Charles Rubenfeld

Tech, Finance, Economics. Currently in investment research, former startup operator

[Charles Rubenfeld @Crubenfeld]

@david_perell Welcome back!

[Charles Rubenfeld @Crubenfeld]

This is the case for basically every company. The more controversial the company, the worse the reporting.

[Josh McGrath @j_mcgraph]

the longer you work at a frontier lab the less you trust any reporting on frontier labs. you gain the ability to smell

- bad faith guesses
- leaks from people who don't understand what's going on
- most importantly, the most gullible reporters

[Charles Rubenfeld @Crubenfeld]

@owenbjennings Bitcoin has been a high beta asset to equities over the last few years. Beta is lower recently but still high. Last stagflation scare saw Bitcoin fall.

Why would this time be different?

[Charles Rubenfeld @Crubenfeld]

RIP to one of the greatest referral programs ever. Got >$500 of free stuff. Consistent give $75, get $75 to your whole contact list.

Always wondered how the math worked…

[Ann Gehan @anngehan]

Social commerce app Flip has shut down, according to this message to users that appears on the company's app and website.

Flip, which tried to challenge TikTok's dominance, raised over $300M + was valued over $1B last year. Investors included Mubadala, WestCap, Forerunner 👀

[Charles Rubenfeld @Crubenfeld]

@yrechtman This should be on the abundance platform 🙂

State laws need to change. I’m sure TLC lobby will fight

https://t.co/9wOJlYvLDF

[Charles Rubenfeld @Crubenfeld]

I don't find the per capita city comparisons all that helpful, given the arbitrariness of the borders and the concentration of crime.

Both NYC and DC have extremely high crime areas. In DC, it seems to bleed more into the wealthy areas.

Either way, it's still true that DC crime is way too high.

https://t.co/BBTrNlX9fr

[Charles Rubenfeld @Crubenfeld]

Achievement unlocked: First time I had someone say to me "I read this great post about [topic], I forget the author" and I was like "the author was me."

[Charles Rubenfeld @Crubenfeld]

Totally, I'm not saying these are good investments or that it's clear where Cursor's moat will come from. I have my doubts too.

More just saying the current margins don't say all that much about future margins because people are willing to burn crazy amounts of capital right now.

Also I think fintech is a little different in that startups claimed to have price advantages they didn't, so they then had to raise prices to be comparable to incumbents. In this case, I'm talking about the market as a whole being priced too low. It's not like Cursor is undercutting some incumbent on price.

The other analogy I'm thinking of here is rideshare, where margins for a while were negative but the underlying business model was sound once rationalization was forced on the sector. Going to write up more thoughts on this today

[Charles Rubenfeld @Crubenfeld]

I feel like people are confused about AI coding margins and what they mean.

1) Software's high margins are not because it is distributed at zero marginal cost. Media is also distributed at zero marginal costs, but media businesses barely make any money.

Software has high margins because of pricing power through all the classic advantages: switching costs, network effects, bundling, and regulatory advantages. Zero marginal costs make it easier to grow quickly, but I don't think it has a huge impact on long-term margins.

2) Where AI margins shake out long term is entirely a function of this same pricing power question. Whether Cursor has a 90% margin or a 10% margin will depend on their ability to justify the additional value they are adding and how much competition eats away at this.

3) Even if the whole AI coding industry doubled prices, there'd still be a ton of demand. There is no risk of this industry falling apart if prices end up rising later.

So I don't think too much of these negative margins today and what it says about the industry's future.

[Charles Rubenfeld @Crubenfeld]

The more internal emails come out, the more Zuck looks like one of the best strategic leaders of our time. Extremely clear thinker and writer.

[Conrad Bastable @ConradBastable]

Love him or hate him, Zuck is one of the only big company execs who understands that trends can reverse, data discontinuities exist, marginal user behavior today does not imply aggregate user behavior tomorrow, and short term maximization strategies can cause long term collapse

[Charles Rubenfeld @Crubenfeld]

This is the real benchmark we need to track. Most agents need 95% or even 99% accuracy for enterprise use cases, not 80% and certainly not 50%.

[LDJ @ldjconfirmed]

Looks like the slope placements were somehow accidentally shifted too much to the right, here is a corrected version, sorry about that!
I'll be posting a google doc soon too with the math and data points organized, so others can more easily make visualizations like this as well.

[Charles Rubenfeld @Crubenfeld]

https://t.co/MeCsaA3eVW

[Charles Rubenfeld @Crubenfeld]

WSJ supports my view that Reeses is peak of American innovation, calling their Reeses + Oreo combinations the "Manhattan Project of Snacks"

[Charles Rubenfeld @Crubenfeld]

The peak of American innovation is not the semiconductor or the airplane.

It’s @reeses peanut butter snacks.

Just when you thought they’d run out of ideas, they keep coming up with new ones.

How about normal Reese’s cup, but make it gigantic? Or do white chocolate? Or make a frozen dessert? Or make it an egg?

I just checked and there’s 198 different Reese’s products still being sold. They’ve probably tried at least 500 different concepts.

This is what America is all about 🇺🇸

[Charles Rubenfeld @Crubenfeld]

@tanayj @nikillinit What would you know about Instagram ads?

[Charles Rubenfeld @Crubenfeld]

@__mailman__ Returns go down 🙂

[Charles Rubenfeld @Crubenfeld]

As @CliffordSosin talks about, most people will just have their own self-driving car instead of relying on a fleet.

1) Not much more expensive to owner your own self-driving car if you are using it every day
2) Even 99.8% reliability of a fleet is not reliable enough for most
3) People want to keep things in their car. You can't do this with self-driving cars.
4) Most people are optimizing for convenience today, not cost, in their buying of cars. Most people buy new cars instead of a used Toyota Camry.
5) Fleets have deadhead miles, though I think this is a small impact

One point in favor of this: Uber basically had no impact on the avg number of cars people own today.

https://t.co/8VM59kbRkT

[Charles Rubenfeld @Crubenfeld]

30% MoM growth on a $10 billion dollar run rate. Wild!

[Andrew Curran @AndrewCurran_]

The NYT had an exclusive on the OAI funding round.
- OpenAI has raised $8.3 billion at a $300 billion valuation, months ahead of schedule
- The round was five times over subscribed
- ARR is now $13 billion, up from $10 billion in June projected to surpass $20 billion by EOY
- business users who pay for ChatGPT has reached five million, up from three million a few months ago

[Charles Rubenfeld @Crubenfeld]

https://t.co/SwZ2wbQYve

[Charles Rubenfeld @Crubenfeld]

It also makes it way easier to hire people around the world. Automated interviews and resume screening, easier to monitor/evaluate, etc.

I still think my piece on this holds up pretty well.

[a16z @a16z]

.@balajis says AI enables labor arbitrage at scale.

A lawyer in the US making $200K. A worker in the Philippines making $2K.

Imagine if AI plus human IQ convergence looks like $20K.

A 10x gain for the global poor. A 10x pressure on Western wages.

[Charles Rubenfeld @Crubenfeld]

@michaelrbock Ah makes sense