The Weekend Edition

Instead of lifting weights this afternoon, go for a run. Or swim. Or bike. Men lose something on the order of 5% of their muscle mass each decade after the age of 35 — hence the prescription to lift, building up to heavy weights using compound exercises. (Think: deadlifts, not bicep curls. Squats, not leg extensions.) In our love of grunting in front of mirrors, we’ve lost the plot: Cardio isn’t just good for your ticker, it’s great for business, too. Plumb the effects of a few half-hour cardio sessions on the brain — as told through science and CEOs — in the Men’s Health classic “The Aristocracy of Cardio,” by Adam Campbell, one of America’s best health writers.

Meet the people teaching your (pre-)teen about the birds and the bees. Move over, Dr. Ruth: The kids are learning about “the facts of life” (biological, emotional and other) from twentysomething Youtube celebrities. If the names Eileen Kelly, Laci Green and Shannon Boodram mean nothing to you, the New York Times has a must-read piece, but we won’t be quoting very liberally from it here — The Algorithms (the ones that decide whether we appear in your inbox or not) are crusty old buggers who prefer we not use the type of words used in the piece. Read it here.

The guy “refounding” Y Combinator: The New Yorker’s Tad Friend profiled the new-ish CEO of YC, the leading startup accelerator, Sam Altman in a lengthy piece. What’s so special about Y Combinator? “A 2012 study of North American accelerators found that almost half of them had failed to produce a single startup that went on to raise venture funding. While a few accelerators, such as Tech Stars and 500 Startups, have a handful of alumni worth hundreds of [mns of USD], Y Combinator has graduates worth at least a [bn]—and it has eleven of them.” Altman’s ambition hasn’t gone unnoticed, with venture capitalist Andreessen Horowitz saying “Under Sam, the level of YC’s ambition has gone up 10x.” YC’s cofounder Paul Graham took it a step further, saying Altman is trying to comprehensively revise the way we live: “I think his goal is to make the whole future.” (Startup Kool-Aid is particularly sweet, folks — rainbow flavoured.) Altman dropped out of Stanford University after two years to form a company called Loopt, which made it into YC’s first batch because “Altman in particular passed what would become known at YC as the young founders’ test: Can this stripling manage adults?” Loopt ended up being sold for USD 43 mn in 2012, a negative return for its VCs. When Paul Graham and his partner Jessica Livingston were looking for successors at YC, “There wasn’t a list of who should run YC and Sam at the top. It was just: Sam.”

For change at the CEO level to succeed, Altman said, the new leader has to “refound” the company and he “very intentionally did that with YC.” He shifted the strategy of the accelerator “to support startups even earlier in their life span, and a fund to continue investing in them as they grow. YC would no longer waft explorers out to sea in rickety ships but launch ironclad armadas to claim an empire. And it would mold not a few hundred companies a year but a thousand, then ten thousand.” Altman’s “terse prescience led one YC founder to call him ‘startup Yoda.’ Entrepreneurs trudge in to see him burdened by half an hour’s worth of calamities and bounce out after fifteen minutes, springy with resolve. Much of his advice follows YC’s standard imperative to transparency: if you’re worried about investors’ responses to a setback, ‘just tell them’; if you’re mystified by what a potential customer’s silence portends, ‘just ask them.’ It’s the knottier questions that elicit his cleaving judgments. ‘Don’t worry about a competitor until they’re beating you in the market,’ Altman told the founders of Elucify at his dining table one afternoon. ‘Competitors are one of the last monsters that haunt your dreams.’”

He’s right on that last one: To heck with competition, and long-live the monopoly. One of the best business books we’ve ever read (as we’ve mentioned before) is Zero to One: Notes on Startups, or How to Build the Futureby Peter Thiel. (Yes, that Thiel — the Republican, Trump-loving gay libertarian.) Don’t set out to compete with an existing business. Set out to do something completely new.

