Bad Blood is a fantastic book and an amazing journalistic feat. The drama is still playing out as I write this with the main characters facing criminal charges and likely to stand trial this year. Like Enron: the Smartest Guys in the Room it’s a brilliant set of lessons about how a company can be rotten but the system of investors and regulators forget to trust their sense of smell. And like the Enron book (in that case Bethany McLean who wrote an article in Fortune magazine posing a simple question — how, exactly, does Enron make its money?), John Carreyrou helped uncover the scandal — he’s part of the story, which makes it an even better tale.
It’s particularly interesting to me because in one version of the story Theranos could have been an amazing tech for good impact investment. It made me wonder how we would have reacted at BGV — would we have spotted the fake?
Theranos was founded in 2003 by 19-year-old college dropout Elizabeth Holmes. Her dream was to revolutionise medical diagnostics by creating a simple, cost effective way for people to get their blood tested from a tiny sample. If she had achieved that, it would indeed have had a huge positive impact on the world. The trouble is that it’s a very hard thing to do.
Holmes was joined at the helm of the company by Sunny Balwani, who made some money in the first dot-com boom and was also her boyfriend. Bad Blood is littered with examples of them making terrible mistakes and hiding information from people (including that they were a couple). Their paranoia was extraordinary — to the extent of fitting bullet proof glass in Holmes’ office and having people trailed when they left the company. What they were covering up for was that the technology they promised didn’t work.
In the business it’s known as ‘fake it til you make it’ and all tech startups do it to a degree. You often have to convince investors that what you’re going to do will be revolutionary before you’ve actually built it (after all you need their money to build the thing). One famous example is the video that the Dropbox founders created to judge whether or not it was worth building the software in the first place. But raising peoples’ hopes of better document synching is one thing — raising the hope of quick, painless diagnosis of diseases is another. Richard Waters is great on the subject in this FT piece.
All the signs were there with Theranos. But hindsight is a wonderful thing and there were many investors, customers and journalists who were duped. Holmes and Balwani got plenty of things wrong but it was the system that allowed them to gamble with peoples’ lives that was really rotten — and it still is.
It’s a strange story when Rupert Murdoch comes out of it pretty well. Despite losing the whole $120 million he’d invested he refused Holmes’ attempts to spike the story at the Wall Street Journal which he owned.
One aspect of the story makes me think we wouldn’t have fallen for it at BGV is that most of the investors seem to have made their decisions based on who else was involved. A classic case of groupthink. We’re always the first investor so don’t have the ‘luxury’ of seeing who else is investing. We also don’t invest very much to start off with so we get to work with teams (usually in very close proximity) before we decide to invest larger amounts. I’d like to think we would have worked out that the Emperor wore no clothes in this case. And finally we’re very sceptical of ventures that insist on secrecy — we think there’s an important link between true tech for good and openness and transparency.
In many ways it’s been a horrible year. The slow car crash of British politics, the gradual uncovering of how badly the tech sector has misjudged ethics and privacy concerns, the growing evidence that climate change is worse than we thought and the ongoing disaster in the White House have made for a year of depressing news. I hope all those things get better in 2019, but as it’s New Year’s Eve I thought I’d go through a few personal good things from 2018.
Food and drink
My favourite meal was in a small neighbourhood noodle and dumpling place in Hong Kong. I’d had a cold that I couldn’t shake off for a couple of weeks and their soupier version of dan dan noodles cured me.
I read 30 books this year, not quite a book a week yet but not too bad. They ranged from the future of food to the history of grime music, taking in scandal in Silicon Valley and ultra running along the way. I think my favourite five were:
If I had to choose one, I’d say Nervous States. It’s bleak about the causes of Brexit and Trump but it’s the most sophisticated analysis I’ve read — and the fact that we’re starting to understand what’s happened a little better gives me hope that we can eventually sort things out.
I don’t feel like I’ve watched anywhere near as many films this year. One that sticks in the mind though is my friend Tim Wardle’s Three Identical Strangers — an amazing story, brilliantly told. The other isn’t really a film — it’s a Netflix recording of a comedy show… sort of. Nanette defies all categorisation but is fantastic.
I’ve been to Italy, France, the Netherlands, Finland, Portugal the USA, China, Hong Kong and Singapore in 2018. I feel incredibly lucky to get to travel with work and agree with Michael Skapinker’s piece about business travel — it’s a privilege not a chore. The stand out experiences weren’t business though, they were backpacking around China by train and particularly visiting Chengdu and Xi’an — incredible food and the Terracotta Warriors are staggering.
My favourite gadget of the year has been my Garmin Forerunner 235 watch. It’s genuinely got me doing more exercise and paired up with Strava and Run an Empire, makes running a lot more fun.
