Thinks 509

The Economist: “Mr Xi’s strategy is best understood as a weighty bet that China is on track to become the world’s centre of innovation over the next decade. A shift towards homegrown tech is altering the geographical layout of China’s manufacturing machine. New investment and migration are being rerouted from rich coastal hubs to inland cities such as Zhuzhou. A second feature is an unprecedented rise in the number of new tech companies. The government is nurturing thousands of groups, big and small, in the fields of data science, network security and robotics. Mr Xi and his advisers are also taking firmer control over markets. Their ability to direct capital flows is already evident in how private-equity groups invest in China…Mr Xi is building an incubator state: an economy that relies heavily on government nourishment to create productivity gains with domestic research and technology. In doing so he is also signalling a premature break with the technological convergence that has served China well since the 1980s.”

Matthew Hennessey: “If a society can bear to hear the unmistakable sound of what the mid-20th-century Austrian economist Joseph Schumpeter called the “perennial gale of creative destruction,” then it can be pretty sure its markets are working as intended.” [via CafeHayek] Donald Boudreaxu: “Markets aren’t set into operation by anyone’s design or intent, so strictly speaking there is no intention – no purpose – that markets can be said to fulfill or to disappoint. But because what most people want from markets is the provision of high and rising standards of living for ordinary people, when and insofar as markets make such a provision, markets are operating as we ‘want’ them to operate.”

Shane Parish: “Today, not tomorrow. What you avoid today is harder to do tomorrow. Today’s choices become tomorrow’s position. If you put off things today, they don’t magically disappear tomorrow. They just get added to the list of things you want to do. Don’t wait till tomorrow. Tomorrow is where dreams go to die.”

Constructing the Bharatverse (Part 1)


It is counting day after the Lok Sabha elections of 2024. As the results start coming in, it is apparent that a political revolution has taken place in India. Independents across the country are winning; candidates from established political parties are losing. These candidates, backed by a people’s movement called United Voters of India, were selected through a primaries process by voters registering their choice on a blockchain. A Swatantra Lok Sabha, with Independents far outnumbering the collective from political parties, is taking shape. The first step of the Indian Revolution is complete. The economic revolution is next.

How did this happen? How did a technology platform in the form of an app manage to unseat India’s most high and mighty from political office? How did unknown, anonymous voters across the nation aggregate their votes to win power? How did a leaderless organisation succeed in uniting and coordinating the actions of hundreds of millions of voters?

The Bitcoin revolution started with a white paper published by Satoshi Nakamoto in 2008, and took more than a decade to achieve mainstream adoption. The Bharatverse revolution began with a white paper and app released in early 2023. It took just a year to bring together lakhs in every Lok Sabha constituency who decided to vote as one for the candidate they selected. These non-aligned and non-voters (NANVs), who were two-thirds of India’s 100 crore (1 billion) voters, united and ejected India’s political parties from the Lok Sabha to deliver on the promise of “power to the people”, a prerequisite for the economic transformation of the nation by bringing freedom and prosperity.

The underlying infrastructure was there. The pandemic had ensured mass-scale adoption of the smartphone across India. Mobile operators had dropped data prices to the lowest in the world. Bitcoin and other currencies and tokens had initiated tens of millions to the world of crypto. The blockchain infrastructure got built out rapidly as investment flooded startups during 2021 and 2022.  All it needed was an idea, an app, and a trigger – all of which came together in late 2022. Bharatverse, a decentralised, virtual world to bring people together, manifested via the Nayi Disha app to spearhead the United Voters of India movement.

None of this would have mattered without the trigger. Even as a section of India prospered during and after the pandemic, a large section had fallen behind. With jobs slow to come by, with education deeply impacted by two years of the pandemic, with a future of diminishing opportunities, with politicians playing with fire by using caste and religion to stir by sectarian sentiments long suppressed, there was an edginess in many, a fragile calm before the storm.

And then came the WhatsApp viral video. But that story will need to wait a while!

Thinks 508

Roosevelt Montás: “One can begin by recognizing that the present has a past; that the categories, the institutions, the ethical norms, political procedures, economic structures of society—all of that has a history. And understanding that history is the most empowering kind of education if you want to alter, to intervene in, to adapt the current world. To understand that past means looking at its sources, and its sources are sometimes called “the classics,” sometimes called “great books.” This doesn’t only mean poetry—it also means documents, debates, and philosophical treatises. But there is a whole kind of humanist tradition of debate, expression, and artistic exploration that lies at the foundation of our society. The best way to educate a human being to be a conscious, effective agent in our society, is to acquaint them with that history, and there are no better tools than the tradition that’s associated with classics. Now, it’s a tradition that we’re always revising, we’re always discovering new classics and we’re always finding new ways of reading them. We’re always discovering new questions and new information that contextualize what they mean. All of that is salutary and necessary and part of what the classics, in fact, prompt and give an occasion for.”

