On My Mind: Crypto M&A, Why Blank Slates Can be Bad, and In-Person Effort in the Age of AI
A selection of half-baked ideas I’m exploring for long-form essays combined with recommendations of great content I recently consumed.
I’m trying a new style of piece this week. It’s a selection of half-baked ideas I’m tinkering on for long-form essays combined with great content I consumed recently. The goal is to publish in this format weekly, with occasional longer-form essays as I develop the ideas mentioned here.
On My Mind
M&A within crypto.
A number of crypto (or crypto-adjacent) companies that went public recently have been getting crushed in the market. Gemini is down over 80% from its IPO, sitting at just $700M. BitGo is down nearly 30% and valued at about $1.2B. Circle is down over 70% from its peak. EToro down >50%.
Part of this may just be air leaving the market as multiples (across many sectors) compress. Some of it may be macro. And some of it is certainly correlated with broader crypto asset price declines.
On my mind, though, is the question: at what point do these companies become attractive acquisition targets?
It feels like there are two powerful trends on a collision course. The first I mentioned above: crypto companies (that had strong enough businesses to go public) are struggling in the markets. The second is that many more traditional financial institutions – banks, exchanges, payment service providers, and brokerages – are rolling out crypto service offerings. I wouldn’t be surprised if the value from these crypto companies’ infrastructure, licensing, and customer relationships starts to make them attractive acquisition targets for strategic acquirers.
Frameworking
In December, I was lucky to meet a legendary investor and someone whom I admire greatly. What struck me most about our conversation was that he seemed to have a framework for everything. Any question I asked and he responded with a structure for how to think about the scenario. It was the type of thing where each answer came across so polished and considerate that he had surely iterated each framework over time. But at the same time, there were so many – and they all felt so natural, and specific – that there’s no way he could have practiced and prepared each one.
The lasting takeaway has been that I should spend more time building and applying frameworks. There seems little downside to having a prepared mind. If thinking is a muscle, frameworking feels like a healthy exercise to add to my mental gym routine. So here goes.
This week’s frameworking: give people something to react to.
If you want an answer, always provide a first attempt and let the other person react to it. If debating a topic, pick a side and choose to defend it as the starting point for discussion. Just avoid starting with an empty slate.
The framing is consistent with Cunningham’s Law: the notion that the best way to get to an answer on the internet is not to ask a question, but to post the wrong answer. People can’t help but tell you how you’re wrong and, by doing so, end up sharing what’s right.
Content I Consumed This Week
Everything is Market by Jesse Walden. I particularly enjoyed the “markets as APIs” framing. It’s an expansive and provoking view of how software and finance will increasingly intersect, especially as two horizontal technologies (AI and crypto) hit inflection points.
Love Story – a new TV show on FX/Hulu that explores the relationship between JFK Jr. and Carolyn Bessette. I’m obsessed with it. One of the most striking (and admirable) things about the show is Carolyn’s wardrobe. I loosely knew that Bessette was a style icon in the 90’s but didn’t fully appreciate it until watching this show. (As an aside: it seems like half the female population in NYC has become inspired to start dressing like Bessette in the past week). The show also made me realize that putting effort into how one dresses will probably grow in importance in a world of AI. When more and more of the world is automated, one of the few things that can’t be edited or augmented is how someone shows up in person. Individual effort is and always will be a differentiator.
Andrew Reed on the Dialectic podcast. Lots of fascinating stories about how Sequoia has evolved and grown. TLDR: Jackson is a great interviewer and Andrew should go on more podcasts!
Books on the docket: Open by Andre Agassi; Setting the Table by Danny Meyer.