Weekend Briefing No. 618

Scaling Craft -- The Cloud’s Dark Mirror -- Automation Creates Jobs

Welcome to the weekend.

Introducing: Acquired Briefing

The Acquired podcast tells the stories and strategies of great companies. It’s the #1 technology show on Apple Podcasts and Spotify, reaching over one million listeners per episode. The Wall Street Journal calls it “the business world’s favorite podcast.”

Episodes prioritize depth—they’re better described as “conversational audiobooks” than podcasts. Each one is packed with insights on how iconic companies actually built their businesses.

If you’re a fan, you know how valuable these episodes are. I’m such a believer that I launched a new newsletter—Acquired Briefing—as a way to share my detailed notes on each episode.

Today I’m highlighting the post on Hermès below.

Over the next few months, I’ll be breaking down the most popular episodes of all time: Meta, IKEA, Rolex, Microsoft, Porsche, Starbucks, and more. These aren’t summaries—they’re deep dives into the strategic decisions, and playbooks that made these companies what they are today.

If you like Founder Fridays, you’ll love these company strategy breakdowns. The insights are directly applicable to how you build and grow your own business.

Sign up for Acquired Briefing below – Don’t miss the upcoming deep dives.

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Prime Numbers

7,000 - Hermès employs 7,000 artisans (80% women, average age 30), training them via schools to scale production 7% yearly without factories, preserving a dying craft.

300 - Each Hermès silk scarf requires 300 moth cocoons and hand-screening with up to 20 masks.

20 - Birkin and Kelly bags generate 25%-30% of Hermès revenue, made by one artisan in 20 hours from 36 leather pieces, with 120,000 produced annually.

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Scaling Craft

Most luxury brands chase growth through celebrity endorsements and aggressive marketing, but Hermès achieved a $200B valuation by doing the opposite—they spend just 4.5% of revenue on communication while LVMH spends 12%, employ no marketing department, and maintain multi-year waitlists by deliberately producing fewer bags than people want to buy. The counterintuitive insight: they solved luxury’s central paradox by making scarcity itself scalable, training 7,000 artisans (up from 250 in the 1980s) in dying crafts like saddle-stitching through proprietary schools, adding just 7% production capacity yearly while competitors chase 20%+ growth through outsourcing. Their pricing strategy defies economics—Birkin bags appreciate 7% annually and resell for up to $500,000 despite $12,000 retail prices, yet Hermès intentionally leaves billions on the table by not raising prices to market-clearing levels, instead using below-market pricing to build customer relationships across their entire product line. This “cornered resource” in human craftsmanship creates an unassailable moat: no competitor can replicate two years of apprenticeship per artisan or the institutional knowledge that keeps employee turnover at 6% (versus 33% retail average), proving that in an age of automation, the rarest competitive advantage might be preserving what machines cannot do. Acquired Briefing (8 minutes)

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The Cloud’s Dark Mirror

When Microsoft’s CEO met Israel’s top spy chief in 2021, he approved moving “sensitive workloads” to Azure servers—corporate speak that concealed a surveillance apparatus now capturing a million phone calls an hour from Palestinian civilians. The collaboration reveals how cloud computing’s infinite storage doesn’t just enable new possibilities; it erases old constraints that once limited mass surveillance, transforming what governments can do when physical servers no longer bound their ambitions. Unit 8200 explicitly sought Microsoft’s cloud because their own infrastructure couldn’t handle recording an entire population’s conversations; the partnership solved a capacity problem that inadvertently made indiscriminate surveillance operationally feasible where it previously wasn’t. Microsoft claims ignorance about storing Palestinian call recordings despite internal documents showing engineers worked “daily, top down and bottom up” with Unit 8200, understood they were handling “audio files” requiring extreme security, and projected hundreds of millions in revenue—a willful blindness that lets tech giants profit from authoritarian uses while maintaining plausible deniability, forcing us to confront whether “we just provide infrastructure” remains ethically tenable when that infrastructure fundamentally changes what’s possible. Guardian (6 minutes)

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Automation Creates Jobs

Most companies use robots to cut headcount, but Newell Brands spent $2 billion automating their Sharpie factory while keeping every employee—then raised average wages 50% by retraining packers as automation engineers who now fix the robots instead of filling boxes. This counterintuitive approach reveals that offshoring and automation aren’t really about labor costs; they’re about whether management views workers as disposable expenses or appreciating assets worth developing. By investing in career training programs (including paying for college degrees) and converting manual roles into technical positions, Newell tripled production speed, improved quality, eliminated price increases, and now manufactures 500 million Sharpies annually in Tennessee faster and cheaper than Chinese factories could. The playbook works because robots don’t eliminate the need for human judgment—they multiply it: someone still needs to troubleshoot when vision systems fail or design the sealing process that prevents markers from drying out, creating higher-value jobs that justify 50% wage increases while making domestic manufacturing cost-competitive with Asia for the first time in decades. WSJ (5 minutes)