Veronique de Rugy: “inflation isn’t caused by corporate greed. Readers of this column know by now that it’s caused by government’s excessive deficit spending, fueled in part by loose monetary policy. Therefore, getting rid of inflation requires an increase of interest rates theoretically higher than the current inflation, along with some overdue fiscal discipline. Reforms like deregulation that promote faster growth in the supply of goods and services would also help. What we don’t need, but what we’ll likely get, is more government spending and more debt accumulation. The result will only fuel the inflation fire.”

WSJ: on the everyday patriotism of diverse democracies: “Civic principles matter, but love of country in the modern West is largely based on affection for ordinary life, from food and holiday customs to sports teams and local geography.”

Thinks 507

The Economist on innovation hubs: “Younger innovation hubs, including Bengaluru, São Paulo and Singapore, look a bit more alike in that their focus is regional rather than global. Instead of breaking new ground they often adapt existing business models to local market conditions. As disposable incomes rise in new regions, consumers become willing to pay for similar “technification of services”, says Peng Ong of Monk’s Hill Ventures, a Singaporean VC firm. Anand Daniel of Accel, a Silicon Valley VC firm, calls this the “X of Y” playbook. And so Flipkart (e-commerce) is the Amazon of India; Nubank (fintech) is the Revolut of Brazil; Grab (ride-hailing) is the Uber of South-East Asia. This helps explain why 70% of South-East Asian unicorns and 80% of Latin American ones are either in fintech or consumer internet. Still, hyper-localisation means each hub is distinct.”

FT on Baillie Gifford’s James Anderson: “Anderson runs through some of the big academic influences on Baillie Gifford. There’s Hendrik Bessembinder, a professor at Arizona State University, who found that over many decades the vast majority of stock market returns come from a tiny percentage of business. Another is work by the Santa Fe Institute in New Mexico, which demonstrated that today’s knowledge-based companies tend to exhibit increasing returns to scale: that is, returns of the winners have become exponential rather than linear. He says that all of this emboldened Baillie Gifford to try to identify as many of the “outlier” companies as possible — very different to most fund managers who have a diversified portfolio of bets.”

Russ Roberts: ” I think most people think–when they hear the word ‘liberal’ education–most people don’t know what liberal arts education is. It’s usually misunderstood. But, what I mean by it is the study of philosophy, literature, and history. But, it’s more than that. It’s grappling with the great ideas that are embodied in those fields in a way that is different than you might learn, again, a preprofessional skill. And, I think it’s easy to misunderstand what those fields are about.”

Loyalty 2.0: How Brands can Tokenise Customer Attention and Data (Part 14)

A New Mu World

Imagining something is the first step to making it real. Over the past few months, through a series of essays, I have tried to put forth a set of ideas that can solve a big problem that businesses face: how to grow their businesses profitably. With marketing sucking away an ever increasing chunk of the spending, brands need to think differently. This is where the Web3 disruption comes in.

Trying to change the status quo is not easy. Google and Facebook have established their dominance in the Web2 world. There is no single company which can take them on, though a few like Amazon and Tiktok will nibble away. Their valuations reflect the belief that investors have in their strong future cashflows – which are increasingly coming at the cost of brand profits. For now, VCs and PEs are willing to pour money into brands knowing full well that half or more of that investment will be spent on the adtech platforms. But at some point in the future, this ‘free money’ will stop. And then brands will be faced with the question of how they are going to get on the path to profitability. CMOs will need to become Chief Profitability Officers. That will mean looking at alternatives to an endless spending on new customer acquisition.

This will require a different approach. The ad spending problem cannot be optimised at the Web2 level. That game is over; Google and Facebook have won big. This is where the disruptive innovation of Web3 comes in. It is a fundamentally new way to imagine the future by asking the question: what is centralised today that can be decentralised tomorrow? Smart people backed by big funding are building the underlying infrastructure for Web3. Cryptocurrencies, their ups and downs, and government regulations have distracted many from the true potential of Web3. New constructs like the blockchain, NFTs (beyond art and collectibles) and DAOs are laying the foundation for a new world – just like the http protocol, HTML, web browsers and servers did more than a quarter century ago.

