Funding the future

Who is funding the future? In order to answer that question, we have to understand the different moving pieces within our economic framework, recent financial markets history and how they all fit together. Money has to ultimately flow from investors at the source, all the way to the entrepreneurs who utilise the capital, to execute their large scale and bold society shaping visions. In the 21st century, internet based platforms have disrupted the traditional means of access to capital and specialised knowledge. This has helped foster the ability to bootstrap start-ups faster, easier and created the ability to impact bigger addressable markets than in previous generations. We will also explore the implication of this disruption within the context of the funding chain and the evolving attitudes of the different stakeholders on the innovation cycle itself.

After the credit crisis, the US corporate essentially de-levered. CEOs took a flight to cash (rightly so), as seen through their record net debt levels. This helped bolster their balance sheets and everything looked rosy. They were immune to any further deterioration in aggregate demand brought on by the recession. Companies optimised costs through the usual means. On the other side of the markets equation, the investors themselves had canned their positions, leaving the S&P500 below the 700 level (March 2009).

Over the following 5 years, the markets walked blindly into a bull territory. No one believed in it whilst it was happening. And even towards the start of 2014, there was a lot of coverage about how many funds had missed the rally from the lows of 2009 – as can be seen from hedge fund returns. Many were trailing the index itself, repeatedly.

The management of US corporations were doing a little better than the portfolio managers (PMs) at these funds. A large number of them were orchestrating a recovery all by themselves, independent from reality. This was no ordinary recovery. With the consumer also trying to de-leverage from the crisis, companies realised that there would be lacklustre aggregate demand. Some argue that technological innovations are part of this issue of consumers needing to spend less, creative destruction becoming creative devastation. Others say that in the developed world, even if you put cash in their hands, they have no desire to spend, citing Japan as an example. Anyway, the point is that corporations had to find a way to make things look good. And they did.

With record levels of cash on their balance sheets, companies started buying back their own shares – by the bucket load. The effect of this has been widely reported and analysed by many this year. Basically, buying your own stock means you reduce the number of shares available. This means that you artificially elevate your EPS. Not only did they use their cash to buy back their own shares but the management started issuing cheap debt. The additional cash raised was used predominantly to buy back even more shares. This multi-year iterative process pushed the S&P500 to record levels.

What is the point of giving you a brief history of the situation post the financial crisis? It is so you can understand the context of the next bit. During this era of earning seasons EPS beats, record margin highs, extraordinary cash levels and stocks reaching all time new highs – the US corporate didn’t spend on capex. Capex investment is of course required for future growth. Investors chasing yield are fully aware of this situation. Many understand that with what we have described above, yield chasing in the traditional markets will be very difficult over the foreseeable future (emerging markets is different story altogether for another day). The S&P500 corporate, in general, is going to find it difficult to create new value if they haven’t invested in the future. Presently, there is no incentive for the majority* of companies to spend on innovation and updating their infrastructure.

If corporates are not investing in the future, we believe that venture capitalists could play an even bigger role in allocating capital to drive innovation forward. If PMs don’t believe in the traditional markets delivering tangible growth in the developed markets and feel like they are chasing diminishing yields, then they will position their funds elsewhere. Institutional investors at entities like pension funds, endowments, private equity fund of funds and the like have a segment on their books called alternative assets. Within this fund sits their allocation for these sub-classes: VCs, private equity, real estate and other alternative investments.

At the moment 10% of alternative assets are allocated for venture capital. However VCs used to be up to 50% of the alternative asset class. VC as an asset class has fallen from grace. You could debate how much of this reduction is due to the dotcom fallout, pushing funds to shy away from this class of investment. In 2012, venture capital had a 12 year negative return. It is understood that this was one of the longer cycles of negative returns the investment class has had.

Markets participants seek to buy what is “cheap” or under-performing. You try to reason and understand from first principals and fundamentals why an asset is behaving in this manner. You can also look for something called “mean reversion”. Either way a case can be made for a VC allocation turnaround. We are beginning to see an increasing number of disclosures, of various funds increasing VC fund allocation. There are various sources showing that in addition to increasing flow from funds into venture capital, the returns for VCs are making a turn around.

If venture capital allocations get anywhere near the 50% levels within the alternative asset class over the coming years, you will see these investments come at a prime time, as the propensity for innovation hits a sweet spot. We are sitting on the cusp of technological breakthroughs which is enabling start-ups to implement low cost virtual reality, low cost sensors for smart devices (internet of things), low cost robotics, low cost 3d printing for prototyping, low cost on demand cloud computing and much more.

It is true that the size of allocation to venture capital in is small, percentage wise, in relation to the total fund sizes at these institutional funds. However, it can be argued that even a small increase in allocation will have tremendous impact on innovation. Say if VC funding doubles to 20%, within the allocation of the alterative asset class. This increase could be sufficient to help the industry capitalise, guide and assist the next generations revenue creating and market owning behemoths like Amazon, Google and Facebook. Remember when gold was trading at 300USD, and note the context that institutional funds typically only allocate a very small fraction of their money to the precious metal. When these funds increased their allocation to gold even by a small margin, it was sufficient to pull the commodity up by the shoe laces and reach all-time highs. A similar effect could be seen in the VC world. It would translate to more start-ups getting funded. This in turn, implies a better chance of funding the start-ups which define the next era.

Venture capital isn’t the only source of raising funds for a budding entrepreneur these days. The new kid on the block, so to speak, is of course crowdfunding. The most talked about platform getting its lion share of success is Kickstarter. Crowdsourcing isn’t in competition with venture capital but augments the funding cycle for start-ups. The ability of the public to micro-finance, on first glance, a niche idea, enables a potential (future) start-up to engage the early adaptor. Crowdfunding asks the public to bear the initial small financial risk. This allows entrepreneurs to experiment, bring to market once dormant, dead, fringe or experimental ideas. These start-up ideas are still in the gestation stage and may not yet be mature enough to be on the radar of bigger venture capital funds. In some sense, the ability to crowd source funding for a project is a bit like angel investing.

Crowdfunding encourages the creative and technical people of different background to get into the start-up scene without necessarily committing mentally to it fully. In the sense their target is to ship a particular product to the public in limited size and not be overwhelmed by the pressure of building something grandiose, like say the next Facebook. The public in the modern age is fully cognisant of the risks involved with crowdfunded projects. Although public backers want to receive their product they funded, most more or less write down the stake mentally and understand the downside of their stake.

