#107 - Investing in the Meme Economy, Shopify ++ TikTok, Networks into Economies, & Opensea Does $1.5b in August

  
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In this week's episode of Reformed Millennials, Broc and Joel discuss investing in the Meme Economy. First the difference betwen stories and narrative especially as it pertains creating a movement around a business —- then about recent examples including, Visa buying a cryptopunk, Shopify's new partnership announcement with TikTok, and a Canadian startup that just raised $2m and is also helping brands leverage the trend of social commerce.

Listen on AppleSpotify, or Google Podcasts.

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👉 For specific investment questions or advice contact Joel @ Gold Investment Management.


📈📊Market Update💵📉

Earnings season continues with major enterprise software companies such as Salesforce.com reporting quarterly results tomorrow. This is big for the GIM program. Were also paying close attention to the all important home building industry which will be in the spotlight as U.S. homes sales data for July is due for release early this week. On the economic front, U.S. Personal Income and Spending data for July is scheduled for release on Friday.

CHINA

Chinese technology shares have had a difficult few weeks, to put it lightly, as authorities have had the sector firmly in their sights. That selloff has abruptly reversed, with the Hang Seng Tech Index advancing 7% overnight as strong corporate results drew investors such as Cathie Wood back into the market. What has grabbed our attention is the share buybacks, however subtle, that the majors are taking part in!

Key Earnings Announcements:

  • Monday: JD dot com (ticker: $JD), Palo Alto Networks (ticker: $PANW)

  • Yesterday: Medtronic (ticker: $MDT), Intuit (ticker: $INTU), Pinduoduo (ticker: $PDD), Best Buy (ticker: $BBY)

  • August 25th: Salesforce.com (ticker: $CRM), Snowflake (ticker: $SNOW), Splunk (ticker: $SPLK)

  • August 26th: Dell Technologies (ticker: $DELL), Autodesk (ticker: $ADSK), Workday (ticker: $WDAY), Peloton (ticker: $PTON)

  • August 27th: Dollar General (ticker: $DG), Ubiquiti (ticker: $UI), Elastic (ticker: $ESTC), GameStop (ticker: $GME)

Investor Events To Watch Out For

  • August 24th: Dan Durn, CFO of Applied Materials (ticker: $AMAT), participates in a fireside chat at Needham SemiCap and EDA Conference

  • August 24th: Jason Robbins, CEO, and Chairman of DraftKings (ticker: $DKNG), participates in a fireside chat at Craig-Hallum Online Gaming Conference

  • August 26th: James Scapa, CEO, and Chairman of Altair (ticker: $ALTR), will participate in a fireside chat at Rosenblatt Technology Summit: The Age of AI Scaling


💸Reformed Millennials - Post of The Week

Here we are in 2021 and the need for storytelling has accelerated.

Packy McCormick has a fantastic essay on all this that everyone should read ( also – do read his Ethereum piece as well when you can). 

Not Boring by Packy McCormick
Story Time
Welcome to the 1,637 newly Not Boring people who have joined us since last Monday! Join 69,350 smart, curious folks by subscribing here…
Read more

As Packy starts out in the above linked essay, he frames it with:

But as things get more and more abstract, as we move evermore towards a world of abundance, and as more and more of what we do and buy is for things beyond survival — like social capital, entertainment, and utility — the ability to weave a good narrative out of a tapestry of little stories is more valuable than it ever has been. How best to do that has changed and gotten a whole lot more complex.

This is no easy task as Packy points out:

I was reminded of how hard it is to spread a message in a conversation I had at a wedding last weekend. A few friends were talking about why the Olympics’ ratings were so bad. Sure, it was weird not having fans, and sure, America’s best athlete competed less than expected, but the real challenge was, we didn’t know any of the other athletes’ stories. In the past, there would have been months of build-up, with profiles on America’s athletes all over ESPN and The Today Show and in the local newspaper. We all would have been watching the same shows, and those shows would have told stories that convinced us to care. They would have crafted a narrative.

