I love business building.

Having said that, my bar for reading business content has only gone up.

I rarely see books worth reading in the bookstore.

Instead, I prefer to find the "best person at X" and watch them do a podcast.

There's one book I did actually read recently that was more than worth it.

$100M Offers by Alex Hormozi.

(If you haven't read it yet you should check it out. Take it as my book recommendation for the year.)

The reason I'm writing is that Alex is releasing Volume 2 of the book $100M Leads.

I'm pretty sure this will eventually be recognized as the #1 business book about how to get more customers for any business and any product.

Moreover, Alex is doing a virtual book launch on Saturday August 19.

Knowing his promotion approach, this could be the biggest live streamed business content event of the year (think Apple).

You should definitely join.

Just to be transparent, once 10 of us sign up and attend the webinar through the above link, we get access to 2 unreleased chapters from the book.

I'll be breaking down the learnings from those chapters in my newsletter so make sure you're subscribed.

If you'ŗe curious I also recently mentioned Alex Hormozi's content in a post about how to find & release bottlenecks in your business.

It's been years since we talked. But that's on me.

See I was always bad at writing. Couldn't write a good essay at school. Luckily I knew a bit of math. Got as far as McKinsey where I nearly got kicked out for subpar "communication skills".

Ouch.

I did eventually figure it out there. Didn't learn how to write, but learned to lean on my superpower – learning. If I could outlearn others, just maybe the insights I pulled together would be more interesting. It worked.

Turns out people who are good at saying things sometimes need people with good things to say.

Then I became a Founder.

The job doesn't just benefit from good writing – it demands it. Content marketing in particular was something I thought would be useful. Unfortunately frequency, quality, niches and topics were not things I had a good grasp on. So many interests, so little commitment to pick one and write something coherent.

I'm trying to improve.

For the past couple of years I've realized that the best insights come from being deep in the mud, not deep in books. So I've started a newsletter again.

This time about building in crypto.

Four issues in and loving it. Some of you are already there.

Join us if you want insights from deep in the mud.

Join us at https://research.auditless.com.

Ash Fontana, Managing Director of Zetta Venture Partners recently published the AI-First Company, a strategy book on AI for the entrepreneur and executive. Knowing Ash and the depth of his thinking on AI, I bought and read the book immediately.

Ash was also kind enough to provide some additional insight for the benefit of the newsletter readers. I hope you enjoy his thoughts and the book. Scroll down for my reflections.

Peteris: AI has been tremendously powerful in enterprise "value" products: running predictions, extracting insights, even saving time by generating text/images and other assets. Equally, AI has been helpful for consumer "engagement" products: recommending things to buy, articles to read or people to follow. Then there are engagement or workflow B2B tools like Slack, Webflow, Zapier, etc. Do you see AI making an impact there?

Ash: Yes, and now is the time it will make an impact. We've been trying to use AI to add functionality and utility to such workflow tools for years but it's mostly been in the form of search, and that hasn't utilized many self-learning methods. I think that we're only just starting to see the potential of recent developments in natural language processing, i.e. transformer-base models, manifested in workflow products. The potential there, to be clear, is to infer the workflow underway from the sequence of phrases people type into such products, e.g. questions they ask a colleague in a chat, what they name a step in a macro, what they type in a search box, etc.

Peteris: Have you read 7 Powers? I'm always looking to fuse different strategy frameworks and see how they match up. In terms of how you think about AI - do you think it fits with the 7 Powers framework (e.g., perhaps data moats being a form of network effect) or do AI-first companies have a different set of powers?

Ash: I have read the book. Generally, I wrote The AI-First Company, because I don't believe that anyone has, to date, articulated the type of competitive advantage built with AI. We tend to use concepts like a network effect, scale effect and learning effect but none of them fully describe the automatically compounding competitive advantage built with AI. That competitive advantage - which I term a data learning effect - is more powerful than anything we've seen before because it gets better with every run of the machine learning model, for example. Data learning effects involve getting a critical mass of data, using internal/learned capabilities to turn that data into information, then putting that information into a network of models that learn as calculations are done in and between different models.

Peteris: What kind of AI-first companies are you most interested in funding these days? Any technologies or market verticals that exist now vs. 2019 that create new opportunities for Founders to jump in?

