Gianfranco's Best of July 2023 Reading List

My favorite articles from July 2023:

Welcome to the July 2023 edition of my monthly reading list, where I share the best pieces I've discovered in AI, economics, leadership, venture capital, and beyond. These resources have been instrumental in shaping my understanding of various domains. I hope they provide you with the same.

Artificial Intelligence and Education

• Generative AI Strategy - The video emphasizes the importance of setting clear goals and understanding the limitations of AI models for companies interested in Generative AI. Making informed decisions is key to leveraging the capabilities of AI while addressing privacy concerns and exploring potential disruptions and opportunities for businesses. (Link: https://www.youtube.com/watch?v=uMulgC4bJY4&t=21s&ab_channel=Weights%26Biases)

• The Homework Apocalypse - The article delves into the impact of AI on education, specifically homework. With AI becoming more advanced and accessible, concerns about cheating and the relevance of traditional assignments arise. Educators must adapt their approaches to maintain the value of assignments and embrace the potential benefits of AI in the learning process. (Link: https://www.oneusefulthing.org/p/the-homework-apocalypse)

Economics and Finance

• Credit Cycles and Minsky Moments - The article explores credit cycles and Minsky Moments, based on economist Hyman Minsky's model. It describes a cycle where credit plays a defining role, leading to a self-fulfilling cycle of credit destruction and economic slowdown known as the "Minsky Moment." Government intervention and investor risk tolerance mark the beginning of the cycle anew. (Link: https://capitalgains.thediff.co/p/minksymoments)

• Why Rates Matter - The article delves into the importance of interest rates and their impact on different types of businesses. Interest rates have significant effects on highly-levered, capital-intensive old economy firms, as well as high-growth, future-focused companies with most expected profits in the distant future. Changes in interest rates can significantly influence the valuation and capital-raising ability of companies. (Link: https://capitalgains.thediff.co/p/rates-matter-rates-matter)

Innovation and Leadership

• Apple Demos vs. Amazon Memos - The article discusses Apple and Amazon's differing approaches to bringing ideas to life. Apple relied on product demos to make important decisions, while Amazon embraced a writing culture using 6-page memos. Both methods aimed to turn ideas into reality, but their execution differed significantly. (Link: https://trungphan.substack.com/p/apple-demos-vs-amazon-memos)

• The Concept that Explains Everything About Marketplaces - This article dives into the concept of transaction costs and their role in understanding marketplaces. By reducing transaction costs, marketplaces can grow and expand their total addressable market. The article also explains how transaction costs can predict a successful marketplace and how to monetize a marketplace based on the transaction costs removed. (Link: https://www.danhock.co/p/transaction-costs)

• How To Do Great Work - Paul Graham presents a four-step process for achieving greatness in any field, emphasizing curiosity, interest, and boldness. The article acknowledges the role of luck and encourages openness to change and exploration in finding the right field and projects to work on. (Link: http://paulgraham.com/greatwork.html)

• How to Think Better: The Skill You’ve Never Been Taught - The article highlights the importance of critical thinking and the negative impact of multitasking on effective thinking. It stresses that quality thinking requires time and concentration, with writing being a valuable tool for clarifying thoughts. (Link: https://fs.blog/how-to-think/)

Technology and Venture Capital

• Generative AI Tech Stack by Apart Sinha - Aparna Sinha's presentation at SF Tech Week explores Generative AI's emergence, applications, and building a moat for AI startups. It highlights the significance of cloud computing, GPUs, Kubernetes, and open-source frameworks like PyTorch in developing Generative AI. Research breakthroughs in transformer neural networks and AI alignment have also contributed to recent advancements in this field. (Link: https://pear.vc/generative-ai-tech-stack-by-aparna-sinha/)

• The Myth of the Infrastructure Phase, USV - The article challenges the notion of a Web 3.0 infrastructure phase and instead proposes an apps-infrastructure cycle. Historical examples demonstrate how apps inspire the creation of infrastructure, enabling the development of new apps. Building apps first to address real problems is vital before creating speculative infrastructure. (Link: https://www.usv.com/writing/2018/10/the-myth-of-the-infrastructure-phase/)

Market Insights and Investing

• Taking the Temperature, Howard Marks - The memo reflects on five market calls made between 2000 and 2020, discussing the factors that led to these calls and their outcomes. It highlights the importance of understanding market cycles, investor behavior, market narratives, and external factors like monetary policy in investing decisions. (Link: https://www.oaktreecapital.com/insights/memo/taking-the-temperature)

• Thoughts on the current crypto VC landscape - The article discusses the current state of the crypto VC landscape, highlighting the importance of DPI (distribution to paid-in capital) as a true measure of fund performance. It also addresses the performance of crypto funds, challenges faced by seed funds, and the trend of VCs pulling term sheets and asking for refunds in the bear market. (Link: https://showerthoughts.substack.com/p/thoughts-on-the-current-crypto-vc)

Insights into Social Phenomena

• Too much efficiency makes everything worse: overfitting and the strong version of Goodhart's law - The article explores the strong version of Goodhart's law, also known as overfitting, and its application to various aspects of society. It suggests potential mitigations for problems caused by overfitting, including better aligning proxy goals with desired outcomes and adding regularization penalties to the system. (Link: https://sohl-dickstein.github.io/2022/11/06/strong-Goodhart.html)

• How to Blow Up a Timeline - The article discusses the decline of Twitter's user experience over the past year, attributing it to a lack of understanding of its core user base and changes made under new leadership. Despite its decline, Twitter is expected to persist in a deteriorated state, impacting user engagement and content quality. (Link: https://www.eugenewei.com/blog/2023/7/6/how-to-blow-up-a-timeline)

• The Psychology of Disneyland - This article delves into the psychology, design, history, and business aspects of Disneyland. It highlights the immersive experience it offers for visitors, discussing Walt Disney's original vision, the creation of the park, and the role of Imagineering in designing its attractions. (Link: https://trungphan.substack.com/p/the-psychology-of-disneyland)

Artificial Intelligence Primers

• Large language models, explained with a minimum of math and jargon - This article provides a comprehensive explanation of large language models (LLMs) without technical jargon or advanced math. It covers word vectors and the transformer architecture, essential components of systems like ChatGPT. LLMs are trained using massive amounts of data to handle the ambiguities inherent in natural language. (Link: https://www.understandingai.org/p/large-language-models-explained-with)

Until next time, happy reading 🙂