I surprised myself by really enjoying Gut by Giulia Enders. I’m generally fairly squeamish about all things medical but I I’m glad I picked this one up. It’s full of interesting stuff from the emerging science of our digestive systems. There are some great sections about what actually happens in all the processes we don’t like to talk about and Enders has a lovely turn of phrase, writing that the movements involved in burping or breaking wind “are as delicate and complex as those of a ballerina”.
Gut bacteria are such an interesting area and we barely understand anything that goes on in there. For a long while we thought that there were very few types of bacteria but it turned out that there were many other types but they just didn’t survive when they were cultured outside the body. We’ve probably still only just started to scratch the surface of the types of creatures that are in there and we know even less what they do.
Gut science has also taught us a bit about human history. By looking at the strain of Helicobacter Pylori in our stomachs we can see where people in particular countries came from. So when the strain in the stomachs of pacific islanders was found to be the same as those from latin america it proved that they’d come that way round. The scientists who proved that there was a bug capable of living in stomach acid did so by drinking the stomach contents people with ulcers and making themselves ill. They won the Nobel prize for medicine 20 years later.
One of the lovely things about the book is Ender’s absolute fascination with her subject. She’s a young doctor who has specialised in gut research but she writes so well (and not without humour). The book was written in German so some credit should go to the translator as well because it’s a fantastic read.
We focus so much on heart health and brain health but actually gut health is just as important. There’s pretty good evidence that it can be linked to depression, heart disease and many other things. I think we’ll see it develop as an area pretty rapidly over the next few years as the tools to decode the composition of the bacteria and other critters in our intestines start to be understood.
There’s an interesting little stat in the FT today. If the whole world population lived at the same density as Hong Kong we’d all fit into an area the size of Egypt.
Now of course that might bring it’s own problems but if you look at the trends, it might not be crazily unrealistic. The world’s urban population was 54% of the total in 2015 and the global rate of urbanisation is currently estimated at 2.05% per year (says the CIA). If that continues, the percentage land area occupied by humans looks set to decrease considerably over the next 30 years. We could see total depopulation of many rural areas in our lifetimes.
We’ve got a lot of work to do to create the tools that will help us live sustainably in cities. Whether it’s aquaponics, lab meat or vertical farming it looks to me like we’ll need to become less dependent on rural food production. We’ll also need new solutions to housing, transport and democracy that are able to cope with higher levels of density.
When I think about it, it’s one of those mega-trends that creeps up on you over decades but is driving so much of the way that things are changing.
I think I was 17 or 18 when I read ‘Surely you’re joking’ for the first time. We had an amazing physics teacher at sixth form called George Andronov who introduced us to all sorts of popular books about physics including Flatland by Edwin Abbott and the Mr Tompkins books by George Gamov as well as Richard Feynman.
I recognised Feynman from the Challenger disaster. I think probably not directly from when it happened (I would have been too young) but from a Horizon documentary several years later — perhaps even a repeat. I remembered the way he showed what had probably happened in a press conference in a way that anybody could understand — just one example of his skills as a communicator as well as a great physicist.
When I got to university I did ok in the first year of undergraduate physics but I really started to struggle in the second year when physics became much more mathematical. It was the Feynman lectures that got me through. I couldn’t afford a copy but there were plenty in the library and I’d sit there in the gaps between our lectures trying to really understand what was going on by reading up on how Feynman explained things.
But physics was just part of Feynman’s life. ‘Surely you’re joking’ is a collection of reminiscences of how the physics came to happen rather than the physics itself. There are so many amazing stories of how he didn’t take the conventional path — how he was able to choose to do things in unusual ways because of his brilliance. He was almost always in demand but would never really play up to what was expected of him.