The risks involved in this new variation of funding the early stage, small scale and an un-tested idea is undertaken by the public. If the founders manage to implement the initial version of the product they sought to create, and demonstrates the viability of the project at this early stage, it opens up the scope for venture capital firms to step in and do what they do best. VC firms can enter the ring and capitalise the founders. VCs also guide the founders and help them avoid the common fit falls. Most arguably, and importantly, allow the start-up to tap into a network of expertise, which will allow them to scale their idea, ready for prime time. This is exactly what happened to the once dormant idea of virtual reality, with Palmer Luckey’s Oculus Rift.

So essentially the market research and field test is done already by the time a VC gets involved in a publicly backed crowdfunded project. The prototype also showed the VC that the product has the potential to gain traction with the public – as the idea was initially backed by them. The number of early adapters allows them to gauge some sort of early stage interest too. All of these factors combined make the investment for venture capital that little less risky. Noting traditionally larger size VCs only get involved in late stage start-ups as investments.

All VCs when going into an investment will certainly have in mind a possible exit strategy. After all a return is what the investor wants. IPOs are not the only way to make a successful exit nowadays, like a Facebook or Twitter public offering. A model that has grabbed the headlines recently is one of where a cash generating publically listed giant comes in to buy the start-up out. Again I refer to Mark Zuckerberg’s acquisition of Oculus Rift for 2 billion dollars.

The corporation which buys out the start-up then can allow the founders sufficient freedoms enabled by the capital backing them, and assist in scaling to create new verticals and potentially fresh new future revenue streams for the new owner. Tony Fadell’s Nest exited VC land through another S&P500 corporate exit. This time it was Larry Page’s 400 billion dollar, cash generating giant to the rescue. Beats by Dr Dre is also another example.

Earlier we talked about the US corporate using their balance sheet to buy their own stock. The other use of cash during more recent times has been to utilise their cash and their high stock price levels to buy new business segments, in order to make bold moves to bolster the potential to generate future revenue streams. Unfortunately this is not a common story for the majority of S&P500 index member. All too often we see stocks being rewarded for divesting business segments. Essentially they are being paid to cut innovation potential for instant cash gratification.

A quick side note: the dynamic between crowdfunding start-ups and venture capital firms could be further complicated in the coming years. The SEC is looking into methods of updating the legal frame work to enable the public to get an equity stake at the crowdfunding stage, which currently they do not. Whether in practise this can be implemented for the crowdfunding community remains to be seen. Once you start getting equity structures into place, it can become very complicated for the ordinary public to fully understand the risks.

Whilst discussing the notion of who funds the future with people, I’ve been asked about the possible implication for the future of innovation itself. As we have outlined in this piece, currently it doesn’t seem likely that immediate future innovations will come directly from existing publicly listed corporations. It may instead stem from the rise to quench the desire of public needs, wants and desires. Instead of a few fund managers sitting in a room deciding which ideas are worth funding, we seem to be moving into an era where any idea can be initially backed by the smaller public pocket. The way the markets have been operating by giving priority to shareholders, doing share buy backs, dividends and divesting – they have in some roundabout way forced innovation to find different mediums to fund itself.

The immediate visible impact that we are currently seeing materialise is that we get more start-ups, more innovation and more efficient futures. Virtual reality was largely ignored till recently. It was not seen the most appetisingly low hanging fruit. Nobody saw ways to bring it to market and monetize the vertical. Academia wasn’t interested. Corporations weren’t interested. Instead the people wanted virtual reality, and so they funded it.

Venture capital investing is not without its risks. VC investing is not liquid. VC investing exits can sometimes take up to a decade to see material monetary gains. Many investments can and do fail. However, with the way the early part of the 21st century has developed, the once really expensive and sophisticated technologies are now available at very low cost and in the hands of the better educated and creative public. This means that it is worth the risk for venture capital in getting a few dud investments, in exchange for the potential of discovering the few start-ups, which more than make up with materialising sufficient gains on the upside. At the same time, venture capital has a shot at funding innovations and technologies to make a better and more equal future for society.

*Of course there are exceptions like Amazon which plough almost every penny back into entering new verticals and trying to own the market in all segments. These players should fare better and effectively be the last man standing, so to speak.


How do we fund the people who create the future?  (Image: A Syd Mead artwork)

Get Ready For The Oculus Rift Upgrade Cycle (and brave new virtual worlds)

I had the opportunity to try out the new, Facebook-owned, Oculus Rift DK2 virtual reality kit over the weekend. Words fail me. The experience knocked me sideways. My mind was totally blown. The virtual reality nirvana of creating presence, that feeling and sense of being “somewhere else” was fully experienced. By no means is the technology finalised but the type of VR as envisioned by many an imaginative mind appears to be very near. This got me thinking about how the whole VR circuit could pan out and some of its implications.

As the Oculus Rift headset improves, its core components will be pushed to their limits. For example, in such areas like increased frame rates, refresh rates and higher resolution. This will allow higher graphics throughput so you can render the image to be displayed and get awesomely low persistence with best possible pixel switching times. In order to experience this improvement in technology within the headset, you’ll need increasingly better discrete graphics cards (GPUs). Gaming console upgrades are at least 8-10 years. Consoles will not be able to keep up with the quick evolving refresh cycle demands you’re going to get from VR headsets like the Oculus Rift. The consoles won’t be able to output renderings of these images. VR technology’s refresh and improvement cycle will be short and rapid as implied by Palmer Luckey, the creator of the Rift.

As VR content creators design immersive worlds to maximise the potential of the Oculus Rift hardware, graphics card manufacturers will likely get back to their glory days, just like the heyday of the PC era when there was strong competition for even more powerful cards. However, I question the ability of the consumer to fully utilise the latest and greatest of these graphics cards on shorter upgrade cycles in the present day, in which wages are not rising in real terms and jobs are tougher to find. Can consumers spend, say, 1000 USD on the latest graphics card so they can play the latest VR experience, every year? Most likely not. The only reason Apple and Co were able to sell millions of 600 USD smartphones was because they were subsidised, and cost amortised over 24 month contracts by the telcos. Could graphic cards go the same route, so you that you could rent your graphics card (including the computer rig), and costs get amortised? In this model, you would pay a monthly fee like Netflix to get access to the newest graphics card.