Speaking of words the algorithms don’t like: The most profane story we’ve read this week is “[Redacted] You Startup World.” Redacted excerpt: “[Redacted] your crazy work hours. Nobody gives a [redacted] that Elon musk is working 100 hours a week, and that Marissa Mayer pulling in a 130 hour work week… You’re not Elon Musk — you ain’t Marissa Mayer, you’re not going to get to space, and you won’t build the next SpaceX. Do me a favor, put your [redacted] Mac away and go play with your kids. [Redacted] your drinking culture too. Please stop celebrating every [redacted] imaginary milestone with whisky, beer, or pizza and beer. Like, every ‘cool’ company has a bar now? Oh, OK, I’ll come work for you because you have the Glenlivet 17 and not the 15. That’s why I show up to work every day.”

StartUp is back: Season 4 of Gimlet’s flagship podcast StartUp has begun, kicking off with a three-part mini-series on what’s happening in the company — and it’s all about growth. The company is hitting a point of “high spending, low revenue” as they develop new shows and are concerned about their cost structure. “Since the start of the year, Gimlet has more than doubled in size. And while growth is often the goal for a startup, it also costs a lot of money … How are they going to pay for all this growth? And what will happen if they can’t?” Co-founder Alex Blumberg also announced that Gimlet will no longer be producing top-ranked podcast Mystery Show, but refused from giving details, preferring to say “there are certain things that certainly need to remain private” (runtime 36:18). Vox has background on what appears to have happened after Mystery Show host Starlee Kine lit-up Facebook.

We’re already living in The Matrix. Longtime readers know we have a pretty complex, love-hate relationship with artificial intelligence, but this has us just a bit flummoxed. “Tech billionaires convinced we live in the Matrix are secretly funding scientists to help break us out of it,” writes the Independent. Among them: Elon Musk, it claims, writing: “Some tech billionaires speculate that the chances we are not living in such a simulation is ‘bns to one.’ Even Bank of America analysts wrote last month that the chances we are living in a Matrix-style fictional world is as high as 50 per cent.” The Independent’s piece isn’t so much new reporting as a roundup of links pointing to stories and videos that bring the conspiracy to life. Choose your pill, folks…

Are you frustrated with the “Common Core” approach to math? If your school, like a number here in Cairo (or wherever you’re reading this outside the US of A) is moving to the US “Common Core” approach to teaching math, take the time to read this piece. We promise it will change how you view the shift. Bonus for nerds: The piece also covers the Next Generation Science Standards, though in far less detail than Common Core. The bottom line: Kids won’t be asking anymore “When are we ever going to use this in real life?” because Common Core is all about real-life application of math. The story is from Quanta magazine, whose reporting in science is amazing — and often syndicated to Scientific American, Wired and The Atlantic.

And speaking of Wired: Barack Obama “guest edited” this month’s issue of the magazine. He apparently thinks it’s a pretty cool time to be alive.

An alternate dimension made by humans, not the computers: West Virginia. Larissa MacFarquar goes to West Virginia for the New Yorker to find out how a once solidly Democratic state has gone Trump: “…in other ways he is not the Appalachian Trump voter as many people elsewhere imagine him—ignorant, racist, appalled by the idea of a female President or a black President, suspicious and frightened of immigrants and Muslims, with a threatened job or no job at all, addicted to OxyContin. Those voters exist, but the political thinking of many others in Trump country is more ambivalent and complicated and non-inevitable than is apparent from signs hung on Main Street or carried at rallies. The perception that people in West Virginia are voting for Trump because they are racist or ignorant is significant, though, since it’s one of the reasons they’re voting for Trump in the first place.”

Flash crashes in the FX market are a bug in an otherwise pretty efficient market making system, Bloomberg View’s Matt Levine writes. Levine, in the light of the GBP’s sudden plunge against the greenback, grants us another nugget of wisdom in explaining the rationale behind the current computer-based market-making system that allowed the value of the GBP to drop rapidly instead of forcing market participants to buy “all the way down to the new level” and then brought it all the way up to the new level. “Traditionally the way a drop like that would happen is that there would be a lot of demand to sell GBP, and market makers who were previously buying [GBP] for [USD 1.262] would lower their bids to [USD 1.260], and there’d be still more selling, and the market makers would start buying at [USD 1.255], and then [USD 1.250], and then [USD 1.245], and so on down, until the pound eventually settled at its new price.”