Feynman’s approach was really forged when he was sent to Los Alamos (pretty willingly given what he and all the other scientists at the time thought Hitler’s Germany might be capable of) and as a 21 year old found his mathematical approach was useful. Some of my favourite bits are about that time when everybody in the science world came together to achieve something extraordinary in just a few short years. Feynman’s boss — Robert Oppenheimer — was perhaps one of the greatest managers and technical leaders of all time. What’s most interesting of course is that they found out fairly quickly that they’d been sold a lie by the military and in turn by the politicians. Feynman found he regretted a lot later on. Oppenheimer was pilloried by the McCarthyite idiots as a communist for the fact that he went public about his regrets and his criticisms of the politicians of the time. He’s best know for his deliberate citation of the Bhagavad Gita, “I am become death, destroyer of worlds”. They were momentous times and perhaps tell us something about how science and technology should respond to the momentous times we find ourselves in politically today.
What shocked me reading ‘Surely you’re joking’ for a second time was how much of a dinosaur Feynman comes across as being. His attitude to women seems pre-historic these days and some of the arrogance comes across as really old-fashioned. I have no doubt that he was an amazing person to hang out with at the time but I think these days he’d just be an inappropriate bore. It only slightly detracts from the book though — it’s still a wonderful read.
There are many great things about working at BGV. There’s watching our later stage teams reach millions of users, watching the founders grow as leaders and people, celebrating as teams raise money along the way, bringing new impact investment into their businesses. There’s working with teams during the accelerator programme as the figure things out and test their assumptions. There’s the moment when we say ‘yes’, helping people realise that there might just be something in that idea they had and that we believe in it just as much as they do.
But my particular favourite part is when we open up applications and say to the world — how can we help you turn your idea into reality? It’s a bit like turning on a firehose of positivity — we love all the people getting in touch and coming along to our Q&A events or drop-ins. It’s a huge amount of fun because we get to meet people who are totally passionate about social or environmental problems and talk through their ideas. We can’t invest in them all but we try to be as helpful as we can even if there isn’t a fit between what we’re looking for and what people are working on.
So what are we looking for? Well, generally we’re best suited to helping idea or prototype stage companies run by a small team of people who really understand a particular social or environmental problem. The idea will have the potential to benefit millions of people and generate real financial value by addressing a problem in health, education, sustainability or democracy. We’re interested in ideas that nobody has done before and we’ll be thinking about how the idea could be protectable as well. Is there a moat that could make this venture the one that wins when other people realise it’s a good idea and try to copy it?
We like teams (ie more than just one person) who are able to show us that they really work well together and bring the best out in each other. We’re looking for people who are super ambitious but have a willingness to listen to feedback and recognise when their assumptions are wrong They are always ready to get out of the office and talk to people to find out what they really want. They’re absolutely committed to addressing the problem they’ve set out to solve and are driven by that strong urge of ‘this needs to change’ no matter what obstacles people put in your way.
Starting a tech for good venture is hard. We know that and we’re complete fans of the people who set out to do it. We spend all our time with them and can’t help but have a sense of awe about their drive and energy in the face of almost constant knock-backs. But when it goes right, there’s nothing more rewarding than seeing something that you built positively benefiting other people.
What I love about our call for ideas is meeting people who are at that ‘just an idea’ stage and helping them work out whether it could be something that really does positively change the world and improve peoples’ lives.
So if you’ve got an idea to solve a social or environmental problem using technology, don’t hesitate to get in touch. We’ll help in whatever way we can.
The Long and the Short of It is John Kay’s attempt to defog the world of professional investment for people who might as well manage their money themselves. Because BGV is an ‘alternative investment fund’ I work in the finance industry (I’m regulated by the lovely FCA) but there are many things about other parts of the money business that I don’t know about. The technicalities of government bonds or ETFs are a long way from what we do at BGV.
It’s a fantastic book. John tries to dispel as much jargon as possible (high net worth individuals = rich people) and helps you to understand the motivations of many of the money managers in the system. He also helps you understand what risk really means in terms of losing your money. There are also some useful rules of thumb for your personal finances and retirement. I don’t really ever imagine retiring in the way that the baby boomers have but I still know that I need to plan for the future.
