Ideas

  • Doom And Gloom From Charlie Munger

    In case inflation wasn't stressing you out enough, Berkshire Hathaway's Vice Chairman, Charlie Munger, channeled Nouriel Roubini in his tirade on the dangers of inflation. 

     

    via Yahoo Finance

    For context, the CPI has inflation rising at the fastest rate in over 40 years. Meanwhile, Munger's current working hypothesis is that our currency will become worthless over the next hundred years. 

    Munger paints a dire picture – but there are a lot of "what-ifs." The infusion of cash into the economy during the pandemic certainly pushed us in a dangerous direction (despite saving the economy). However, 100 years is a long time, and there are many steps we can take as an economy to slow that snowball. One of those includes the continuing scale of innovation. As new technologies arise, and the value chain of industries changes, so does the economics of our nation. 

  • Compute Trends In Machine Learning

    I often talk about Machine Learning and Artificial Intelligence in broad strokes.  Part of that is based on me – and part of that is a result of my audience.  I tend to speak with entrepreneurs (rather than data scientists or serious techies).  So talking about training FLOPs, parameters, and the actual benchmarks of ML is probably outside of their interest range. 

    But, every once in a while, it's worth taking a look into the real tangible progress computers have been making. 

    Less Wrong put together a great dataset on the growth of machine learning systems between 1952 and 2021.  While there are many variables that are important in judging the performance and intelligence of systems, their dataset focuses on parameter count.  It does this because it's easy to find data that is also a reasonable proxy for model complexity. 

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    Giuliano Giacaglia and Less Wrong (click here for an interactive version)

    One of the simplest takeaways is that ML training compute has been doubling basically every six months since 2010.  Compared to Moore's Law, where compute power doubled every two years, we're radically eclipsing that.  Especially as we've entered a new era of technology. 

    Now, to balance this out, we have to ask the question, what actually makes AI intelligent?  Model size is important, but you also have factors like training compute and training dataset size.  You also must consider the actual results that these systems produce.  As well, model size isn't a 1-t0-1 with model complexity as architectures and domains have different inputs and needs (but can have similar sizes). 

    A few other brief takeaways are that language models have seen the most growth, while gaming models have the fewest trainable parameters.  This is somewhat counterintuitive at first glance, but makes sense as the complexity of games means that they have more constraints in other domains.  If you really get into the data, there are plenty more questions and insights to be had.  But, you can learn more from either Giancarlo or Less Wrong.

    And, a question to leave with is whether the scaling laws of machine learning will differ as deep learning become more prevalent.  Right now, model size comparisons suggest not, but there are so many other metrics to consider. 

    What do you think is going to happen?

  • The Future of Spaceflight

    When I talk about exponential technologies, I almost always end up discussing Tesla and SpaceX. 

    Elon Musk is an interesting guy.

    220220 Elon

    Whether they end up doing everything they say they're going to, his companies massively accelerate the rate at which capabilities turn into products and platforms for future growth.

    I recently shared the Elon quote: "Stop being patient and start asking yourself, how do I accomplish my 10-year plan in 6 months?  You'll probably fail, but you'll be a lot further along than the person who simply accepted it was going to take 10 years!"

    I don't know if he really said it.  Nonetheless, it sounds like him … and I agree with the sentiment.

    The New Space Race.

    When I was young, the Space Race captured the heart and souls of Americans.  But, for the past few decades, it was in the background.  Recently, that has changed.  The space race is getting hot again.  Resources are pouring into this area, and SpaceX is leading the pack. 

    In 2018, I shared excitement that the boosters he used were reusable.  Today, people are talking about how the newest ship, Starship, could render other rocket programs obsolete. 

     

    Cost-of-space-flight-chartvia visualcapitalist

     

    While there's always room for competition, I can see many programs falling far behind if they haven't been focusing on reusability.  Assuming Starship delivers on its promises (keeping in mind that Elon is often over-confident about his timeline), it will be cheaper and more versatile than anything out there. 

    I think it's naive to assume that other companies aren't doing interesting things … but by the time they release anything comparable, it's possible that SpaceX will already dominate the market. 

    The economics of reusable rocketry isn't yet cost-effective for most potential customers, but Musk is undoubtedly moving the needle in the right direction. 

    Hopefully, he can continue to raise the expectations of both consumers and producers.  The results could be out-of-the-world.

    Right now, suborbital trips from Virgin Galactic and Blue Origin cost between 250K to 500K per trip – and trips to actual orbit cost over $50 million. 

    However, I believe the cost of space travel – and space tourism – will drop radically within my lifetime. 

    It's hard to comprehend the scale of the universe and the scale of our potential … but that's what makes it worth exploring!

    Even though we've only been talking about space travel, there are so many other exponential technologies that this applies to just as well.

    Onwards!

  • A Busy Day …

    I was just in Arizona, at a Genius Network event. Listened to some interesting speakers, spent time with some great friends and business partners, and also got to share some ideas with them as well. 

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    My big takeaway for the weekend was on the power of contests and competition not just for attracting customers, but for hiring and as a catalyst to adoption and experimentation. 