While it was an orderly and convenient system it was “kind of dumb,” Levine argues. “Everyone wanted to sell — the fundamental demand for the pound was in the [USD 1.24] area, not the [USD 1.26] area — but the market makers kept buying, at prices that kept getting lower, until when the dust settled they were left long a lot of pounds that they’d bought for prices that were now much too high.” The new system, while susceptible to flash crashes, allows for a “better trade,” Levine says; “computers, instead of buying all the way down to the new level, allowed the [GBP] to fall to an absurd level and then bought all the way back up to the new level.” Why is that? If the market moves are real, “trading against them is a money-losing strategy. The new, cruel, coldly logical regime involves electronic market makers who are too timid and capital-constrained and rational to trade against big moves. So they just let them happen — in fact, let them go too far and too fast — and then buy on the rebound, making money instead of losing it. Making money is better than losing money.”

The developed world does agriculture differently than us. The New York Times’ George Steinmetz spent nearly a year trying to capture the scope and “dizzying grandeur” of 21st century agriculture, culminating in a wonderful photo essay. The photos include ones showing lifts that tip trucks to pour out their cranberry hauls at the Ocean Spray receiving and processing yard, the world’s largest.

China is our long-lost (and much more disciplined) sibling, part 901: “For two days in early June every year, China comes to a standstill as high school students who are about to graduate take their college entrance exams. Literally the ‘higher examination,’ the gaokao is a national event on a par with a public holiday, but much less fun. Construction work is halted near examination halls, so as not to disturb the students, and traffic is diverted. Ambulances are on call outside in case of nervous collapses, and police cars patrol to keep the streets quiet. Radio talkshow hosts discuss the format and questions in painstaking detail, and when the results come out, the top scorers are feted nationally. A high or low mark determines life opportunities and earning potential. That score is the most important number of any Chinese child’s life, the culmination of years of schooling, memorisation and constant stress.” Read “Is China’s gaokao the world’s toughest school exam?” in the Guardian.

This will not win over your husband / wife / kid if they’re on the opposite side of the “five-second rule.” But it’s worth a try. Read: “I’m a Doctor. If I Drop Food on the Kitchen Floor, I Still Eat It” in the New York Times’ The Upshot blog.

Sleep-deprived as we are this morning, we don’t remember how this appeared in our Tweeter feed, but still, it’s true: The Royal Opera House has the best drop-down menu in the world. Via @JackTindale. Heading to Blighty soon? We’d be booking tickets to Kenneth MacMillan’s Anastasia if we were. The full-length ballet bills itself as “a compelling exploration of identity in the turbulent wake of the Russian Revolution.” You can catch the trailer here (watch, run time: 0:31).

If you’re stashing cash overseas in some dodgy tax haven, you’re going to want to read former Guardian editor Alan Rusbridger’s piece for the always-brilliant New York Review of Books. From the leak of documents from offshore “tax-mitigation” artists Mossack Fonseca to the origins of modern tax havens, it’s a very solid read. Part two should be out in the NYRB’s next issue.

Then go read this piece from Business Insider: “I’ve been helping the ultra-rich protect their wealth for years, and here are the 10 best pieces of advice I can give you about money.”

Formulating moral arguments: When people try to make a moral argument for or against something, they tend to conflate the notions of “wrongness” and “harmfulness,” Malcolm Gladwell says in short video from his New Yorker festival speech (runtime 05:45). He specifically mentions the case of the Princeton student protests of having their School of Public and International Affairs named after Woodrow Wilson, an “unrepentant racist.” Students there, Gladwell says, were weakening their arguments and undermining their own cause by arguing that the name “harms” them — naming the school after “a guy like that” is just wrong; “it’s wrong for a modern university to celebrate a man who’s as reprehensible as Woodrow Wilson.” Gladwell explains “wrongfulness is not contingent on harmfulness, it [is] irrelevant.”

