Category: Long Form Notes

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Revisiting Google’s Business Model and the Threat of AI

In early 2017, Capital Flywheels discussed how Google’s business model was at risk of AI disruption.

Back then (and even until very recently), most people assumed Google to be the leader in AI. If anything, the mainstream narrative seemed to be the other way around: Google, armed with an insurmountable edge in AI and data, was on the verge of disrupting tech and beyond, including healthcare, autos, and more.… Read the rest “Revisiting Google’s Business Model and the Threat of AI”

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Curve Inversion Magic and the Coming Recession

The US Treasury curve inverted sometime in 2nd half of last year.

A curve inversion happens when the long end of the curve (i.e. long-dated Treasuries) yields less than the front end of the curve.

This is an economic indicator worth paying attention to because the Treasury curve inverted prior to every recession since the 1970s (recessions shown in this following chart as gray bars, which consistently follow periods where the blue line dips below zero, indicating an inversion):

Source: St.… Read the rest “Curve Inversion Magic and the Coming Recession”

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Lessons from SVB / A Reminder of Our “HODL” Economy

Now that we are a few weeks removed from SVB, Signature Bank, Silvergate, and Credit Suisse crises, the overhead storm finally seems to be abating.

Whether the crisis is truly over or not, only time will tell…

What will stay with us will be its lessons and consequences, much like how the lessons of 2008 continue to shadow us.

But if we’re not careful, we may draw the wrong conclusions from this whole ordeal.… Read the rest “Lessons from SVB / A Reminder of Our “HODL” Economy”

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(Silicon Valley) Banks, Berkshire, and the Right Way to Do Leverage

Over the past month, the collapse of Silicon Valley Bank (SVB), Signature Bank, Silvergate, and Credit Suisse have shaken the foundations of the global financial system.

Despite significant changes in the regulatory landscape since 2008 and the many talking heads that have promised that financial crises are a thing of the past, the sudden collapse of several major institutions over a few short days certainly makes a loud statement.… Read the rest “(Silicon Valley) Banks, Berkshire, and the Right Way to Do Leverage”

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The Death of Capitalism and The Rebirth of Religion

This is Part 2.

In Part 1 – The Truth About Money – We discuss the properties of Money and explore why Money should be considered debt.

In Part 2 – The Death of Capitalism and the Rebirth of Religion – We discuss how society is rejecting the long-established rules around Money (and Capitalism) and why that will usher in a new era of Religion.… Read the rest “The Death of Capitalism and The Rebirth of Religion”

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How the Metaverse and Digital Twins Can Accelerate Innovation

This is Part 2.

In Part 1 – Competition, Experimentation, and Progress – I discuss why the positive benefits of technological and societal Progress alone are not enough to encourage people to pursue it, why Competition and Experimentation are both necessary to create Progress, and how to look for areas of potential Progress in the coming years.

In Part 2 – How the Metaverse and Digital Twins Can Accelerate Innovation – I discuss the the potentially transformative power of the metaverse and digital twins, and why societies and companies that successfully harness this technology could see rapid periods of Progress.… Read the rest “How the Metaverse and Digital Twins Can Accelerate Innovation”

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Competition, Experimentation, and Progress

This is Part 1.

In Part 1 – Competition, Experimentation, and Progress – I discuss why the positive benefits of technological and societal Progress alone are not enough to encourage people to pursue it, why Competition and Experimentation are both necessary to create Progress, and how to look for areas of potential Progress in the coming years.

In Part 2 – How the Metaverse and Digital Twins Can Accelerate Innovation – I discuss the the potentially transformative power of the metaverse and digital twins, and why societies and companies that successfully harness this technology could see rapid periods of Progress.… Read the rest “Competition, Experimentation, and Progress”

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Cloudflare Aiming for the King

You come at the king, you best not miss.

Omar Little, The Wire

So in war, the way is to avoid what is strong, and strike at what is weak.

Sun Tzu, The Art of War

Almost two years ago, Capital Flywheels added Cloudflare to the Paper Portfolio shortly after Cloudflare’s IPO. For a while, the market overlooked Cloudflare and largely assumed Cloudflare to be fairly undifferentiated vs other CDN companies like Fastly and Akamai.… Read the rest “Cloudflare Aiming for the King”

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How Shifting Consumer Preferences Could Threaten “Buy Now, Pay Later”

This is part of an on-going series exploring the “buy now, pay later” (BNPL) space.

Part 1 “Buy Now Pay Later” and What Might Be Coming Next discusses why BNPL adoption is likely to surprise to the upside…and why BNPL must ultimately merge with commerce to survive.

Part 2 “Buy Now, Pay Later” and the Coming “Closed Loop” discusses Square’s acquisition of Afterpay…and why BNPL is a credible threat to the current payment network landscape.… Read the rest “How Shifting Consumer Preferences Could Threaten “Buy Now, Pay Later””

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How 3D Printing Threatens Amazon…and What That Can Teach Us About the Power of mRNA

The power of mRNA technology to truly transform society in the coming years can be a bit hard to understand.

We can already see the importance of mRNA tech / vaccines in our daily lives because of how central it is for combating COVID-19, but understanding its potential beyond COVID-19 likely takes a bit of a leap of faith for the average person.… Read the rest “How 3D Printing Threatens Amazon…and What That Can Teach Us About the Power of mRNA”

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The Only Two Business Models That Matter?

This is Part 1.

In Part 1, I discuss why rents vs tolls is an increasingly relevant and powerful descriptor of business models (from a revenue generation perspective) and why it matters.

In Part 2, I discuss the conditions that allow for the rise of rents, why technology is becoming the new “landlord”, and why you want to own it anyway as a hedge.… Read the rest “The Only Two Business Models That Matter?”

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Gaming is Eating the World and How Gaming Can Can Restore Trust in Society

Almost exactly a decade ago, Marc Andreessen famously proclaimed:

Software is eating the world.

Source: A16Z

With hindsight, it’s clear Marc Andreessen was not just right, he was absolutely right.

Even before considering the proliferation of software in 2020 in a COVID-driven world, software was already well on its way to dominating most aspects of our lives by 2019.

And what makes that proclamation even more incredible was how out of consensus that view was when it was written in 2011.… Read the rest “Gaming is Eating the World and How Gaming Can Can Restore Trust in Society”

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Reshuffling the Geopolitical Deck / How Technology Resets the World

This post is part of a series.

Part 1 – “The Coming Economic (R)Evolution” discusses the rise of technology and the creation of digital businesses that no longer need labor or capital…and why understanding their impact on the economy is necessary to navigate the shifting investment landscape in the coming decades.

Part 2 – “Empire(s) of the 21st Century” discusses how technology has eclipsed geography as the most important factor in geopolitics…and why this could potentially shift geopolitical competition from “country vs country” to “country vs tech”.… Read the rest “Reshuffling the Geopolitical Deck / How Technology Resets the World”