Weekend Reading

16 March 2019 | by Katherine Fischer, CFA

A summary of this week’s best articles. Follow us on Twitter (@INTRINSICINV) for similar ongoing posts and shares.

‘We Know Them. We Trust Them.’ Uber and Airbnb Alumni Fuel Tech’s Next Wave. (Erin Griffith, @eringriffith, The New York Times)

Riley Newman, a former head of data science at Airbnb, created a venture capital fund named Wave Capital to invest specifically in Airbnb employees who were planning to leave to start their own companies.  “It’s part of Silicon Valley’s often-incestuous circle of life. The start-up world projects a meritocratic image, but in reality, it is a small, tightknit club where success typically hinges on whom you know.”  Silicon Valley Mafias are nothing new: Fairchild Semiconductor, one of Silicon Valley’s earliest successes, was created by former Shockley Semiconductor employees, and the Paypal Mafia has included some of the most successful entrepreneurs of the last century including Peter Thiel, Elon Musk, and the creators of YouTube, Yelp and LinkedIn.  What makes this round of mafias different is that they are part of the “gig economy” and have dealt with real-world policy issues in cities, as opposed to primarily dealing with the digital world.

Inside the Dystopian Reality of China’s Livestreaming Craze (Matthew Walsh, @matthewwalsh91, Sixth Tone)

“People’s Republic of Desire” is a dystopian documentary that highlights the people behind China’s craze for online livestreaming, a market that could be worth close to $16.7 billion by 2020.  The film’s director, Hao Wu, has worked in Silicon Valley as well as for Alibaba and Yahoo China.  “The characters in “People’s Republic” so thoroughly blur the line between their offline and online selves that the viewer struggles to see where real life ends and performance begins.”  The film has received many awards including the Grand Jury Award for best documentary feature at the 2018 SXSW Film Festival.

Boeing 737 Max 8 crashes stand out at a time of unprecedented airline safety (Christopher Ingraham, @_cingraham, The Washington Post)

Despite the two recent fatal accidents involving Boeing’s 737 Max 8 jet, flight safety has increased dramatically over the last few decades.  “When you take off on a commercial flight anywhere in the world, there’s less than a 1 in 1 million chance that the flight will end in a fatal crash. Back in the early 1970s, the odds of that happening were about 1 in 160,000.”  The increase in safety is due to technological advancements (such as collision avoidance systems) as well as increased regulation.

What is Amazon? (Zack Kanter, @zackkanter, Zack’s Notes)

What started as an algorithm for finding the best physical products globally became a platform for creating any customer-centric experience that the company came across.  The future of Amazon could go either way: either it will find a way to keep incentive structures intact and dominate the global economy for many years to come, or it will become another company that was successful until it wasn’t.

While we do not accept public comments on this blog for compliance reasons, we encourage readers to contact us with their thoughts.

The information contained in this post represents Ensemble Capital Management’s general opinions and should not be construed as personalized or individualized investment, financial, tax, legal, or other advice. No advisor/client relationship is created by your access of this site. Past performance is no guarantee of future results. All investments in securities carry risks, including the risk of losing one’s entire investment. If a security discussed in this blog entry is owned by clients invested in Ensemble Capital’s core equity strategy you will find a disclosure regarding the security held above. If reviewing this blog entry after its original post date, please refer to our current 13F filing or contact us for a current or past copy of such filing. Each quarter we file a 13F report of holdings, which discloses all of our reportable client holdings. Ensemble Capital is a discretionary investment manager and does not make “recommendations” of securities. Nothing contained within this post (including any content we link to or other 3rd party content) constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instrument. Ensemble Capital employees and related persons may hold positions or other interests in the securities mentioned herein. Employees and related persons trade for their own accounts on the basis of their personal investment goals and financial circumstances.