Using Gladwell’s notion, and in the light of Donald Trump’s deplorable comments glorifying [redacted] assault, we really appreciate Samantha Bee’s takedown of GOP’s officials’ morally inconsistent “response” to the comments. Trump’s comments, she says, “ are not wrong because you have female relatives … Trump’s comments were wrong because women are human. And if you haven’t stood cravenly by while he insulted them for a year you wouldn’t be in the pile of elephant sh*t you’re in today” (runtime 05:32).

DOCUMENTARY OF THE WEEK: Shenzhen: The Silicon Valley of Hardware. Just bear with us on China for a little bit longer. Fortune cookie riddle: What do you get when you combine hackers with the center of global electronics manufacturing and a lax attitude toward intellectual property laws? The burgeoning hardware economy of the city of Shenzhen, dubbed by Wired — which has apparently taken to making good documentaries now — as the Silicon Valley of Hardware. The film explores a marginally overlooked focal point in tech innovation outside the US and for the most part, outside the hands of the Silicon Valley oligarchy. It argues that Moore’s Law — which predicts that the number of transistors per square inch on integrated circuits doubles every year — is actually slowing down, and with it, the amount of useful stuff a computer can do. The trend is now moving to optimization and capitalizing on what smartphones cannot do.

Cue the city of Shenzen, an electronics manufacturing hub that grew out of Deng Xiaoping’s economic reform — and with it its own brand of tech entrepreneur. This isn’t a hacker in the traditional sense, but of the rise of the imitator-maker. The growth of an extremely strong manufacturing base, which also serves a middle class not yet as affluent as the West, has favored the counterfeit maker, whose ingenuity and healthy disregard for copyright laws has led to much cooler versions of gadget’s like robots, drones, fitbits, and other personalized hardware tech. In the business sense, this new innovation center is now fast becoming the place to rapidly prototype, manufacture, and get to market these devices. You can catch the documentary on Youtube here (run time: 1:07:50)

The latest trailer for Star Wars Rogue One is out, you can view it here. Running time: 2:37

The best non-finance / biz / econ blog post we’ve read this week: “What you eat makes a huge difference in how optimally your body operates. And what you spend time reading and learning equally affects how effectively your mind operates. Increasingly, we’re filling our heads with soundbites, the mental equivalent of junk. Over a day or even a week, the changes, like those to our belly, are barely noticeable. However, if we extend the timeline to months and years, we face a worrying reality and may find ourselves looking down at the pot-belly of ignorance.” It’s about GIGO, folks. Always has been. Read: The Pot-Belly of Ignorance on Medium.

Trump Wars: The NYT’s lawyers strike back: Following the New York Times story we mentioned in our Thursday issue, which presented the accusations of two women who allege that Republican presidential candidate Donald Trump groped them, about ten more women have come forward with their own allegations. In true authoritarian fashion, Trump’s campaign threatened to sue the New York Times for libel, and the response published by the NYT’s Assistant General Counsel David E. McCraw dismantles the notion that the Orange One has the basis for a libel claim, reminding Trump’s lawyers: “The essence of a libel claim, of course, is the protection of one’s reputation. Mr. Trump has bragged about his non-consensual [redacted] touching of women. He has bragged about intruding on beauty pageant contestants in their dressing rooms. He acquiesced to a radio host’s [Howard Stern’s] request to discuss Mr. Trump’s own daughter [Ivanka] as a “piece of a[**]… Nothing in our article has had the slightest effect on the reputation that Mr. Trump, through his own words and actions, has already created for himself.” Read the letter in fullhere, pdf.

But even if Trump is defeated next month, no one should expect that his “movement” will simply disappear. Trump has long laid the groundwork that his defeat will be due to widespread electoral fraud, a belief which over half of his supporters believe, according to polls cited by the Associated Press, despite a study showing that from over 1 bn votes cast from 2000 to 2014 in all American elections, only 31 cases of voter fraud were identified. The issue goes much deeper than unsubstantiated popular belief in widespread voter fraud, and extends to the base of support which Trump has managed to manipulate and galvanize from white working-class voters.

Two pieces worth considering about the lingering effects of Trump’s candidacy on the American electorate were published yesterday. Both are worth a read: “Why Donald Trump’s politics are likely to live on,” by MarketWatch’s Steve Goldstein and “Trump may be finished — but Trumpism is just getting started,” by The Atlantic’s Ronald Brownstein.