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When Everyone’s a Scammer

India’s scam economy isn’t underground—it’s mainstream, with nineteen-year-olds earning three times the average formal wage by lying over the phone, operating openly enough to recruit journalists mid-scam. The counterintuitive reality: widespread fraud isn’t a sign of moral collapse but of rational adaptation to a broken social contract, where the top 10% control 80% of wealth and formal employment offers survival wages while scammers promise Rs 45,000 monthly for spreading misinformation. What makes someone choose fraud over honesty isn’t desperation alone—it’s when legitimate paths disappear entirely, when college graduates spend years seeking Rs 12,000/month jobs while scam call centers hire immediately at higher wages, creating an alternate economy where “Section 420” (India’s fraud statute) becomes a casual descriptor rather than criminal stigma. The victims aren’t wealthy elites but cleaning ladies losing Rs 25,000 and laborers throwing themselves under trains, yet scammers feel no guilt because hierarchy determines morality: cheating Western strangers earns pride, defrauding government officials becomes honor, and only stealing from fellow strugglers triggers doubt—revealing how extreme inequality doesn’t just create crime, it rewrites the entire moral framework around survival. The Dial (6 minutes)

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Rebuilding From Digital Zero

Syria’s tech entrepreneurs spent 14 years in exile running companies from Turkey while their homeland had electricity 30 minutes daily, GitHub banned, and video calls impossible—then the regime fell overnight and they rushed back to build Airbnb competitors and ride-hailing apps in a country where 64% still aren’t online. The paradox: catastrophic infrastructure collapse creates unexpected advantages because there’s no legacy systems to migrate, no entrenched incumbents to displace, no regulatory capture to unwind—Syria can leapfrog directly to modern fintech and digital government while developed nations spend decades untangling bureaucratic spaghetti code. These founders aren’t handicapped by starting from zero; they’re liberated by it, able to architect payment systems, identity infrastructure, and public services using 2025 technology patterns that countries stuck with 1990s foundations can only dream of implementing. The real challenge isn’t technical capability—exiled Syrians worked at Google and Apple, know current best practices, and secured Trump’s sanction lifting for international funding—it’s whether a 15-year gap can become a strategic reset where absence of infrastructure becomes permission to build it right the first time, proving that sometimes the fastest path to the future runs through complete destruction of the past. Rest of World (5 minutes)

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The Strenuous Life

A father takes his sensitive son to Theodore Roosevelt’s Badlands hoping to teach resilience through “the strenuous life,” but discovers the kid already possesses courage—just not the kind that involves punching people. True toughness isn’t about tolerating pain or confronting bullies; it’s about knowing which kinds of strength matter for your life, not someone else’s template of masculinity. Roosevelt transformed himself from asthmatic “wretched mite” to cowboy president by embracing physical brutality, even punching a drunk holding two guns—but he also suppressed all mention of his dead wife, suggesting his celebrated resilience came with psychological costs the father doesn’t want to replicate. What the son teaches the father is that you can scale buttes fearlessly, remain unfazed by blood, and build authentic confidence without ever needing to enjoy watching someone get their ribs shattered—that boyhood obsessed with Junior Ranger badges and first-aid kits isn’t weakness requiring correction but a different, equally valid form of courage. The real lesson isn’t that kids need toughening up; it’s that we project our own unresolved traumas (a mugging at 13, shame about avoiding fights) onto children who may never face those exact demons, mistaking our path to self-acceptance for the only path available. The NYT Magazine (6 minutes)

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Should We Work Together?

Hi! I’m Kyle. This newsletter is my passion project. When I’m not writing, I run a law firm that helps startups move fast without breaking things. Most founders want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a flat, monthly fee so you can control your costs and focus on scaling your business. If you’re interested, let’s jump on a call to see if you’re a good fit for the firm. Click here to schedule a one-on-one call with me.

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Weekend Wisdom

I wish to preach, not the doctrine of ignoble ease, but the doctrine of the strenuous life, the life of toil and effort, of labor and strife; to preach that highest form of success which comes, not to the man who desires mere easy peace, but to the man who does not shrink from danger, from hardship, or from bitter toil, and who out of these wins the splendid ultimate triumph. - Theodore Roosevelt