The Weekly Distillation No.70
Culture Wars; Inflation; Web 3; Spirits; Remote Work; Crypto; War; Marriage
This newsletter is written for entrepreneurial leaders who want to learn about the moment we are living in but don’t have time to read broadly; who want to grasp the key themes; and who want to create better ways of advancing their mission. The Weekly Distillation covers a broad range of topics with the intent to curate the key narratives of the week, how they fit the broader themes of society and to pose questions that help you to think deeper on the application in your context. You can read more about the key themes I see here.
People once said…………
“The harder the conflict, the more glorious the triumph.” - Thomas Paine
“We've had a very consistent position down the years. Sinn Fein is not in favour of abortion, and we resisted any attempt to bring the British 1967 Abortion Act to the north.” - Martin McGuinness
“The greatest destroyer of peace is abortion because if a mother can kill her own child, what is left for me to kill you and you to kill me? There is nothing between.” -Mother Teresa
“You cannot have maternal health without reproductive health. And reproductive health includes contraception and family planning and access to legal, safe abortion.” -Hillary Clinton
“The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.” - Vladimir Lenin
“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.” - Sam Ewing
“O, what a tangled web we weave when first we practise to deceive!” - Walter Scott
“And I think it's important not to forget this is a war the Russians started, and of course, they can end it tomorrow.” - John Kirby, Pentagon Spokesman
“The Committee is highly attentive to inflation risks.” - Federal Reserve press release
Skim it in a minute
Culture Wars
What a week for culture wars. The leaked majority opinion of the US Supreme Court has brought forth all sorts of divisions again. JD Vance (he of Hillbilly Elegy) succeeds in the Republican Primary thanks to a Trump endorsement (despite having been a NeverTrumper in 2016). Technology company after tech company announce how they will both comply with the law, but also provide ways of supporting their staff to have abortions where desired, including in the case of Amazon, $4,000 for travel expenses. Musk raises $7bn of external equity investment to acquire Twitter and the internet pontificates on future content moderation policies - is this the end, or the beginning o free speech?
I’ve been reflecting on what role a corporate should have in the development of society. Historically, thanks to Adam Smith, a fine Scot, western society has worked to the basis of corporates make profit and charity and politics are done elsewhere. You still see this mentality reflected in UK company accounting where companies have to political donations. However, we live in an era whereby we have also recognised the externalities of business and that business does not exist in a bubble. UK law changed some years ago to ensure that boards took account of all stakeholders, not just the shareholders, when making decisions. The implications of decisions on the environment, local communities, the workforce, the shareholders, the public at large, should now all be regularly considered. Exercised properly, this would be a good thing. I’m highly sceptical that many boards truly practise this, so ingrained is the practise of shareholders first and no-one else matters.
But we have gone beyond this now, particularly in the US. We have now moved to large corporates seeking to influence policy, coerce policy or protest against policy. That might be defendable in some areas, where the legislation was directly relevant to the core function of the company. But Amazon on abortion? Or what if Spotify takes a view on climate change policy? Or Walmart on immigration? Every corporate out there on #BLM, #Ukraine or #hashtag. Aha, I hear you say, this is highly defendable because 1) they’re using their leverage to back my positions and 2) these factors are all about staff retention. Staff care about these issues, and as Fergal Sharkey once sang, “a good staff is hard to find”. Play to matters they care about and they will join and they will stay.
Let’s not debate the issues here but let’s instead look at the angle of corporate socio-political power. Leaving Twitter aside, the influence that Amazon, Facebook, Google, Apple and Netflix hold over our lives is significant. However, they are not democracies and not all employees’ voices matter. Would you have concerns if they stood for 1) forced repatriation of illegal migrant workers 2) reunification of Taiwan by any means China saw fit, as a way of keeping their supply chains open 3) support for Government surveillance, as a way of keeping regulators away 4) support for tax havens to keep profits high?
Where do you draw the line? North Carolina lost an estimated $5bn of economic activity when the tech industry rebelled against transgender legislation. It’s not possible that that leverage does not influence decision making processes. So do you want non-democratic institutions social engineering the future of society? Remember VW in WW2? And yet, neither do we want a return to the days of old where corporates felt that all they were about is making money. As with all forms of leadership these days, being a board director is harder than ever and more confusing than ever. Steps to advance the common good through commerce are commendable, steps to influence policy and the legal system should have to jump a much higher barrier at board level.
Economic Wars
The US reserve increased rates by 50bps and the market had a relief bounce (not as bad as feared) followed by a tantrum (we’re heading for a recession) followed by a relief bounce (chill out people). The confirmation by the Fed that it will move from QE (buying assets) to QT (selling assets) by June is fascinating - we’re about to see if public sector funding has been the primary driver of asset inflation over the last decade.