One smart friend who works in media asked: “How would you get those stories out to everyone today?” Hint: you can’t. And that’s the Olympics! It’s bringing one of the world’s most beloved brands to the table.

On the other hand, in my small corner of the internet, NFTs have completely dominated the conversation. Not everyone in the world is talking about NFTs. Even in the midst of NFT-mania, only 109k people have bought an NFT on OpenSea this month, according to rchen8 on Dune Analytics.

Packy’s lessons from crypto are on point:

Packy explains…:

We don’t need most of the things that we buy or spend time on today. Even the best, most useful B2B SaaS is a nice-to-have, however important it seems. The beautiful thing about NFTs, and why they’re such an interesting case study, is that they’re the purest, most honest distillation of that trend. Of course we don’t need a $10k jpeg. Duh.

The thing that people scoff at — these are just stupid jpegs! — is the same thing that makes them so rife for narrative building. They’re largely empty vessels into which the community of owners and supporters can pour stories that turn into a narrative. Studying what makes certain NFTs valuable is instructive for anyone trying to build a narrative today.

The narrative in the media is ‘this is a bubble’, ‘this makes no sense, ‘investors are going to get burned’. This Narrative took hold after the great financial crisis. It’s easy to tell a ‘Big Short’ story because that’s the last great crisis story.

Today, as Packy points out, we have ‘bottoms up’ narrative Petri dishes.

I loved this post from Justin that does a good job of capturing this moment and era and the crypto/NFT story – ‘Everyone is Having Hilarious Fun and You Are Not‘.

The financial media narrative has been wrong forever.

It is easier than ever to find storytellers and the right narratives to create incredible alpha...

Find your own storytellers, make your own bets...

The world of blockchain consultants is upon us...


Chris Dixon on the Memes, Crypto and Web 3.0

We spent the last 20 years building networks on the internet. Social media platforms like Instagram, Twitter, YouTube, and Discord are networks, which can be divided into billions of smaller networks, consisting of followers, friends, subscribers, backers, etc.

These platforms gave many people an audience who didn’t previously have one. But due to fundamental structural misalignments between the networks and the companies that own them, we’ve seen increasing tension around these networks’ rules and economics.

For example, social media companies that control large networks routinely kill off promising 3rd-party developers, fight cross-network interoperability, charge excessively high take rates, and adopt intrusive advertising models.

We are now entering a new era of the internet — Web 3 — where we have the chance to upgrade these networks into economies, and in the process build systems where the incentives of the network owners, network participants, and third-party developers are fully aligned.

Economies (as used here) are networks with various crypto assets freely flowing through them, from any node to any other node, directed by the decentralized participants and not by the centralized network owner.

Why crypto? You could theoretically have digital economies without crypto, but crypto guarantees genuine ownership of goods (NFTs) and money (tokens), thus lowering switching costs and preventing networks from playing Web 2 games like deprecating APIs and raising take rates.

When Web 2 networks allow for commerce, it is very limited, with centrally prescribed prices, products, and buyer-seller relationships. Because of user lock-in, Web 2 take rates are extremely high. I wrote more on this here:

A true digital economy is like a real-world bazaar. Anyone can create new goods and services and is free to trade with anyone else. People can fully express their creativity, and enjoy the economic upside of what they produce.

What might new economies built on top of existing networks look like? We can get a glimpse of the future by looking at emerging NFT communities. For example, the CryptoPunks economy flows across Discord, Twitter, Telegram, OpenSea, Larva Labs, etc.

In these communities, CryptoPunks are not “just jpegs.” They are cultural artifacts that derive value through the shared myths, memes, stories, and experiences of their surrounding communities. Punk 6526 explains it well here:


🌊 Canadian Companies Mentioned 🇨🇦


🎙️Other Links Mentioned in the Episode🎙️


🌊 Best Links of The Week🔮