Believe it or not, I was a teenage heavy metal fan. Growing up in the Midlands I had the albums, the posters and the t-shirts, but never the long hair and tight trousers — I don’t think I could have pulled those off. It’s weird looking back and realising that all the music was on cassette and vinyl. It makes me feel very old.
Anyway, one of my favourite bands was Iron Maiden and I’ve just finished lead singer Bruce Dickinson’s autobiography ‘What does this button do?’ which is a lot of fun. I’ve been listening to the audiobook (which Bruce narrates himself) on long drives and on the bus and tube when I’ve had a chance. There have been many moments when I’ve struggled not to laugh out loud and I think my fellow passengers have wondered what was going on.
Alongside the Spinal Tap style antics that I think every band of the era went through, the thing that comes through is the incredible work ethic in the band and constant experimentation. The characters are just fantastic, co-manager Rod Smallwood comes out of the book very well and sounds like a bit of a legend. Metal is a peculiarly British thing. Its origins are in the Midlands in the 60s and 70s but it went on to influence the whole British music scene and had a huge effect on the US as well. This radio documentary is ace if you ever want to know more.
While there’s a lot about the band in there, most of the book is about the things Dickinson has done outside music. He’s kept himself busy to say the least. He’s been a world class fencer and created a best selling beer for example but his real passion is flying. He started out flying small single propellor planes and over time became a qualified airline captain. Most recently flying the band and all their gear around the world on tour in a Boeing 747. There are long passages about why he loves it as well as a few terrifying near misses.
Dickinson makes an unusual decision for an autobiography to not even mention any relationships or kids. There’s an afterword that explains why but you do notice it. It’s almost a work memoir rather than a life memoir. I’ve seen other reviews that criticise the book for that — saying it feels like he’s hiding the real him — and I do agree. Nevertheless it’s a fantastic book and well worth a read — not just for teenage metal fans.
As I write this it’s unclear whether the current British Government will survive. Amidst the chaos, spare a thought for the civil servants who have to keep the show on the road. They’re incredibly important.
For a description of why their expertise matters, read Michael Lewis’s new book The Fifth Risk. It’s terrifying. There’s no other word for it. It examines what’s been happening in the transition from the Obama to Trump administrations.
Lewis interviews people who worked in three of the most ‘boring’ and misunderstood government departments — Energy, Agriculture and Commerce. Actually those departments are responsible for nuclear safety, the US food supply and predicting the weather — including tornados. Without their expertise and knowledge, the US would be an extremely dangerous place.
You could sum up his conclusion on the machinery of government as ‘I think you’ll find it’s more complicated than that’. It takes dedicated, intelligent, experienced people to make things work. The implications of the complete failure of Trump’s people to understand this are scary but perhaps the worst is the nuclear threat. That’s where the title of the book comes from. The first four risks rattled off by the person who used to run nuclear safety are fairly obvious — a dirty bomb, a broken arrow and so on. But the fifth risk is ‘project management’. There is no evidence that the Trump team understands that and good people further down the organisation are leaving in their droves.
Fortunately, we have far fewer political appointments in the UK so the majority of the machinery of Government remains when you have a change of political leadership. I know ‘experts’ are out of favour at the moment, but I for one am very glad they exist.
It’s an interesting, and possibly civilisation-ending, question. Should we go out of our way to let other alien civilisations know that we’re here, or try to remain very, very quiet? It’s an example in Steven Johnson’s excellent new book Farsighted — an expansive sweep of all the techniques that are available today to help us make better decisions.
The alien question builds on an article he wrote for the New York Times Magazine last year. It was about the projects that are searching for extraterrestrial life and those broadcasting messages in the hope of something hearing us. Over the last few years some scientists have become more excited about the potential for us hearing from other civilisations as we’ve found more and more planets in the ‘Goldilocks zone’ orbiting other stars in such a way that they are similar enough to Earth to support life.
But what if the response of aliens is to see us as a threat and immediately annihilate us? Colonialism would suggest that when people come and say hello, it’s not always good for the indigenous population. Of course, we can’t know exactly what will happen but one of the arguments in Farsighted is that fiction is one of the best ways of understanding and training for decision making.
There’s an amazing novel that does just that. I don’t think I’ve ever had such a mind bending experience through science fiction as The Three Body Problem trilogy by Cixin Liu. It’s about what happens when an alien civilization knows about us. The second book in particular is really disturbing. The Dark Forest in the title is the idea that in a universe of many millions of civilisations, it might not be a good idea for us to show where we are. The third book — Death’s End — takes it all to its logical conclusion.
The Three Body Problem completely stopped me in my tracks. I read all three books last year. It’s an immense achievement — there’s nothing quite like it. It was also the first science fiction book I’d read by a Chinese author but I’ve read a few others since and enjoyed them all. I’ve got no doubt it will become a classic and be read for centuries. If we last that long.
