When Tailwinds Vanish – This is a very interesting piece by John Luttig. He argues that the opportunities for new internet startups to hit home runs is diminishing as the internet matures. As winning in the internet economy becomes a zero-sum game, he points to incumbents as the ones more likely to win what’s left of growth opportunities. Further, venture capital isn’t being used for research and development, but for expenses like sales. Considering this, he believes there needs to be another layer on top of the internet economy that enables companies to get the financing they need without tapping into venture capital – Sand Hill Sachs, as he calls it.
The piece is quite thought-provoking, but I think John is looking at the internet too narrowly to say there’s a small window for anymore big wins. Look at areas like the transfer of food from the industrial portion of the supply chain to the consumer portion. This COVID-19 situation has put a big spotlight on the lack of dynamism in how that transfer works. New York City doesn’t know how many people in public housing have COVID-19. Stock exchange IEX has coiled up 38 miles of optic fiber to prevent high-frequency traders from having a leg up on their competitors. These all highlight problems that can be solved on the internet. There’s the opportunity for companies to get big wins. Maybe Silicon Valley just isn’t the place for the fresh thinking needed to see them. Maybe there needs to be some more diversity of thought.
Chinese start-ups are being starved of venture capital – with worrying omens for the west – The fallout for VC in China isn’t looking pretty right now. It’s an interesting with the tenor a lot of US VCs are trying to roll with claiming that “we’re open for business. ” Those Q2 numbers on how the US VC ecosystem fared will be interesting to take a look at!
Black Founders Remain Optimistic About Survival Despite Running Out of Money (SURVEY) – TPInsights founder Sherrell Dorsey surfaced some encouraging insights from founders in the TPInsights membership. In particular, it was great to see a good number of founders have enough cash to hold on for three more months.
Franchising in Africa during the coronavirus (COVID-19) era – Kendal Tyre shares some nice insights on franchising opportunities across Africa. He definitely got the wheels turning, particularly in thinking about my post last Sunday.
Ngozi Okonjo-Iweala gets International appointment – I’m glad to see Dr. Okonjo-Iweala in this role. She should be IMF managing director, but that’s water under the bridge. More vim to her as she aims to get a bunch of different stakeholders to work together in putting out the resources we need to handle this virus.