Thinks 888

Morgan Housel: “Venture capital is a tail-driven business. You’ve likely heard that. Make 100 investments, and almost all of your return will come from five of them; most of your return from one or two. Correlation Ventures crunched the numbers. Out of 21,000 venture financings from 2004 to 2014, 65% lost money. Two and a half percent of investments made 10x-20x. One percent made more than 20x return. Half a percent – about 100 companies – earned 50x or more. That’s where the majority of the industry’s returns come from. It skews even more as you drill down. There’s been $482 billion of VC funding in the last ten years. The combined value of the ten largest venture-backed companies is $213 billion. So ten venture-backed companies are valued at half the industry’s deployed capital…A takeaway from that is that no matter what you’re doing, you should be comfortable with a lot of stuff not working. It’s normal. This is true for companies, which need to learn how to fail well. It’s true for investors, who need to understand both the normal tail mechanics of diversification and the importance of time horizon, since long-term returns accrue in bunches. And it’s important to realize that jobs and even entire careers might take a few attempts before you find a winning groove That’s how these things work.”

Marc Levinson in 2020: “The [cargo-shipping] container era began in April 1956, when the Ideal-X, a converted tanker left over from the war, carried fifty-eight aluminum containers on its deck from Newark, New Jersey, to Houston, Texas. No one imagined this concept would turn the world economy upside down. It was conceived with an entirely different purpose in mind: to shave a few dollars off the cost of moving trucks between North Carolina and New York.” [via CafeHayek] Donald Boudreaux: “It cannot be said too often: Entrepreneurial innovation is inseparable from capitalism. It is indispensable not only for economic growth but even for the maintenance (if such were our goal) of our current standard of living. (When objective facts on the ground change, innovation is necessary to deal with these changes. If, say, a source of raw materials dries up, innovation is necessary to find new sources or sufficient quantities of acceptable substitutes.) Yet industrial policy necessarily is hostile to innovation because innovation necessarily is not part of the industrial-policy plan. The fact that industrial policyists continue to ignore this reality should embarrass them. Alas, it seems not to do so.”

Julia Angwin: “Nearly all of the tech platforms developed extensive and detailed rules banning hate speech after finding that the first thing that happens on a new social network is that users start tossing slurs at one another…But fear is weaponized even more than hate by leaders who seek to spark violence. Hate is often part of the equation, of course, but fear is almost always the key ingredient when people feel they must lash out to defend themselves.”

WSJ: “Many countries are competing to be the “plus one,” with Vietnam, Mexico, Thailand and Malaysia in particular contention. India must still overcome entrenched problems that have kept it a bit player in global supply chains. Its labor force remains mostly poor and unskilled, infrastructure is underdeveloped and the business climate, including regulations, can be burdensome. Manufacturing remains small relative to the size of India’s economy. Nonetheless, after decades of disappointment, it is making progress. Its manufactured exports were barely a tenth of China’s in 2021, but they exceeded all other emerging markets except Mexico’s and Vietnam’s, according to World Bank data. The biggest gains have been in electronics, where exports have tripled since 2018 to $23 billion in the year through March. India has gone from making 9% of the world’s smartphone handsets in 2016 to a projected 19% this year, according to Counterpoint Technology Market Research. Foreign direct investment into India averaged $42 billion annually from 2020 to 2022, a doubling in under a decade, according to central bank figures.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.