In my writings, I have tried to imagine what new worlds we can build on top of the Web3 infrastructure. We need to solve real problems and fix real inefficiencies. And as I see it, there is no bigger one than in the world of marketing – the 50% adwaste that is impacting company profits. The core theme I want to champion is sustainable profitable growth, which needs profit-centric and customer-centric marketing. This is where the idea of Loyalty 2.0 comes in.

Thinks 506

James Pethokoukis: “What are America’s greatest economic assets? Certainly our democratic capitalist system — democracy, rule of law, property rights, the price system — would be at the top of that list. But then what? Lots of candidates, from our vast natural resources to our world-leading university system to our ability to attract the very best of global talent. And, of course, the existence of some assets affects others. Our largest technology companies are the economy’s crown jewels, but they wouldn’t exist if not for some of the above factors, among others (immigration + universities + property rights + California weather). Here’s another asset: the American venture capital industry.”

Martin Casado: “Ten years ago, if you started a software project, you really didn’t know if you were going to complete it. It was more art than engineering. Certain people could do it and certain people couldn’t, and it was hard to outsource. Now, with all of the tooling built around it, cloud, mobile, containers, all of these things…if you start a software project, it will almost certainly be completed, and it will be done better and faster than before. The question has moved from can you build it to how effective will it be. We never ask founders if they can build software anymore. We know they can. It is more, how does software use data to create features and differentiation? If you assume anyone can build software and build it with success, then the next question is who can extract the most interesting features? It often becomes a data problem, much more math, statistics and science than engineering. It feels to me like the engineering problem is mature and we are now in the realm of math, science, statistics.”

FT reviews “How Religion Evolved”: “The first [urge] is our need to bond. Humans are highly social animals but there are ceilings above which the usual means of primate bonding cannot go. There’s only so much time in a day to groom one another. In the absence of such mechanisms, our ancestors developed certain shared practices — singing, dancing, eating, storytelling — which, when done ritually or in synchrony, have the same bonding effect. Although many evolutionary biologists claim that religion is an unintended consequence of evolution, Dunbar is clear that religious practices improve the individual’s “fitness”. “[A]ctive involvement in religion both makes you feel happier and provides you with a level of support that helps you cope.” In effect, one of the origins (and engines) of religion lies in its capacity to keep us healthy and together.”

Loyalty 2.0: How Brands can Tokenise Customer Attention and Data (Part 13)

Mu Tokens

There are many ways to earn and encash Mu tokens. Here are some starting ideas.


  1. Users providing zero-data about themselves upon registration
  2. Opening and reading emails and other incoming push messages
  3. There could be higher incentives for steaks (acting on successive messages) and speed (less latency between receiving the message and taking action)
  4. In-message actions eg. clicks, playing a game, giving feedback (NPS, ratings)
  5. Providing preferences (zero-party data)
  6. Participating in surveys
  7. Agreeing to participate in trials and sampling
  8. Watching a product video
  9. Sharing on social media
  10. Referrals
  11. Actions on website or app eg. connecting email ID to mobile number, which provides the brand an additional channel of communications
  12. Greater rewards for Best customers
  13. Using Micronbox as the app for brand messages
  14. Using WhatsApp or an in-mail chatbot as an alternative to calling a support helpline (helps reduce costs for the brand)

Note that all of these are not linked to transactions. The key point to note is that the Mu tokens become an instrument for marketers to nudge customer behaviour. As has been explained earlier, the prerequisite for success is creating the hotline with customers. None of these ideas are easily doable today because marketers don’t have the conversation pipe to their customers.


  1. Paying for unique and differentiated experiences on the three axes of access, ease and exclusivity. These are “priceless” in that brands (or influencers) are not “selling them”. For example, a bookstore can provide me early access to a book for some of my Mu tokens. So could the OTT platforms. A new electric car company could offer me a priority test drive. Artistes (creators) could offer priority access to their works in exchange for Mu tokens.
  2. There would be a brand marketplace where brands could list all their premium offerings to enable easier discovery
  3. Selling to brands or other customers via the exchange.
  4. Transferring to friends or family members
  5. Buying brand NFTs
  6. Holding on to the tokens with the belief that they will increase in value over time (because there is an upper cap on the total Mu tokens that will be in circulation)
  7. Converting to cash (this may have some tax implications in some countries, so perhaps could be avoided)

These are just a few initial thoughts. The MuDAO needs to create the trading platform (exchange). After that, brands and customers will take over and create a virtuous cycle which benefits both sides. What’s needed is for the tokens to have utility and be “alive” (have circulation), leading to mutually-beneficial brand-customer relationships, bringing them closer.