A quick side note: Eventually mobile GPUs will most likely be integrated into the headmount display of the VR kit itself, which will get increasingly lighter over time, even lighter than it is in its current incarnation (already very light!). This means a separate high cost PC with expensive discrete GPUs may not be required. This mobile GPU based Oculus Rift is not my own idea but suggested by the founder of the Rift himself at a talk earlier this year. However, even the Rift team acknowledge that, at the moment, due to factors such as heat constraints, packing everything into a mobile headset will be tricky. For now and a few upgrade cycles, discrete heavy duty GPUs connected to PCs will most likely deliver the best virtual experience.

Consumers are not the only target market for low cost VR. Businesses (including SMEs) and professional clients may potentially offer a significantly large target market. A device like the Oculus Rift could generate cost savings for these corporate and professional users. Imagine how many hours in the virtual operating theatre future medical surgeons could log, before ever entering a real one. Firemen could be placed and tested in complex and hazardous situations before going out in the field. The military could put their ground troops to train against pre-programmed counterparts in the virtual world. The number of professional application scenarios are multitude. The consumer may struggle to keep up with the upgrade cycle of GPUs during the multi-year (and potentially multi-decade) duration in which the VR technology matures, plateaus and generates experiences that converge close to real life (including the embedding of haptics and other experience enhancing peripherals). On the other hand, the professional services and corporations will be able to stomach these graphics hardware upgrade cycles easier. It is cheaper than exposing employees to real life events in order to train them, where there would be potentially huge safety risks.

Let’s say, hypothetically, that the low cost VR market in terms of graphics card upgrade cycle is like 80% corporates/professionals, and 20% consumers. If the graphics card manufacturers make a similar percentage of their revenues in the same split, they could potentially afford to subsidise private consumer use of their graphics cards. In fact this will have a positive effect on their GPU sales. Because the more consumers who have experience with VR in the home, the more likely they will be receptive and want VR training at their place of work. This is the kind of scenario that led to the dominance of Microsoft in the workplace. For example, many households had Windows and Office suites in the 80s/90s. I’m sure many of them were pirate copies; in fact I believe there was some very high count of piracy of Microsoft software in the developing world. Even though Microsoft lost out on revenue in the home market in this sense, this only meant when people went to work, they would want to use Microsoft products, and corporations would pay up for its licenses.

The Oculus Rift itself is the culmination of nearly a decade of R&D and mass production into smartphone technology including their low cost sensors. The device uses OLED smartphone screens to display the VR image. So you can easily foresee that Oculus Rift kits will be sold cheaply. Perhaps even below cost by the likes of Facebook, as the Rift team has previously implied. Revenue generation considerations will most likely come later, perhaps from selling digital content, where there are plenty of models to borrow from. As VR improves to mimic reality better over the next two decades, the bottleneck for the mass acceptance for VR may lay in the graphics cards. Ultimately, high-end GPUs determine how well the VR can be displayed and piped to your eyes, in order to replicate the emerging reality. Let’s see. Literally.


There is no spoon but you will need powerful GPUs to power the brave new virtual worlds.

Wikipedia for the 21st Century

Wikipedia is the 5th most visited website on the planet, after Google (with YouTube included), Facebook, Yahoo and Baidu. The most amazing thing about the Wikipedia movement is that it is constantly updated by a dedicated group of people, called Wikimedians, for free. Yet the beauty is that anyone with access to the Internet can go in and create new entries or update a page, in an act called an edit. All information added to Wikipedia ultimately has to be fact based and referenced. If there is no reference for the piece of information, it is tagged with something known within the community as “{citation needed}”. Wikipedia covers everything from historical biographies of notable people to breaking news. Breaking news is often tricky to document, as the events are still unfolding and facts can be dynamic. Nevertheless, Wikimedians do a solid job of keeping live historical event writing fair and balanced.

I just spent the last few days at a conference in London, Wikimania 2014, which brought together Wikimedians from all across the globe, including prominent members of the movement, like it’s founder Jimmy Wales. The overarching theme of the discussions was that the site, although used by a large swathe of the population, is nowadays done by a relatively small number of highly dedicated people. Part of the reason for this is that in order to do an edit, there are high barriers to entry. Some of these are the time needed to get to grips with its protocols, standards and rules. This can be daunting for a newbie. Even the newly appointed and tech savvy Executive Director of the Wikmedia foundation, Lila Tretikov, said that she had only recently done her first English language “edit”. She also spoke during the conference about how the processes will need to be refined, so as to let more people from all parts of society to feel welcome and comfortable. If you grow the base of Wikimedians then you allow the possibility of getting even better balanced and unbiased factual writeups.

Wikipedia’s structural complexity and the sheer human manual labour required to maintain and update the site is its greatest strength but also its biggest weakness. Strength because of the ability of anyone to create edits to the online encyclopaedia, thus being able to harness human capital to manually create the largest freely accessible deposit of human knowledge. Weakness because the growth and accuracy is likely to be directly proportional to the number of people willing to dedicate their free time to the movement. Even if the site’s user interface is refined to make it easier for a newbie, how many additional people would be willing to dedicate their time and effort to transition from being primarily a content consumer to a content creator? But this weakness has a potential solution. What would allow Wikipedia to morph into a true 21st Century living, breathing and constantly updated catalogue of human knowledge would be to deploy machine intelligence over the web.

Currently there are a large number of bots running on Wikipedia. In fact, bots accounted for 15% of Wikipedia’s 19 billion page views on July of this year. The function of these bots is structural in nature (correcting errors, handling templates or tabulating data dumps), rather than in mimicking the human cognitive faculty, by carrying out functions like reading source materials and creating a textual page on a developing and breaking news story. But observe the increasing amount of machine intelligence projects being implemented at sites likes of Google and Facebook. The former has made clear they want to go beyond search and move more towards a Star Trek type computer system, where you ask it a question and you receive the answer, without having to manually scan a page result yourself. Apple’s Siri and Google’s Google Now are in early stages of doing this. Siri uses Wikipedia as one of its sources when you ask it a question.

Wikipedia could be compared to the early stages of search engines. In the early years, Yahoo! used human operators to index and classify weblinks. Everything was catalogued using manual labour, much as Wikipedia does today. Then came the era of Larry Page and Sergey Brin, who automated the indexing process using smart algorithms, like PageRank. This brought Google to the world - its bots crawling the web, constantly indexing the Internet, faster and more efficiently than any group of dedicated humans possibly ever could. Wikipedia can be viewed as being in the pre-industrial world, where it requires the manual labour, time and intellect of humans to process information through their brains and write.

