90: Amazon's Logistics, Rivian $50bn IPO, Pinterest & Microsoft, Semi Shortage, Nvidia, Adyen, Unreal's MetaHumans, Apple + TSMC AR Displays, and Diderot Effect

"Is that a lot?"

I've waited many years
Every print I left upon the track
Has led me here

-Fiona Apple, I Want You To Love Me

"When I do background vocals, I never plan what I’m going to sing. I just press record and sing along. It all comes from improvisation, and then I take out the parts that don’t work."

—Fiona Apple, in interview. (man, that's a life lesson, just another version of Bezos’ one-way and two-way doors)

"You can't bring facts to a feelings fight."

That’s a line by Michael Dempsey on a recent interview. He said he originally got it from Adam D'Augelli.

I think it compresses the idea well.

🔢 It’s very easy for our monkey brains to forget what numbers mean.

Especially on social networks. Once in a while, I try to remind myself that there's real people behind every tweet.

Recently, I posted on Twitter that I had around 3,000 subscribers on this, and someone sent a photo of a packed concert hall that has a 3,000-person capacity.

That made it very tangible, and slightly terrifying.

Another thing that I keep underestimating even though I know how incredible it is:

Everybody's now 1-degree of separation from everybody else. I still can't really wrap my mind around that, and how different it is from any social structure in which our brains have evolved…

Just yesterday, someone was discussing Texas Instruments on Twitter, and someone replied that they were an analog chip designer. Just like that, you can reach anyone, anywhere. Are you taking advantage of it?

🛀 If you think about it, the average public company has many thousands, if not millions, of shareholders.

So what is an ‘original idea’ that nobody else has?

Is it just about being different from the people immediately surrounding you?

That sounds like more of a ‘social signalling’ justification than something truly about originality or results…

(don’t get me wrong, I understand that if the consensus is that something is worth $50 and you think it’s worth $75 and are right, that’s a valuable differentiated view — I’m talking more about how some people sound a lot like hipsters on the sourcing of what to even look at, passing on lots of things that turn out to have been great ideas just because their direct peers — those 100 people out of a million shareholders — also like it)

🗣 So it turns out Clubhouse is mostly for people without young kids living in the PST timezone.

It sounds great in theory, but in practice, I never can just listen to a talk. Either it’s family time, or bedtime.

Maybe someday I’ll do Clubhouse room or a a Twitter Spaces or whatever, and just say the time and date on this newsletter, so we can have a little group conversation about whatever interests people at the time. I wish I was more extroverted, that’d make it easier to do, but hey, you gotta do some things outside of your comfort zone sometimes.

¯\_(ツ)_/¯


Investing & Business

‘A third of all US parcels are now delivered by Amazon’s own logistics network’

Is that a lot?

Quick Thought on WSB’s Future Pumps

So now that GME’s chart looks like a stalagmite, I was thinking that there’s post-spike reflexivity involved, or meta-gaming, or whatever.

The next pumps may actually deflate faster, because now everybody has seen what happened, and that this can’t really be sustained and ridden to the moon, so everybody will want to be the first one out of the door rather than be left HODLING a bag of crap.

That’s my intuition, anyway, we’ll see if it plays out that way.

See edition #84 for my previous thoughts on the WSB phenomenon.

Rivian Looking at ˜$50bn IPO in 2021

So the designer of EVs (can we call them a maker yet?) is planning a big IPO later this year. Many probably know the company because Amazon has invested, and ordered 100,000 electric delivery vans from them.

I think it’s really interesting that we’re at a point of the cycle where these two statements are part of the same article:

Rivian Automotive Inc., the electric-vehicle startup backed by Amazon.com Inc. and Ford Motor Co., is looking to go public as soon as September at a valuation of about $50 billion and perhaps more [...]

&

Production and U.S. deliveries of its debut consumer EV, the R1T pickup, are due to start in June. The company will then start delivering its R1S SUV in August.

So it could IPO for more than $50bn, but hasn’t delivered products to customers yet…

Oh, and if Rivian wants some free advice: Redesign your front end before launch.

You got the “distinctive” part down pat, but you really missed on the “looks good” part. Your pickup just kind of looks like a surprised Japanese cartoon:

‘GM warns chip shortage could cut 2021 earnings by up to $2 billion’

Who knew these tiny bits of polished sand were that important?

You know who always has plenty of inventory? Texas Instruments…

Though to be fair, not everybody can do what they do. Analog chips tend to have a super long life (ie. the same chip will often be used by OEMs building products for decades), so you can stockpile them.

The more cutting-edge digital semis tend to be sold on performance and features, have a faster refresh-rate and get obsolete much faster, so you probably don't want a huge warehouse full of them.

