shortfall. One thing she notes is that the CPM YouTube charged was $29, and the amount she got from that was $10. Which sounds steep. On the other hand, it's hard to name an independent content creator who assembled a large audience without operating on one of the big platforms, so a 70% cut may just be the market rate for getting access to an audience that big.
- Hunter Hopcroft on the rise of private credit and captive private equity-owned insurance companies. I disagree with some of the analysis here—it seems reasonable that an aging country would have more demand for fixed income relative to equity, and that this would lead to corporate capital structures shifting to debt to meet this demand, for example. But it's a good overview of how the market is changing, and a good look at how regulations can have a surprising indirect impact on who is the optimal owner of which asset.
- In this week's issue of The Riff, we're talking globalization, the changing structure of the AI industry, and how autonomous vehicles affect Uber. Plus, I narrowly avoided the classic tech/finance trap of having strong opinions about geopolitics by noting that the Taiwan/China situation always sounds precarious if you describe it accurately, and since I have no idea how the status quo has lasted this long in the first place it's very hard to make predictions about what might come next. Listen with Spotify/Apple/YouTube.
- In this week's issue of Capital Gains, it's time to pick nits with personal finance advice: given the complexity of the modern economy, it's very good that there are bestselling books that tell people things like "credit cards are not free money" and "there are a number of ways to invest your money that can produce good long-term returns with minimal effort on your part." The good advice simplifies, but sometimes it oversimplifies in a harmful way, thus: never make a financial decision guided by the total (un-discounted) amount of interest you'll pay over the life of the loan. That number exists as the output of relevant inputs, but on its own it will never tell you anything useful. (As an illustration, we consider a hypothetical credit card that lets you borrow on more favorable terms than the US government, but that, from a total-interest-paid perspective, is inferior to putting a purchase on a credit card with a typical credit card rate and just paying the minimum balance each month.)
BooksHouse of Huawei: The Secret History of China's Most Powerful Company: Let's consider two theories of Huawei, the Chinese telecom equipment giant: - It's a business founded by a former member of China's military. Huawei used purloined IP from more larger companies in wealthier countries to crank out knockoff equipment at low prices, and embedded this equipment in communications systems around the world. Huawei's tools have backdoors, allowing it to earn a sort of in-kind dividend where products built thanks to state-sponsored hacking enable further hacks later on.
- It's an entrepreneurial company founded by someone who wanted to get out from under the thumb of China's state-run economy, and who chose a high-growth sector, invested heavily in R&D, spread equity widely throughout the company, and built a globally competitive business inside a generation. This company followed applicable laws, but, being a Chinese company, that meant following China's laws, and doing business with governments that China approved of even if other countries didn't.
This book works as a case for both. Every developing country disregards intellectual property laws in richer countries; the story of US industrialization starts with IP theft and obviously didn't end there. And it's not as if the US telecom industry is immune to charges of cooperating with intelligence services: the recent Salt Typhoon hacks managed to infiltrate systems that US telcos had in place in order to cooperate with information requests from the government ($, WSJ). So this book is partly worth reading to get a look at all the tricky situations companies find themselves in when they operate in a sector that's heavily regulated and that can be a source of valuable government intelligence. But it's also a more straightforward book about entrepreneurship and determination. If you read biographies of 19th-century tycoons, there's often a bit more hardship and physical danger in their lives than most people in the developing world experience today. But for Chinese founders, that kind of thing is in much closer chronological proximity: Huawei's founder, Ren Zhengfei, had to deal with famines and political purges during his childhood, and must have felt incredibly relieved when the Chinese government shifted its focus from rooting out capitalist roaders to accumulating capital. "Scrappy" isn't a strong enough word for the attitude that that kind of formative experience can engender. So when you read about them selling equipment in Iraq and Iran (and lying about it), or telling every sales manager to prepare a progress report and a resignation letter ("I will only sign one"), it's helpful to remember where this instinct comes from. Open Thread- Drop in any links or comments of interest to Diff readers.
- It's always interesting to see how companies climb the technology ladder when they're founded in poor countries that don't have much of a head start in this respect. What are some good examples of this from outside of China?
Diff JobsCompanies in the Diff network are actively looking for talent. See a sampling of current open roles below: - An AI startup building tools to help automate compliance for companies in highly regulated industries is looking for a director of finance with 5+ years of finance experience. 3+ years in a financial function at a SaaS company a plus. (NYC)
- A growing pod at a multi-manager platform is looking for new quantitative researchers, no prior finance experience necessary, 250k+ (NYC)
- A company building better analytics for pricing insurance is looking for a senior software engineer who likes turning messy data into clear answers. (NYC or Boston)
- A premier proprietary trading firm is looking for smart generalists to join their investor relations team, working with external investors, rating agencies, and the internal finance team. Investment banking and/or investor relations experience preferred. Quantitative background and technical aptitude a plus. (NYC)
- A hyper-growth startup that’s turning customers’ sales and marketing data into revenue is looking for a forward deployed engineer who is excited to work closely with customers to make the product work for them. (SF, NYC)
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.
|