Perhaps the role of the new Executive director of the Wikimedia foundation is to drive the movement into the 21st Century by beginning to implement more machine intelligence. Imagine various news sources publishing a global event, and Wikipedia intelligence bots contextually analysing the written material, understanding it, writing a summary and cross referencing all of it in a blink of an eye. A very tough problem to solve, but a most interesting challenge and one that would secure the future of Wikipedia and let it grow as largest free deposit of human knowledge in history.

The flag of Wikimania 2014 fluttering on a windy London day.  How might Wikipedia transform itself into a truly 21st Century entity, even though it was actually founded in the early part of the 21st Century.

The Emergence of Privacy in The Digital Era: Why snapchat and their ilk may be the future of communication

When I first heard of Evan Spiegal’s Snapchat it really made no sense to me. Why would you not want your messages to persist, so you can look through them at a later date? It seemed to me like an app for people to send silly and trivial messages to each other. But recently I realised it might be a little more than sending a random selfie with a strange looking person you’re sitting next to on the bus ride home. Snapchat and the new ilk of vanishing messaging apps might be part of a bigger trend for privacy - let me explain.

It is now widely known (due to ‘superstar’ whistleblowers) that governments have been utilising modern infrastructure to spy on its civilians on an epic scale. Governments may have been infiltrating the mega-corps like Google and Facebook, potentially allowing them to play Peeping Tom into billions of private and public messages.

Now look at the increasing number of retrospective investigations happening at the moment. In the UK media there has been the whole hacking and News of the World scandal. In the world of banking, there is an ongoing FX/IR rigging debacle. These two investigations could be interpreted as retrospective investigations, as when the events were happing in real time - nobody within the specific industries thought they were doing anything off kilter, they probably just thought they were doing their jobs well. The reason these investigations were possible in the first place is because of the availability of the digital correspondence including phone logs, emails and instant messages.

In the past it would have been much more difficult to go back retrospectively and investigate. Look for example into the allegations into the UK houses of parliament and destruction of key documents that may have brought to light certain wrongdoings to the vulnerable in society. However with the ability to store digital communication, process and retrieve almost everything nowadays - this opens up the ability to investigate cases on a historical basis. This is all fine if for example, you are selling some illegal substance, and it is against the law to do so at the time. However, potentially in the above media and banking cases, (I am no lawyer) but it is not 100% clear cut that laws were being broken at the time. The persistence of digital communication means that even if your intentions are good, there is a risk that a re-interpretation of the law in some future time could land you in some very hot water.

A friend having read my previous post on “The permanence of digital communication”, suggested that using crypto could be a way of securing your digital interactions, so only you could read it. There are potentially two issues with this. First is that currently there is no mass consumer service which allows this and has taken off. The second is that even if say, Google or Facebook allows to use crypto to secure your messages so only you and your recipient can access them, depending on how the encryption is done - the law could demand that they be given the digital keys to access the communication (So you see encryption is only as strong as you keep the keys to yourself). The reason given to access your keys? - the law at some future time of course! - which may have been different to when you were sending the correspondence.

I have yet to read into the complete technology stack and methodology of vanishing messaging applications, so don’t know exactly whether the messages are stored centrally at the corporation servers or whether they are as is per the application and deleted once transmitted to the client mobile in order to maintain privacy. It would be good if they were encrypted when sending, so nobody could snoop along the pipes. OK, you can take a screenshot to save your friends message but that isn’t the point, the point is to prevent mass archiving from external sources.

I find it very interesting that applications such as Snapchat, TapTalk and Sobrr may have slipped through the net and although started as a popular app for the younger demographic (school/university) of the population for sending trivial communications - they maybe the kind of communication apps the masses may adopt one day to use in their daily lives - to prevent their privacy being impeached in future times, retrospectively. If you’re a VC or a start up - it might be the time to double down on vanishing messaging apps which highlights privacy as its key strength. Privacy (and power) to the people I say.


Might apps like Snapchat signal the trend where society has a thirst for messaging apps which maintain your privacy?

The Permanence of Digital Communication

“I’ve seen things you people wouldn’t believe… Attack ships on fire off the shoulder of Orion. I watched c-beams glitter in the dark near the Tannhäuser Gate. All those… moments… will be lost in time, like [small cough] tears… in… rain. Time… to die…” -

The Replicant (android) from Ridley Scott’s science fiction masterpiece Blade Runner

In an era where it is so easy to share the minutiae of your life online through photos, videos and the written word, there is a question over which of these should remain permanently alive. Which should be searchable for future generations and which can merely remain transitory and forgotten, like tears in the rain?

The permanent nature of online postings is a reason why Evan Spiegel’s Snapchat is so popular with the current youth generation. In previous generations, what we said in the school playground or communicated to our friends through handwritten notes passed around the classroom would be forgotten or destroyed. They couldn’t be stored, processed and retrieved by future times. These words disappeared. Kids could say things, make mistakes, learn and not be impacted by their youthful and misguided indiscretions. The current young generation communicate through digital platforms, and although this allows you to convey your thoughts and actions over large distances, they are stored on servers of multinational corporations. These interactions are stored, processed and searchable. So the current batch of younglings have embraced technology that lets them communicate with their peers but which vanishes into thin air after initial consumption.

How about your working thoughts? They’re not permanently recorded, I guess? You only post the actualised and complete thought, self censored for whatever reason. You are allowed to think through the many alternatives and decide to share the one output. Your transitory thoughts are already stored. The example I give is when you type your Facebook status, and you don’t hit post, instead you delete the line - this metadata is stored on the social network’s servers. The reason being, they want to eventually know why you are self censoring. So it’s not impossible that one day they will collect the deleted text too. Google also does something similar to this. Think about it: how many times do you have to hit save in Gmail? Not much. If your Internet times out, the browser crashes or closes by accident, you often see a draft automatically saved. Your draft thoughts and ideas are captured, stored and processed. Although I haven’t yet read anything to conclude that Google will do anything with this data (the variations of emails you haven’t sent yet) that door remains open.

