Per My Last E-mail #4

Natively Integrated Companies, Exhalation, and Optical Illusions

Hi Friends 👋,

Hope you’ve had a better week than the Warriors. We’re back on the Sunday cadence, and I’m hoping to stick to this going forward.

Puja and I have been up since 5:30am watching India play Australia in the Cricket World Cup, and it’s looking good for India with 352 runs in their overs. Only 2-3 hours to go!  

Natively Integrated Companies

As the capstone for my writing class, I wrote a 3-part series on The Rise of the Natively Integrated Company. In it, I explore the shift from businesses that focused on controlling supply, to those that focus on controlling demand, and ultimately, to Natively Integrated Companies: companies that combine the focus on building quality products that old-school businesses had with the focus on owning relationships with customers that companies like Airbnb, Zillow, and Netflix do.

I spoke on a real estate tech panel at Blackstone a few months ago. In response to one of the questions about how our businesses could become asset light, I replied that Breather was actually pretty heavy - we lease space, have in-house design and construction teams, manage our own operations, build our own tech, and build direct relationships with our customers via phenomenal customer care, sales and marketing teams - and that our heaviness was the key to creating a superior, differentiated experience. Afterwards, one of our investors, who I hadn’t seen in the audience, came up to me and said “Great job up there. But I hated your answer about being heavy.” In a way, this series is my 8,000 word response.

This is the longest piece I have written, and it reflects the experience I’ve gained at Breather and lessons I’ve learned following other startups closely. I hope you’ll check it out, let me know what you learned, let me know what you disagree with, and if you like it, share it with people who would enjoy it.

🚨 Athens Airbnb Update 🚨

Our house in Athens is live on Airbnb! But Puja told me that I can’t post a link because low conversion rates will hurt our search ranking. If you want to see the house and PROMISE you’ll book, I’ll send you the link.

Tweet of the Week

I get it. When I was a freshman in college, I took an Astronomy class expecting an easy A, and it turned out it was pretty hard and there was physics involved etc. So I can sympathize with our President’s confusion over whether the Moon is part of Mars.

What I’m Reading

📖 Writing 8,000 words on Natively Integrated Companies didn’t leave me too much time to read, so I’m still early on in  Range: Why Generalists Triumph in a Specialized World by David Epstein.

😤 I’m also giving Audible a spin and listening to Exhalation: Stories by Ted Chiang. The book is a series of science fiction short stories that Meghan recommended to me. The author Alan Moore describes Exhalation better than I can:

“As much thought experiments as stories, Ted Chiang’s exquisite mechanisms employ science fiction as an instrument to probe the human condition. Like the chronicler of Exhalation’s title narrative, he opens the back of his own head and lays bare its mysterious golden motion for the hushed appreciation of an awestruck audience. Beautifully written and conceived, this is a marvelous, astonishing collection that we would do well to read before the worlds it conjures are upon us. Urgently recommended.”

I highly recommend both Range and Exhalation, and each in the format that I’m consuming them: read Range and listen to Exhalation.

Links and Listens

🚖 Uber’s Path of Destruction in American Affairs Journal

Mike Madonna sent me this brutal takedown of almost every aspect of Uber’s business by American Affairs writer Hubert Horan. I have read a lot of the negative press on Uber, and have even written about the challenges of their business model in my Shen Yun and Why There Won’t Be Any New Aggregators posts, but I’ve never read anything so convincing from the anti-Uber camp.

Horan essentially argues that Uber is one of the greatest examples of Greater Fool Theory - aka “I don’t need to think that this business will actually make money to buy the stock as long as there is some greater fool who will buy it from me at a higher price later” - and that they have optimized for “growth at all costs” from the beginning. Growth means more investment which means more subsidies which means more riders which means more growth which means more investment which means that Uber has been able to put off dealing with the fundamental underlying challenges that come with running a transportation business.

Horan thinks that Uber has been a net negative and that regulated taxi businesses weren’t as dumb as they looked. If you’re interested at all in Uber’s story or startup economics, this long-ish article is worth the time.

🏀 Data, Decisions and Basketball with Sam Hinkie on Invest Like the Best

This replay of an interview Patrick O’Shaughnessy did with former Sixers General Manager Sam Hinkie a little over a year ago popped into my feed again this week. If you haven’t listened to Hinkie speak before, or read his resignation letter, it’s surprising to hear an NBA GM speak so fluently about markets, machine learning, books, hiring, and innovation. One of my dreams is to work with Sam Hinkie one day, and this podcast is a good example of why that is.

🏃🏼 The Heart of a Swimmer vs. The Heart of a Runner in The New York Times

Once upon a time, I was a good runner and I have always been a terrible swimmer. I was hoping that this Times article would tell me that as a runner, I have the heart of a champion. It didn’t. What it said instead is, “While all of the athletes’ left ventricles filled with blood earlier than average and untwisted more quickly during each heartbeat, those desirable changes were amplified in the runners.” I’ll take it.

💰 50 Things I’ve Learned in the First 90 Days of Running a Company by Romeen Sheth

Romeen Sheth just finished his first 90 days running Metasys, and he shares 50 things that he learned and brought to the job. My three favorites are:

• You don’t have to rely on yourself to develop instincts

• Curiosity is the best predictor of performance

• Start with imagination, end with logic

Bonus: I realized at the end that Romeen is a Duke alum. Knew I liked that guy.

👀 An Optical Illusion that Will ZigZag Your Brain in SyFy Wire

Optical illusions are always fun, and this article on one even asks about aliens, “How will the stochastic constructions of their own brains (assuming they even have brains like we do) separate them from us in ways we cannot even fathom?”

What’s Next

This week, I’m working on the Loonshots course and starting some follow-up posts on Natively Integrated Companies. If you have feedback or topics you would like to see me dig into, you know where to find me.

Thanks for reading. If you know anyone who would be interested in receiving this weekly e-mail, please forward away! And they can always subscribe here.

Best,

Packy