The Education of a Libertarian

Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of “capitalist democracy” into an oxymoron.

Source: The Education of a Libertarian by Peter Thiel

I’d missed this before — Peter Thiel actually argues that extending the right to vote to women in the 1920s is responsible for the decline of freedom in the US? Mind bogglingly regressive.


Facebook Doesn’t Make as Much Money as It Could—On Purpose

… the Facebook auction doesn’t maximize short-term revenue for the company. The goal is to show people only ads they want to see—ads that are just as enjoyable as everything else that shows up in your Facebook News Feed … the goal is creating value for the participants rather than short-term revenue [as] they believe it will maximize revenue in the long term.

“If you’re an advertiser and you’re getting a chance to show your ad, you’re going to take away the opportunity from someone else,” Hegeman explains. “The price can be determined based on how much value is being displaced from those other people. An advertiser will only win this placement if their ad really is the most relevant, if it really is the best ad to show to this person at this point in time.”

Source: Facebook Doesn’t Make as Much Money as It Could—On Purpose | WIRED

Really impressive approach to advertising from Facebook; this can only be done in a true marketplace — I don’t see how someone using an undifferentiated advertising market could do this successfully.


Unit Economics

There are now more businesses than I ever remember before that struggle to explain how their unit economics are ever going to make sense.  It usually requires an explanation on the order of infinite retention (“yes, our sales and marketing costs are really high and our annual profit margins per user are thin, but we’re going to keep the customer forever”), a massive reduction in costs (“we’re going to replace all our human labor with robots”), a claim that eventually the company can stop buying users (“we acquire users for more than they’re worth for now just to get the flywheel spinning”), or something even less plausible.

This is particularly common in startups that don’t pass the Peter Thiel monopoly test—these startups seem to have to spend every available dollar on user acquisition, and if they raise prices, customers defect to a similar service.

Source: Unit Economics – Sam Altman

How much of this is because of the massive flood of venture funding in the Valley? Lyft can continue to match Uber’s low prices because it has a huge war chest to fund customer acquisition and keep prices low. If Lyft’s funding ran out, then perhaps it wouldn’t be quite as much a race to the bottom.

I was recently doing some restaurant research, and senior member of the restaurant team believed that they’re chain of restaurants would be better off if network cover prices were higher — it’d keep the weak operators from really competing, because customer acquisition would cost more, and their unit economics would break. Seems like something similar could happen to many tech companies (particularly the labor intensive ones) when the funding runs out.


Don’t miss Cosme

Eater does a great job capturing the culinary brilliance that is Cosme. One of the best meals I’ve had this year.

Is there any other New York chef that shows off maize in all its multifaceted glory than Olvera? Let’s start with the purple crisps that begin every meal; the dense tostadas taste like something out of a nuclear-powered movie theater, popcorn to the power of ten. Then a swiss chard tamal arrives, the masa acting as a sponge for the leafy green’s mind-bending, almost offaly flavors.

House made tortillas magically appear with every other course for impromptu taco making. The soft rounds hit you with a sweet, musky aroma, but they’re pliable, paper thin, and neutral on the palate, allowing any fillings to shine through strong and clear. They’re the appropriate medium for duck carnitas, slowly cooked to an earthy, almost livery funk. And just when you think you’re about to get sweet corn for dessert, Olvera brings out just the opposite, a corn mousse with a vegetal sting. Only a sugary husk meringue on top provides the sweet relief this brilliant dish needs. Call it a Mexican pavlova.

Source: Six Reasons Why Cosme Is One of NYC’s Most Relevant New Restaurants – Eater NY


The New York Times is shutting down

Bad news though. Microbilling doesn’t work. It has been tried over and over and over and over and over and over and over and over and over and over and over again.

You know that guy who is always nickle and diming you over every little part of a deal. You know how irritating that is? That is how people react to micro billing. I’ve tried it. The only way micro billing works is if the friction is so low that people don’t really even realize they are being billed, and that? Well, that’s probably criminal.

The New York Times is shutting down