It’s been interesting to watch the current pension reforms working their way through the system in the UK. Overall I agree with the change that means people now opt out rather than opting in. In a few years time it will make a huge difference to the fund management business because there will be so much more money that needs to find a home. The UK already has the second highest amount of pension assets and that’s expected to grow further.
If all goes to plan, many people will have some security about the future that they’ve never had before. I wonder whether it will make working for an organisation rather than being self-employed much more appealing and have a big effect on the gig economy. From a public policy perspective it makes sense to build more support for people from companies as long as it’s really well regulated and fits with the way that small companies work.
That’s where my worry comes in. We’ve just gone through ‘auto-enrolment’ at BGV and some of the processes just don’t make sense. The standard of the information that’s being offered both by the Government and the pension companies is awful — full of jargon and bureaucracy rather than making it clear what the risks and benefits are. Really they should get people to read John Kay’s book.
At first I thought it was a duck. It was swimming in the white swell of the broken waves on the beach near the southern tip of New Zealand. But while it swam like a duck, it definitely didn’t walk like a duck. As we watched it awkwardly flipped upright and waddled out of the sea and onto the sandy beach.Until you’ve seen a penguin in the wild, nothing quite prepares you for how odd they look. It was like a tiny human in a penguin suit. As if its arms and legs were constricted by the very efficient swimming suit that it had on over the top.
Our trip to New Zealand over Christmas really got me thinking about the future of conservation. The yellow-eyed penguin that we saw is classed as endangered but there’s a massive effort to increase numbers along New Zealand’s coast. Mainly this involves removal of invasive species and limiting human access to some extent.
We also visited the amazing Zealandia near Wellington. Walking in at dusk was one of the most magical experiences of my life. We’d parked the car, had a short briefing, walked through double animal proof gates and then we were surrounded by flocks of species of bird that I’d never seen before and there was little doubt that they ruled this roost. The valley is cut off from any invasive species by a fence all the way around. It was created almost by accident when the city authorities realised that they’d built a dam on an earthquake fault (oops) and so the valley was pretty much abandoned until some enlightened naturalists spotted an opportunity.
Some countries like New Zealand and Costa Rica are ahead of the curve but this process is something I think we’ll see much more of over the coming decades. Not just protection but reversal of human impact on nature and reintroduction of plants and creatures that may have been previously wiped out or put on the endangered list.
We’ll see old species reintroduced — perhaps even ones that are extinct but where some genetic information is preserved. While Jurassic Park was science fiction (and we don’t have much dino-DNA), the basic idea will come true within my lifetime I think. Stuart Brand has been popularising the idea of reintroducing the carrier pigeon to north America where it was once incredibly common. Others have talked about particularly reintroducing species that were wiped out by humans. Who knows maybe one day the phrase ‘dead as a dodo’ might die out itself.
I’ve just about been keeping up my book per week resolution but I haven’t quite managed to keep up writing about them. So here goes — a few notes about each of the last three books I’ve read.
The first was Wind, Sand and Stars by Antoine de Saint-Exupéry (yes, also the author of The Little Prince). Written in the 1930s it tells of the early days of aviation. I chose it because it came up when I searched for books about Patagonia — where we were heading on holiday. The author was stationed here as a station manager for Aeropostale in the late 1920s. I’m writing this looking out over the sea and the mountains a couple of hundred kilometres from his base. He probably flew over the small town we’re staying in many times.
I love flying but I also love that it’s the safest form of transport. It wasn’t always like that. In the days of Aeropostale hundreds of pilots and crew were lost just trying to find their way along new routes. In South America they had to find their way through the Andes with no pressurisation of the cabin or even heaters. They had no real navigation aids other than a compass. Descending into the cloud could be disastrous. You didn’t know whether there was clear air or a rocky mountain just below.
