One Step Up #36
This week we look at Reddit, TikTok, Barry Diller Mindset, The Man Who Abandoned Value, FB vs Australia, and a piece on effort
Reddit: Organized Lightning
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Tour de force of Reddit’s past, present and what the future holds. Mario talks about why Reddit is one of the most misunderstood and undervalued companies in the world.
What started as “My Mobile Menu,” a way to order food via text - ended up being what the founders would describe as : building the “front page of the internet.”
In this piece, you will learn more about:
Reddit’s topsy-turvy history
Why it’s undervalued
Where the company is headed
The Galaxy Brain moves to take it to the next level
This article is another one in what I call the “Can you please just get (insert author’s name) on your Board since they’re effectively doing your job for you” series. Packy McCormick, who writes Not Boring - falls in this category too.
Eugene Wei’s final piece on TikTok. I’ve learnt a ton from these - always a joy to read. As someone who doesn’t use TikTok - this piece was just so so informative. Regardless of whether you’re a user or not, you need to read this to understand why engagement is so high on the app.
The way they’ve managed to reduce friction for users to create engaging and viral content blows my mind.
I think a lot of people want to be but they don’t want to do. They want to have written a book, but they don’t want to write the book. They want to be fit, but they don’t want the tedium of working out. They’re ashamed of rejection and they’re ashamed of imperfection. I might want lots of people to subscribe to this Substack, but do I want to workshop a post every day? Donna Tartt once said in an interview that if the writer’s not having fun the reader isn’t either. I think people make the best things when they love the process, when they willingly shoulder the inherent uncertainty and pain that comes with it. It’s almost like a form of prayer: you offer up what you can even though the reward is uncertain. You do it out of love.
Fantasy is easy and effort is punishing. Seeming is always easier than being.
Barry Diller's Beginner's Mind
If you want to know what Carol Dweck would describe as a “growth mindset”, look no further than Barry Diller.
He is Chairman and Senior Executive of IAC/InterActiveCorp and Expedia Group and founded the Fox Broadcasting Company and USA Broadcasting. Diller was inducted into the Television Hall of Fame in 1994.
It seems almost unreasonable to expect a true beginner’s mind from someone who has achieved mastery. It implies accepting that the accumulated domain expertise could be outdated, that existing networks could lose their relevance, that patterns stop working. It’s like writing off goodwill on the balance sheet: an acknowledgement that costly intellectual property lost value.
“Everybody wants to start where they are. Nobody wants to go back down the mountain to find a path to the top. Everybody wants to stay on the path they're on. The hard part is not the learning, it's the unlearning.It's not the climbing up the mountain, it's the going back down to the bottom of the mountain. It's the beginner's mind that every great artist or businessperson has. You have to be willing to start from scratch.” Naval
This article should leave you asking difficult questions.
This is another great profile of an investor who pivoted late into his career (from Graham type value to growth).
When Arne Alsin started his new firm in 2012, Amazon became its first holding. Today the online juggernaut is the most conventional — and most popular — hedge fund stock in the world, but when Alsin first invested in it the smart money was skeptical. After all, the company wasn’t profitable.
But Amazon was already upending the world of retail and had embarked on a new venture that caught Alsin’s imagination: cloud computing. Although he has no background in technology or science, Alsin says “I just dove into it, 100-hour weeks, I think, five weeks in a row.”
He explains:
You can figure everything out if you just spend enough time and break it down into its simplest component parts. Everything is just an on-and-off switch. Everything is just a pixel of information. Just keep digging, keep taking notes and figuring things out, and see how things work like an engineer. And that’s kind of the way I went at cloud computing.
On naming his firm Worm Capital:
Worms, he says, may have both bad and good connotations, but they’re critical to life on the planet. “Worms do their work first, in the soil; the worms have to carve out the tunnels, and the architecture inside the soil, and the organic material gets spread around and then you have growth.”
The Australian government recently announced a bill that would require the likes of Facebook and Google to pay publishers for displaying news links on their sites. Goes without saying:
They banned all news sharing on their website. All. Everything. You couldn’t share a single news article on FB. Eventually though, the Government decided to amend the bill.
FB did not mince words at all in their announcement.
It’s like forcing car makers to fund radio stations because people might listen to them in the car — and letting the stations set the price.
As Trevor writes:
Ultimately, this all comes down to power.
The fact is Facebook is more important to news publishers than news publishers are to Facebook.
Facebook recently disclosed that the impact from any news ban is minimal to their user experience with news making up less than 4% of the content people see in their News Feed. In contrast, Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million.
Disclosure: I’m long $FB and it makes a significant part of my portfolio.
Till next time.