Now for a bit of future prose. You already see people experimenting with brain wave headsets, to extract signals so that you can control computer devices simply through your mind. If and when this technology develops, it might be possible to record your thoughts, and send them to another person - like you would do with written material though your mobile. Then the question of transitory thoughts will become even more important. You have many more thoughts in the process of deciding on the thoughts than the one you actualise and send. Will society store everything? Or simply just the one you decide is the one you want communicated. We think things are complicated now in the era of click to share. We ain’t seen nothing yet…

PS.  This blog post was inspired by a tweetstorm session from Marc Andreessen in which he talked about how people were incorrect to belittle the efforts being put into communication apps, for example verses other so called “more important” projects. He said that communication apps that are being produced by the Valley is laying the foundation for everything we’ll do in the next 100 years. I won’t paraphrase Andreessen anymore, instead will quote his tweets:

- Subtext often that communication tech/apps in particular somehow aren’t important or don’t matter, vs energy, education, etc.
- I think this is 100% incorrect: Communication tech/apps including Internet are the foundation for everything else we’ll do for 100 years.
- Why? Communication is the foundation of collaborative work, which is how all the important problems gets solved. People working together.


How to Co-Exist in Harmony with Disruptive Technology: A Lesson From Pixar, Disney and Apple

Jeffrey Gundlach, the CEO of the investment firm DoubleLine Capital made an interesting point the other day about the new disruptive player in town, Tesla, and how it should play its strategy versus the incumbent automotive industry. In this blog post I shall outline Gundlach’s thought experiment and why his idea is actually very similar to what allowed Apple to thrive and co-exist in harmony with the media content industry.

First, let’s get an overview of Tesla’s vision. Elon Musk’s goal is to get society off of gas guzzling combustible engine cars into environmentally friendly electric motor vehicles. He is up against the fierce and well-built axle of the auto industry, utilising the current law and lobbying powers to stop Tesla. The auto companies see Tesla’s electric car as disruptive in the negative sense. The way they see it is, if Tesla wins - they lose. A zero-sum game. Gundlach sees it differently; he believes Tesla and the automotive industry can both win.

A quick aside: currently the edge for Tesla is in its battery technology, including the newly proposed lithium-ion giga-factory. Manufacturing and assembling cars (with quality control) is a difficult business. It is something Tesla has spent the last decade perfecting. However good they are now in terms of making cars, the auto companies have this process perfected - for example in the sheer volume of cars they can ship, a stage which Tesla is yet to reach. Musk has made it clear, they are supply rather than demand constrained for its electric vehicles.

Gundlach proposes that Elon Musk goes to all the major auto corporations and makes a deal: that Tesla will exit the car-making business IF Musk’s company gets to deliver the battery technology behind the electric cars. Auto companies get to keep doing what they do, making cars on scale (but electric this time) and sell through the dealerships or outlets they choose. Tesla also wins, they become the world’s leading manufacturer of electric car batteries.

The downside for car companies in embracing the rollout of electric cars (against their gas fuelled models) is that it will end up destroying the additional revenue-generating ecosystem built up in order to support the gas models. For example, with electric cars you wouldn’t need to take it in for an oil change, etc. Not to mention all the relationships autos have with, for example, the gas industry. Autos could keep fighting Tesla but if Musk gets his way, Tesla could potentially end up owning the new electric auto sector, just like Amazon owns the online retail world in the West. For Tesla the risk is they don’t have enough power to scale and create “affordable mass electric cars”, or end up spending too much time battling the automotive lobbies.

The other industry that comes to mind which till recently fought technological disruption was the media (content) industry - music, movies and television. With the advent of near zero cost (not really but you get the point!) reproduction and the growth of digital distribution of content through the Internet in the 1990s, services like Napster were established. Media owners were reluctant to cut any deals with the then willing Napster. They believed that they should keep their content off the Internet and remain distributing using physical media. Why kill margins and tight control? Physical media supported an ecosystem too (like gas cars currently do) - retail outlets which sold their media goods. If they gave the content to Napster, it would be difficult to control copyrighted replication. So media companies fought tooth and nail from preventing the future happening in a legal fashion. This forced an entire generation to get their media fix online through anyone other than the content creating media companies, who were getting zero revenues from these downloads.

How did we eventually get to the era of media companies being comfortable to putting content online through the likes of Netflix, Lovefilm, Spotify and co? For this let’s go back to the late 1980s - when Steve Jobs bought this really cool little computer animation company called Pixar from George Lucas’s LucasFilm. Recently I watched a Charlie Rose interview (1996) of Steve Jobs. In the interview, Jobs tells us that the attraction of Pixar for him was that it was a great technology company. When Pixar IPO’d the markets read Pixar as a technology company, too, and the stock was misunderstood initially. During the interview Jobs said that though it was initially a technology acquisition, Pixar was essentially a content creating company. Pixar told stories and good ones at that. These films would produce annuities. Jobs said that a technology company makes things that won’t sell after say 2 years. It needs something new. A content company can sell the same media forever, to the next generation.

Now let’s look towards Apple at the turn of the century. In 2001 just after the introduction of P2P services like Napster, Limewire, eDonkey and co. distributing millions of MP3s for free, Steve Jobs released the very sleek and fashionable iPod. Marketing of the iPod was quintessential Apple - making it the must have premium device of the new millennium. A few months later Apple made the iTunes application, which acted as media player for the Mac. Soon enough, they would release the same application for the PC. Now iPods could be used by more than simply Apple Mac users, it now included the multiple millions more of PC MP3 music lovers.

Another important step came in 2003 when Apple launched the iTunes Music Store. Fast forward to 2006; Steve Jobs sells Pixar to Disney. This I believe has the markings of a genius at work. By selling Pixar, a content creating company to Disney, Steve Jobs was now a director at one of the largest media companies in the world. One can say he was already a media exec being the owner of Pixar – but being Disney’s largest shareholder could only help. In order to sell more iPods, and in the future iPhones (2007) and iPads (2010), you needed media content. Steve Jobs being in the media circle now, could approach the various music labels and talk. Jobs went round to all the heads of the labels, and assured them that their content would be safe on the iTunes store. He said to the media owners that Apple would take a very small cut from selling their content - the media companies could keep nearly the entire selling price. He convinced his now peers (and not rivals) to go for a more modern pricing plan - per track. Jobs told them that Apple would be happy to simply make the margins from selling their iPod. And the rest is history – the iTunes store went on to sell movies, TV episodes and apps. The media companies had made the transition to selling content online, albeit slowly but surely. And Apple became one of the largest corporations in US history.

I don’t know how much effort went into the timing and planning of what I outlined in the events above - but it certainly helped us reach the era where we can legally buy and rent media online with very little friction. Both Apple and the media companies comfortably co-exist now. And the consumer won too. Thank you Mr Jobs.

