Alimi!

Engineering|| Black|| Islam ||Arsenal|Politics|| Aspiring lover of books 😀. Give me a vibe and I'll match it.

[Big Brain Business @BigBrainBizness]

Starbucks founder and chairman emeritus Howard Schultz explains how a trip to Italy turned a bean retailer into 100 million weekly customers:

The new business model was standing in a Milan coffee bar, waiting to be noticed.

"There's 1,500 Italian coffee bars in Milan alone. And I'm watching the ritual of coffee, the sense of community. I go in, I taste the coffee."

Back home, Starbucks sold beans for people to brew in their own kitchens.

Milan reversed that in a single thought:

"And at that time, Starbucks had only been selling coffee for the home. And I'm thinking, 'Wow, we — the opportunity is not for the home. The opportunity is in the store.'"

@HowardSchultz didn't spend the flight home building a deck.

"And literally, I race home with the idea. And in a sense, the rest is history."

Asked what specifically impressed him about those Italian coffee bars, Schultz doesn't mention the espresso. He talks about the people pulling it:

"The baristas are highly trained. They're professionals. There's a real sense of pride and integrity."

And the habit that formed around them:

"And you know the ritual itself of people coming back to the same coffee bar every day. The barista knows the customer."

That was the entire thesis, compressed into one question:

"I kind of thought, wow, could we recreate that in America?"

The moment they tested it, the company stopped being a retailer:

"And then all of a sudden we could see when we started to open up the coffee bars the whole thing began to transform itself."

Schultz ran on conviction alone. No forecast, no projections:

"Did we ever think that we'd have 36,000 stores in 80 countries around? No. The entrepreneurial DNA inside me just — I need to do something for myself and this is what I believe I should do and I can see the future. I'm going to try it."

And the scale that idea eventually reached, in his own numbers:

"Over a 100 million people a week come through. It's a lot of people."

[Startup Wisdom @StartupWisdom_]

.@sama on why founders need to focus on speed:

"The ability to get things done quickly — this is not quite the same as determination. There are determined people who are still very slow movers. And that works on a lot of things in life. It does not work for founders. Being quick and being decisive and getting things done quickly — if you look at our data, that would just correlate almost exactly with all of our successful founders. And other founders that look on paper like they should be really successful but fail often are missing this one trait.

The trick to being a great founder, at least in the early stages — and honestly this kind of goes on forever — is your ability to be presented with a problem unlike anything you've seen before and solve it very quickly."

[Big Brain Business @BigBrainBizness]

Amazon founder Jeff Bezos, twenty million customers deep and still losing money in 2000, on why that was the strategy and not the accident:

The charge put to him is blunt: to lose money when you've got 20 million customers takes real skill.

Bezos doesn't flinch or spin.

"Well, we have that. But what's really going on is we're investing. So, and most of our investors do understand that."

He points to the share price as evidence the market had already priced the strategy in:

"If you look at our stock, two and a half years ago it was at $3 a share and now it's at $50 a share."

Then, unprompted, he volunteers the part most executives would bury:

"It went up as high as hundred and something at one point. So, the internet stocks are very volatile."

Pressed on where the money is actually going — is it the huge warehouses that aren't being used yet? — he confirms it without hedging.

"That's part of it. In fact, one of the things we did in 1999 was invest in about 4 million square feet of distribution center space around the world. And our company is investing sort of ahead of the curve in order to fulfill customer demand."

The UK is his headline example:

"One of the places we're investing most heavily in fact is right here in the UK. We have one of the largest distribution centers in Europe right outside of London where we service UK customers and we now have over 1.4 million UK customers and that number is growing very rapidly."

Then the attack switches: without shops, Amazon never meets its customers. A high street greengrocer that went online at least still has outlets, still goes face to face.

Bezos rejects the premise that the relationship is thinner:

"I think we actually interact with our customers a lot. So the folks we have here at Amazon co uk are one of the reasons I think we've been so successful here is because those people are so good. And one of the ways they can be so good is they get so much feedback from customers."

Told that email isn't real contact, @JeffBezos gives the sharpest line of the exchange:

"There's a great thing about email which is it turns off the politeness gene in the human being. So you get real feedback."