But hey, it's not cheating, TXN picked the space they play in very deliberately…

Speaking of GM:

“We don’t have any plans to invest in bitcoin, so full-stop there,” she said in response to a question from Morgan Stanley analyst Adam Jonas [...] “This is something we’ll monitor and we’ll evaluate. If there’s strong customer demand for it in the future, there’s nothing that precludes us from doing that.”

So is every public company going to be asked about this on earnings calls now? (looks like it has started)

Hey Volkswagen, any plans of investing in Dogecoin?

The 21st century is weird, and not just because of stuff like this.

‘U.S. chip industry calls on Biden administration to fund factories’

A group of U.S. chip companies on Thursday sent a letter to President Joe Biden urging him to provide “substantial funding for incentives for semiconductor manufacturing” as part of his economic recovery and infrastructure plans.

The chief executives of major U.S. firms such as Intel, Qualcomm, Micron and [AMD] signed onto the letter. [...]

the governments of our global competitors offer significant incentives and subsidies to attract new semiconductor manufacturing facilities, while the U.S. does not (Source)

Great idea. It would further not only many US long-term strategic goals, but it would also de-risk things for the whole planet, because the implications of having all our silicon eggs in just a couple baskets in SK and Taiwan affect everyone.

Not that this would be easy or quick to do. But the best time to start on a long and arduous journey is right now.

Update: The White House is apparently on the case:

The administration is identifying choke points in supply chains and discussing an immediate path forward with businesses and trading partners, the official said in a statement to Bloomberg News. In the longer term, the administration is looking for a comprehensive strategy to avoid bottlenecks and other issues the semiconductor industry has been facing for years.

President Joe Biden is expected to sign an executive order directing a government-wide supply chain review for critical goods in the coming weeks. The chip shortage is a central reason for the order. (Source)

Adyen H2 Report is Pretty 🤯

H2 Processed volume +29% YoY

H2 Net revenue: +28% YoY

H2 EBITDA +36% YoY

EBITDA margin was 62% in the period, and 59% for the full year.

Free cash flow conversion was €217.0 million in the second half of 2020, up 37%

Free cash flow conversion ratio was 92% in the second half of 2020

CapEx were 4% of net revenues

Substantial net revenue growth (+70%) in North America

Surging ecommerce volumes alongside store reopenings

We aim to continue to grow net revenue and achieve a CAGR between the mid-twenties and low-thirties in the medium term by executing our sales strategy.

We aim to improve EBITDA margin, and expect this margin to benefit from our operational leverage going forward and increase to levels above 65% in the long term.

Also, gotta appreciate their love of Sankey charts:

Pinterest 👀 Microsoft

Microsoft approached Pinterest in recent months about a potential deal to acquire the $51bn social media company [...]

The talks were currently not active, said one of the people briefed. Microsoft has been pursuing an acquisition strategy aimed at amassing a portfolio of active online communities that could run on top of its cloud computing platform. [...] Pinterest, which last week said its monthly users had grown to 459m, relies on Amazon Web Services as its infrastructure provider. [...]

Pinterest, whose market value has increased more than 600 per cent during the coronavirus pandemic, has signalled in the past that it desired to remain an independent company. (Source)

If Microsoft’s going to try to buy something that big, shouldn’t it be Twitter?

Or are they hoping to avoid the drama that Twitter would bring, and Pinterest appears to be the low-sodium version of social networks..?


Science & Technology

Unreal’s MetaHumans (aka Automating Creating Digital Humans)

Pretty amazing stuff, but the impressive part isn’t just what you see, but how it’s made:

Creating one high-quality digital human is difficult and time-consuming. Scaling that effort to create many diverse digital humans of the quality required by next-gen platforms and high-end virtual production is a formidable task indeed. That’s why today, we’re incredibly excited to offer you a first glimpse of MetaHuman Creator

MetaHuman Creator is a cloud-streamed app designed to take real-time digital human creation from weeks or months to less than an hour, without compromising on quality. It works by drawing from an ever-growing library of variants of human appearance and motion, and enabling you to create convincing new characters through intuitive workflows that let you sculpt and craft the result you want. As you make adjustments, MetaHuman Creator blends between actual examples in the library in a plausible, data-constrained way. You can choose a starting point by selecting a number of preset faces to contribute to your human from the diverse range in the database.

More details here.

h/t Julie Young, Zoe Scaman

Apple Working with TSMC on Micro OLED Display Tech for Augmented Reality Product

Interesting rumor about Apple collaborating directly with TSMC to create next-gen micro-OLED displays for some augmented reality (AG) product under development.

It would certainly make sense, and wouldn’t be the first time that Apple built a device around an advancement in display technology (the original iPhone was the first modern multi-touch device that most people handled — remember when pinch-to-zoom was a new gesture that blew people’s minds?).