Maybe Jeffrey Gundlach is right, perhaps Elon Musk’s Tesla might think about collaborating with the incumbent auto companies for a good outcome for all concerned. Then Elon Musk can turn his focus to another amazing project that others fear to take on - Hyperloop anyone?


How can old business models embrace disruptive technology?  See opportunity with cooperation and not as threats with isolationism.

Crowdsourcing and 21st Century Lobbying

Internet citizens are capable of more than simply generating likes and re-tweets.  Over the last few years we’ve seen entrepreneurial individuals and groups utilising the Internet to crowdsource financing for projects, with steadily increasing levels of success.  We’ve seen everything from funky e-ink smart watches like the Pebble to bold Matrix-like futuristic virtual reality devices like Palmer Luckey’s Oculus Rift.

Moreover, the interwebs have been a place for funding beyond simply cool widgets – it has been funding people too.  Startups like Pave.com and Upstart are aiming to allow net citizens to invest in talent.  Politicians like (President) Obama and Italian politician Beppe Grillo have leveraged social media and Internet-led crowdsourcing to successfully fund their political campaigns. 

How far can this notion of crowdfunded financing be taken? Can a variation of financing via the Internet enable crowdfunding to assist in making transformative and measurable changes in society?  Can crowdsourcing on the Internet lead to improving the life of the ordinary citizen, on a nationwide basis?  In what form would that take place?  In our current political set up, change can be brought through lobbying.  Arguably, wealthy individuals and corporations currently have control indirectly of lobbying power in many nations, including the United States.  An example in the USA is lobbying through SuperPACs.  Interestingly, a project called MayOne.us attempted a “citizens’ funded and crowdsourced SuperPAC” already.

Let’s look at a current issue - net neutrality. There is a lot of differing opinions on this issue at the moment. In the US, the telco and cable companies* are using all means to weaken net neutrality. Newer technology firms such as Netflix are fighting it but currently it seems that the infrastructure incumbents are winning. Theoretically speaking, this could be a negative for American citizens and may have wider implications than your next episode of House of Cards not streaming well.

Deciding the exact lobby reforms to improve the quality of life of citizens and society at large is not easy.  For example, in an era of technologically led unemployment, and no wage power to the workers, would something like basic income be a good idea?  Maybe.  But even if the electorate thinks it’s a good idea and feasible to implement (after passing through various economists and analysis), it may not be possible to bring it into action, simply due to how things are currently structured.  Perhaps a form of crowdsourced lobbying could be a stepping-stone to improve and evolve the way democracy works in the 21st Century.


Whilst writing this post a friend pointed out a study stating: “Multivariate analysis indicates that economic elites and organised groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence.” (BBC link)

* Comcast is one of the biggest spenders in lobbing.

The pyramids we build

“Ponder for example that the leading technological companies of this age, I think for example of Apple and Google, find themselves swimming in cash and facing the challenge of what to do with a very large cash hoard. Ponder the fact that WhatsApp has a greater market value than Sony with next to no capital investment required to achieve it. Ponder the fact that it used to require tens of millions of dollars to start a significant new venture. Significant new ventures today are seeded with hundreds of thousands of dollars in the information technology era. All of this means reduced demand for investment with consequences for the flow of - with consequences for equilibrium levels of interest rates.”  - Larry Summers (2014)

The above comment was made last week and everybody on the twitter-and-blog-sphere had their own opinion on Larry’s remarks.  I wanted to make some replies on twitter to add my take on the discussions but it proved somewhat tricky to convey the bigger picture in fragmented chunks of 140 characters.  So I think it’s time I returned to Microbytes.

A particular comment on twitter about Larry Summers’ speech got me thinking. It stated that WhatsApp’s skyrocketing M&A value was only made possible by big capex spend by the telcos. The thesis was that creating giant companies with little investment is a misnomer.  I don’t necessarily disagree with this view - indeed, WhatsApp (and other start-ups) do depend on telcos updating and expanding the existing Internet infrastructure.

So what I want to do in this post is to draw a picture for you to show why this is normal, and why it doesn’t discount the fact that you’ll be able to create giant (valued) start-ups with very little investment. Just like WhatsApp.

Imagine a pyramid.  The lower end (the base) is large, and will probably be costly to build out, in terms of investment cost and time.  After the base is ready, others can build higher up the structure - faster and cheaper.  Note, also, that the people who choose to focus on the lower end of the pyramid will most likely have to maintain the base (let’s ignore the Google fibre model for now), which remains costly.  Remember, we haven’t even mentioned the soil on which this structure is built.  Who put time and effort to create this?  I imagine this took a lot of time, a lot of trial and error. And a lot of risk.

Let’s translate this pyramid metaphor to the example of a modern corporation, like WhatsApp.  Start with the lower end, below the base - the soil and more or less the foundation. This is akin to the US government having funded an agency that today is commonly known as DARPA. During the Cold War, the American government wanted to establish different methods of maintaining communication with command and control, in case a nuclear strike were to knock out communication towers. So they spent a lot of intellectual capital, money and time developing protocols that would eventually morph into what we today call the Internet. It was only natural this kind of large-scale project was executed by a government body - which, unlike the investor-backed corporations existing within capitalism, required no immediate return.  They were in a position of making large bets with an indefinite time horizon of fruition.

At the base of this pyramid sits the telcos.  They enable the pipes where our trillions of bits and bytes flow - which translates into Netflix movies, iTunes songs, Flappy Bird-like games, Snapchat photos, WhatsApp messages, Facebook posts and Tweets.  The telcos buy spectrum, own/buy patents and build out physical hardware infrastructure. This isn’t cheap. Last year, AT&T alone stated they would invest 12 billion USD in expanding out new greenfields of infrastructure. AT&T’s market cap stands at 166 billion USD.  So this capex was about 7% of its market cap.  This is compared to 58.3 million USD in funding (including a Series C round of 50 million USD by Sequoia Capital) that was used up by WhatsApp before its exit - eventually valued with cash and stock at 19 billion USD.  That is 0.3% of funding relative to its exit valuation.

