#98 - Hedging Inflation, the New Narrative in Tech and $140m Community Building Lesson from a 25y/o Podcaster
In this week's episode of Reformed Millennials, Broc and Joel discuss what to expect from Lumber and commodity prices in the upcoming months, why tech needs to get past investing in business software and how a 25 yr old podcaster can raise $140m VC fund in a matter of weeks.
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👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
The markets are still a mess.
We've talked a lot about the churn from growth to value these past 12 months… But one of the most interesting analogues for 2021 comes from JC Parots at Allstarcharts and how this market is exactly what we should be seeing in Year 2 environments:
"Year 2" market environments , and, I gotta say, what we're seeing now looks a lot like that.
And my point this whole time has been that if this market wasn't a mess, then that would be abnormal. A hot mess is exactly what we should expect.
Here's a quick reminder of what the other "Year 2's" have looked like:
Go through all the major Indexes, Sectors, and stocks.
What do you see? Chop Chop Chop....
Our favorite take on the Meme Stock Craze from Chris Camillo:
Meme investing is a sickness that is born from the falsity that the stock market is rigged in favor of institutional investors and the only way to win is to out manipulate the institutional manipulators. In reality retail investors have a massive natural edge over institutions in that the us regular folks are diverse, not biased, and are not consumed by market noise. We are much better positioned to observe real world changes in technology, culture, and our own consumer behavior as they happen – and to connect that change to investable opportunities in the market. But nobody, especially not the attention seeking financial media is pushing out that narrative so we are stuck in this perpetuating idiotic fight with Wall Street where the only way people think they can win is with ridiculous meme stocks. I have gone as deep into Reddit and meme stock YouTube as one can go and the conversation around these trades is about the dumbest I have ever seen. It’s full blown idiocracy. I’ve had my fun making a few million getting in early on these meme tickers when they start trending and the conversation is expanding but cannot wait for it all to end. Unfortunately I don’t see that happening anytime soon.
💸Reformed Millennials - Post of The Week
Canada's Most Important Company - $SHOPIFY Expanding Their Relationship With $GOOG, $FB.
Shopify Inc. will open up its e-commerce checkout system to all retailers selling through Google and Facebook Inc., expanding an existing collaboration with the two U.S. giants and marking the first time the Canadian technology company has offered a product to merchants that don’t use its platform.
Retailers who sell products through Facebook or Google properties such as Instagram, YouTube or Google Maps will be able to offer shoppers the chance to pay for their purchase using Shop Pay, starting in July for Facebook and later in 2021 for Alphabet Inc.’s Google. Shop Pay is a checkout product that stores users’ information, speeding up online transactions. Right now, retailers have access to it through those social media platforms, but they must be Shopify merchants to use it.
This is a big deal, and a big change for Shopify, but it's useful to understand the long-term context of this announcement.
First, the company’s financials — and the driver of its sky-high valuation — have long reflected the reality that Shopify is first-and-foremost a payments platform tied to the GMV of e-commerce, but this change makes that shift a reality from a product perspective. Merchant Solutions is its own independent product line.
Second, this also inverts Shopify’s funnel; from the Bloomberg article:
Shopify sees little risk that opening up Shop Pay will cause some retailers to cut their ties to the company in favor of doing all business through Google or Facebook — “just the opposite, in fact,” Finkelstein said. Shopify is convinced that e-commerce merchants will want to maintain bespoke websites at the core of their businesses. But many of them will opt to sell across multiple platforms, including social media, and that increased complexity should make Shopify’s system even more valuable, he said.
“You now need to reconcile inventory across eight or nine channels. You now have to handle shipping and fulfillment across eight or nine channels. And so as the complexity increases, the value of using Shopify as the central retail operating system also increases.”
This is the argument Ben Thompson was making last month in Market-Making on the Internet:
there are huge opportunities to operating orthogonally to demand-owning Aggregators, particularly making it easy to operate businesses that function across multiple Aggregators. Shopify’s bet is that offering payment solutions will not simply drive more business for Merchant Solutions, but also be an on-ramp to Subscription Solutions as well.
Third, this — not the Shop App — is Shopify’s true coming-out party as a consumer brand. Facebook and Google are counting on the fact that consumers know and like and trust Shop Pay to drive more conversions than they could drive on their own, not simply because it is easy to use, but also because it is familiar.
All-in-all, everything about this announcement is very impressive. It feels like a mutual benefit for all parties. Additionally, for Google and Facebook to recognize what is their core business, what isn’t, and to act accordingly in a major props to SHOP; and even more impressive is the way that Shopify has not only laddered up from a SaaS business to a payments business, but also its willingness to recognize what is the dog and what is the tail, and put each in its proper place.
Harry Stebbings Raises $140m Venture Fund at 25 on the back of a Podcast
Advice For Anyone Starting a New Career or Job
🌊Best Links of The Week🔮
Morgan Housel is back with ‘Harder Than It Looks, Not As Fun As It Seems‘
The Cooperation Economy by Packy McCormick is excellent
Does Tech Need a New Narrative - Anna Wiener (New Yorker)
34 Mistakes on the Way to 34 Years Old - Ryan Holiday
Moderna: the Software of Life - (Podcast)