Business Iteration and Covid Vax Decisions

by Jaffer Ali (follow @Jaffer_Ali1)

 The following is a tweet thread sent 5/13/23

1/ Friends, it has been necessary to iterate our business several times over the years. We have seen so many changes in technology, buying behaviors (we used to send out paper catalogs!), selling on TV to selling on the Internet, etc.

2/ One problem entrepreneurs have (well, all businesses for that matter) is not keeping up with the changing landscape. And change happens faster and faster due to the *knowledge doubling curve* escalating. Think about what is the half life of “knowledge”.

3/ If you think what you know about business today will last very long, you are delusional. I am not talking about Truths, but things do not work the same way. If you are a taxi driver, it is silly not to contemplate the way your industry has changed with Lyft & Uber.

4/ With data and information flooding our ability to assimilate it, we need to make decisions WITHOUT waiting for the full “evidence” to materialize. This is a cousin of making decisions under conditions of uncertainty.

5/ If you think that all you need is more data, more information, more knowledge to achieve some form of certainty, do not go into business. Go on home and take the short cut because the world is too complex and unpredictable to become certain on what way you need to iterate,

6/ So really, the skill needed is to make decisions with LESS INFORMATION, not wait for more because there is never enough. You will be wrong often, so you need to learn how to clip your left tail risk. You need to survive your inevitable mistakes.

7/ The process of iterating our business and deciding NOT to get the Covid vax had similar impulses. What? It was not certainty or evidence that kept me away from the vax. It was data that I KNEW second hand was *cooked* PLUS the vax being experimental PLUS

8) a healthy skepticism of Big Pharma PLUS a distorted informational landscape. Others with other pieces of evidence chose to get vaccinated. Many of both sides became evangelists for their decision. IMO, evangelizing either position implied a level of certainty.

9) Whether business or your health, we filter massive amounts of information. Entrepreneurs with a bias to action, will not be paralyzed by that knowledge but act with little information and iterate their business model. Is acting with little evidence domain specific?

10) The answer is deeply psychological. FEAR determines action in each domain. In business, losing money creates fear. In health, dying or bad outcomes create fear.

11) In the end, we all need to face our lives with humility and understand uncertainty rules. When I get a chance, I will write an essay, “Uncertainty Rules”… humility is the #1 rule. And never use uncertainty to paralyze action in most domains.

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Jaffer Ali is the CEO of PulseTV and TrySERA

Exchange Economics

By: Jaffer Ali

What are the basics of Exchange Economics? How do they make money? This is a short guide. If you read this thread, you REALLY should consider getting your Bitcoin off exchanges. FYI 99% of other shitcoins will be going to zero on or off exchange, so do whatever you want w/ ’em 1/

Exchanges charge a % of the transaction buying or selling. B) Exchanges trade against clients. You put a buy limit order, they buy & sell to you and make the difference. You put a sell order at X, they make money the other way c) Exchanges lend out BTC, charge interest. 2/

They own their own BTC, but like FTX, many of them lend out YOUR BTC. They thus have no cost of goods and as long as there is no bank run, they can satisfy withdrawals…until they can’t. 3/

D) They let you keep your cash and BTC on the exchange for *free*…sure, why not because they can OUTRIGHT SELL YOUR ASSETS and keep the money (see FTX). I am not making this up. 4/

E) Even when exchanges sell your BTC for cash, you log into your account and it will show that you still own what you bought. And if you want to withdraw, they will just take it from a different account. as long as no bank run, you do not know if your BTC is REALLY there 5/

F) If they get too many withdrawal requests, the first go to practice is to SLOW WITHDRAWALS. They rest on customer service incompetence rather than fraud to slow withdrawals. But this is only stage 1 of withdrawal woes. 6/

G) When the withdrawal requests become too many, exchanges will HALT WITHDRAWALS (see Celsius, Voyager, FTX, Genesis, etc.) Why halt? They FRICKIN’ have sold it out the back door or pledged it as collateral and liquidated. They PLEDGED YOUR ASSETS for THEIR GAIN. 7/

H) Exchange Economics is very flawed as a business. But is ideal for fraud and accumulating assets. Beware of all FREE services. Exchanges are not banks, but run by traders who think they can outsmart the market. 8/

I)The “Not your keys, not your coins” mantra is catchy and while true, it takes a while to deconstruct how exchanges screw their clients. 9/

J) The only reason to have your BTC or assets on an exchange is if you are planning to trade short term. Buying BTC and leaving it on any exchange puts you at the mercy of Exchange Economics. End of thread.