Ash: I'm completely focused on funding the tools and infrastructure used by people to build AI. There are so many applications, in so many industries, but they need the utilize the expertise of people in those industries to get going; we need domain experts to define the predictive features of AIs and train them up to a sufficient degree of accuracy. So, I'm investing in tools to build, train, deploy, monitor and manage ML models.

***

As you can glean from the answers, Ash has contemplated existing strategy frameworks carefully in coming up with a holistic approach on how AI creates value in companies. My bias is always to attempt to fuse and integrate different frameworks together and I've long been on the hunt for the default tome to describe "data moats".

AI First does this and more. It introduces the more general term "data learning effects" (DLEs) and describes how they intersect with several traditional moats. It's immediately become the #1 reference on AI strategy for me and it is great to finally plug that (big) gap in the strategy bookshelf.

Annual planning is a core part of "personal strategy" and has many benefits even if the plans change (reflecting on the prior year, restructuring priorities, thinking about habits).

I want to highlight 3 frameworks that are less known and could be a useful addition to your planning arsenal.

8760 hours

This is a complete planning system from Alex Vermeer and a good starting point. I particularly appreciated his focus on reflecting on enjoyable activities and the structured flow.

Goal factoring

Goal factoring is a visual way of connecting your values to specific goals and actions. Here is an example from Malcolm Ocean. It's especially useful as an antidote to optionality hunting.

Tiny habits

BJ Fogg's approach to habit creation is simple but resonates with my experience and minimizes the anxiety you will undoubtedly experience while taking on a new habit.

Happy New Year and Happy Planning!

While Cornered Resources (such as a strong early team) are commonly considered doctrine rather than a moat, the omission of process power was more interesting.

What is Process Power?

Helmer describes companies with Process Power as follows:

Benefit. A company with Process Power is able to improve product attributes and/or lower costs as a result of process improvements embedded within the organization. For example, Toyota has maintained the quality increases and cost reductions of the TPS over a span of decades; these assets do not disappear as new workers are brought in and older workers retire.

Barrier. The Barrier in Process Power is hysteresis: these process advances are difficult to replicate, and can only be achieved over a long time period of sustained evolutionary advance.

He admits that process power is rare and difficult to achieve. But is it too rare to apply to SaaS companies?

On one hand, the path to growing a SaaS business is well benchmarked and there are processes describing anything from finding leads to deploying reliable infrastructure.

But there are companies that get very different results.

The process outliers

Ahrefs is a popular SEO tool with a fifth of the engineering resources of their biggest competitor Moz. They claim to achieve this by using an OCaml based stack also favoured by Wall Street traders Jane Street.

Tiny is a start-up conglomerate that uses several ideas like simple positioning and No Code to quickly spin up new businesses in record speed. They also run one of the leading design and development studios Metalab, and one of the earliest No Code agencies 8020, ensuring excellence in both areas.

Does this mean that every SaaS company should use OCaml and Webflow or is there a way to create process advantages organically?

In an industry that speeds things up traditionally with investment, we have ignored frameworks that build process advantages in a capital-agnostic way.

Improving process

I'll offer three examples.

The first is the Theory of Constraints, a framework introduced in The Goal. The Theory of Constraints predicts that every company is usually constrained by one bottleneck at a time, called a “constraint” and releasing that constraint is the key for increasing output.

Another theory, promoted by Douglas Engelbart is the ABCs of Organizational Improvement. Engelbart argues that we should manage not only core activities (also known as “A activities” or “Business as usual”) but have explicit roadmaps for both B activities (“improving how we do A”) and C activities (“improving how we improve”). By focusing on process improvement explicitly, we can create compounding leverage for core activities.

A more modern example of continuous process improvement is described in the Protocol Series by QuantumBlack.

To summarise, having a great process is not the same as having great execution and we should not neglect that, even in SaaS.

P.S. Here is the categorization of the SaaS moats I went with. The high-level categories are from 7 Powers, the bullets are from Lemkin.

Counter-positioning

• “No Contract at all” easy on-boarding

Network effects

• Data
• Structured Data
• Partners + Ecosystem
• Agencies and Implementation Partners

Switching costs

• Integrations
• “Most Enterprise” Vendor
• Long Term Contracts

Economies of scale

• Using massive amounts of capital to play in every segment

Brand

• Brand

Cornered resource

• ???

Process power

• ???

Since I've recently migrated from Squarespace to Ghost, the blog and the newsletter are now merged in one.

Also, in case you are wondering, there haven't been new updates to the newsletter as I'm working on some new long-term content related to strategy which you will hopefully enjoy.

The McKinsey Global Institute estimates that predictive maintenance solutions will have a potential impact of nearly $630 billion per year in 2025 in manufacturing alone. This level of reduction in equipment downtime and equipment capital investment should be very attractive to reliability engineers who can recommend exploring predictive maintenance and recruit other parts of the organization to provide the necessary level of support.

The article is below: https://reliabilityweb.com/articles/entry/how-to-make-the-most-of-predictive-maintenance.

It was a memorable experience to have as a Product Manager. On one hand, I was working on a very exciting technology (using machine learning for predictive maintenance), on the other, the end users, reliability managers, were experts in operations (which I knew little about at the time) and far from early adopters. Writing for an industry article is just one example on how I had to adapt Silicon Valley product management techniques to target a different customer persona.

NOTE: This post already assumes you have installed Ghost. If you haven't, I recommend either installing Ghost Pro or going the Digital Ocean Droplet route by starting with these links which will set up your blog, Google Analytics, a custom domain and your SSL certificate:

• Basic Droplet setup https://marketplace.digitalocean.com
• Domain configuration https://blog.stephsmith.io/setting-up-blog-with-ghost-and-digital-ocean-droplet/
• Google Analytics integration https://ghost.org/integrations/google/
• Securing your blog with SSL https://robertnealan.com/setting-up-ssl-for-ghost-on-digitalocean-with-lets-encrypt/. UPDATE: this feature is now built into Ghost https://ghost.org/integrations/lets-encrypt/.

Here are the steps you need to follow to migrate your content from Squarespace:

1. Do a mass migration. Go to https://www.simonfacciol.com/squarespace-to-ghost/ and follow the instructions. This is the hardest step in the process as it will require you to install node.js locally. After this you may note that some of the images are missing and some of the internal links are not working anymore. We will address this in steps 2-4.
2. Manually recover and reupload images. Using the script above will not actually recover images, instead they will be linked to and still hosted on the Squarespace CMS, moreover there will now be explicit HTML code in your posts that will be unreadable. Just delete this code, but don't forget the caption you had on each image.
3. Set up a redirect rule. Set up a redirect.json file to make sure old permalinks point to the same blog posts. Here is the official guide on how to set up redirects. For myself, I had two "blogs" to export in Squarespace - one was called "posts" and the other was called "principles" (my example is at the bottom of the post).
4. Review permalinks. Manually review each individual blog post for redirection. If you previously renamed a Squarespace post, there may now be an inconsistent URL in your old Squarespace blog and your new Ghost blog. Go through the archive of your Squarespace blog, selecting individual links and appending them to your Ghost blog address and seeing if they redirect correctly. If they don't, just rename the Ghost post permalink accordingly.
5. Fix other embeds. As for embeds like videos and other extensions, you may want to handle them similarly to images, manually recovering the URL and finding ways to embed them in Ghost.
6. Finalize your new domain. Change your domain to point to your new Ghost blog.

Example redirects.json file:

[
    {
        "from": "/posts\/([0-9]{4})\/([0-9]?[0-9])\/([0-9]?[0-9])\/(.*)",
        "to": "/$4/",
        "permanent": true
    },
    {
        "from": "/principles\/([0-9]{4})\/([0-9]?[0-9])\/([0-9]?[0-9])\/(.*)",
        "to": "/$4/",
        "permanent": true
    }
]

Feel free to tweet me any questions or additions at @p_e.

1/ #roamcult

TL:DR; Roam is going to make Notion better

Roam is a new personal note-taking tool that helps you maintain a "second brain". It doesn't have a great design or fancy features, but it has this idea of bi-directional linking that makes it really easy to create highly inter-linked and tagged information. Initially I wanted to share this with you because I've started to depend on this tool in a matter of days. This post by Nat Eliason explains how to use Roam to power a second brain.