Thinks 505

Alexander Salter: “By his own admission, Matthew Hennessey is an unlikely author of an economics book. He has no experience in business, accounting, or finance. Until fairly recently, he was quite intimidated by the dismal science. Yet he’s managed to become the Wall Street Journal’s deputy op-ed editor, so he likely knows a thing or two about markets. Over the course of 200 entertaining pages, he proves it. Visible Hand is the elementary economics book we’ve been waiting for. I don’t mean it’s an Econ 101 text of the kind college freshmen wearily slog through. It’s something much more important: an everyman’s introduction to how property rights, prices, and profits and losses make the world go ‘round. I hope we can get copies of this book in the hands of every high school senior in the country.”

Rahul Krishnan, Arjun Rakesh, and Ruchin Kulkarni: “OnlyFans was able to onboard a large number of creators by offering a lucrative referral program that incentivized content creators to invite others from their social and professional circles. The program guaranteed a 5% cut up to $1M from the referred creator’s earnings for anyone who refers others to the platform. There were no limits to the number of creators one can refer, nor the total referred earnings. The referral program was a huge success. Bear in mind that whereas on Uber and Airbnb, making money is linear, on OnlyFans it is multiplicative.”

Leif Abraham: “Canonical advice for builders is to start by building an MVP or “Minimum Viable Product.” We try and get our teams to focus on a different first step, creating a “Minimum Marketable Product” or MMP.  What’s the difference? A lot of the time, builders confuse MVPs with prototypes and/or focus solely on the feature set. MMPs get away from this framing by including several other factors in the process. When you’re building an MMP you have to take into account factors like design, branding, and positioning.  The result is that MMPs are actually sellable. They’re compelling enough to attract real customers. Moreover, because of the extra care that goes into an MMP, they create a good first impression. I believe it’s extremely hard to change someone’s opinion of a product after that first encounter.”

Loyalty 2.0: How Brands can Tokenise Customer Attention and Data (Part 12)

MuDAO Tokenomics

MuDAO creates the Mu tokens.  The number of tokens could be limited or fixed, or supply may be left flexible, in order to accommodate future demand or respond to exogenous shocks. For the purpose of this article, we will assume the supply is limited. Let us take the number of total tokens to be 300 billion. How do these tokens come into circulation?

The first 100 billion can be given to entities who help with enabling Loyalty 2.0 for brands. These could be ESPs (email service providers) or martech platforms. An ESP could embed the tokens it receives (or buys) in brand messages sent through its platform. A martech platform could do the same for push notifications. To take some real numbers: an ESP sending 10 billion messages a month could offer Mu tokens as rewards for opens and clicks on behalf of the brands. Assuming 2 billion such actions in a month, the ESP would enable the circulation of 25 billion Mu tokens in a year spread over hundreds of millions of individuals.

Another 100 billion Mu tokens could be auctioned over a 3-year period: 100 million a day for 1000 days. Brands could then buy them via the exchange, thus setting an initial price for the token. Brands could now reward their customers for additional actions: in-mail engagement, zero-party data, and so on.

The final 100 billion Mu tokens could be split two ways: 50 billion for the developers and miners who will underpin the Mu tech, and another 50 billion for treasury operations to ensure market liquidity.

The entire 300 billion should be in circulation in the next few years. Individuals would have a Mu wallet which could also serve as identity for their brand engagements. The wallet could also house NFTs that brands could periodically offer for free or sell. In the steady state, brands would buy Mu from the exchange (sellers could be individuals or even other brands) and then use them as incentives for strengthening their customer relationships.

The big question: where will brands find the money for this? Would this not lead to an additional outflow leading to a further hit on profitability? My answer is: No. It would be the opposite. Today, brands spend 90% of their marketing budgets on new customer acquisition, and half of that money is wasted. If they can use some of that “adwaste” money for their existing customers, it will lead to more attention, higher retention and, hopefully, increased transactions. As I keep saying: To get customers to pay attention, pay them for their attention (else you will pay Google and Facebook 100X more for them). The twin combo of higher revenues and lower marketing spends will improve profitability.

By disintermediating the adtech platforms, brands will find rich rewards themselves – delighted customers. The added dimension of gamification that the Mu tokens bring can make it attractive and exciting for customers. Metrics like Hooked Score and Earned Growth Rate can be good complements to Net Promoter Score in measuring customer loyalty – redefined to go beyond transactions but also include attention, sharing of customer data, referrals and many other actions that marketers decide.