Thomas Jefferson's Nephew

Give the earth itself and all it contains rather than do an immoral act

Happy Friday! And welcome to all our new subscribers!

It was great having a full week back at home without travel. Somehow, I still feel exhausted — I think a side effect of having a toddler. But, I’m glad to be back on a more normal schedule at least.

Next week, on Wednesday, I’ll share a bit of a deep dive on this year’s annual Berkshire Hathaway Shareholder Meeting. Keep an eye out for that one.

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On My Mind

Last week, I wrote about a soon-to-be founder’s startup idea. I thought his specific idea was challenging given he would be building an incrementally better product as opposed to tackling a new challenge.

In the B2B SaaS world, incrementally better solutions can be hampered by a difficult go-to-market motion. You have to convince a customer that their current solution, which they have paid for and learned to use, doesn’t work as well as they think. You then have to also convince them that your new solution is so much better than their current one that they should change.

That can be a tough sale — and see the quote in the Things to Read section from Jensen Huang, NVIDIA co-founder. He shares a similar concept, and he knows how to build a company much better than me.

Despite the above being my opinion — and the founder wanting my opinion — I struggled to share it. It feels a bit arrogant to be skeptical at such a high level. I wasn’t really diving into the specifics of what he wanted to build and debating those pieces with him. I was more or less asking him if he should get an entirely new idea.

I finally shared my feedback while thinking I was surely going to alienate myself from this exceptional person. His response surprised me.

No one else he had spoken with had done anything but encourage him (while offering funding in exchange for a chunk of the company, of course). He was thinking about the beauty of the tech he could build, not the business implications of selling that beautiful to-be-built tech.

Now, he didn’t say he agreed with me. But he did say that he needed to think some more about my response. He has since iterated on a few pivots around his original idea. He is early enough in development that pivots are relatively easy.

Time will tell if I helped him or just slowed him down — but at least he found my feedback helpful.

What is odd to me, however, is that I didn’t share anything really insightful. I know some of the others he has spoken with well — and all of them would have had the same gut reaction I did. They apparently decided to provide mainly encouragement instead.

It is easy to tell someone what they want to hear as a way to build a relationship. That approach can be disrespectful, however.

I want this guy to be successful. A couple years spent building exceptional technology is a big commitment. If he can’t really sell it once it is built, I can’t think of a more demoralizing outcome. Unfortunately, I see many tech-focused founders arrive at that endpoint.

So, I’m going to try my best to keep having wholly honest conversations. There are enough people in the world that automatically respond with positivity — and positivity could be the right response. But when it is not, an honest conversation is more respectful.

Personally, I think I can do that. The real trick then, it seems, is to find the people who will have wholly honest conversations back when I need something different than just positive support.

Quote of the Week

Don’t use skepticism as a thinly veiled excuse for inaction or remaining in your comfort zone.

Tim Ferriss

Poll of the Week

Have you used AI to write something for you at work?

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Last Week

Question: Has your lifestyle been impacted by inflation?

Results: 56% said “Yes.” I would have to put myself in the same camp — I am putting less into investments / savings every month.

Things to Read

Integrity | From Thomas Jefferson’s Advice to His Nephew by Thomas Jefferson / Rational Walk, 1785

Give up money, give up fame, give up science, give the earth itself and all it contains rather than do an immoral act. And never suppose that in any possible situation or under any circumstances that it is best for you to do a dishonourable thing however slightly so it may appear to you. Whenever you are to do a thing tho’ it can never be known but to yourself, ask yourself how you would act were all the world looking at you, and act accordingly…

It is of great importance to set a resolution, not to be shaken, never to tell an untruth. There is no vice so mean, so pitiful, so contemptible and he who permits himself to tell a lie once, finds it much easier to do it a second and third time, till at length it becomes habitual, he tells lies without attending to it, and truths without the world’s believing him. This falsehood of the tongue leads to that of the heart, and in time depraves all its good dispositions…

Never think of taking a book with you. The object of walking is to relax the mind. You should therefore not permit yourself even to think while you walk. But divert your attention by the objects surrounding you. Walking is the best possible exercise. Habituate yourself to walk very far.

Building | From Conversation with NVIDIA’s Jensen Huang by Patrick Collison / Jensen Huang, 2024

Our purpose should be to go and do something that has never been done before, that is insanely hard to do, that if you achieve it could make a real contribution... If that's the case, the market is probably zero billion dollars in size because it's never been done before. I'd rather be a market creator than a market taker...

It's a gut call in the sense that your intuition says something as a starting thesis. But then you have to reason through it and the reasoning of it is much much more important to me than a spreadsheet. I hate spreadsheets because you can make spreadsheets do whatever you want. You can make any chart you want out of a spreadsheet - you just got to type in some numbers - and so I don't love spreadsheets.

For that reason I love words. Words are reasoning. Tell me how did you reason through this. What's our intuition? Why do we be believe that matters?

Trash AI | From Meet AdVon by Maggie Dupre / Byrne Hobart, 2024

Maggie Harrison Dupré writes in Futurism about AdVon, a company that places AI-generated writing with AI-generated author photos and bios on reputable sites.

There's a pattern in declining industries where companies try to monetize their brand at the cost of rapidly degrading it: in the short term, putting the Sports Illustrated logo on this content makes the content more valuable, but in the long run it makes SI worthless. That happens faster when the content provider is misleading companies about how it writes its content — the article has some fun examples of reviews for lifting belts suddenly veering into talking about Gucci, and reviews for microwave ovens that accidentally describe real ovens by reassuring customers that they can indeed use them to heat items wrapped in foil.

And there turns out to be another layer to the grift, where the same company that's getting paid to produce AI-generated reviews is also getting paid to insert particular companies' products into those reviews.

Byrne Hobart

I attended that meeting; I think it was my second meeting held at the Joslyn…

A year before this meeting, Warren said to me in his office that he measures his success as a manager by how few shares trade. To this he added, in passing, that that is not a view shared by his fellow CEOs, or on Wall Street. Not splitting the shares was one significant means of nurturing long-term ownership. Indeed, years later the specialist for Berkshire trading confirmed that the lack of trading meant shares could trade with a hundred dollar spread on a 10,000+ price, which amounted to 10 cents on a 10 dollar trade, less than the then 12.5 cent minimum spread. The reason? He didn’t need a higher spread to cover the risk of a sudden large trade.

Related to this is one of my favorite memories — not from a meeting. In the early ‘80s one day I walked through Grand Central in NY. Merrill Lynch had a booth there with two Quotrons, with two lines of people, which I ignored. I approached the desk and easily got the attention of a nice woman who was eager to help:

“May I help you?”

Yes, could you give me a quote for Berkshire Hathaway?

Sure, she replied, “I’ve never heard of it”; and proceeded to leaf through a 2” volume of listings.

Arthur Clarke

Visuals

Delinquent Credit Card Debt Growing

Long-Term Downside Protection from the S&P 500

Don’t Get a Motorcycle

If you found today’s issue interesting, more than anything, I would appreciate you forwarding it to someone that might also enjoy it. It is a big deal to me whenever someone reads my work, so I appreciate your support.

Have a great weekend,

EJ

Twitter / X: @HistoryEJ

Disclosure: Nothing in this article constitutes investment advice. More detailed disclosure here.

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