Pushed once more — it isn't face-to-face contact, is it, and don't you lose something without it? — he concedes the fact and rejects the conclusion:

"No, of course not... No. I think it's a different kind of experience."

And that different experience has a specific job to do:

"One of the things that we do is we're trying to save people time and save people money. And I think Amazon co uk does that. It's a huge selection of products, not just books, but also music and videos. And we offer them at as low cost as we can."

[Ronit Pereira @CAronitpereira]

“Singapore’s health system costs 20% of what American health system costs and that’s entirely practical due to the talent of Lee Kuan Yew.”

“In Singapore, you get a savings account the day you’re born and if you don’t spend it, your heirs get to spend it eventually.”

- Charlie Munger

[Startup Wisdom @StartupWisdom_]

Peter Thiel on why the best startups sound boring at first:

"Healthcare IT, education software — somewhat overrated. SaaS software, pretty badly overrated. If you hear the words 'big data,' 'cloud computing,' you need to run away as fast as you possibly can. You need to just think fraud and run away. These buzzwords, they're a tell — like in poker — that the company's bluffing, and that it's undifferentiated, because we've heard the buzzwords before.

Conversely, the things that are underrated are the ones where there are no buzzwords, which don't actually fit into any pre-existing categories. Google would have been described as a search engine in 1998 — people would have said, why do we need another search engine, we already have 20. If you described Facebook as a social network circa 2004, that's a misleading categorization. People aren't interested in networking in the abstract; they're interested in real identity. Real identity was the key innovation Facebook had."

[Investment Wisdom @InvestingCanons]

Peter Lynch:

“People are very careful: they spend hours to get $50 off an airplane flight. They look at everything. And [then] they'll put $10,000 in some crazy stock they heard about on the bus.”

[Rohan Paul @rohanpaul_ai]

AI companies are spending and earning enormous amounts of money, while many customers are still exploring how best to translate the tec into financial value creation.

---
Chamath: "Let’s say a “barrel of intelligence” is one million tokens. You can buy that barrel from OpenAI for $26. Anthropic’s latest model costs about $56. Elon Musk is selling you a barrel of intelligence for $1.

Mark Zuckerberg is about to sell it to you for $1.50. Demis Hassabis and Sundar Pichai are trying to sell it to you for $1, and the Chinese will sell it to you for $0.50.

This rationalization has to happen. We have the same basic input being offered at dramatically different prices. If you made an early bet on one of the companies selling extremely expensive barrels of intelligence, and you try to pass those costs through to customers, you may run into downstream difficulties. That has to play itself out."

----

From "CNBC Television" YouTube channel, (full video link in comment)

[David Senra @davidsenra]

My conversation with Sam Altman (@sama), co-founder & CEO of @OpenAI.

0:00 Tobi Lütke, AI-Native Companies & Why Adoption Moves Slowly
5:45 Sam's Own Resistance to AI & the Missing iPhone Moment
10:00 Models, Compute, Power Laws & Non-Consensus Talent
18:37 From AI-Obsessed Kid to Founder, Investor & Back Again
23:19 Impossible Problems, Scientific Discovery & Human Connection
30:16 AI's Two Biggest Risks: Loss of Control & Centralized Power
33:09 Iterative Deployment, AI Safety & Learning From Reality
40:27 Why People Fear AI & the Coming Small-Business Boom
46:13 Context, Memory & the Next Way We Will Work With AI
49:17 OpenAI's Platform Strategy & Killing Good Ideas
53:20 Peter Thiel, Paul Graham & the Value of Nonlinear Thinkers
1:00:42 How Y Combinator Changed Startups & Shaped OpenAI
1:04:03 Learning More From Success & the Power of Repetition
1:09:45 Building OpenAI Without Customers, a Product or a Playbook
1:15:57 Letters to His Son & Preserving the Story

Includes paid partnerships.

[Z Fellows @zfellows]

"Not to be discouraged if the business you end up with is not the one you started out to pursue..."

