Weekend Briefing No. 332
Welcome to the weekend.
I hope you’re having a great weekend. I’m taking the evening off tonight, so there will be no Bourbon & Briefing. I’ll miss you guys, but we’ll be back at it next Saturday.
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30,000,000,000,000 – Government deficits worldwide could reach $9 trillion to $11 trillion in 2020, and a cumulative total of as much as $30 trillion by 2023.
25,000,000 – This week 21 years ago, a little known company called Google closed their first $25,000,000 round of financing.
100,000,000 – This week that very same company, Google, announced that it is committing $100,000,000 in funding participation in Black-led capital firms, startups and organizations supporting Black entrepreneurs, including increased investments in Plexo Capital and non-dilutive funding to Black founders in the Google for Startups network.
Token Black Friend
Ramesh A. Nagarajah wrote a piece on his life experiences, which highlight how subtle and insidious cultural racism is. I am a token black friend. The black one in the group of white people. My family’s immersion in the white community, our success in school and now in the workforce, and the fact that we grew up in a middle-class black household (highly uncommon in Boston) led us to believe we had somehow transcended the plight of the black man. Yet, what scared me so much as we watched the videos of Ahmaud Arbery and George Floyd is that we clearly had not. In both cases, it could have been us. There is no escape. There is no level of success that will spare you. We are black men, and that is all that matters to some. I think of the way the black girls were treated as second rate in high school. Guys rarely tried to talk to them romantically, and if they did, others discussed it with an undertone of comedy. I never felt this way, personally, but didn’t realize until college that my silence was compliance. I was participating in denying dignity to the black women around me. Then there are the instances most white people will recognize, though they probably never knew how damaging their words were. Every token black friend can recall the times when a white friend chooses to dub you “the whitest black kid I know.” It’s based on the way I speak or dress or the things I’m into, and it’s a comment on me not fitting the image they have of a black person. When I resist accepting such a title, the white person claims it’s a compliment—as if the inherent superiority of whiteness should leave me honored to be counted among their ranks. More impactfully, it suggests that my blackness is something that can be taken from me. That my identity as a black man fades because I am into John Mayer or I’ve visited the Hamptons. And further, it assumes that my black identity is not something I am proud of. It ignores the fact that the acculturation and assimilation I experienced growing up with all white friends was not voluntary. It suggests that my blackness is a burden, when in fact, minimizing my blackness was most often my burden. Another example: I am criticized by my white friends for code-switching when I am with my black friends, just because they don’t understand the slang and how it connects black people to a common culture. The length of my journey makes me inclined to be more patient with others in this process, as it’s taken me this much time to wake up. We should all be reasonably patient with one another, but I would encourage individuals to not be patient with themselves and to treat these issues with the urgency they deserve. The anger on display over the past week should exhibit the need for change. Human Parts (16 minutes)
Black While Startup
Black entrepreneurs say they are encouraged by the movement but deeply skeptical that the industry will change. Interviews with 20 Black tech leaders depict a position of power that can sometimes feel powerless. Repeated assumptions that they’re not in charge of their own companies, a common experience among Black chief executive officers, can instill a lingering sense of self-doubt. They describe a career of subtle slights or outright discrimination in which they face regular inquisition about their credentials and peculiar suggestions to hire a White business partner to make investors more comfortable. One says he carries around a notebook emblazoned with the logo of his alma mater, Stanford University, to fit in. Bloomberg (7 minutes)
It’s no secret that I’m a fan of Indie.vc. In fact, they are one of the only investment firms I’d consider working for. (Bryce, shoot me an email if you’re reading.) Here’s why. Too many founders tried to shoehorn themselves into looking like a billion-dollar company to get funding, and too many promising companies either didn’t start or don’t get funded because they didn’t fit that criteria—not to mention the thousands of businesses started by women and minorities who have been largely ignored by a VC industry dominated by white men. Bryce Roberts, Indie.vc founder, believed there was room for another funding model that backed “real businesses.” Some VCs derided Indie.vc as an investment firm for “b team” companies that can’t scale big enough or fast enough to get real VC money or somehow have a “lower bar” for investments. But the model is now proving prescient. Over five years, Indie.vc has backed 34 companies—half of which are women-led companies and 20 percent are Black. And while there haven’t been any big exits yet, the companies that receive Indie.vc funding seem to be much more robust than their peers, especially in a challenging economic climate. On average, they’re growing 100 percent in the first year and 300 percent the second year, says Roberts. Plus, the fund’s mortality rate is 10 percent— compared to about 44 percent with traditional VC-backed companies. Marker (9 minutes)