Whip That Boy!

By: Jaffer Ali

“Masters desired to maintain order in a society in which they were in unquestionable positions of authority” – Michael Dickman, Historian **

It looks like Ye, formerly known as Kanye West, is in trouble for saying things considered anti-Semitic. He has been dropped by Adidas, had his banking relationship with Chase Bank withdrawn, TV and Movie studio MRC cancelled release of his documentary, he’s been suspended from Twitter and abandoned by everybody from the mother of his children to friends like Jay-Z.

Whip That Boy!

What Ye is discovering first hand is a centuries old practice of how a minority can maintain its grip on the masses when severely outnumbered. Back in the days of the slave plantation, overseers on the Master’s orders would pick the biggest and baddest slave, tie him to a tree and whip him in front of the rest of the slaves.

This was to be a warning to all the other slaves to keep them in line. The Master would not have to whip each slave, just pick out one periodically for whatever infraction to frighten the rest. The photo above became famous and circulated throughout abolitionist circles.

This essay is not a spirited defense of Ye, but an explanation of the well-developed technique of how Oligarchs or those in power attempt to maintain “order.”

Whip That Boy!

In colonial India, the British General, R.E.H Dyer surrounded a peaceful crowd of protesters and opened fire. His troops fired until they ran out of ammunition. This became known as the Amritsar Massacre. At the inquiry, where he was cleared, he defended his actions by saying his intentions were to create an incident that would reverberate throughout India and the Empire.

Of course General Dyer was not without full throated supporters like the famed Rudyard Kipling who declared, “[he] did his duty as he saw it.” Case closed, I guess.

Whip That Boy!

Oligarchic power recognizes that it is in the extreme minority and *needs* an effective way to tame the slaves. In the Middle East, dictators and/or monarchs, with their imperial Western masters, routinely pick a group or country to lay waste to as an example to keep the rest of the region or nation in line.

This was one reason the U.S. brutalized Iraq and decimated its infrastructure. Iraq was a warning to others in the region. Gaddafi did not get the message so Libya was additionally made an example of. Of course, there is never a shortage of those defending the whipping. This is especially true for foreign whippings. Neoconservatives from both parties fulfill Kipling’s role and have many obliging Op-Ed pieces in major newspapers to act as a salve to cover the scars. The whipping was necessary.

Whip That Boy!

Israel uses Gaza as the slave tied to the tree. Every few years, Israel will brutalize Gaza to be a warning to the other Palestinians under its control. The brutalization is carefully coordinated to be swift as to not result in a global PR backlash.

Of course, just as the slave Master pointed to whatever the infraction was that drew the whipping, Israel and its protector, The United States, have a clever narrative arsenal to blame the Gaza slaves. The “victim” is always inverted. The brutalized are whipped and painted as the villain. But the Master with F-18s, tanks, helicopters, cluster bombs and all modern weaponry is depicted as the victim and if you think or say differently, YOU are the anti-Semite.

Whip That Boy!

I have never been a fan of Kanye West. His confused ideology is not my cup of tea. But the entire business and media industry has tied Ye to a tree and economically castrated him. How much remains to be seen. We see many joining the campaign and few are coming to his defense. And that is the point. If you defend free speech, you become the racist anti-Semite.

The thing about the whipping of Kanye West is that it is actually creating an even larger rift between the Jewish and Black communities. West’s view about Jewish power in media is seen to be proven by his whipping. The photo featured here is called “Whipping Peter.” He was a slave obviously whipped who escaped and this photo was one of the things that united white liberals in the North against the institution of slavery.

When they tie a slave to a tree and unrelentingly whip them, whether in a colony, prison, or plantation, Oligarchs tread the cliff between message and mutiny precariously.

**From “Honor, Control and Powerlessness”

https://dlib.bc.edu/islandora/object/bc-ir:104219/datastream/PDF/view

Bitcoin And The Search For Value

by: Jaffer Ali

I recently wrote a short tweet thread about the relationship between *math* and Bitcoin. That thread can be read below and I will amplify afterwards.

I think both Bitcoiners and Nocoiners make a mistake in believing BTC is about *math*.  BTC is not a probability equation, but a risk problem. Trying to handicap the future price of BTC is a waste of time & even if your guess turns out to be right that would be luck. 1/

But understanding your RISK is a different issue completely. Your investment/speculation/gamble should be based upon the level of risk you can tolerate comfortably. If your risk=0, go on home and take the short cut. BTC would not be for you. 2/

If your risk tolerance is “non-zero”, it is almost stupid not to have some BTC. Why? The potential asymmetric upside (which is not calculable) could be huge. This is not a hopium dream, but understanding that there are many attributes that many like about BTC.  3/

To be clear, these attributes might not necessarily hold sway. The positive attributes of horse carriages did not last forever. But the point of this thread is that Bitcoin’s future price cannot be reduced to formula and is not a math equation. 4/

My suggestion is to disregard both Bitcoiners and Nocoiners who say “Bitcoin is about math”. Bitcoiners who handicap probabilities of BTC hitting X, Y and Z prices to come up with an expected present value bring you no closer to understanding your personal risk. 5/

Those making counter mathematical arguments also have nothing to say about your personal risk. So, get a handle on risk before you get out your wallet. 6/

Let’s unpack this a bit. I am using the term “risk” in a non mathematical way divorced from probability. This is often the way entrepreneurs use the term “risk” and I am applying it to what I call the Bitcoin investment, speculation or gamble thesis. Entrepreneurs will contemplate the consequences of an enterprise going to zero. They look at what life looks at zero in other words. Can they withstand the enterprise going bust? Or a marketing campaign going bust?

And this is my approach to Bitcoin. Can I personally withstand BTC going to zero? While the potential asymmetric upside of Bitcoin cannot be reduced to a mathematical equation, it is rather obvious that it COULD have a huge upside. Nobody can with any precision come up with a probability of BTC going to X, Y or Z. Even if you calculate a multitude of probabilities and thus come up with the expected value of X, Y or Z, this will not help you if there is a non zero chance of Bitcoin going to zero. This last sentence does not mean you *should* avoid BTC, it suggests that you *should* only put money into BTC that you can withstand it IF it goes to zero.

The above is a simple rationale for buying Bitcoin.

The rationale for staying away from Bitcoin is generally laden with empty opinions that use undefined terms of value. Even the likes of Warren Buffet will pontificate that Bitcoin has no “intrinsic value” which he knows is a concept devoid of meaning. Nothing has intrinsic value. Immediately consider purveyors of intrinsic value clownish.

Other critics will pronounce that BTC has no utility therefore has no value. Putting aside whether the pronouncement is true or not, critics seem lost and fail to understand that the utility theory of value is a rabbit hole that anyone daring to crawl inside will be lost forever. I do not argue Bitcoin’s utility but the well trodden but misbegotten ground that utility is essential for something to have value is for children. Bitcoin critics using the utility argument should not be taken seriously.

Another search for value or more to the point a rationale for the anti-BTC thesis is that there are no cash flows from a BTC investment and thus any discounted cash flow analysis cannot properly be undertaken. And if in 140 years after the last Bitcoin will be mined, there might be no incentive to maintain the BTC network. A network that has no way to monetarily compensate former miners, this critique says the expected value of BTC with a compromised network goes to zero. Even if the assumption *might* one day be correct, it is not terribly relevant for the outlined risk proposition of putting money into Bitcoin today. As for discounted cash flow equations, they are filled with assumptions that are thinly veiled opinions masquerading with the patina of mathematical precision.

The case against Bitcoin is without rigor as is the case for it. All appeals to math for or against BTC are hollow but what remains is one’s risk tolerance amidst an incalculable potential upside. This is a verbose explanation of why your investment, speculation or gamble in Bitcoin should be guided by how much risk you can comfortably handle to sleep at night. Pundits cannot help your sleep routine.