Apple is collaborating with its longtime chip supplier TSMC because micro OLED displays are not built on glass substrates like the conventional LCD screens in smartphones and TVs, or OLED displays used in high-end smartphones. Instead, these new displays are built directly onto wafers -- the substrates that semiconductors are fabricated on -- allowing for displays that are far thinner and smaller and use less power, making them more suitable for use in wearable AR devices [...]

The micro OLED project is now at the trial production stage, sources said, and it will take several years to achieve mass production. The displays under development are less than 1 inch in size. [...]

In addition to micro OLED displays, the company is also working on micro LED technology, and has trial production lines in place for both types, Nikkei has learned. (Source)

It’ll be curious to see which of micro-OLED and micro-LED matures faster and where they end up over time. I’m not super familiar with the pros and cons of each, I just know that they’re better than what we have now and are the likely next evolutionary step in display tech, and that micro LED seems to be the most promising of the two.

Nvidia to un-Mothball Old GPUs Because of Semiconductor Shortage

Nvidia is supplementing the sky-high demand for GeForce RTX 30-series graphics cards by releasing stock of older GPUs to board partners, who can then use those to craft new hardware. [...]

“There have been a lot of rumors recently about Nvidia releasing more GPUs to AIBs from older generations—the [GeForce] RTX 2060 and GTX 1050 Ti were specifically mentioned” (Source)

The 2060 came out in 2019, the 1050 in 2016.

The band is back on the road playing the greatest hits from the back catalogue….

Backblaze’s 165,530 Hard-Drives

I wrote about cloud backup co Backblaze all the way back in the intro of edition #22. One thing they have is lots of hard-drives, so it’s always interesting when at the end of each year they release stats on their fleet of HDDs, their failure rates, and whatever else they learned that year.

The Annualized Failure Rate for 2020 Is Way Down

The AFR [annualized failure rate] for 2020 dropped below 1% down to 0.93%. In 2019, it stood at 1.89%. That’s over a 50% drop year over year. So why was the 2020 AFR so low? The answer: It was a group effort. To start, the older drives: 4TB, 6TB, 8TB, and 10TB drives as a group were significantly better in 2020, decreasing from a 1.35% AFR in 2019 to a 0.96% AFR in 2020. At the other end of the size spectrum, we added over 30,000 larger drives: 14TB, 16TB, and 18TB, which as a group recorded an AFR of 0.89% for 2020. Finally, the 12TB drives as a group had a 2020 AFR of 0.98%. In other words, whether a drive was old or new, or big or small, they performed well in our environment in 2020.

The Diderot Effect (aka careful when you buy nice things)

The Diderot effect is a social phenomenon related to consumer goods. It is based on two ideas. The first idea is that goods purchased by consumers will align with their sense of identity, and, as a result, will complement one another. The second idea states that the introduction of a new possession that deviates from the consumer's current complementary goods can result in a process of spiraling consumption. [...]

The effect was first described in Diderot's essay "Regrets on Parting with My Old Dressing Gown". Here he tells how the gift of a beautiful scarlet dressing gown leads to unexpected results, eventually plunging him into debt. Initially pleased with the gift, Diderot came to rue his new garment. Compared to his elegant new dressing gown, the rest of his possessions began to seem tawdry and he became dissatisfied that they did not live up to the elegance and style of his new possession. He replaced his old straw chair, for example, with an armchair covered in Moroccan leather; his old desk was replaced with an expensive new writing table; his formerly beloved prints were replaced with more costly prints, and so on. "I was absolute master of my old dressing gown", Diderot writes, "but I have become a slave to my new one … Beware of the contamination of sudden wealth. The poor man may take his ease without thinking of appearances, but the rich man is always under a strain".

Source.

Omega Events

This one feels like it’s from a year ago, but it’s from a month ago. Thought-provoking thread on ‘Omega Events’ by an ex-Reddit CEO:


The Arts & History

Do you think these people would prefer to go through what you’re going through?

Saw a hole in the ground big enough for me to fit in while walking in the woods (scale doesn't show on the photo, it's maybe 4-5 feet deep).

Reminded me of the 'Bastogne' episode in Band of Brothers (HBO, 2001 — great mini-series, you need to see it if you haven’t, and again, if you have), and of the real soldiers who spent weeks getting shelled in these miserable conditions.

Whenever I feel sorry for myself, it always helps to try to keep some perspective.

The Royal Tenenbaums GIFs

I made some new GIFs. ¯\_(ツ)_/¯

It all started with Deadwood GIFs.. Then Mad Men GIFs

The GIF conglomerate is still humming.