    Unfortunately, my flight coincided with the first half of the Super Bowl.

    Luckily, the Cowboys avoided conflicting with my schedules.  I’d hate to think how I’d feel if I had to decide whether to attend the Super Bowl.

    Conveniently, being on a plane didn’t limit my ability to watch. 

     

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    Essentially every other person had the game on their device – so Zach and I could watch the game we don’t really care about while thinking about what could have been. 

    Do you think the Rams really have home-field advantage?

    Here’s an idea.

     

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  • Here Are Some Links For Your Weekly Reading – February 13th, 2021

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    Here are some of the posts that caught my eye. Hope you find something interesting.

    Lighter Links:

     

    Trading Links:

  • Functional Mapping: Nature’s Desired Path

    There's a concept in design and transportation called Desire Paths. 

    The desired path is the path that users take despite the intended path by the builder of a community or application. 

    Here's a great example. 

    6tj18p093vb81Reddit via itstartswithani

    And, here's a whole community forum focused on desire paths. 

    It's often easier to take advantage of human nature … or just nature … than fight against it. 

    To that effect, I shot a short video on how this relates to your business and tech adoption. I call it functional mapping. Check it out. 

     

    Understanding the natural path for both technology and your clients makes it easier to understand and anticipate the capabilities, constraints, and milestones that define your path forward.   That means you actually have to understand the different types of users and what they expect to do.

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    Each stage is really about the opportunity to scale desired capabilities and automation.

    It isn't really about building the technology, rather, it is about supporting the desire.

    You don’t have to get it right.  You just have to create momentum in the right direction.   Meaning, if you understand what is coming, you don't have to build it … but you should figure out where you want to build something that will move things in the right direction.

    You’ve probably heard me talk about how Capabilities become Prototypes. Then Prototypes become Products.  And, ultimately, Products become Platforms.

    This model is fractal.  That means it works on many levels of magnification or iteration.

    What first looks like a product is later seen as a prototype for something bigger.

    SpaceX's goal to get to Mars feels like their North Star right now … but once it's achieved, it becomes the foundation for new goals.

    This Framework helps you validate capabilities before sinking resources into them. 

    It helps you anticipate which potential outcomes you want to accelerate.  Rather than simply figuring out what the easiest next step is … you have to figure out which path is the best next step to your desired outcome.

    The world is changing fast! Hope you're riding the wave instead of getting caught in the riptide!

  • The Future of the Blockchain

    Last week, I talked about market performance in 2021.  A decent portion of that article talked about cryptocurrency and the recent downturn (after a stellar 2021).  I'm a skeptic by nature, so it's hard for me to get behind any specific coin (even Bitcoin) at this point in time.

    This week, I had a conversation with good friends, including John Raymonds, about the topic as well.  John is much more active in the space and brought up some good points.  Something I noticed was how the level of discussion is starting to elevate and mature. People are beginning to think about secondary and tertiary value propositions. The conversation even made me think about repurposing some of our underutilized hardware in our server room for some crypto-related purposes.

    So, today, I want to focus on a different aspect of the equation … the potential value propositions of cryptocurrency as a technology – and the blockchain. 

    To start, I want to talk about Industrial Revolutions.  In part because we're at another inflection point. 

    A Look at Industrial Revolutions

    The Industrial Revolution has two phases: one material, the other social; one concerning the making of things, the other concerning the making of men. - Charles A. Beard

    There are several turning points in our history where the world changed forever.  Former paradigms and realities became relics of a bygone era. 

    Tomorrow's workforce will require different skills and face different challenges than we do today.  You can consider this the Fourth Industrial Revolution.  Compare today's changes to our previous industrial revolutions. 

    Each revolution shared multiple similarities.  They were disruptive.  They were centered on technological innovation.  They created concatenating socio-cultural impacts.

    Since most of us remember the third revolution, let's spend some time on that. 

    Here's a map of the entire "internet" in 1973. 

     

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    Reddit via @WorkerGnome.

    Most of us didn't use the internet at this point, but you probably remember Web1 (static HTML pages, a 5-minute download to view a 3Mb picture, and of course … waiting for a website to load over the dialup connection before you could read it).  It was still amazing.

    Then Web 2.0 came, and so did everything else we now associate with the internet; Facebook, YouTube, ubiquitous porn sites, Google.  But, with Web 2.0 also came user tracking, advertising, and we became the "product."  Remember, you're not the customers of those platforms – advertisers are.  And if you're not the customer, you're the product. And when you're not the customer, there's no reason for the platforms not to censor your thoughts to control the narrative. 

    Putting You In Control

    Web3 (and the blockchain and its reliant technologies) brings the power back to the people. 

    Primarily due to decentralized access with equal treatment for everyone.  Governments are already being pressured by Bitcoin and other cryptocurrencies.  But so are banks and brokerages, due to smart contracts and Ethereum.  Soon, even VCs will be impacted due to OHM fork treasuries or initial DEX offerings. 

    As Web3 gets more mature, so will decentralized finance.  Meaning, big banks, governments, ISPs, and more will have less control over the applications and uses of the technology. 