Good news for entrepreneurs! This week, the Small Business Association (SBA) announced that it has simplified the PPP loan forgiveness application. There are now two versions of the loan forgiveness application: the Full Forgiveness Application and the EZ Forgiveness Application. Both have been simplified from the original 11-page forgiveness application, but the EZ requires less calculation and less documentation. You may use the EZ Forgiveness Application if you: (1) are self-employed and have no employees; (2) did not reduce the salaries or wages of your employees by more than 25 percent, and did not reduce the number or hours of their employees; or (3) Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of your employees by more than 25 percent. Check out my article in Forbes for a quick explainer and links to the new apps. Forbes (5 minutes)
Captain of the Day Traders
Seasoned investors have been puzzled at the disconnect between the fragile economy and rapidly rising stock indexes. Wall Street increasingly thinks the rally is driven by retail investors, particularly bored bettors looking for action. Seasoned investors have been puzzled at the disconnect between the fragile economy and rapidly rising stock indexes. Wall Street increasingly thinks the rally is driven by retail investors, particularly bored bettors looking for action. Without sports, some gamblers have turned to stocks, The Times’s Matt Phillips writes. The new investors have helped push the market up, some analysts believe: “There’s zero doubt in my mind that is a factor,” said Julian Emanuel of BTIG. The traders’ patron saint is Dave Portnoy, the founder of the rowdy—and controversial—sports site Barstool, who has refashioned himself into a sort of Jim Cramer for the pandemic era. Mr. Portnoy, who made millions by selling a Barstool stake to the gambling company Penn National, live streams his profanity-laced trading sessions to millions. He boasts that he’s outperforming Warren Buffett and declared on Twitter last week, “I’m the captain now.” (His track record is mixed.) New York Times (6 minutes)
A new Justice Department proposal Wednesday accelerates a headlong charge in Washington to rewrite a law that protects online services from being sued over user-created content. The Justice Department is urging Congress to revise Section 230. You may have heard it mentioned in the news, but what exactly is Section 230? Tucked inside the Communications Decency Act (CDA) of 1996 is one of the most valuable tools for protecting freedom of expression and innovation on the Internet: Section 230. It says that "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider" (47 U.S.C. § 230). In other words, online intermediaries that host or republish speech are protected against a range of laws that might otherwise be used to hold them legally responsible for what others say and do. The protected intermediaries include not only regular Internet Service Providers (ISPs), but also a range of "interactive computer service providers," including basically any online service that publishes third-party content. Though there are important exceptions for certain criminal and intellectual property-based claims, CDA 230 creates a broad protection that has allowed innovation and free speech online to flourish. Electronic Frontier Foundation (7 minutes)
Could you ever have predicted the events in 2020? No. The world is a fragile and fluid place. Predictions on the future are so often wrong, but can we have permanent assumptions? Here is an attempt at naming a few that might guide business, investing and outlook on life in general: (1) The world breaks about once a decade. There are so few exceptions it’s astounding. It can be economic, political, military, social or a mix. But it breaks all the time, in ways few see coming. The breaks aren’t as scary if you have a permanent assumption that they’ll keep happening and don’t preclude long-term growth. (2) A big group of people can get smarter and better informed over time. But they can’t, on average, become more patient, less greedy or more level-headed during periods of upheaval. That will never change. And it highlights the idea that edges, when they exist, usually come from behaving better than average rather than being smarter than average. (3) It’s easy to take advantage of people. It’s also easy to underestimate the power and influence of groups of people who have been taken advantage of for too long. The former is obvious, the latter surprises people in a life-changing way a few times per century. Collaborative Fund (7 minutes)
Fountainhead by Ayn Rand. The revolutionary literary vision that sowed the seeds of Objectivism, Ayn Rand's groundbreaking philosophy, and brought her immediate worldwide acclaim. This modern classic is the story of an intransigent young architect Howard Roark, whose integrity was as unyielding as granite, and of Dominique Francon, the exquisitely beautiful woman who loved Roark passionately but married his worst enemy. This is also the story of the fanatic denunciation unleashed by an enraged society against a great creator. As fresh today as it was then, Rand’s provocative novel presents one of the most challenging ideas in all of fiction—that man’s ego is the fountainhead of human progress. Amazon
Most Read Last Week
America’s Therapist—The week we lost the world we knew, Brené Brown held church.
20 for 2020—This is my reading list on race in America.
New Realities for CEOs—The next wave of great leaders will adapt their styles and organizations to harness the passion—the weaker ones will be paralyzed and pummeled by it. Any CEO who ignores this bottom-up revolution will suffer public backlash, recruitment and retention challenges, and fits of internal turmoil.
About the Weekend Briefing
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For those who have read The Fountainhead: during moments of major societal conflict, it's always useful to ask yourself: Who's playing the role of Keating? Roark? Toohey? Wynand? -Tim Urban
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