What I Read This Week: 2022-49
The bubble has popped for unprofitable software companies by David Heinemeier Hansson
Asana lost an incredible $285m in 2021, $210m in 2020, and $118m in 2019. They’re on track to losing even more with over $370m in losses booked for the trailing twelve months. That’s closing in on a billion dollars in losses over the last four years. Madness. […] Beyond the madness, there’s a real question as to how long losses like that can continue. It appears they’re down to just $238m in cash on hand, which wouldn’t even be enough runway for another year at the current loss-rate.
Rising interest rates and inflation have upended investing
The same logic diminishes the investment case for startups and nascent firms, which by definition will earn the lion’s share of their profits in the future (if they prove successful at all). Higher rates diminish the value of future profits relative to current ones. For a firm whose profits are projected to remain stable indefinitely, less than a tenth of the present value of its future earnings comes from the first ten years when the interest rate is 1%. At 5%, around two-fifths does.
Sure enough, the type of startup that draws the most interest from investors has changed, says an experienced venture capitalist. Whereas those that expanded the fastest used to be the most highly prized, the balance has now shifted in favour of those that generate, rather than burn through, cash.
Why I’m Less Than Infinitely Hostile To Cryptocurrency by Scott Alexander
This post is emphatically not intended as a claim that crypto will go up more, or that it won’‘t go down a lot, or that there won’t be any more disasters or scams. It’s a claim that aside from its going-up ability, crypto is still a set of interesting technological solutions to regulatory problems. They’re already solving some problems, and maybe later they’ll solve more.
I do agree with this.
If you’re in a developed country, and you’re happy with your banking system, and you’re not a sex worker, and you have zero concerns about your country being taken over by fascists, you probably don’t need cryptocurrency and shouldn’t worry about it.
I am not entirely sure of that framing, frankly feels a bit kitsch. Moxie Marlinspike talked about this in his 2018 speech Changing Threats To Privacy: From TIA to Google:
So one thing that I’ve noticed is that privacy advocates, people who are working on these privacy projects, are really in love with “The Other”. These are people like Iranian dissidents or Chinese dissidents in faraway parts of the world. The interesting thing about it to me is that if you look closely at you know Iranian dissident or Chinese dissidents, they really have very little in common with what privacy advocates are doing, and yet advocates are still sort of obsessed with their struggles. I guess I would suggest that it’s because these are the few places in the world that are still speaking that language of data control, that language of “information freedom” that all of our projects were sort of born out of, and so they just happen to sort of dovetail even though they don’t really connect with the lives of people that are working on the projects. I would say that even those places are beginning to realize that the strategy of data control is not entirely effective
Moving on to a related article:
What in the Ethereum application ecosystem excites me by Vitalik Buterin
I don’t want to quote any specific excerpts from it but only remark that I appreciate him distinguishing concepts that are different yet often used interchangeably: protection from outside (censorship resistance) vs inside (trustless), decentralising for “robustness” vs “efficiency” (permissionless) vs “interoperability” with respect to the “governance structure” and/or the “implementation”.
The California Effect by Mr Money Mustache
The ultimate lesson, then, is to remind yourself that no, your current life is not normal.
It’s super weird and super specific, and you can completely change the damned thing in as many ways as you like and you absolutely will adapt and be able to handle it.
Designing For Ambiguity by Paul Taylor
People living there have to find their own way around, negotiate for themselves, and use their own brains.
The famous Feynman approach.