21networks

I invest in various network based businesses and talk about career and/or investments. Hope it's helpful. Not investment advice.

[21networks @21networks]

This account repeats important, but not original, thoughts about: investments, compound interest, service, humility, prayer, ongoing analysis, and gratitude. Questions welcome. Not investment advice.

[TaxPawspective @TaxPawspective]

It’s curious that this insight into how Treasury thinks isn’t getting more concerned media scrutiny.

Treasury is explicitly telling Australians that it thinks not taxing them on gains they haven’t (and in fact might never) realise is an “interest-free loan” from government.

[21networks @21networks]

@Waymo I am in a debate with two @MIT professors on AGI. The question is can Waymo generalise intelligence across many dimensions?

[21networks @21networks]

@alphacpapa @CapitalObserver Could you please say more about this?

[21networks @21networks]

@Interlime @Seasoner19 @AlanKohler @abcnews I wish you and your family the best. All this political commentary isn't helpful. Buying a house is hard enough at the best of times.

[21networks @21networks]

@leighjasper There will still be some limited carve out for startups. We are using the following diagram to try and organise our community and explain the risks: https://t.co/O2KysqtMZe

[Pushmeet Kohli @pushmeet]

When I was asked by the American Academy of Arts and Sciences to write an essay on my thoughts on how AI will accelerate Science, I felt honored but also felt that it would require a lot of thoughtfulness and diligence to distill my thoughts on paper.

The essay has now been published and I cannot be more thankful to the @americanacad and @GoogleDeepMind teams for their feedback and encouragement during the process.

Key reflections from my essay:
🔭 AI is our newest revolutionary lens: Just as the telescope and microscope expanded our physical perception, AI is extending our cognitive reach, allowing us to decipher the immense complexity of the data-universe.
🧬 The rise of "machine intuition": AI is not just a computational engine. By detecting hidden structures across disciplines—from protein folding to extremal combinatorics—it acts as an ultimate bridge, accelerating the interdisciplinary breakthroughs that modern science depends on.
🏗️ From puzzle-solvers to architects of questions: As we transition toward open-ended, agentic AI systems that actively generate novel hypotheses, the burden of reasoning is shifting. We are evolving from being the solvers of intricate puzzles into the architects of profound scientific questions.
✨ Expanding human potential: AI won't replace scientists; it expands what we can imagine and achieve. Just as the telescope didn't make astronomers obsolete, AI is giving us the stars.

Read the full essay here: https://t.co/LCoF7ds7WZ

[Robin Dods @toy59496]

The Chalmer Delusion: Outcome Bias & The Static Pie Fallacy

https://t.co/X5uAtgEL0y

I encourage you all to look at the excellent interview of Jim Chalmers by Philip Coorey of the AFR.

What struck me is that he appears genuinely sincere that he has a good policy and that it will work in delivering intergenerational equity and productivity.

It reminded me of Oscar Wilde's letter when he was in jail...

"Most people are other people. Their thoughts are someone else's opinions, their lives a mimicry, their passions a quotation".

Jim Chalmers is not you, and he is certainly not me, so how can his mind arrive at such bizarre conclusions.

I think the answer lies in the field of psychology: outcome bias combined with the static pie fallacy.

Jim Chalmers sees the successful founder, investor or business owner - but not the thousands who failed, lost capital, went bankrupt or spent years building nothing. Capitalism’s winners are visible; its graveyards are invisible.

Then comes the static pie fallacy: treating wealth as something merely to be redistributed rather than created through risk, incentives and relentless trial-and-error.

He doesn't see that for the pie to grow, incentives must be rewarded, and that outcomes are destined to be fundamentally inequitable If the model works properly. However if the pie grows large enough we have enough wealth to bring up those at the bottom. But we will never be all the same, and rewarded the same, if we were that would be socialism.

But he cannot see that, as trapped in his own psychology, Jim Chalmers feels taxing success is morally righteous rather than economically destructive.

The problem is that innovation only exists because extreme rewards compensate for extreme failure.