Winter is coming. Let’s hibernate: The most recent episode of the Stuff You Should Know attempts to explain how animals hibernate during winter months to escape food scarcity. For hibernating animals, “their bodies undergo some mind-boggling physiological changes in the coldest months,” it is not just extended sleeping. This evolutionary response drives hosts Chuck Bryant and Josh Clark to ask if humans could learn to hibernate (runtime 47:05).

A moment of your time for this public service announcement: CityLab is tracking how architecture and smart urban planning can help those condemned to living in refugee camps for prolonged periods of time can make a decent home out of it. A big part of the problem is perception. Refugee camps vary, with some developing into actually cities with very poor services, a very different setting than their traditional image as tented lots. Their residents vary, with many having to flee middle-class lifestyles, a far cry from the disheveled and poor huddled masses being purveyed by a new class of right-wing demagogues in the West. These issues, coupled by the urgency of building camps for those fleeing war zones with immediate short-term needs hampers long-term thinking, and has pushed down in the priority lists of NGOs and international aid organizations the application of sustainable communities practices in the camps.

Architect Anicet Adjahossou, named an Innovation Fellow by the UNHCR in 2014, is at the forefront of applying sustainable urban design to the refugee camps. By talking to residents and determining their day-to-day needs, these camps can be structured to facilitate access to key infrastructure in the camps, tackle issues with space management and overcrowding (a key driver of stress as we all know in Cairo), and helping developing new self-reliant economies around urban and localized food and craft production. “If you have people seen simply as a logistic challenge for the next 10, 15, even 20 years, then you are missing opportunities,” says Kilian Kleinschmidt, founder of the Innovation and Planning Agency, a global network of humanitarian experts. he adds that “People in crisis need to rebuild their identity and individuality, and only then can they give to community.” The lessons here should not go unnoticed in Egypt, which hosts 119,665 people, according to data from UNHCR, and around 500K by the government’s count.

The health industry is on the verge of a breakthrough: “The world’s last tn USD industry was created out of computer code. The world’s next tn USD industry is going to be created out of a genetic code,” former US Department of State Senior Advisor for Innovation Alec Ross tells Big Think. Only 15 years ago, the procedure for genome mapping was as expensive as USD 2.7 bn. Five years ago it cost USD 100k. Now the procedure can be done for as cheap as a few thousand USD. Genome mapping will allow for detection at far earlier stages, says Ross. An example of this is a liquid biopsy, a non-invasive blood test that can detect cancerous cells at 1/100 the size of what can be detected by an MRI. Genome mapping also opens up the possibility of precision medicine as early as within five years, adds Ross. Medicines they will be personalized to account for our personal genetic makeup as well as the specific genetic makeup of the illness that we have.

Facebook and Google announce plans to build new undersea fiber-optic cable from N. America to Asia: On Thursday, Facebook and Google announced they will build the Pacific Light Cable Network, which will stretch from Los Angeles to Hong Kong with an estimated data transfer capacity of 120 terabits per second, making it the world’s highest-capacity undersea fiber-optic cable, Wired reported. Construction on the cable is set to begin this year and aims to launch operations in 2018.

Saudi and Japan’s SoftBank announce new tech fund which may reach USD 100 bn: Saudi Arabia’s sovereign wealth fund the Public Investment Fund (PIF) and Japan’s SoftBank Group announced on Thursday they will create a technology investment fund that grow as large as USD 100 bn, making it not only one of the largest technology investment funds, but one of the world’s largest private equity funds, Reuters reported. The PIF is set to invest up to USD 45 bn into the SoftBank Vision Fund over the next five years while SoftBank expects its share to be at least USD 25 bn, according to a statement from the bank. The fund would be managed by SoftBank’s subsidiary in the UK. The move would build on the PIF’s new higher risk strategy following its acquisition of a USD 3.5 bn stake in Uber last June.