— Kerry Healey

[Big Brain Business @BigBrainBizness]

Starbucks chairman emeritus Howard Schultz explains why enduring companies get built "in the mud" and not at 20,000 feet above the horizon:

[Big Brain Business @BigBrainBizness]

Jamie Dimon thinks the biggest mistake retail investors make is judging every stock by a chart of the whole index:

[Kevin Carpenter @kejca]

Charlie Munger: "I can't think of a single example in my whole life where keeping it simple has worked against us. We've made mistakes, but they weren't because we kept it simple."

"The chief advantage that Berkshire has had in accumulating a good record is that we have avoided the pompous bureaucratic systems."

"We've tried to give power to very talented people and let them make very quick decisions."

[Big Brain Business @BigBrainBizness]

a16z co-founder Ben Horowitz on why Amazon's cheapest furniture and Apple's most expensive doorknobs are the same decision:

Two companies. Opposite spending habits. Same underlying logic.

Start with Amazon, which Ben describes as having "one of the strongest cultures in the technology business."

"[Amazon] has this thing about frugality, and they said it so hard, like in the old days when you got to Amazon, you got a desk that was made out of a door and some 2x4s. Like, we can't even afford desks. Like, that's how cheap we are."

That wasn't cheapness for its own sake. It was strategy made physical.

@bhorowitz explains that the door-desk "really went with their strategy of being the low price, basically the low cost provider always."

The furniture existed to make an external promise credible internally:

"The promise to their customers was you go to Amazon, you don't have to price check because we're going to be the lowest cost."

Now the opposite end of the spectrum.

"Contrast that with Apple. They just built like a $5 billion campus and I don't know what the doorknobs cost, but they're probably thousands of dollars."

Same decision, different answer. Ben's explanation:

"They're all about high design, beautiful products, these kinds of things. They're never going to have a cultural value of frugality. It wouldn't make sense for them."

A frugal Apple would be a contradiction. An extravagant Amazon would be a broken promise.

Both companies are behaving rationally, because both are spending in the direction of what they sell.

Ben makes the trade-off explicit:

"Apple's products are a lot more beautiful than Amazon's products. And Amazon's products are a lot cheaper. And so, which one do you want?"

That question is the entire lesson. You don't get both. Pick one, then build the culture that makes it true.

"Your culture has to support your business strategy. And that's why every culture isn't right for every company."

His conclusion:

"It's not a good culture or a bad culture. It's a cohesive culture that achieves the goal that you want."

[SMX 🇺🇸 @iam_smx]

When NVIDIA CEO Jensen Huang introduced the DGX Spark, he looked back to 2016, when NVIDIA unveiled the DGX-1, its first AI supercomputer, and Elon Musk became its very first customer

At the time, almost no one was interested. The exception was Elon Musk, who was then involved with OpenAI, which was still a nonprofit startup. Elon called NVIDIA and became the DGX-1’s first customer

Jensen recalled:

“A young company, a startup, a nonprofit startup in San Francisco was so delighted to see the computer, they said, ‘Can we have one?’ And I thought, ‘Oh my gosh, we sold one!’ But then I discovered it was a nonprofit and that company was OpenAI”

It’s remarkable to look back now. At a time when very few people understood how important AI computing would become, Elon was already paying attention

[Startup Archive @StartupArchive_]

Jeff Bezos explains Amazon’s process for expanding into new products like Kindle and AWS

“I would definitely advise a small startup company to be as narrow and as focused as is possible to be. If you look at the original Amazon business plan, there was no hint of anything other than books in it… I wanted to build an online bookstore, and that was it.”

But the online bookstore worked better than they thought it would. So Amazon launched music, and that worked better than they thought. Then video, and that worked too. So Jeff sent an email to customers:

“I picked about 1,000 customers and I said, besides the things we sell today - books, music, and video - what would you like to see us sell? And the list came back incredibly long-tailed… So it’s been kind of one foot in front of the other.”

As Jeff explains, Amazon expands into new businesses in two ways:

“One is from a customer need. We will work from a customer need to the skills that we need. And the other one is skills forward: from a skillset we have to a new set of customers.”

Kindle is an example of a customer need - Amazon had no hardware team at the time, but to make sure they didn’t miss the transition to ebooks, they built one.