Delete PayPal Tweet Thread on 10/14/22

by: Jaffer Ali  (@Jaffer_Ali1)

The following short Twitter thread is an important one because PayPal announced and the rescinded the arrogant change in their AUP (Acceptable Use Policy) which stated that they would fine a user $2500 per EACH INFRACTION of what they considered “misinformation”.

If you read this, consider joining the Delete PayPal team. Here you go:

Those that sit atop w/ power have 2 basic ways to maintain their position: 1) Thru brute force as in authoritarian societies 2) Thru persuasion in liberal democratic societies. Both will control or at minimum influence the information landscape to maintain power. 1/

This is not new. Oligarchs have been doing this for thousands of years. It is important to understand the mechanics. They need to control narrative to maintain their position. With MSM, it was relatively easy to limit debate and push competing narratives to the margins. 2/

Social media initially changed this and continues to be a thorn to Oligarchs. Enter algorithmic suppression and outright canceling, yet the structure of social media makes it difficult for Oligarchs to *eliminate weeds” and those challenging official narratives are the “weeds”. 3/

There are many unwitting idiots that support Oligarch’s overall narrative control. It is quite easy to spot them and they cross the entire political spectrum. But algos are not effective in containing a bottom up protest. 4/

PayPal lending its resources to its fellow Oligarchs stepped in sh!t thu its arrogance. Their plan was to use economic threats to limit narrative inimical to the prevailing agenda. PayPal’s announced $2500 fine for “misinformation” was a poor euphemism for narrative control. 5/

PayPal’s gambit was a desperate gasp & basically an admission that social media can’t fulfill media’s historic role, which was/is and will always try to spread the myths & narrative of Oligarchic power. 6/

If you have read this far, the previous tweets form the rationale to #DeletePayPal. I deleted for my sons…and for my future grandchildren. Be an example that says, “Today I will not bend the knee”. Use whatever voice you have to spread the word. Delete PayPal today. 7/

Bitcoin HODLers Who Tell Others To Spend Their Bitcoin

by: Jaffer Ali

“There are two things which a man should scrupulously avoid; giving advice that he would not follow and asking advice when he is determined to pursue his own opinion.”

 – Norm MacDonald

For new people, HODL was a misspelled version of “hold” that turned into an acronym, “Hold On for Dear Life”. It now is shorthand for those Bitcoiners who want to hold onto Bitcoin and not trade it.

What is at the essence of HODLing? Every Bitcoin HODLer I have met believes that the price of BTC will go up in the future. The logic is compelling when you match their actions with that belief. But there is a curious group of Bitcoin HODLer that maintains their stack while promoting OTHERS to spend their Bitcoin to purchase a TESLA, buy a cup of coffee, etc.

Their rationale is that they can hold two ideas at the same time. Yes, I understand. The two thoughts are; I will hold on to my Bitcoin and you should support adoption by getting others to take your Bitcoin. I am speaking of people in first world countries, not third world nations or countries with rampant inflation whereby merchants will not accept fiat.

But the advice these *dual purpose* HODLers have for others is be good Bitcoin citizens and help adoption, all the while hoarding their BTC like they were pre-1965 silver quarters. They shift the emphasis to merchants accepting BTC for goods and services. I understand the benefits to merchants. I am a merchant. When a consumer uses a credit card, they can charge back and merchant fees are generally over 3% that the merchant pays.

Consumers using a credit card not only have consumer protection laws plus get a 30-day free loan if they pay the balance within 30 days. Often cash back on purchases too. But the advice for being a good Bitcoin citizen sees adoption as a currency to be a primal objective…that is again, for others. The more convicted HODlers are, the less they want to part with *good money* and rather dispose of fiat.

Of course Satoshi’s original vision was for Bitcoin to be an uncensored, global currency. That is the gist of his white paper. But the real world has a different use case for Bitcoin; a digital property that could emerge as a store of value. Some liken it to gold. This is why 65% of BTC has not moved from wallets in more than a year. These people are not using it for buying coffee, land, or a Tesla. They are treating it as either an asset or hoping it to become one.

Putting aside the use case that Alex Gladstein makes (which is compelling for underdeveloped counties), the shift from consumer HODL to merchant is troubling. The common refrain is that consumers can spend BTC with a merchant and immediately buy more BTC, and therefore do not lose anything. Of course the merchant is always free to use fiat to purchase BTC. Optionality for the merchant is important as is the optionality for consumers.