The Third Plate by Dan Barber really got me thinking. Barber is the world renowned chef behind two amazing restaurants: Blue Hill in Manhattan and Blue Hill at Stone Barns in New York state. I haven’t been to either but after reading the book would love to. Barber also features in the first series of Chef’s Table on Netflix which is about him as a chef. The book is about a much bigger topic — the future of food.
The ‘third plate’ in book’s title is the imaginary plate of food that Barber would serve as ‘the future’ in a menu of the past, present and future of our food system. He has studied the history of farming and our diets in incredible detail, and the book catalogues all the problems it has created. He does this from the perspective of a chef who sees how it plays out in the taste of ingredients and not from an environmentalist’s point of view. His view is we’ve created an agricultural system where crops don’t taste nice, make us unhealthy and in the long run destroy the soil they’re grown in.
Barber stands out as a chef because of his relationship with the farmers who grow the ingredients for the restaurants. He’s a keen advocate of the farm to fork movement and the book describes his adventures learning about extraordinary farmers around the world. The sections in Spain where he learns about ethical foie gras and some amazing techniques for farming fish are particularly good. It’s not as simple as a transition to organic agriculture because none of our systems are set up to deal with that. It’s also very possible to grow organic mono-crops which don’t do much to help the land or the taste and health benefits of food.
You can tell a lot about a society from its food and thinking about the future through the medium of what we’ll eat and how we’ll grow it is an interesting exercise. It’s an area we’re super interested in investing in at BGV. It’s the intersection of technological and natural that interests us.
Transportation costs and labour shortages could drive agriculture closer to cities. Some people call this urban farming, others vertical farming (because if you do it in built up areas, the logical thing is to build farms upwards rather than sideways — we’ll measure farms in stories, not hectares). We’ve already invested in LettUs Grow in this area.
We’ll see huge leaps forward in understanding the microbiome of soil and plants in the coming years. We’re interested in technologies that will make this easier and more useful.
We’re also interested in technology that supports rewilding as agriculture reduces as a percentage of land use. We need to be prepared for this because it’s not just a case of leaving land to nature. We’ll need to be careful that we rewild properly — the chances of invasive species wrecking areas of land is pretty high.
The Third Plate is an excellent book. Well worth a read if you care about the food that you eat and where that might come from in the future.
I’ve read a lot of new books this year but haven’t got round to writing up little reviews of them like I was doing last year. So I thought I might try and catch-up with posts about the standouts over the next few months.
The grime scene started in Bow, a mile or so away from where I live in East London. You can see the ‘three flats’ in the photo on the cover of the book from our window. The book is the story of grime from about 2003 through to the current day.
The headlines would have you believe that grime was just about gangs, guns and knives but it was also a creative outpouring about how badly politicians and the people who ran London at the time misjudged the impact of their policies on the lives of poor people (particularly poor black people) in East London. People in the grime scene were persecuted by the police, the city and politicians — in a way that was only thinly veiled racism.
The music was (and is) incredibly claustrophobic. Lots of the early lyrics focused on a few square miles around Roman Road and Bow. Dan Hancox contrasts it with the expansive, epic ‘Empire State of Mind’ by Jay-Z about New York which is full of wealth, bling and private jets. Grime is about what it feels like to have no hope of escape and Hancox thinks Dizzee Rascal called his album ‘Boy in Da Corner’ because he felt trapped. The urban music scenes in the US and UK scenes were very different. These days people from both scenes are multi-millionaires but the music came from very different places.
I remember going to grime nights in Shoreditch in 2005/6 and having no idea what was going on. Ten years later and some of the people who were there are some of the most successful artists in the UK music industry. Not only have they become successful themselves but they’ve changed the way the music industry is organised. Grime was about being an outsider and independent which meant that it took them ages to actually break through — as Hancox points out, grime wasn’t really commercially successful until 2016 (except for a few artists who had to morph their style to get mainstream acceptance). Now the independence that grime artists hung on to is much more the norm. The music industry has been transformed.
The book is a fantastic story of some of the people who hung on in there for over a decade while the music they loved gradually gained acceptance. Take Wiley who is interviewed throughout the book — you get the feeling he believed it it would be big from one day. He was always building up people, and helping out younger artists. There’s a hint of satisfaction in the later interviews with him, that a bunch of poor black teenagers from an estate in East London made their mark. You can’t help but root for him. Against the mainstream, against discrimination, against politics, against the police, their message finally made it — like he always knew it would.