The argument is not one of intelligence, but of philosophy, and there is no common ground or resolution.

This is a very old dilemma, and Thomas Kuhn would say Jim Chalmers and the business community have "incommensurable frameworks", and trapped in his own paradigm he is unable to view the world differently. What we see as an apparently rational disagreement is actually a failure of shared meaning rather than a failure of intelligence.

The conclusion is sobering that the only way to resolve the problem is to remove Labour through the election box because the framework in which they make decisions is so foreign to economic reality that they will inevitably fail to interpret the world around them in a way that will grow the pie.

They are prisoners of their own ideology.

https://t.co/X5uAtgEL0y

[Ben Thompson @bnthompson]

I oppose a CGT carve-out solely for “startups”.
Any business that risks capital to employ Australians deserves support - especially as AI creates alternatives to traditional jobs.
We should back all private sector job creators, not just those with the right label.
https://t.co/4iU4vSnnxD #BuildAustralia

[21networks @21networks]

Understand.

Think of it through the eyes of two production managers: The first is a 50 year old man with deep industrial expertise who thinks his job is to improve production. The second is 30 year old women focussed on improving diversity. Same initial economics. Who do you think best improves productivity over time? Multiply that across every Australian company.

Again, thanks for the discussion.

[21networks @21networks]

Dear Mark,

IMO, the governance change clearly and dramatically impacted both improvements to labour productivity and process engineering. A board only has 4-5 additional slots and maybe 50 hours/year of discretionary time. Before 2000, this was spent on the commercial topics you mention. By say 2015, the whole focus had changed to the new agenda of Board diversity, ASX Governance principles, Climate change, Corporate culture, and Workforce issues. The whole intent of the firm moved to "Stakeholder" capitalism along with the definition of productivity.

20 years ago the ASX was one of the great exchanges of the world. Now, not so much.

The transition occurred slowly, and company by company, as the directors of boards rolled over. A campaign was run to get rid of “Pale, Male, and Stale” directors with deep commercial experience. Firms kept investing in capital through the 2003-2015 period despite the new governance regime but it was more the old mining “dinosaurs” than the new progressive firms.

The reason that I like Peter Swan, is that he had the courage to look at the individual company level data to make the case. As the board agenda changed, so did hiring and capital allocation and inevitably all measures of performance.

In 2007, I moved my time and capital away from the ASX as all this became clear to me. I have focussed on the Australian start-up ecosystem, which has grown from nothing to become 8.7% of GDP. That engine for national productivity is now being disrupted by the CGT changes, leading to my interest in national productivity.

Thanks for the discussion. I have learned from it. Hopefully, we can protect start ups so that they can continue to drive Australian productivity forward.

Best Regards, Charles

[21networks @21networks]

@Larryjamieson_ I, like many, will make fewer early stage investments. How this affects the Start-up ecosystem is a raging question at the moment: https://t.co/vNJD2KABGY

[21networks @21networks]

@Mark_Graph https://t.co/tGYqybvBVu

[21networks @21networks]

@Mark_Graph https://t.co/w0eOhnu9Ee

[21networks @21networks]

@bubbleboi We do have some credible early stage chip makers focussed on niche applications.

[21networks @21networks]

@matt_barrie @DaveSharma What is your alternative? We are trying to do something at @innovationbay however we can't compete on funding.

[21networks @21networks]

@Mark_Graph Thanks, that is clear. Do you have a view on the root causes of our decline in MFP? My assumption has always been that it was caused by the HIH royal commission that reported in 2002 and the ASX Governance Principles that followed in 2003. https://t.co/Xq0WD5G8k8

[21networks @21networks]

@AvidCommentator How much do you think this changes as specific candidates are announced? In some seats, I expect it to be One Nation vs Lib/Nats. With whomever finishes first winning the seat with the preferences of the other.

[21networks @21networks]

@spenderallegra do you have any insight on how the proposed budget consultation process for start-ups will work? My concern is the disruption to ongoing fundraising. https://t.co/oskkBXq0Gi