Day: November 15, 2022

META Lesson 3: Tell me a story!



In my first two posts on Facebook, I noted that its most recent earnings report, and the market reaction to it, offers an opportunity for us to talk about bigger issues. I started by examining corporate governance, or its absence, and argued that some of the frustration that investors in Facebook feel about their views being ignored can be traced to a choice that they made early to give up the power to change management, by acquiescing to dual class shares. Facebook, I argued, is a corporate autocracy, with Mark Zuckerberg at its helm. In the second post, I pointed to inconsistencies in how accountants classify operating, capital and financing expenses, and the consequences for reported accounting numbers. Some of the bad news in Facebook's earnings report, especially relating to lower profitability, reflected accounting mis-categorization of R&D and expenses at Reality Labs (Facebook's Metaverse entree) as operating, rather than capital expenses. In fact, I concluded the post by arguing that investors in Facebook were pricing in their belief that the billions of dollars the company had invested in the Metaverse would be wasted, and argued that Facebook faced some of the blame, for not telling a compelling story to back the investment. In this post, I want to focus on that point, starting with a discussion of why stories matter to investors and traders and the story that propelled the company to a trillion-dollar market capitalization not that long ago. I will close with a  look at why (Read more...)

The Construction Industry’s Growing Waste Problem


This post is by Tessa Di Grandi from Visual Capitalist


The following content is sponsored by Northstar Clean Technologies

The Construction Industry’s Growing Waste Problem

Globally around 2 billion tonnes of waste is generated every year and the construction industry is a large contributor.

What’s more, demand for construction materials is growing alongside population and economic development, but the production of new materials to support this growth consumes both energy and resources.

The above infographic from Northstar Clean Technologies highlights the final destinations of construction and demolition (C&D) debris.

Breaking Down Waste

The sad truth is that only a small amount of C&D debris that could be repurposed actually is.

So where do these materials end up? Let’s take a look at the breakdown of C&D debris by destination in 2018, recorded by the U.S. Environmental Protection Agency.

Material C&D Debris Type (million tons)LandfillCompost & MulchManu. ProductsAggregate, OtherFuelSoil Amend.
Concrete71.2032.8301.200
Wood29.62.51.207.50
Gypsum Drywall13.200.2001.9
Metal1.103.6000
Brick and Clay Tile10.8001.500
Asphalt Shingles13020.10.020
Asphalt Concrete4.9091.810.300

143.8 million tons of C&D waste was sent to landfill in 2018, consisting of a mix of materials ranging from wood, concrete, and asphalt.  

Concrete (Read more...)

In My Newsletter I Trust


This post is by Om Malik from On my Om


blue and white logo guessing game

No matter how often this happens, we don’t learn our lessons — we continue to till other people’s proverbial land and keep using their social spaces. Whether it is Facebook, Instagram, LinkedIn, or Medium, we get trapped in the big platforms because they dangle the one big carrot in front of our eyes: the reach, the audience, and the influence. 

And we keep doing their bidding — they use our social networks, our work, and our attention — and, in the process, help make their networks gigantic and indispensable. We become pawns in their end game. And then they change the rules of the game — after all, if you own the league, you make the rules.

I have known the truth about social platforms. I quit Facebook and Instagram years ago, and candidly I am better for it. I don’t need 5000 friends — 15 good ones will do. And as far as sharing photos — I am happy that I have about a thousand people interested in my photographic work instead of 100,000 followers on Instagram. You, too, can sign-up for my photo newsletter here.

I have not quit Twitter for sentimental reasons. I sent out the first non-Twitter tweet and kinship with Jack. Even as the platform became unusable, I still stayed. I started using Twitter less. If I don’t visit today or tomorrow, my world doesn’t stop. So perhaps that is why I am not as distressed as others who are mourning about the future (Read more...)

Visualized: FTX’s Leaked Balance Sheet


This post is by Niccolo Conte from Visual Capitalist


Visualization of FTX Balance Sheet

Visualizing FTX’s Balance Sheet Before Bankruptcy

In a difficult year for the crypto space that has been full of hacks, failing funds, and decentralized stablecoins going to zero, nothing has compared to FTX and Sam Bankman-Fried’s (SBF) rapid implosion.