I stumbled across Five Books this morning. It’s a fantastic archive of interviews with people who recommend the best five books on their chosen subject. It ranges from Diane Coyle talking about the best economics books of 2016, through to Tyler Cowen on the best books about information theory or Jeremy Mynott on the best books about birdwatching. Whether or not you agree with their picks, it’s a real treasure trove with over a thousand topics covered so far.
It got me thinking about what my five books would be. I think I’d choose ‘values and invention’ as my topic at the moment (with a bias towards understanding how we can create the most positive social change from digital technologies) and my five would be:
The Lunar Men by Jenny Uglow is the story of the pioneers of the industrial revolution who met on the full moon each month in Birmingham in the 1760s to swap ideas and invent the modern world.
Where Good Ideas Come From by Steven Johnson is the best explanation of how we think innovation happens. Spoiler alert: it’s not the way that governments and big companies think it does.
What the Dormouse Said by John Markoff explains why Silicon Valley is a pretty confused place ethically. The mixture of military money and 60s counter-culture made for some strange ideas.
The Making of the Atomic Bomb by Richard Rhodes is the ultimate history of how the brightest and best scientists and engineers of a generation found their skills put to work on something that almost none of them thought was a good idea in the end.
Microserfs by Douglas Coupland is an ordinary (and very funny) tale of what it’s like to work for a technology company when nobody really asks why you’re doing what you’re doing.
Alastair Darling was on the radio this week talking about how he got his first inkling of the financial crisis while on holiday in France. It was ten years ago and he’d walked into the local village to pick up some croissants and a copy of the FT and he read the news that BNP Paribas had frozen three funds with exposure to sub-prime mortgages. I was just looking back in my diary and it turns out I was on holiday in a French village as well — I have to admit that I didn’t read the FT and I had no suspicion of what was going to happen until many months later, but the crisis went on to have a big effect on everything around me.
I’ve just finished reading Ben Bernanke’s autobiography The Courage to Act and learned a huge amount about what happened and how central banking and financial regulation work. It’s not a short book and it does have quite a lot of detail about particular meetings and the way that decisions were made, but I loved all that. Bernanke took the job with a promise to make the Federal Reserve more transparent and he’s certainly done that by explaining its inner workings in this book.
Bernanke had a hard act to follow. Alan Greenspan had been Chairman of the Fed since the 1980s and was fairly universally respected. With hindsight of course he made some very big mistakes and allowed the buildup of toxic financial products that Bernanke had to help fix. Bernanke hints that Greenspan was a ‘bit of a character’ but doesn’t outright criticise him except to say that he resisted transparency in a way that Bernanke would then go on to reverse.
As Bernanke came to realise, 90% of his job was communication and giving other people confidence that everything would be ok and 10% actually involved action and doing things like providing money to stop ‘too interconnected to fail’ institutions from going under. Bernanke was very well prepared for what happened because of his academic career studying the Great Depression of the 20s and 30s.
One thing struck me about his approach though — underneath all the technical and political goings on he doesn’t mention ever personally questioning whether the American economy could fail. It wasn’t just that the stock market could crash — there were people who were worried that capitalism was teetering and it was time to get out. Bernanke never seems to have thought of that possibility though, which is telling.
The final section of the book contains his reflections on where we are now and he cites three reasons he’s optimistic about the future of the US. I’m guessing it was written before Trump came to power because all three reasons sound pretty flimsy now. The first is immigration, the second is technological innovation and the third is company building. I’m a huge fan of America but I wouldn’t hold out too much hope of those trends improving for the next four years.
Before Vulcan became the birthplace of Mr Spock and a British bomber aircraft, but after it was the Roman god of fire and volcanoes, it was a non-existent planet.
The Hunt for Vulcan by Thomas Levenson is a great little book telling the story of how Newton’s theory led to its discovery and Einstein’s general theory of relativity led to its destruction.
Newton’s amazing work led to the discovery of a whole host of celestial objects as theorists looked at the trajectories of the existing planets and realised that to explain their paths through the sky there must be other bodies whose gravitational force was affecting them. The most famous example at the time was Neptune theorised by Urbain Le Verrier and then observed by astronomer Johann Gottfried Galle.
The progression of the planet Mercury made everybody at the time think that it too must have a hidden body affecting its orbit and many people claimed to have seen it. For over a hundred years astronomers searched for Vulcan — even naming the shy planet before they’d truly found it.
Ultimately though, it took Einstein to realise that Vulcan wasn’t just hiding, it didn’t exist. Newton’s theory only told us so much about the universe. The slight discrepancy in the progression of Mercury from Newton’s laws was actually a result of relativity not a hidden planet. The Hunt for Vulcan tells the story of how Einstein developed his theory and you can’t help but marvel at just how much of a one-off he was. In a few short years, Einstein completely changed science and our understanding of the universe and in so doing proved that Vulcan just didn’t exist.