    If handled correctly, that means competition can discourage the productization of your digital presence.

    Removing Barriers

    There are many practical ways this would impact your life – but let's look at one that's already happening. 

    El Salvador recently made Bitcoin legal tender.  Talking about all the reasons this happened is beyond the scope of this article, but it does make El Salvador an excellent case study for the possibilities. 

    To start, it's now easier and quicker to buy a beer there (with Bitcoin) than it is in the US with cash.  It also stabilizes pricing in a civil war, because it's easy to move both in and out of the country. 

    Consequently, it also means that their currency holds its value as they travel to other places. 

    Let's take this to the extreme.  Let's say someone was to convert all their net worth to Bitcoin, and put it in a hardware wallet.  They could conceivably memorize their seed phrase, throw the wallet in a fire, and fly to El Salvador with only the clothes on their back.  After finding a way to scrounge up the money to buy another hardware wallet through random acts of labor … they would be in a completely new country with their entire net worth and no other footprint.  It's scary – especially for governments and their taxing authority.  But, it creates a new set of potentials and freedom.

    Now, take it a step further.  What would the world look like if you had all your health data, insurance, etc., with you anywhere you travel?  The world becomes your oyster in a way that was almost impossible before. 

    And that's only the beginning. 

    But, to bring it back to my skepticism again, there are a lot of roadblocks, inferences, and time in between today and the decentralization of the internet and finance.  And for now, that thought experiment only really works if you're willing to move to El Salvador.  The larger countries seem to be doing everything they can to discourage the adoption of cryptocurrencies. Though I think the smaller countries view this as a chance to become one of the new hubs of the world.

    However, maybe it's time for this quote by Elon Musk: 

    "Stop being patient and start asking yourself, how do I accomplish my 10 year plan in 6 months? You will probably fail but you will be a lot further ahead than the person who simply accepted it was going to take 10 years."

     

     

  • Here Are Some Links For Your Weekly Reading – February 6th, 2022

    Have you paid attention at all to the Spotify controversy?

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    Here are some of the posts that caught my eye. Hope you find something interesting.

    Lighter Links:

    Trading Links:

  • How Much Electricity Does Bitcoin Use?

    Electricity use is one of the common complaints people have when talking about Bitcoin adoption and mining. 

    So, how much energy have we been using to mine Bitcoin?

    More than you might’ve guessed.

    The world is changing.


    Bitcoin-energy-usage

    via Daily Infographic

    I know several people that are getting more into mining as cryptocurrency continues to grow in popularity (despite the downturn). 

    While this amount of energy usage is startling – and bad for the environment – there are many ways to reduce the consumption of electricity by cryptocurrencies. 

    On the other hand, this might be an interesting alternative data source that gives us a different perspective about the ongoing popularity and commitment people have towards a currency.

     

  • It Isn’t Whether Tom Brady Is Retiring – It’s About When … and Why We Care?

    In 2017, I wrote an article “asking” why the Patriots were so good. Then Tom Brady left, the Patriots have suffered (somewhat), and Tom Brady won another Super Bowl with the Buccaneers. 

     

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    Now, several sports pundits are reporting that he may be retiring. Tom Brady insists that he hasn’t made a final decision yet. 

    Of course, there is the matter of the $15 Million portion of his signing bonus that becomes payable to him on Friday. That might explain the “confusion” on timing?

    Regardless, all this talk reminded me about what makes Tom Brady special. 

    There is a difference between ‘luck’ and ‘skill’.

    Both exist … yet, luck favors the prepared.

    In life, as in sports, hard work often beats talent (especially if talent fails to work hard).

    But, when you see this picture from the 2000 NFL Combine, it’s hard to believe that Tom Brady would be a 7-time Superbowl MVP taking the Buccaneers to the Super Bowl in his first year with them. All at the geriatric (for an NFL player) age of 44. 

     

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    via CBS Sports

    When I talked about the Patriots, I focused on the fact that they were a well-oiled machine with a powerful framework of success that allowed individual greatness to shine. 

    I think Brady’s continued success is emblematic of that. 

    Tom Brady is a paragon of culture, process, and hard work. Much of his approach was molded by his time with Belichick, but of course, he gets enormous personal credit as well. 

    He expects the best of himself and brings out the best in his teammates. That’s enabled him to stay a top-level competitor despite not being the strongest, fastest, or most mobile QB (and that was when he was young). 

    As well, Tom Brady is remarkably consistent and disciplined; his diet, his routine, his exercise, his film routine, etc. All NFL athletes have impressive routines for the most part, but take a look at Tom Brady’s routine. It’s a routine built for him and his needs – and he’s got it dialed in. He doesn’t need to waste time trying to get big in the gym, so he focuses on 9-key exercises to support his goals. 

    The System is the ‘system’; but, within it, you can measure what works, who contributes, and then use those insights to identify the best things to try next.

    Win, lose, or draw … some things speak for themselves. And whether he retires today, next year, or never, we don’t need to wait five years to know he’s a Hall of Fame player with an incredible career.