Amazon Web Services (AWS) is an example of skills-forward:

“We had probably more distributed computing expertise than anybody else in the world because of transactions. Transaction systems are so complicated and hard to build, and we had a service-oriented architecture of great complexity - probably before anybody else. Because we were doing that, we could see the future a little bit and decided to build AWS, which has turned into a huge business in its own right.”

Jeff concludes:

“Business is very situational. Rules of thumb are good, but they have to be applied to the right situation. Sometimes the old maxim that you should stick to the knitting is correct, but sometimes it’s wrong. And a senior leader’s job is to figure out: Which situation are you in?”

Source: @BusinessInsider (Dec 2014)

[Big Brain Business @BigBrainBizness]

Doug Leone, Chairman of Sequoia Capital, on why childhood pain is the most reliable predictor of relentless drive:

Asked what makes the culture work, he doesn't begin with strategy, markets, or how they pick founders. He begins with a screening criterion most firms would never say out loud:

"So, I think it starts with the people that we hire. We hired people that had a shock in their system when they were growing up."

Then he names the shocks:

"Maybe they were shunned. Maybe they were too smart for their own good. Maybe they were left by a parent. Maybe they were in a vicious competition with a twin brother. We have all those."

@dougleone puts himself in the sample:

"In my case, I came from Europe. I got abused in high school. I was pissed off."

His thesis is that the wound never closes, and that this is exactly what makes it useful:

"So, we find these folks are a little edgy and for the rest of their lives they have something to prove in some ways not very different than founders."

Credentials only tell you what someone has already done. The shock tells you what they're still trying to settle, and Leone is betting that it keeps producing long after the credentials stop.

But he's equally clear that the trait arrives damaged. The same experience that manufactures the drive also isolates the person carrying it:

"We put those people in an environment of trust. We teach them because those people and starting with myself, we were not pros at using the we pronoun."

He's diagnosing his own hire, and himself:

"Those people tend to be I people because they were set aside and we put them in a circle of trust and we teach them that we is better than I."

The mechanism that makes the lesson hold is payroll:

"We get compensation right. We don't have a situation that Johnny makes 10% more than Susie. It's pretty flat, which means we share things among us."

You can't ask people who were set aside as children to trust each other while paying them on a scale that ranks them against each other. Flatten the pay and you delete the internal scoreboard, so the need to prove something has nowhere to point except outward.

Which is where the drive finally goes:

"And so we have this need, this incessant need to do something, to win that never goes away. And so when you say we work hard, it's all we've ever known."

[Compounding Quality @QCompounding]

When should you sell?

[Investment Wisdom @InvestingCanons]

Warren Buffett: “The bottom 2% in terms of income in the United States, the bottom 5%, and for sure the top 1% all live better than John D. Rockefeller was living when I was 6 years old.”

“John D. Rockefeller was the richest man in the world and, today, you can get better medicine, better education, better entertainment, better transportation. You can do everything better than he could.”

[Startup Archive @StartupArchive_]

Marc Andreessen explains why he prioritizes satisfaction over happiness

“I don’t believe in balance. I think people are wired differently so it’s hard to generalize this kind of thing. But I am much happier and more satisfied when I’m fully committed to something. So I’m very much in favor of imbalance.”

Marc continues:

“I don’t think happiness is the thing to strive for. I think satisfaction is the thing… Satisfaction is a deeper thing which is like having found a purpose and fulfilling it. Being useful. That I’m fully delivering on the gifts that I’ve been given, that I’m net making the world better, that I’m contributing to the people around me, and that I can look back and say: ‘Wow. That was hard, but it was worth it.’ I think that generally seems to lead people to a better state than pursuit of pleasure and happiness.”

And on the relationship of money and satisfaction:

“I think Elon would be a great example of this. He’s a guy who from the day he started making money at all just plows it into the next thing. I think money is definitely an enabler for satisfaction. Let’s put it this way: money applied to happiness leads people down very dark paths. Very destructive avenues. Money applied to satisfaction, I think is a real tool.”

Source: @lexfridman (Jun 2023)

[Big Brain Business @BigBrainBizness]

Ben Horowitz, co-founder of the $90B fund a16z, says the culture advice your HR consultant is selling you is almost the exact opposite of what actually works: