Back from a three week break, and I’m still settling into writing these -
Investors have been so impressed with Grammarly’s annoying YouTube ads that they just gave it US$90m at a valuation of more than US$1 billion. Their employees will be happy with this news, because of the corresponding increase in their (paper) net worth. I’ll tell you who else is happy - Natural Language Processing (NLP) programs of universities all over the United States. A great deal of this fresh funding will be chucked at AI-wunderkind-dropouts/people with PhDs in NLP to urge them to head over to the Bay Area, and spend their lives building a tool that checks the world’s grammar.
You know what, though? Long before all this funding came about, I could have told you that the people behind Grammarly meant business - all by looking at just one data point - what language did Grammarly use for their core logic? They used a language called Common Lisp.
Now this isn’t a test I came up with. It’s something Paul Graham (the man behind YCombinator) did. Common Lisp is a much-derided language among the undergrad community in colleges around the world, because where other languages require you to memorise their idiosyncratic syntaxes, Lisp just requires you to just think, which is exactly what an undergrad wants to do when they’re sitting, hungover, in their 8am Intro to Comp Sci class. But there’s a small community of people (led by Paul Graham), who believe that outside of university, if you use Lisp, you’re one of those mythical programmers who wield industrial-strength, mechanical keyboards that spit out code at 10x the regular programmer’s speed. I’m inclined to believe them here. There’s a very specific subset of programmers that use Lisp, and they are generally really good.
Thus, this is a useful test if you’re a VC who’s looking to invest in a tech company, and you want to make a judgement about the quality of the company’s technical team. Anyone who’s using a language such as Lisp for building their tools is obviously technically gifted, which means that “that’s good, one less thing [to worry about]”.
Back in 2015, Fiat Chrysler Automobiles’ (FCA) former boss, the late Sergio Marchionne put out a brilliant slide deck titled “Confessions of a Capital Junkie”. In it, he said - the auto industry polishes off capital the way a junkie polishes off heroin, with less and less to show for each additional dollar spent. Car parts and features are easily replicable (even the “proprietary” ones), and money is generally spent in keeping up with everyone else (for example, if Audi comes up with LED lights, everyone else has to spend valuable capex in building LED lights, or be left behind, etc.). For every new vehicle created, 50% of the money spent goes into components that go unnoticed by the consumer (I’m a 100% sure that most of the Bugatti Veyron’s owners never noticed that the car came with a special horn that would not go off by accident whenever the car’s magnificent W16 engine was given the beans) - only 50% is spent on things that differentiate your product. All of that, and a whole litany of complaints specific to the auto industry. The only cure for this, he said, was to have more tie-ups between companies in the industry, increase commonality between platforms, engines, etc., so that money that could be spent better elsewhere.
Once again, this wasn’t a new idea. People who’ve been sufficiently high up in the industry have understood since time immemorial that consolidation was the way forward. When Lee Iacocca was at Ford in 1971, he had negotiated a tie-up with Honda on similar lines (Honda would sell Ford 300,000 engine-and-transmission sets at $711 each) until Henry Ford II told him, “no car with my name on the hood is going to have a Jap engine inside”. After he got fired from Ford, he wanted to build a company named “Global Motors”, which would bring together Chrysler of the USA, Renault of France, and Mitsubishi of Japan. The resultant combo, he believed, could take on any other competitor.
Back to the slide deck, though. While Sergio Marchionne is dead, we can see that his ideas still drive FCA - because FCA and Peugeot announced a merger, making them the 4th largest automobile manufacturer in the world after Volkswagen, Toyota and Nissan-Renault-Mitsubishi. Just imagine all the cost savings! All the synergies! Wherever Marchionne is today, I can bet you he’s happy.
Imagine you are a South Korean Army officer. You’re at a high-powered desk job somewhere at HQ, making big decisions about how to save your country in case Kim Jong-un, or Trump, or China go bananas (must be pretty difficult to be a South Korean Army officer). One day, your President calls you and requests you for 12 of your best snipers for a mission so secret that he declines to even tell you about it. You assemble a team of 12 of your finest, give them the customary “do good by your country etc.” speech, pat them on the back, plie them with Soju and send them off to the border, with a song on their lips and not a care in their hearts. You imagine that they’re going to take out a high value target, possibly a North Korean big shot who’s been annoying your country for a while.
A week goes by, maybe even two. No news out of those guys you’d sent off. “Must be a dangerous mission, that requires them to stay undercover for long periods of time”, you think. Then one day, all 12 of them walk back, looking tired, but happy. You’re as curious as anyone else about the nature of their mission. Surely, they knocked off a at least a couple of North Koreans for all the time they spent there?
At the debrief, they tell you that they’ve been killing North Korean pigs. This is not a euphemism. They have been killing North Korean pigs, for the past two weeks. An outbreak of contagious illness threatens the pig stocks of the world, and North Korea has refused to declare any cases within its territory. And also, while there are restrictions on the movement of people in North Korea, there are no such restrictions on their pigs (did Kim Jong-un read Animal Farm, by chance?). So their pigs have been crossing the border and infecting South Korean pigs, which is how the entire sniper mission came about.
There you go, hope you have a great week ahead.