But those pioneer pilots changed the world. They connected places like Punto Arenas to the outside world. Messages and people could get here from Europe in a few days rather than the weeks or months they would take by sea. It’s an amazing book. I loved it.
Next up was Meditations by Marcus Aurelius which I also liked. It’s one of the three main books people point you to to learn about stoicism. Instinctively I’m attracted to it as a way of thinking. It’s not a rip-roaring read and is perhaps better suited to dipping in and out rather than reading cover to cover. It’s thought that Aurelius didn’t write it for others to read at all — it was simply a kind of notebook diary in which he jotted down thoughts about philosophy. My only criticism of stoicism is that as well as helping you weather the bad times it flattens some of the highs of the good times — I prefer to celebrate those.
Finally I read Superforecasting which is such a good book. Through their Good Judgement Project, Philip Tetlock and the team proved that ‘ordinary’ people could out-predict all of the so-called experts in prediction who dominate our news media as talking heads or columnists. They then set about learning how the superforecasters worked and seeing whether it was a process that others could learn. The book is full of useful tips based on real stories and data from the research. The authors are also self-aware enough to point out the limitations to their findings — in particular superforecasters’ ability to predict ‘unknown unknowns’ or ‘black swans’ as Nassim Taleb would call them.
Prediction is something that you have to do as an investor and I’d read a lot about avoiding cognitive biases but Superforecasting gave me lots of extra insights and techniques. Thoroughly recommended.
AKA the gateway drug for more expensive Charlie Munger books
I was going to read Poor Charlie’s Almanack last week but balked at the price of nearly £90. According to one reviewer this may make me a poor investment decision-maker but we’ll come back to that later. Instead I read Charlie Munger: The Complete Investor by Tren Griffin on the basis that it was 10% of the price and I reckoned must contain 10% of the wisdom. Surely even Charlie would think that was a bargain?
Value investing has always fascinated me. I’ve read a lot about Ben Graham, Warren Buffett and Berkshire Hathaway but I’d never really read much specifically about Charlie Munger, Buffett’s ‘partner’ and Vice-Chairman of the company. Their straightforward, common sense approach to investment and way of doing business that values honesty, loyalty and growth over the long term has certainly influenced the way I do things.
(As an aside I think they’ve had massive blind spots because they haven’t thought about the future in any great detail — they famously ignore any projections or forecasts. It always amazes me they didn’t spot their investments were in part causing climate change or inequality for example. I think it has something to do with the psychological refusal to make any predictions about the way decisions will play out into the future.)
The way Munger has studied his own decision making is pretty impressive as well as all the time he’s set aside for studying other peoples’. The book is based on extracts from speeches, articles and interviews with Munger and outlines his various mental models and rules for making decisions.
The starting point of his approach is that the shortcut to being smart is often simply not to be stupid. Knowing what you don’t know is sometimes far more useful that being brilliant. This is a big part of what is perhaps the most important first filter for investments at Berkshire Hathaway. When assessing whether you can estimate the intrinsic value of an investment you should be able to very quickly put it in a basket for ‘yes’, ‘no’ or ‘too tough’ and unless you have a special insight, put it in the ‘too tough’ basket and move onto something where that’s inside your ‘circle of competence’.
Fundamentals of Graham investing
Both Buffett and Munger describe themselves as ‘disciples’ of the Ben Graham approach to investing. In this book Munger describes that approach as having four tenets:
Treat shares as proportional ownership of a business (not just pieces of paper or numbers in a spreadsheet) because that’s what they are.
Only buy when you have a significant ‘margin of safety’ on price so you know that you’re getting a good price compared to the price that others might pay.
Mr Market should be your servant not your master. Treat it as having a split personality — something that sometimes offers you lots of money for what you have (a bull market) and occasionally offers you something you want very cheaply (a bear market).
Apply the three rules above with consistency and discipline. This rule is the hardest of the four.
