Weekly Reading Notes #1-40

27 October 2023

Kieran

Oct 27, 2023

The usual collection of things which caught my attention in the last week (or so).

Product Delivery

Related (perhaps very tenuously) to getting the right things done.

Okta security breach, the actual breach here is relatively minor - an attacker ‘stole’ some Okta user credentials, using them was able to login to an Okta support system where they accessed some files containing customer credentials credentials and using these could login to customer systems. What’s interesting here is thinking about the benefits/risks facing someone building a system, when you use Okta (or similar) to provide login pages/etc - thanks to comparative advantage/specialisation it is faster, cheaper, easier and more secure than rolling your own. But on the other hand Okta (and similar) become magnets for attackers. The key in my mind is to think about incentives and responses. A company like Okta faces existential commercial pressure to do a good job - while government identity systems do not. Okta’s response has been textbook; first secure the vulnerability and then provide clear, transparent notice to everyone. I’m sure Okta will lose some marginal sales to competitors but overall I don’t think this will impact their business.
2023 DORA Report, short summary of the 2023 State of DevOps report - key highlights for me were:
- User focused teams worked in companies with higher organisational performance, I think this is muddling things slightly. I would expect user-focus as the organisation level to be causative of user-focus as the team level and performance at the organisation level.
- Loosely coupled architecture1 improved performance on all metrics.
Mo’ Founders, Mo’ Problems via Failory, nice look at the challenges of founder teams at Startups and possible pathways. One sentence summaries:
- Solo founders - replicate the founders strengths and weaknesses e.g. the engineer CEO who doesn’t hire enough sales people.
- Duo founders - it’s a marriage and they don’t always work out.
- Three founders - inherently unstable.
- Four plus founders - politics from day one.
Practically speaking I don’t think there is much difference between three and four-plus, and even looking at solo founders + early hires. The solution is that there needs to be a clear leader and clear reporting lines into that leader. This isn’t really revolutionary there are good reasons that co-CEOs in business are rare and co-presidents/prime ministers don’t exist in politics.
Birkenstock IPO (a few weeks old), slightly weird sandals aren’t exactly the most exciting thing around but I’m fascinated by the career of the CEO who seems to have gone TV reporter to TV executive, then advisor to Brikenstock (via an introduction by an art dealer) to CEO to multi-millionaire. On the valuation front Birkenstock is hovering around a $7b market cap putting it far ahead of peers on a ~5.5x P/S compared to ~1.5x - while they have a relatively untapped market (men) I don’t see a 4x revenue expansion bridging this gap.
Costco's $9B clothes business, another good CEO story - the new CostCo CEO has been with the company for 40+ years and started as a forklift driver. The most interesting pieces here though are notes on the rest of the business:
- Shifting more clothing tan Lululemon, Ralph Lauren and Levis.
- Working in the grey market to get cheap brand name clothes.
- Use of store layout to expose customers to products throughout the store (Australian readers will recognise this in Aldi and UK readers in the ‘middle of Lidl’)
Uncle Sam needs more money, trying to predict the macroeconomy is both one of the most important things you could do (because it drives everything) and one of the most pointless (because it’s so hard to predict). My priors are loosely that government spending and debt is unsustainable due to an ageing population so on macro I’m basically a permabear. This piece is basically bias-confirmation - but biases can be right!
Techno-optimism responses (Matt Yglesias and Ezra Klein), two good follow-ups to last week’s note representing the centre-left reply to Andreessen’s libertarian manifesto. My response to their response:
- Both pieces are largely examples of mood affiliation - Andreeson has a libertarian (or maybe even alt-right) vibe so as centre-leftists they are generally opposed while agreeing with many of the specific points.
- MattY generally reduces Andreeson to a straw man that all technology is always good and then refutes this - he doesn’t engage with Andreeson’s point that the problems of technology are solved with more technology.
- Both point out that Andreeson is quite self-serving having skipped from boosting crypto to boosting AI - I think there’s a lot of merit to this argument and I would have liked them to focus here.
- Klein argues that Andreeson is alienating people which will generate a backlash - on a philosophical level I’m deeply uncomfortable with this idea of a ‘social license’ which is an amorphous concept based on the threat of legislation. Practically I think it’s bad faith - as we’ve seen with environmental laws. Historically I think Klein is misattributing the turn in the 70s to overreach rather than demographic forces and judicial activism.
Why don't you just sell all your stocks and buy ETFs ($), there are many reasons to directly pick stocks but if you actually believe you can reliably beat the market then you should be working at a hedge fund or levering up and laughing all the way to the bank. Personally I think of it as something between a hobby and an exercise in motivated research. I aim to modestly beat the index but really I know the bigger factor is savings rate and time in the market. Yet I still follow dozens of stock-related newsletters.

