Local vs Global Maxima

Partnership, Square & Afterpay, Owlet SPAC

I’m very proud to announce that Elicia and I are now Partners at AirTree (more in the AFR here, as well as our blog posts about each other here and here).

It’s a dream come true — three years ago I arrived as a new immigrant to Australia, unsure what the future would hold. Today, I have a career that’s continually compelling and I work with people I both respect and care for.

Reflecting on how the world of startups and investing has sucked me in with increasing intensity, I can’t help but think of Sewell Wright’s theory of fitness landscapes.

I started my career on the trading floor in London selling Equity Derivatives to US hedge funds and institutions. While I climbed the ranks and could have built a lucrative career in that world, I always knew I would never be world-class because I simply didn’t care as much as the most talented people I worked with. I hit my local maximum.

My career in VC feels different. I have a level of (unhealthy?) obsession that relentlessly reinforces how little I know and how much there is to learn. This work pulls me in and encourages me to try to become a little smarter every day.

At the time, the decision to leave banking felt so high risk — leaving a promising career for an unknown future against the advice of everyone around me — yet without taking that leap I would have never discovered this sense of motivation and purpose. Through exploration of the adjacent possible, I found a much higher peak to scale.

I’m so grateful to AirTree for taking a chance on someone without an obvious background and for giving me the opportunity to run at this career in my own way. I still feel so early in this journey, with so much still to learn, and I look forward to spending decades mastering the craft.

Square & Afterpay

Last October, I wrote my investment thesis on Square, based on their unique opportunity to unite the merchant and consumer offerings in a positive feedback loop that would build a sustainable competitive advantage over the long term.

Square’s product releases over the last two years demonstrate that this feedback loop is at the core of their product roadmap, from Salary Advance to Cash App Business and instant Square Payroll transfers to Cash App users.

In that article, I also mentioned that BNPL would be an obvious addition to this feedback loop — providing yet another reason for consumers to adopt Cash App while also generating additional revenue for Square Sellers, and over time creating the opportunity for Square to bypass traditional payment rails and associated fees.

While expensive, Afterpay is a smart acquisition not just because it enables Square to switch on BNPL quickly, but also because their customer base is in exactly the growth markets Square is targeting — International and Enterprise.

Owlet SPAC

Pregnancy exposes you to a whole new (depressing) world of consumer products. These brands are poorly designed and terribly marketed.

Case in point, this was the best-reviewed breast pump I could find:

While the baby world is filled with innovation as doctors, parents, and increasingly venture-funded startups invent solutions to solve specific problems (Snoo, Trunki, Elvie, Willow), there is a big gap in the market for a trusted brand offering a suite of products that all work well together and can be bought in a bundle before birth (everything feeding, sleep, and health-related).

That’s why the Owlet SPAC presentation caught my eye — their pitch is to build this ecosystem.

The presentation focuses on the healthcare products they’re targeting, which I cynically believe is because they’re trying to anchor their multiples against digital health rather than e-commerce. But, if you look at the roadmap, it’s much broader than just health, with a mixture of both content and physical products:

I hope we see more companies targeting this market, there’s such an obvious opportunity for a trusted consumer brand selling a basket of high margin one-off and subscription products to a cohort of consumers who are much less price-sensitive than in other areas of their lives.

Links I loved:

Commencement speech by Shonda Rhimes at Dartmouth

Shonda Rhimes is one of my idols. Here she confronts her fear of public speaking and shares her lessons for life — Be someone who does, not someone who dreams. Don’t feel sorry for yourself, acknowledge how incredibly lucky you are, then volunteer some of your time to those less fortunate than yourself. As a parent with ambitious work goals, you will always feel like a failure and that’s ok.

Intelligence Squared: The Sunday Debate

I’m leaning away from interviews and towards debates in my podcast choices these days. Hearing both sides helps to understand the complexity of an argument and often makes you realise the extent to which both sides agree much more than they disagree.

Well-expressed take from Kain at Synthetix on DeFi vs NFTs:

kain.eth @kaiynne

I’ve been thinking a lot lately about the intersection of DeFi, NFTs, art and gaming lately. Putting my current thoughts into a thread…

Christopher Hitchens on why Orwell matters