Unemployment is so low, and the job market so hot, that there is no doubt some slack before interest rates start to bit. However, US credit card debt remains a concern, at $856bn and rising rapidly (and this ignores the growth in Buy-Now-Pay-Later (“BNPL”) options, which have already overtaken credit cards in Australia. We have built a society on credit and now we are about to rapidly increase the cost of that credit, at a time when inflation is expected to reach 10%+ (prob relevant inflation is nearer 15-20% according to some commentators), in the face of an ongoing war, a supply chain crisis and equity markets that some commentators believe are heavily overvalued and in bubble territory.
Actual Wars
Russia appears to be gradually winning the war in the East of Ukraine, albeit the heavier weapons are on their way. The West still isn’t providing enough offensive weaponry to make a material difference (tanks, fighters, long-range missiles, ships) but as the war turns, this has to be expected. The ongoing gradual escalation continues - Russia tests nuclear-capable Iskander missiles in Kaliningrad, the West reportedly gave the Ukrainians information that helped them kill a few Generals and sink the Moskva flagship Cruiser.
Monday marks the anniversary of The Great Patriotic War, the name the Russians apply to WW2. Twenty six million, six hundred thousand people. The amount of Russians that died in that war alone. This included 8.7m soldiers. There’s a belief in Russia that it won WW2 and you’d have to have sympathy with that argument. It’s hard for us to understand how significant WW2 is in the psyche of Russians. Refighting the Nazis sounds a great rallying cry for Monday, combined with an expected mobilisation of reservists and calling this a war. Will that make any difference? Maybe, over time - but it demonstrates in the near-term that there is no ambition for peace negotiations, the war will be ongoing for a while and there remains significant risk in the creeping escalation - Finland likely to join NATO, 20,000 extra US troops in Europe, vast numbers of warships in the Med and Baltic, ongoing intelligence gathering, provision of weapons, etc etc. We’re at war in all but name with Russia, bar the boots on the ground.
Whilst we’re on Putin, what plans does he have for his gold? Time to create a gold-backed currency?
What’s happening in Web 3 & Tech
Regular readers will know that I am fascinated by DAOs. I realised I might have got a bit over-excited when I found myself explaining DAOs to the COO of a excellent tech firm this week. I’ve had two conversations in the last week with people building DAOs and the benefits of them are going to be fantastic albeit it’s still so early.
What happens when you decentralise land ownership in the metaverse?
One of the biggest issues with DAOs is that the votes that you need to evolve the protocol have a very low turnout. It isn’t uncommon for only 1% of votes to be cast. This gives incredible power to active token holders. Most vote communication happens via Discord and yet many users turn off notifications. Now a company plans to notify token holders of upcoming votes by email, text and EVEN PHONE CALLS!
How to build an economy within a DAO.
What happens when you pair AI with extremely ill people and libertarian technologists? You get AI driven assessments of whether someone is ready to kill themselves and be given a passcode to unlock a suicide pill. Automated assisted dying. So many very significant moral questions and objections to this.
Despite current challenges, the future of NFTs is bright according to Forbes.
Goldman launched a Bitcoin backed loan, with Coinbase on the other side.
Want to earn crypto and NFTs every time you go for a run? A startup has launched that offers that, with the aim of improving health and wellbeing. And making lots of money.
Loving this - a very tongue-in-cheek take on what culture is like in the startup / VC world of Silicon Valley right now. Spot on.
Future of work
Why mission-driven organisations might create the worst operating tempo and why we perpetuate sick organisations
Loving remote work but are there even enough remote work job opportunities? A great hiring perk.
Covid is still a factor in the workplace. South African cases have tripled recently - what’s going on and what can we learn about what might be coming next?
Airbnb is doubling down on work from anywhere (a trend that also benefits their revenues as people book into Airbnbs as their remote office on the road). Here are their 5 rules for work-from-anywhere.
The world of drinks
Another example, this time Wm Grants, of how the warehouse shortage will be temporary and won’t be that hard to fix given time. There are now multiple examples of new warehousing being built.
I had the privilege of visiting Mike & Liam at Burn O’Bennie Distillery in Banchory recently, which was an education on flavours and distilling by people bringing a refreshing take to the historic industry. Really cool things going on here. Good to see another interesting partnership.
Fancy an asparagus based vodka?
I’ve spoken with over 100 people in the last 10 days, predominantly entrepreneurs and a lot in the world of tech and doing cool things. Common threads - desire to bring about change, exhaustion from overwork, confusion about the road ahead, lack of very early stage funding, dealing with people issues, passionate about their mission, plugging away and feeling very lonely. It’s been great to listen and help in some ways, but that thread of exhaustion from overwork, confusion about the road ahead and dealing with people issues seems very apparent amongst most workers these days.
Rest and space remain the best antidote. Hard work does not equal success. Finding the important amidst the urgent is the key to leadership. I’ll be celebrating my 25th wedding anniversary next week which is a personal reminder to me of what’s important amidst the urgent. Marriage is good, my wife is amazing and I’m looking forward to many more years!
Thanks for reading and thanks to everyone who gave encouraging feedback over the last two weeks.