Know your own biases
A lot of the book focuses on Munger’s diagnosis and awareness of common psychological biases, including his own. Munger talked about these in a lecture he gave at Harvard back in 1995 outlining ‘18 causes of human misjudgement’ which you can read about here but the book does an excellent job of setting them out and collecting further Munger quotes from elsewhere.
Finally, the book has an interesting section on another important element of the Berkshire Hathaway investment strategy — this is the concept of the ‘moat’ that an individual company has to defend it from competition or somebody else try to do the same thing. Moats come in five forms:
Supply side economies of scale — you have access to more of the thing that you’re selling than anyone else.
Demand side economies of scale (Network effects) — your product or service becomes more valuable as more people use it.
Brand — you have developed a story and reputation that means people are willing to pay significantly more for your product than others.
Regulation — you’ve learned to understand regulation so well that it actually serves as a barrier to entry/moat for their competitors.
Patents or protected intellectual property — you’re able to fend off competition because you’ve legally protected your innovation.
Overall, I really enjoyed the book. Munger’s a great person to learn about and I’ve taken the plunge and I ordered a second hand copy of Poor Charlie’s Almanac.
My second ‘book a week’ of the year was ‘Start With Why’ by Simon Sinek. It’s linked to one of the most viewed TED talks of all time which I watched after reading the book (I’m not sure which came first — the book or the talk).
My short review would be ‘watch the talk rather than read the book’. I ploughed through it but didn’t enjoy it much. It’s very repetitive and the tone of voice is a bit grating. There’s no elegance to the writing compared to Black Box Thinking which I read the week before.
Digging a bit deeper into why I didn’t like it, I think it’s because when you work in the tech for good world, everyone starts with why. All the founders we work with have a social purpose and if they need convincing they should start with why, you’ve got something to worry about.
The strange thing is that Sinek often talks about companies that he says focus on the why but doesn’t say what their reason is for existing. I don’t disagree with the examples — Southwest Airlines, Apple, Microsoft are all good companies — but he doesn’t say what their real social ‘why’ is. It’s all a bit vague. Southwest is about letting people travel more. Apple is somehow about creativity. Microsoft about ‘a PC on every desk’. But the why of all those companies is much more dominated by ‘to make money’ than any real social purpose.
The other section of the book that I didn’t like was the one about mixing ‘why’ and ‘how’ . It’s very muddled. Sinek seems obsessed with the idea that the charismatic leader who defines the why can’t be involved in the how. Walt Disney needed his brother Roy. Steve Jobs needed Steve Wozniak. Maybe that was the case for those companies but it’s not a universal principle. The idea that as a ‘visionary’ you can just ignore all the practicalities and hand those over to someone else is a bit 20th century.
Of course you should start with why. I wholeheartedly believe that the world of business is gradually shifting to that conclusion but I don’t think this is the book you should read to help you on the journey.
I’ve really upped the amount of time I spend listening to podcasts over the last twelve months. I think it’s partly that the quality and variety of what’s available has increased but it’s also displaced reading articles on the web as a lot of the sites and publications I used to read have become more aggressively advertising heavy and/or are surrounded by a toxic culture of debate that puts me off.
These are my five favourite podcasts at the moment:
BBC’s The Documentary — some of the best and most diverse stories from across the BBC World Service and their partners in other countries. Regularly updated and each episode is usually 30 mins.
Conde Nast Traveler’s Travelogue — I love to travel and the podcast is much more down to earth than the rather glitzy magazine. There are some genuinely useful tips and great recommendations for places to go.
Stephen Dubner’s Freakonomics Radio — each episode is so well researched and scripted. It always leaves me with lots to think about.
The Reboot Podcast with Jerry Colonna — long interviews bordering on therapy sessions between Jerry and tech founders or investors. The quality varies based a bit on who the guest is but there are some gems in there.
How I Built This — interviews with founders of some (now) well known companies. Reminds me very much of the ‘founder confidential’ talks we run for BGV.