What's become more interesting for me now is actually their go-to market positioning. There is even a Twitter account for Roam Cult and the Founder has been quick to embrace Rich Hickey memes, attracting a particular kind of community.

I'm still rooting for Notion and I think Roam have helped them to think about a useful new feature - I can't wait for bi-directional links to hit Notion.

2/ Movement Culture

TL:DR; There is no fitness without mobility

As I'm diving deeper into my bodyweight training journey, I've discovered some interesting resources along the way. First this skill tree for bodyweight training that I've been using as a training guide and tracker: https://www.reddit.com/r/bodyweightfitness/comments/az79av/new_and_improved_bodyweight_fitness_progression/.

Second is this summary of Ido Portal's Movement Culture methodology, which introduces and emphasizes mobility into bodyweight training. Relevant for anyone who trains to improve their health and longevity and the "prehab" and mobility routines are very well curated. If you're like me it will take you some time to truly appreciate and devote time to mobility but once you do, you won't look back.

Third is this excellent podcast with Chris Sommer and Tim Ferris on why mobility is essential to strength development.

3/ Fundamental theory of Physics

TL:DR; Stephen Wolfram is the master of personal leverage.

Could a physicist decide early on to focus on building a computer to do physics for him? Could they spend decades turning that computer into a company with hundreds of employees? And could he then turn back and try to develop a Fundamental Theory of Physics? This is what Stephen Wolfram is doing and its incredibly exciting even if the avenue ultimately proves lacking.

4/ A tale of Two Silicon Valleys

TL:DR; Silicon Valley is splitting in two and you want to be on the side of innovation.

John Luttig's piece When Tailwinds Vanish is a gem explaining that Silicon Valley has been predicating its growth on massive internet market expansion which is now slowing.

It's becoming clear that Silicon Valley will bifurcate into people that will chase the old dream, long gone and focus on zero-sum games in software. There will also be people who will continue looking for new fields and new platforms like biology, crypto and others. This is something I've been struggling to articulate when explaining why I'm now in "crypto" not in "technology".

Some of the most exciting things in Silicon Valley originated in home brew computer clubs and other informal networks of tinkerers when there was no market. Crypto meetups and gatherings still feel like this with people discussing substance not high-level aspects. Recognizing these fields is hard but one of the ways to do it is to look for things that a lot of people still don't believe in or don't pay attention to.

5/ The rise of esports

TL:DR; Whatever sport you used to follow IRL is now on Twitch

My favorite sports to watch recently have been esports and endurance events like Iron Man World Championships and UTMB. The two worlds of esports and traditional sports are merging in interesting ways right now. I've watched F1 esports, cycling esports in Zwift and attended a Travis Scott concert in Fortnite. An optimistic sign for remote entertainment and something to pass the time with while we wait.

1/ An album recommendation from me and the Grammys

TL:DR; Find "Father of the Bride" on your favorite music service.

Vampire Weekend sounds like a teenage chick flick, but is the name of a band that was formed by students of Columbia University. I've enjoyed their music over the years, not least because Ezra Koenig's lyrics don't shy away from tackling current issues. The latest album Father of the Bridge took them 6 years to make and is incredible (I also recommend catching them on the concert tour if you can). In this interview he talks about why such a long break was needed.

2/ COVID-19-proof bodyweight training regimen

TL:DR; If you want to stay strong while avoiding the gym, try this workout system.

One of the most common failure modes of people working out is working too hard without a clear plan for progression. Here's how it goes: you commit to 10 push-ups per day. After 30 days you don't feel like you are much stronger or can do that many more push-ups, so you stop. Or maybe you start running and eventually build up to running 5k. So three days a week, you do your 5km run, trying to beat your previous time. Of course that fails, because it's unsustainable to do 3 high heart rate runs per week.

It's easy to include progression in weight training. You simply add more weight every week to whatever you are lifting. Bodyweight training doesn't accomodate for that. If you're also put off from going to the gym, you need to find a way to create progressive load through bodyweight training.

Enter this workout system. Using varied exercises that impart more leverage, it allows bodyweight training to get progressively harder to develop more strength.