I find advice to spend Bitcoin while HODLing problematic. I personally do not give BTC advice. I did not give ANYONE advice to get vaxed or not vaxed even when asked. At most I would only say what I did (not vaxed if you are wondering). If anyone asks me for advice about Bitcoin, the most I will do is tell them what I do.

But if someone gives vax advice that they personally do not take themselves, what would you think of them? The same pertains to Bitcoin advice. We should not just to ignore these people, but they should be ostracized and shunned. I might be a bit harsh. They are a confused lot who have not understood that Bitcoin adoption as a currency and adoption as a store of value are at odds.

[One more time for emphasis, I am not speaking of the unbanked or nations that are experiencing a Weimar-like inflation of their currency]

There is a lot of misunderstanding regarding the Bitcoin value thesis. The confusion surrounds either utility or thinking an attribute of value is the same as value. An attribute of BTC’s value could be; scarcity; transportability; divisibility; security; censorless or any number of other attributes. People make purchasing decisions based upon how much they like one or more attributes of a *thing*.

But whatever your opinion is about Bitcoin, it may be best to limit one’s advice to what the advice giver actually does.

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Jaffer is the CEO of PulseTV and TrySERA and can be followed on Twitter @Jaffer_Ali1

For feedback: bitcoinfeedback@gopher-news.com

Gresham’s Law, Bitcoin And My Father-In-Law

by: Jaffer Ali

Below was a tweet thread sent on 8/19/2022. It was raw and spontaneous so please forgive spelling and grammar.

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My father-in-law taught me Gresham’s Law. He was a simple man with a H.S. degree, worked as a janitor most of his life. Not only did he not formally know Gresham’s Law, I doubt he could spell it (said affectionately). But he demonstrated a keen understanding of it. How?

Before 1965, all quarter coins in the U.S. were made of 90% silver. From 1965 on, quarters were made of a mixture of cheaper nickel and copper. Both the pre-1965 silver quarters and post copper & nickel ones were both *worth* 25 cents in circulation. 2/

But the silver quarters had more real value for the silver, so my father-in-law instinctively started collecting the pre-1956 silver quarters. He would never spend those, but instead, horded them and spent the *cheap* hybrid coins. 3/

This is a classic case of bad money (copper & nickel) driving out good money from circulation (90% silver). When he died, his wife and children had no idea that he saved thousands of these *good coins*. He willed so many to his children and grandchildren. 4/

Voila! Gresham’s Law in actual practice. I had never heard of that principle until years after he died. When I read about the law, it was already ingrained thru witnessing it in action. 5/

Now as I try to understand Bitcoin and Bitcoiners, there is a disconnect. Many proponents like to think of BTC as “the best money ever created”, better than silver and gold…and of course better than fiat whichever nation they live. 6/

But pay attention…do they REALLY BELIEVE that BTC is *good money*? And if they do, why are they applauding every time someone uses BTC as a currency and this parts with the *good money* rather than horde it. 7/

I am not talking about 3rd world currency use cases with unbanked people…but in the U.S. There is cheerleading to part with *good money*. Gresham’s Law in reverse…it is like spending pre-1965 quarters. of course, that is if the pro BTC thesis is correct. 8/

I am just pointing out that anyone advocating spending BTC to buy a TESLA, Houston Astros skybox, or Starbucks coffee is akin to telling my father-in-law to use the silver quarters to buy a pack of gum. 9/

BTW, I am NOT ARGUING here that the BTC thesis is correct, I am pointing out that if one BELIEVES In BITCOIN as sound, good money, it is a folly to promote using it as a currency (again, in the U.S). 10/

There are exceptions like when one NEEDS to spend BTC because they have no other fiat to spend… or do not want to be over exposed to BTC. I know people who have had to sell their gold for fiat-moving from sound money to fiat since gold is not accepted at the grocery store. 11/

The confusion of Bitcoiners is similar to nocoiner confusion because they associate use (utility) with value, an utterly childish notion that is very *sticky*. So they applaud using BTC use (in 1st World Countries) BECAUSE they want to prove its utility…and thus value. 12/