Is India replacing China as tech’s next frontier? Major tech firms “are looking at India, and they are thinking, ‘Five years ago, it was China, and I probably missed the boat there. Now I have a chance to actually do this,’” former Google executive and chief product officer of Flipkart told the New York Times. India’s growing appeal was underscored when China’s president, Xi Jinping, refused to waver on his government’s tough Internet policies during a meeting with tech executives in Seattle last month. On the flipside, India’s Prime Minister Narendra Modi’s recent visit to Silicon Valley involved meetings with the same executives sent a clear message: “Help India become an Internet powerhouse.” Immediate results included Google pledging to provide free public Wi-Fi in hundreds of Indian railroad stations Microsoft agreed to help India bring wireless Internet to its 500,000 villages, and chipmaker Qualcomm promised USD 150 mn to finance Indian start-ups, the NYT reports.

Are we moving towards an era where AI could be integrated into a mainstream videogame? The Guardian’s Keith Stuart attempts to answer that question, arguing that with “social AI” and “natural dialogue systems, we’re heading into an era where players could negotiate with computer-controlled characters, where persuasion, seduction and intrigue replace guns and aggression.” Game designer Aaron Reed, who was part of a team that developed a social simulation game Prom Week, is working with Mobius AI to provide game developers with a social AI engine. “As we start giving more control to social simulations, we can at first expect to see richer, more intriguing versions of the types of characters we have now,” he says, “shopkeepers who can carry on a more dynamic conversation, quest-givers or lore-spouters who can answer questions or respond to your specific circumstances, and so on. But as your system gets smarter and you’re willing to give it more control, it really starts suggesting entirely new genres of game that don’t yet exist.” However, the solutions are emerging, and UCSC PhD student James Ryan, who is working with the Expressive Intelligence Studio tells Stuart he is “absolutely” certain that mainstream video games could soon encompass characters with their own agendas and internal, unscripted lives.

Apparently, lots and lots of you bank with CIB, because the most clicked item this week was CIB’s announcement (pdf) of new limits on credit and debit card use abroad. The other most-clicked items this week included:

• A crazy-brave Egyptian kebab shop owner in New Zealand nonchalantly keeps serving customers even as he’s held-up at gunpoint. (Youtube)
• Interview with said Egyptian-NZ kebab shop owner (BBC)
• Ana Navarro roasts Trump and Scottie Nell Hughes – CNN (Youtube)
• Chinese Tourists in Egypt Have a Unique Way of Greasing Palms (WSJ)
• An Investor’s Plan to Transplant Private Health Care in Africa (New York Times)

The economics of exotic dancing: Exotic dancers are not technically “contractors,” more like individuals who run their own businesses, writes Ainslie Caswell. “I found many benefits in being able to run my own business from the pole, one of which was the ability to choose my own customers… If I simply felt tired, I would sit back, be lazy, and see the impact in my wallet. It was my decision, and no one could tell me otherwise.” Explaining the details of earning money in the profession, Caswell stumbled upon some brilliant yet very basic economic insight: “Putting a person directly in charge of how much money she can make will result in actual work getting done. This is one of the many reasons why I actually liked stripping, even though it was, at its core, a sales job.”

The likelihood of long-term success on a crash diet of living off kale and almonds or sticking to 1,000 calories a day is “almost zero,” medical weight loss expert Charlie Seltzer, MD tells The Daily Beast. Stelzer says he tries to shift patients’ thinking from the scale to other health factors such as how well they sleep or whether they can deadlift. as well as addressing issues such as emotional eating. However, “Weight cycling,” the official term for yo-yo dieting, may be okay if you’ve lost weight in the past through smart, consistent strategies such as healthy eating and moderate exercise but then got flipped off the wellness path, Tiffany Wright, PhD, founder of Skinny Coach Solution. “Every minute that you’re at a healthy weight is beneficial for you. It’s less stress on your heart and arteries, reduces your risk of disease, and increases your lifespan tremendously,” she says.

MOVES- On my way out: A certain someone who will go unnamed is leaving Enterprise to go [redacted] off to wherever. Over 500 issues later, this individual signs off with the first video they added to the first issue of Enterprise. While the video does not accurately express the same sentiment felt, as this individual will always think fondly of Enterprise, it is in its own strange way oddly fitting. (Watch, running time: 34 seconds)