This example (albeit oversimplified) of 7% vs. 0.3% in capex vs. market value is the difference in being at the lower end of the pyramid versus being higher up in the structure.  Since the 1990s, the costs associated with starting up a modern corporation (with its software driven internet delivered model) have steadily fallen.  For example, look at how Instagram, Netflix (the streaming segment) and the countless newer start-ups are reliant on the emergence of cheap dynamic scalable server hosting like what AWS (Amazon Web Services) provides. Jeff Bezos’ Amazon itself spent a fair amount of capex and time developing the tools to reach mass scaled infrastructure the company could sell cheaply. During the dotcom era, if you wanted to start a modern web company, you had high start-up server and scaling costs.  Whereas today, a two-man team on a laptop can launch the next online-based disruption with minimal costs (at least, relative to the to the dotcom era), piggybacking on the infrastructure provided by services like AWS.

I have read a few comments arguing that the era of capex spend isn’t over.  No it isn’t.  It never will be.  It’s just that the most valuable companies by return on investment live in the present Internet space due to the pyramid we’ve built over the last 60 years. What we need is new capex to build new verticals.  New pyramids. But this requires not only a lot of capital but to accept high risk.

Very few people currently seem willing to take the suitable risks - instead issuing share buybacks.  One of the well-known examples of a pro-capex investor is Mr Elon Musk (PayPal, Tesla, SpaceX, Solarcity).  He took a huge personal financial risk to make a play in a historically tough area with a lot of economic (hence government subsidies etc.) and technological issues: electric cars.  Up until very recently, it wasn’t a sure thing he would win with Tesla. Now we see his bigger play - disrupting the energy pyramid - with Tesla’s newly announced lithium ion giga factories - to reduce the cost of batteries. Imagine how many future start-ups will be able to leverage off of this kind of capex.  This potentially turns Elon Musk’s company into the Amazon Web Services of battery technology.  So capex spend isn’t over - but we need more risk takers out there to emerge and create newer pyramids for future generations.Robotics has seen a lot of capex spend in the new millenium to build out this vertical.

In the early part of the 21st Century, the pyramid on which society has depended on and lived off is the Internet.  And this pyramid has been taking shape since the Cold War and the days of ARPAnet.  The pyramid we’ve built for our era is maturing. A mature pyramid means that newer corporations sit high upon this structure feeding over the protocols and physical pipes which came before them. Not requiring much capital to thrive, as Larry Summers indicated in his speech. This diminishing requirement for capital vs. value created (for shareholders) is partly one of the reasons why interest rates should remain lacklustre and low in the near future.

However, these physical pipes/protocols need refreshing every so often, which undoubtedly costs a lot. Back in the day when this pyramid wasn’t mature, the companies building the base created a lot of jobs for workers, generating a nice income for themselves and their employees.  AT&T currently has about 250,000 workers.  WhatsApp has around 50 employees.  Another example is Kodak vs Instagram.  Did someone whisper income inequality skew?  That’s a whole separate pyramid we’ve managed to build…

I will leave you with the words of President Obama from a speech at Roanoke, Va., heavily misunderstood when uttered in 2012:

“There are a lot of wealthy, successful Americans who agree with me—because they want to give something back. They know they didn’t—look, if you’ve been successful, you didn’t get there on your own… If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that. Somebody else made that happen”


We need more risk takers out there to emerge and create newer pyramids for future generations.  Robotics, nano-tech, energy, material sciences, space exploration and more.

Monarchy 2.0

It can be argued that the automation and systemisation (via silo-ification) of jobs has contributed to society naturally requiring less human capital to function. Note also the profits are not being redistributed to the workers: meaning real wages have been falling for the last 30 years - it doesn’t look good. Instead the corporate historical high earnings are going into share buy backs and dividends. Meaning, profits are going to capital owners (rentier class). This only helps to accelerate the rise of inequality within society. If you take this cycle to the Nth degree, it means at some point, the ordinary worker may not have sufficient wages to consume any products produced by the rentier class on a meaningful scale. Then the question arises, will this lead to revolution in the developed world? Surely it is not in the interests of the rentier class. This is a question a friend posed to me recently. He suggested that the rentier class will avert this as previous rentier-class type institutions have in the past. My friend suggested an example: look at how effective the UK monarchy has been at protecting the system so they can still exist. He continued to say why would we reach a point in which everybody but the rentiers have next to no wealth? And that people have claimed this would happen since the cotton mills in the industrial revolution (and it seems to wax and wane).

In the past, extreme inequality would indeed be overturned by riots and revolutions. However, presently in the West, you could question how much discomfort people are in.  Would they really be bothered to disrupt their WiFi-ification tethered existence to unlock themselves from their lives to revolt away from their iPhones, YouTube videos, Facebooking and Tweeting? (except when they did indeed riot with their blackberries and social media in the streets of London and Middle East). Historically, the owners of capital (old style rentier class) were often King and Queen like. Like monarchy. Buildings, land and the process to make products (like food) were owned by a few. So if they were smart enough, they could make a decision without consultation to allow their citizens to have a little more. They could then avert riots and continue the status quo. However, in the modern day, the capital power (rentier class) are more widely spread. This means any unilateral decision to avert catastrophe is made tougher. For example, why would Amazon increase wages of its non robotic (factory) workers? Its loyalty is to its shareholders. Bezos* could decide in his wisdom to follow the style of Henry Ford, that his employees should be paid more so they can afford to buy from Amazon. But then investors might punish said rentier class over another company which decides not to increase wages but instead payout in dividends? So what I’m saying is it is much tougher in the modern day to tactically deploy measures to combat the inequality conundrum. Why will Amazon co-ordinate with other corporations to raise wages in unison? If one corporation acts alone for the better good of humanity - they could risk losing investor confidence. Kind of like a prisoner’s dilemma scenario. Helping humanity is not what capitalism is about (post capitalism is. but that’s another post for another time, I think…).

What is the scenario that will pan out if the inequality conundrum continues to play out? You may end up in a situation which is the staple of science fiction dystopian futures. The rentier class will get to a point where they decide it is not worth selling things anymore. It doesn’t make sense. And they don’t need people to work to produce the items. They can continue the quality of life they expect. So you can imagine a bi-modal society on acid emerging. There will be a section of the population which lives in extreme poverty. They have no resources, they don’t have the automation or machines and they don’t have the money (tokens) to buy things they need. The rentier class might not even accept any form of money in exchange for resources. But the poor may have things like the internet to help sedate them into accepting their situation. Perhaps they will have food which costs very little or nothing (with the little bit of tokens they are given). The point being that they will not be allowed into the rentier section of the nation. The rentier section will be fewer people. They will have access to all the resource they need, which will help fuel the machines that run their part of civilisation. They will be the Kings & Queens of the 21st Century. A modern monarchy.