One addendum to Gresham’s Law. There can be an inflection point when bad money is so compromised in a country that nobody wants to accept it. I was in Argentina a couple of years ago and merchants sighed when I pulled out Argentine pesos to pay. 13/

I imagine this is going on in Lebanon as the country is basically becoming dollarized with inflation skyrocket…So when a currency becomes so worthless (bad money), *good money* drives out bad money. A reversal of Gresham’s Law. 14/

And this last point is one reason why BTC and/or the U.S. dollar in 3rd world countries may make sense. But not in the U.S. IF THE BITCOIN THESIS is correct. 15/

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Jaffer Ali is a serial entrepreneur and is the co-founder of PulseTV and TrySERA. You can follow him on Twitter @Jaffer_Ali1

Why BlackRock $8.5 Trillion Fund Is Good For Bitcoin

[What follows is not investment advice. It is an opinion on what the recent BlackRock news means for the future price of Bitcoin.]

For feedback, use the link below:

bitcoinfeedback@gopher-news.com

BlackRock’s Bitcoin Moves – by Jaffer Ali

“Five years after calling Bitcoin an “index of money laundering, BlackRock’s Larry Fink is getting laser eyes.” Politico

Unless you have been living under a rock, whatever color, BlackRock CEO Larry Fink’s announcement on 8/11 may end up being the most profound day in Bitcoin’s history since Satoshi released his white paper. This was the day he announced that the world’s largest asset manager was creating a Bitcoin trust for institutions.

What does that exactly mean?

BlackRock has over $8.5 Trillion in assets under management. This means pension funds and other institutions have invested their money to let BR manage their money to get yield on their cash reserves. And now BR will allow these institutions to buy shares in a newly created company to get exposure to Bitcoin’s price.

Blackrock will go into the open market to purchase Bitcoin and hold in the trust, just like Grayscale Bitcoin Trust did (GBTC). Ok, so why is that such an important event in the history of Bitcoin?

“Large asset managers are starting to consider this a real investment. I think it’s a major data point in terms of traditional asset management companies embracing what really for years has been almost ridiculed.” – Chris Brendler, research analyst at DA Davidson.

Since Satoshi’s white paper and the first BTC mined, Bitcoin was almost exclusively a retail investment or used by consumers as a currency. But BlackRock’s announcement signals a shift or rotation from retail to institutional investors for the digital asset. Institutional adoption brings huge investment into Bitcoin and thus the price “must” inevitably rise as increased demand meets a capped, scarce supply.

Institutional adoption has been foretold by many people from Shark Tank’s Kevin O’Leary, Bloomberg analysts and Bitcoin bull Michael Saylor. Most predictions were couched with the caveat that institutions would not join the Bitcoin party until regulations paved the way for safe investing. But BlackRock is changing this condition in real time.

It is one thing for Central Africans and El Salvadorans to adopt Bitcoin, but quite another to see multibillion dollar pension funds invest money in entities that hold Bitcoin. BlackRock is front running regulations to get ahead of other asset management companies. If the newly formed BlackRock Bitcoin Trust for institutional investors is successful, it is likely that BR’s competitors like Vanguard and Fidelity will also create vehicles for sovereign wealth funds, pension funds and large institutional investors to take advantage of current BTC prices before what Kevin O’Leary calls a “coming tsunami” of institutional money.

“We know they [crypto currencies] are a speculative investment, but we have identified it as a long-term trend.” – David Botset, at Charles Schwab’s asset management arm.

Once regulations become law, pension and institutional funds will buy Bitcoin directly and custody the coins with banks. Also corporate treasuries will be more amenable to adding BTC to their balance sheets as well. This would save them management fees that the trusts and funds charge. But the profound shift from retail to institutional adoption has other consequences. Bitcoin will emerge as a store of value asset. This will be its primary use case, but of course this is my personal speculation.

The old guard Bitcoiners that dream of a global currency supplanting fiat will not be happy. Many of the plebs who have been front running institutions will most likely sell out cheap, booking their gains while the super wealthy march toward a Pareto-like distribution where 80% of available Bitcoin will be owned by just 20% of the people…just like land or other assets.