3/ Loops connect moats

TL:DR; When building a moat, devise a loop that connects with an existing moat you have.

I love loops as a way of understanding company strategy. But the idea of a single complicated loop is highly non-reductive and too complex to be useful as a model. Above is the Disney loop.

I wrote a draft article laying out a simpler theory where loops are simply ways to go from one set of moats to another. More detail in the article. I think this is a useful extension of the 7 Powers strategic framework.

4/ Async and remote working

TL:DR; Async is a stronger form of remote work.

Auditless is a remote-first company. This happened organically but fits well with our beliefs - talent is global, asset-light is high ROI, etc. There are some adaptations one has to make that are now becoming relevant for more and more companies. Being remote is one thing, but being asynchronous is a whole other challenge. Remote means relying on Zoom for all meetings and Slack for conversations - it's simply bringing things offline. Asynchronous means relying on tools like Notion for writing, ideation, task management, etc. to empower people to move forward without relying on others. Asynchronous creates room for the kind of focus sophisticated engineering requires.

This Gumroad document lays it out pretty well.

5/ Suhail's mega-thread on the early days of mightyapp is 👌

TL:DR; Check out this thread.

I've been following Suhail's thread about the early days of Mighty App. Just like Making of Karateka, there's something incredibly inspiring about the ups and downs of day-to-day start-uping - and it's much more educational than reading a blog post about a framework they used along the way.

1/ I launched a thing - new approach to SEO

TL:DR; Auditless launched a cheat sheet for Ethereum programming languages: https://reference.auditless.com/.

Here's a couple of things I've learned the hard way:

• Blogging = SEO. if you write a blog, the only sustainable way for you to acquire customers is to answer topics people search for. There are blogs that are primarily social media driven (Paul Graham's essays) but they are exceptional.
• The "standard" way to do SEO is to pay north of $1,000 per article every week and dump 5,000 words of keyword rich content. This is a perfect example.
• Moe Amaya discovered a better way - you can do SEO by building lightweight internet destinations as products.

That's what the Auditless Reference is.

2/ Getting overwhelmed with planning? Introducing the Traveler's Notebook

TL:DR; If you want to take notes but don't, get a Traveler's Notebook.

I've recently been overwhelmed by context switching. Notion is still pulling it's weight but I'm missing a portable think-space, something where I can jot down and lay out my thoughts to resolve problems and frame solutions better. I found this nifty notebook from Japan and will be trying it out.

It's actually a notebook system, allowing you to reuse the same notebook cover and use different refills for different contexts and purposes (albeit the whole thing is much less economical than it sounds). I'm going to be using separate refills to isolate across work, life and clients.

3/ Organising Genius, a new study group from Matt Clifford

TL:DR; Matt Clifford is starting a new study group on the topic "Organising Genius". I'm joining in London.

Matt Clifford with a little help from friends has gathered an amazing syllabus to study from the best organisations that allowed smart people to achieve incredible things (think Silicon Valley, Bell Labs, Manhattan Project).

This is a continuation of the Peter Thiel group from last year which I really enjoyed and will be a wonderful way to kickstart your 2020 reading habit. It would be great to meet some of you there.

Book clubs are a cheat code.

4/ The rise of start-up studios

TL:DR; The economics for starting a start-up studio have never been better.

What does this tweet have to do with start-up studios? Massive reduction in cost to create a start-up combined with increased competition for investment. What will this push investors to do? This will necessarily push investors to build/incubate their own start-ups as deal terms will get untenable.

Start-up studios are also pretty sustainable because they provide a clear path to continuously reinvest funds. Today's VC model today is under some moral pressure because it is intrinsically transient. Even the Google Founders don't want to work at Google anymore.

That's a sign that start-ups are not the world changing vehicles they once were, but instead a piece of equity that's expected to grow. A better model would have VCs vertically integrate with public market investors and hold the company throughout its tenure (like a studio...).

There was another great thread listing the best venture studios out there.

5/ Game design applied to Product Management

TL:DR; Game design > Gamification says Rahul Vohra.

I loved the talk, I think it is a new and useful way to think about certain productivity tools.

Related tweet: Company dashboards should feel like video games.