After an astronomical rise in the crypto space over the past three years, crypto exchange FTX and its founder and CEO SBF have come crashing back down to earth, largely unraveled by their misuse of customer funds and illicit relationship with trading firm Alameda Research.

This graphic visualizes FTX’s leaked balance sheet dated to November 10th, and published by the Financial Times on November 12th. Spreadsheet shows nearly $9 billion in liabilities and not nearly enough illiquid cryptocurrency assets to cover the hole.

How did FTX wind up in this position?

How FTX’s Bankruptcy Unfolded

FTX’s eventual bankruptcy was sparked by a report on November 2nd by CoinDesk citing Alameda Research’s balance sheet. The article reported Alameda’s assets to be $14.6 billion, including $3.66 billion worth of unlocked FTT and $2.16 billion of FTT collateral.

With more than one-third of Alameda’s assets tied up in FTX’s exchange token FTT (including loans backed by the token), eyebrows were raised among the crypto community.

Four days later on November 6th, Alameda Research’s CEO, Caroline Ellison, and Sam Bankman-Fried addressed the CoinDesk story as unfounded rumors. However, on the same day, Binance CEO Changpeng Zhao (CZ) announced that Binance had decided to liquidate all remaining FTT on their books, kicking off a -7.6% decline (Read more...)

Taking A Long Term View Of Web3


This post is by Fred Wilson from AVC


This post was co-written by Katie Haun and Fred Wilson

The events surrounding FTX have shaken the confidence of many. How did one of the largest crypto exchanges collapse so quickly? Why do meltdowns like this seem to keep happening?

At times like this, it helps to have a long-term view of web3 as a sector, not just a forward-looking long-term view, but also some perspective on where we have come from.

As longtime investors in web3 and board members (also individual shareholders) of Coinbase, one of the oldest and best-known companies in the space, we thought we might share some thoughts.

Web3 is a software-driven innovation that has a built-in financial system. This has been both a strength and a weakness. On the one hand, tokens enable developers and users to contribute to open-source protocols and participate in the economic upside of doing so, leading to strong developer communities. That’s been a positive relative to how software has been developed, monetized, and governed in the past. On the other hand, tokens lend themselves to boom/bust cycles and a sense by many that web3 is simply a speculative endeavor with no real substance behind it. 

This perception is only reinforced by the companies and individuals who started web3 companies and projects with the exclusive intent of making a lot of money very quickly through leveraged trading and speculation, pumping and dumping, and, sometimes, outright fraud.

Most of the well-known meltdowns in web3, going all the way back to Mt Gox (Read more...)

Seth Rosenberg | Bringing DeFi Lending Mainstream


This post is by Greylock Partners from Greymatter


Audio version of Greylock investor Seth Rosenberg's essay "Bringing DeFi Lending Mainstream," read by Greylock's head of editorial Heather Mack. Crypto hype and speculation got us into the current chaotic winter. But the core infrastructure remains, and is still ripe for the innovation that will take us into the next crypto summer. There are many real use cases across financial services that can not only usher us into a more secure, inclusive, and efficient financial system, but also return trust and ownership to those for whom crypto was created in the first place – the users. Rosenberg unpacks the use case of defi lending to illustrate how this can be done. You can read the essay here: https://greylock.com/greymatter/bringing-defi-lending-mainstream/

WeaveGrid


This post is by Collab Fund from Collab Fund


When it comes to electrifying transportation, the future has arrived ahead of schedule. And we believe we’ve found a winner in WeaveGrid, which we recently invested in.

Auto manufacturers long derided electric vehicles as impractical – today, they are investing billions to catch up with the inexorable.

The rate at which consumers are buying EVs has consistently beat projections. Electrification is spreading across all categories of vehicles: two-wheelers in Israel, three-wheelers in India, passenger cars in Europe, and even airport buses in the US.