So the largest asset managers who have all taken a beating in the first two quarters this year are looking for a way for high yield returns to stem the tide of money leaving their funds. There are few places to generate high yields and Bitcoin *could* be this asset. Asset managers are faced with the dilemma of offering exposure now before regulations are passed or see BlackRock scoop up pre-reg money.

BTW once regulations come out, these asset funds will most likely put BTC into their fund portfolios. Is this first-hand knowledge? No, it is my personal speculation… and informs my “bet”.

*****

Jaffer Ali is the CEO of PulseTV and TrySERA. You can follow him on Twitter @jaffer_ali1

Supply Chain Problems vs. Demand Problems Tweet Thread

by @Jaffer_Ali1

Supply chain problems usually work themselves out rather quickly. The REAL PROBLEM occurs when there is a DEMAND PROBLEM. Supply side folks generally miss this because they think supply is everything. This is such a common problem.

Curing supply chain problems *can* affect demand but this is only one vector. The REASON forecasting is so difficult is BECAUSE future demand is not reducible to formula. BTW, the discounted cash flow wonks are manifestly delusional as the real world destroys their models.

Forecasting demand is humbling and subjective. It does not mean that it is irrational, except it becomes so when you trust the DCF subjective model as if it is real. The model is not real world and EVERY model requires humility as our data/information/knowledge doesn’t = wisdom.

You never get to wisdom w/o humility. So data/information/knowledge + humility can lead to wisdom. So what does this have to do with what is going on today? We are experiencing a real problem with consumer demand in the U.S. This is what we see by sending out 3 million emails daily.

A raft of *reasons* for declining demand may be used like: consumer debt at an all time high, the post pandemic splurge has exhausted consumers, anxiety over a multitude of political issues, a belief we are in recession, or whatever.

The reasons for a DEMAND PROBLEM are not easily addressed like SUPPLY PROBLEMS. This difficulty causes most to concentrate on SUPPLY ISSUES (they are important), but real world solutions require addressing the multitude variables of demand.

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Jaffer Ali is the CEO of PulseTV and TrySERA. He has written more than 200 essays and articles covering media and online commerce. I can be reached at j (dot) Ali at PulseTV (dotcom)

Twitter Thread by Jaffer Ali

@jaffer_ali1

Friends, I firmly believe in the power of knowledge, but spend more time trying to understand the limits and use of knowledge that leads us astray. This is one reason I attended RWRI 5X (I am a slow learner).

Over the years, I became aware that entrepreneurs like me make decisions differently than reductionists. Innovation and/or novelty do not give way to models and math. AI, data nerds and reducing a landscape to mathematical equations is hampering the intuitive spark that lies at the essence of the entrepreneurial spirit.

What I’ve done in the past 40 years across domains cannot be taught. There is no *how to* manual that captures that Divine spark of creation. The entrepreneur that combines intuition with ACTION has a different *matrix*. Even with that “DNA”, the world “conspires” against ACTION. And what I mean by ACTION is not just doing stuff, but a boldness to create, to move, to defy what others are too scared to try. To act in the face of overwhelming uncertainty… not piddling uncertainty, but acting when 99% cower in fear and remain dormant.

Some may label the entrepreneur as irrational even crazed nutcases. Remember Robert Fulton, inventor of the steamboat (called Fulton’s Folly). Entrepreneurs may and often go broke (been there, done that myself a few times), but the valleys of failure pale next to the exalted heights when that intuitive spark overcomes all the odds that naysayers blather and gawk …

Entrepreneurship is about much more than monetary rewards. Overcoming the negative nay saying nerds to realize a vision is a soulful reward and almost akin to a religious epiphany.

I will leave this thread with a short passage from Patton’s essay, “The Secret of Victory“. Replace “war” with “entrepreneurship”:

Despite the years of thought and oceans of ink which have been devoted to the elucidation of war, its secrets still remain shrouded in mystery… War is an art and as such is not susceptible of explanation to fixed formulae. Yet, from the earliest times there has been an unending effort to subject its complex and emotional structure to dissection, to enunciate rules for its waging, to make tangible its intangibility. One might as well strive to isolate the Soul by dissection of the cadaver as to seek the essence of war by the analysis of its records.