Being rentier means that you have an excellent quality of life but you also naturally want your heirs to continue to have an even better quality of existence. So perhaps the only way out of poverty is to be very smart (through your free internet) and be a scientist or entertainer for the new Kings & Queens 2.0. It’s just like the olden days where scientists and artists used to work directly for the monarchy type establishment. It’s funny that our Web 2.0 and all the automation that comes with it might evolve into something we had many years ago: Monarchy 2.0.


The UK monarchy like establishments used to be the olden style rentier class,  Will continued rising inequality fuelled by automation (replacement of workers) lead to Monarchy 2.0 lead by the new rentier class.

* To be fair it is unfair to pick Bezos’s Amazon as an example. Better would be Walmart and McDonalds. As Amazon has recently surpassed the 100k employees overtaking Microsoft. However the premise still holds for their warehouse workers.

Who wants to be a rentier class?

I was talking to a friend who questioned why capitalism should not continue as it is.  He said that people always want the next best thing (to attract a suitable mate).  However I reckon whilst this is not wrong in general something was bothering me about this seemingly intrinsic need for more and the perpetuating cycle it promotes.  For example (in the West) you are taught that if you work hard, work long hours, keep trying your very best and with a touch of luck - you too could live in that big mansion with your red shiny fast car and model girlfriend*.  It is also known on the other side of the pond as the American Dream.

In the West there are two strands of people in general.  The first have most of what they need according to Maslow to be comfortable.  Their basic needs are met and the surplus is utilised to achieve superficial status.  They continue to work as they did when they first started out because they don’t understand the diminishing marginal returns.  This part of society continues to work late every day and many weekends at the sacrifice of spending time with their friends and family.  If they could only keep doing 100+ hours a week they might be able reach the next level.  The next level?  Yes, the mansion, shiny car, the model girlfriend, the yacht, the island and the Learjet.  They might even be able to one day do nothing in return for the income and join the mighty rentier class.

The second group of society doesn’t have the basics to survive comfortably. Maslow is not met and they have no surplus.  They don’t necessarily all starve because of the welfare safety net established in the West post WWII.  However they need to keep working long hours for low wages to make sure they can achieve bare subsistence living.  Most of the profits of their toil winds its way to the rentier class.  The rentiers as it stands have not been sharing their profits back with the workers for the last 30 years or so.  Unless there is radical change in the mentality of the rentier class, this status quo will not change.

So basically we’ve broken down society into 3 streams (for simplicity).  We have the low wage workers struggling to make ends meat who need to keep working.  Then the comfortable middle class who wants to keep working for the dream of joining the rentier class one day.  And finally the rentier class itself.

In the mid 1990s when I was in school, the UK established the National Lottery.  You were sold the dream of becoming an overnight millionaire.  Only thing you had to do was spend 1 GBP.  The nation went lottery crazy.  Mothers, fathers, sons and daughters started ploughing money into this dream.  If they played every week, maybe just maybe, it could be them!  After a while the cold reality set in.  People had sat down and calculated the mathematical odds of actually hitting the jackpot.  I remember a lot of people being excited (media influenced, of course).  They poured perhaps 20, 30, 40 or even 100 GBP per week into hoping to win.  I started showing people the calculations and the odds.  I think it was something like 1 in 14 million.  I recommended to people to instead buy something they enjoyed with their money.  I certainly never put my pocket money into the National Lottery after understanding.  Instead I bought things that I valued and needed. Things like books, games to play or items to do artworks.

Keep in mind how the rentier class operates.  They are owners of the capital and infrastructure.  This enables them to mine the workers and extract profit from the workers and the middle class.  Look at the English Premier League.  Many years ago if you were in a lower division there was always hope and the dream that if you worked really hard, trained well and had a bit of luck - you might be one day able to make it to the top flight football league.  Fast forward to modern day football.  With the rentier class moving into football (eg. the wealthy owners) it has essentially made the old concept of working hard and moving your team up the leagues to join and compete with the top league near impossible.  The gulf between the rentier class clubs and the middle/working class clubs in terms of financial power is too big.  Without the capital and structure to back you up, no amount of good football will let you make it to the top and stay there.  The “American Dream” is over in the English Premier League

What is the relationship between the National Lottery, the English Premier League metaphor and the need for the middle class working more and more?  The middle class are working more than they need to because they have been sold the dream of winning through capitalism.  If they play, they might win.  It worked in the past so must always work.  They have heard and seen so many success stories. They have been told and convinced that if they keep working, every weekend, maybe just maybe, they might be a rentier class too one day with their shiny mansion, fast red car and model girlfriend.  But what they don’t realise is that the gulf between them and the rentier class is so big (like in the football example) that in the modern era the odds are against you.  So instead the middle class should not be doing work they don’t enjoy to earn more money they don’t really need, to buy the things they don’t really want to  join the circle they can’t join.

The path you are taught is that you study hard, then you go to university, you get an expensive qualification, and then you get a cubicle job that you don’t enjoy (ignore for a second your cubicle job is probably going to be automated at some point).  In the past this used to give you an edge.  However the edge is usually lost in anything once nearly everybody else follows the same path. This is what has happened to higher education.  This path once used to fast track you to the rentier class status but nowadays this path grows workers for the rentier class.

Where is the edge now? The edge is in entrepreneurship. Entrepreneurship (including invention and discovery) is more possible today than before due to easier access to capital (because return from other investments are so low). They also have cheaper tools like the internet to leverage free information, people and networks. They may fail but there is a safety net of the welfare state behind them. Intrinsically they take more risk and therefore have higher rewards. But these people may one day be really able to join the rentier class… if they keep trying, working and have a bit of luck.

The question is when will the workers/middle class gain clarity and understand the odds are stacked against them like in the lottery example and stop wasting their lives and playing the “who wants to be the rentier class?” game show. Oh wait, they are too busy to think and work out the odds because they are kept so at bay in playing the 9 to 5 and 100+ hour/week game…


The edge is with the entrepreneur and not with the 9 to 5 and 100+ hour per week worker.  Elon Musk the super successful entrepreneur (PayPal, Tesla and SpaceX) joins the rentier class.  It comes with model like girlfriend.

*Your highly unsuitable mate (who has nothing in common with you) the model girlfriend comes with your mansion and shiny fast car. No refunds given. (By the way this could be the other way round, and isn’t gender specific.)