Off-Topic

Not even tangentially related to product delivery, but still interesting (to me).

Econ GOAT (MR), Tyler Cowen has released his latest book as a free pdf with a chatbot companion. This means you can read the book like normal but you can also freely query the chatbot - essentially using it as a tutor. You can ask questions and discuss issues but you can also generate and mark homework. The long-promised MOOC/auto-didact future may finally be here.
Young people will probably soon deliver a united Ireland, a recent survey in Northern Ireland found that 57% of 18-24 year olds would vote for unification with the Republic of Ireland. As ever, these kind of polls are a snapshot and people’s views can change over time - however as the salience of the troubles fades I think that reunification is essentially inevitable. How that plays out will be interesting.
- For the Northern Irish the sticking point is obviously the question of unionist identity, but that will surely become less of an issue over time.
- For the UK perspective it feels like an easy decision - Northern Ireland is a significant net drain on the economy and continually complicates Brexit.
- For the Republic of Ireland it feels like a tougher decision. On the one hand they can’t really say no - but on the other hand they (like West Germany before them) would be absorbing a poorer region with uncertain political ramifications. My prediction is that they would try and negotiate some kind of payment from the UK.
What I don’t think would change is the common travel area - much like Australia and New Zealand the economic and cultural ties between the two countries will always be significant and it’s in no one’s interest to restrict them.
On a Lack of Ambition, we can build nice things but in general we don’t. This piece makes a few arguments that we have forgotten high literacy, lost a sense of history, lost of sense of civic society and become mired in a sort of nihilism. I’m inclined to agree. A society which retreats from the difficult and the great to focus on the easy and the self.