Electrifying millions of vehicles is one of the most exciting opportunities in climate tech. But this mobility revolution is also an enormous challenge: how do we charge millions of EVs without compromising the electrical grid?

Because as EV adoption accelerates, so too will the demand for electrons to charge them.

There are already ~2.5 million EVs on the road; by 2030, ~44 million will be sold each year. Charging a single EV from home increases a house’s energy consumption by 2-3x. So when thousands of vehicles charge at the same time, they can push the grid to its limit. And we’ve seen how when the grid is already at capacity, as was the case in California this summer, grid operators struggle to get EV owners to delay charging.

In short, our ‘dumb’ grid wasn’t designed to transport so many electrons.

pecan street image.png Source: Pecan Street via Canary Media

Today, utilities’ only solution is to spend money on costly infrastructure upgrades. BCG estimates (Read more...)

WeaveGrid


This post is by Collab Fund from Collab Fund


When it comes to electrifying transportation, the future has arrived ahead of schedule. And we believe we’ve found a winner in WeaveGrid, which we recently invested in.

Auto manufacturers long derided electric vehicles as impractical – today, they are investing billions to catch up with the inexorable.

The rate at which consumers are buying EVs has consistently beat projections. Electrification is spreading across all categories of vehicles: two-wheelers in Israel, three-wheelers in India, passenger cars in Europe, and even airport buses in the US.

Electrifying millions of vehicles is one of the most exciting opportunities in climate tech. But this mobility revolution is also an enormous challenge: how do we charge millions of EVs without compromising the electrical grid?

Because as EV adoption accelerates, so too will the demand for electrons to charge them.

There are already ~2.5 million EVs on the road; by 2030, ~44 million will be sold each year. Charging a single EV from home increases a house’s energy consumption by 2-3x. So when thousands of vehicles charge at the same time, they can push the grid to its limit. And we’ve seen how when the grid is already at capacity, as was the case in California this summer, grid operators struggle to get EV owners to delay charging.

In short, our ‘dumb’ grid wasn’t designed to transport so many electrons.

pecan street image.png Source: Pecan Street via Canary Media

Today, utilities’ only solution is to spend money on costly infrastructure upgrades. BCG estimates (Read more...)

Reflections!


This post is by Om Malik from On my Om


I crave these moments of stillness. I occasionally find myself in the right place with the right camera and capture the moment precisely the way I feel it. Of course, it takes a bit of an effort to get rid of the distracting color 😉

I hope you are having a great day, where ever you are!

November 15, 2022. San Francisco

Listen & Learn from Veteran VC CFOs/COOs



NVCA successfully hosted its sixth annual Strategic Operations and Policy Summit in Washington, D.C., earlier this month. The 1.5-day conference, developed in collaboration with NVCA’s CFO Taskforce, attracted 110+ senior operators from North American venture firms.

The big picture: According to Jim Stewart, CFO of True Ventures, the event is “unparalleled in terms of its focus on technical topics, best practices, and industry-related policy updates” for this unique stakeholder group.

The program culminated with a veteran CFO and COO panel moderated by Pacific Western Bank’s Kay Parry. The discussion focused on giving senior operators impactful advice to enhance their partnerships.

Three takeaways:

  • Keep your ears to the ground: Kristen Laguerre of Boston-based MPM Ventures gets her best intel from the “lunch line.” She utilizes skills in communication to develop empathy for her colleagues by asking questions and actively listening. She finds this to be more impactful than getting information from ubiquitous email memos.
  • Don’t know everything: Blake Koriath excels in his role as CFO at High Alpha because he hasn’t mastered 100%. New challenges arise on a daily basis, and the unknown motivates him to continue to learn, grow, and add value to his partnership.
  • Leave your ego at the door: Sue Biglieri of Kleiner Perkins has been in the industry for decades and reminded the attendees to remain grounded.

Why it matters: These lessons play a helpful role for senior operators of varying skill sets. We hope the 110+ senior operations professionals at the event all left Washington (Read more...)