AI Worship, thus far AI seems relatively good at creativity and relatively bad at technical work. In some sense this is unsurprising because the training data is more creative than technical and the fundamental model (prediction of next best token) lends itself to creativity. The implications are interesting though. If you feed the Bible and all of Christian doctrine into a model and create a ‘Jesus Chatbot’ what would this mean? Would we get new novel interpretations of old texts or would we get more a more prosaic ‘average’ of previous thought? My money is on the latter. Organised religion has (mostly) withstood a lot, I don’t think chatbots will be it’s undoing.
America needs a bigger, better bureaucracy, a long piece but the short version is that we should hire more civil servants. I think this fails on three principle counts:
- Conceptually it fails to differentiate between state capacity and state capability. It is easy to count bums on seats and dollars spent but it is hard to measure actual capability versus waste.
- "Ministerial review" or review by bureaucrats (as opposed to judiciary) is not a panacea - the UK and AU have that for housing but still face massive issues (don’t believe me, just try and get planning permission).
- Most substantively there is no plan to get from here to there politically of practically.
Overall I am increasingly onboard with the Dominic Cummings model that the existing bureaucracy is impossible to reform to a new ‘start-up’ bureaucracy should be established in parallel on a completely new model.
Three Mile Island, this is an interesting read both for the actual detail of what happened at Three Mile Island and the spicy quotes from the subsequent reports like this one:
That it was a groundless fear, an unfortunate error, never penetrated the public consciousness afterward, in part because the NRC made no effort to inform the public that it had erred.
Devanney places the fault here at the feet of unaccountable government bureaucrats but I think this misses the parts (also highlighted in the piece) that the corporate bureaucracies involved also hid and downplayed issues for commercial/regulatory reasons.
On the reactor failures themselves though I’m struck by an incredible respect for the plant operators who on multiple occasions were able to figure out the real problem in literal minutes and act decisively to avoid meltdown.
Memoir of a Transsexual, an interesting read. While it’s difficult to generalise form a sample size of 1 - it’s also the reality that we won’t ever have large sample sizes to draw from.
Ozempic Is Obviously Good For [most] Business, if your business is built on selling junk food then Ozempic (and similar) medications could really be a an existential threat (the top 20% of fast food customers account for ~50% of sales) but focusing on the possible losers is missing the point. Millions of people living healthier and more productive lives would be a net positive for the economy. The comparison here would be worrying about the future of tobacco companies as fewer people smoke.
Disclosure: long Diageo.
Infrastructure Costs, this follows on from previous notes on infrastructure costs with a few more factoids:
- The jump in construction costs in the UK (and I would bet the rest of the Anglophone world) really happened between the 1970s and 1990s after whcih it has been flat. Again the 70s is a hinge point (see conspiracy theory) - this to me points to Ralph Nader (previously covered here).
- The proportion of ‘soft’ costs (design, etc) in the Anglophone world often tipping ~50% of total while staying at 5-10% in Europe. Another point towards the judicial/regulatory/NIMBY factor.
- While not strictly comparable the Jubilee Line tube extension (proposed in the 70s and completed in the 90s) had a 400 page environmental impact assessment while the Sizewell C nuclear power plant had a 44,000 page assessment - which was deemed insufficiently detailed.
- Zebra crossings in the UK are more expensive than basically anywhere else in the world because they require flashing lights which basically nowhere else in the world does.
Podiatrist's questionable business practices, I’m not quite a crunchy-granola2 type but I’m adjacent. I’ve always had a deep scepticism of modern footwear and podiatry so this piece is some bias confirmation. I’m reminded of a flat-footed ex-girlfriend encouraging me to see her podiatrist for help with my very high arches. Needless to say their solution was (expensive) orthotics. Surprisingly even for me the orthotics for my crazy high arches and my ex’s crazy low arches were (drumroll please) identical. The podiatrist had a pretty nice car though.
Geography of Israel-Palestine, I’m not going to wade into the Israel-Palestine conflict more broadly - but this article is an interesting piece on the geopolitics of the area, which is almost never discussed and I’m embarrassed to admit is something I knew basically nothing about. Below is an (exaggerated) relief map (from a subsequent article), the West Bank is a hilly area with elevations up to ~1,000m at the highest points and relatively towers over both the coastal plain and the Jordan river valley. On the other side of the Jordan river are the Jordanian Highlands at ~1,200m. Militarily control of the high ground is key to success and so the ‘natural borders’ of any state on the coastal plain are the river and the sea (hence the Palestinian chant). Looking purely at the map it is hard to imagine any Israeli state giving up military control of the West Bank (or Galilee/Golan heights) but easy to see why they returned the Sinai to Egypt.
Evaluating Geothermal Learning Curves via MR, the efficiency of solar and wind power generation has increased massively - might we find the same benefits in geothermal if we scaled it up? As a process drilling holes in the ground inherently lends itself to learning curves because the feedback loop is short. The real question is how much have we already improved on hole drilling through oil/gas (~50-100x) and how much more improvement is possible?
Slavery was bad ($), slavery and empire was good business for some but bad economically overall. Legalised theft makes thieves rich but victims poor. This is really the key para:
In contemporary academia, the take that colonialism and empire-building was mostly pointless would be considered a spicy right-wing take, because leftists want to denigrate the achievements of the liberal/democratic/capitalist order by emphasizing the idea that all this modern prosperity was, in fact, built on bloodshed and brutality. To own the libs, [leftists] want to embrace the old conservative idea that this exploitative and immoral conduct of the past was also highly efficacious.