Reading Roundup - July 2025
A monthly roundup of random readings from around the web.
Port automation, subscription toilets, rollups, Apple, skyscrapers, and more. Enjoy!
(1) Do U.S. Ports Need More Automation?
“The ports that have adopted automation aren’t necessarily particularly efficient […] the most automated port [in the US], Los Angeles, [is] very close to the bottom of worldwide rankings.” Some reasons why port automation isn’t a magical fix for port processing times: (1) automated container handling struggles with real-world conditions more than expert crane operators (e.g., handling fog, shifting in the waves, etc.); (2) the high fixed cost of automated cranes financially struggles in the balance with high variance container volumes (variable labor cost is more easily aligned with variable container shipments); (3) automation of loading/unloading doesn't fix the other bottlenecks in the port (e.g., availability of truck chassis); and (4) lack of port coordination: “[Most] US ports lack appointment systems for trucks to arrive or pick up cargo; instead, trucks arrive randomly, often creating large amounts of congestion as they wait to load and unload.”
(2) A Priority Pass for Bathrooms
I’ve thought about this idea for years… Ever wandered around in NYC (or any other big US city) and needed a bathroom? There aren’t many public bathrooms; you often have to pay the “Starbucks tax” to use one in a coffeeshop. The (proposed) solution: a subscription pass for toilets. Toilets are a classic under-utilized asset that could be put in a “network” for subscribers to use, with fees paid to the restaurants, shops, etc., to make their semi-public toilets available. Smart locks could control access and tracking (so they can ban anyone who clogs the toilet). To increase adoption, this could initially be given out as a credit card rewards perk. The author thinks that this could generate >$100M in annual sales. That sounds a bit high, but who knows… I know someone who pays for Equinox just to have a toilet anywhere in the city.
(3) CEO Explains How He Faked Results in $300 Million Meltdown
The story of the failed Indonesian aquaculture startup eFishery. This Softbank-backed unicorn sold a remote-controlled fish feed dispenser—a decent idea!—but ran into the classic problems of using hype and fundraises to mask underlying problems in the business. Among other financial games, eFishery paid farmers to re-route existing off-market transactions onto their “marketplace,” then booked that GMV as revenue (“90% of eFishery’s revenue came from businesses with less than 2% of gross profit margin”), and raised over $300 million on that rising revenue. A second trick was using poorly-underwritten loans to farmers to purchase their products, then obscuring the bad debts and lack of cash conversion. Sounds like the real fish food was the investors.
(4) The Rise and Fall of the Stock Market’s Music King
Hipgnosis was a COVID-era rollup of music royalties. It didn’t go well. Some reasons: (1) overly-aggressive capital deployment fueled by cheap money (“Armed with cash from repeated equity raises and millions of dollars in debt, they orchestrated acquisitions of 29 catalogs in 2019 and 72 in 2020”); worsened by (2) overpaying for acquisitions (“Before [Hipgnosis], catalogs often traded in the range of 10x earnings. Hipgnosis stunned the industry by paying twice that. [The multiples] were definitely north of 20x.”; and (3) “creative” accounting to keep capital flowing (“Hipgnosis frequently [said] that it had owned 100% of catalogs when in many cases it had purchased only revenue streams, which [is] like being entitled to rent from a building but not owning the real estate.“). When the rollup music stops, the song always sounds the same.
(5) Apple + Anthropic?, Apple’s Fall, and Apple’s Options
Stratechery on Apple’s AI dilemma: “While I as a consumer would prefer they take the ChatGPT option — ChatGPT is for me more important than the iPhone — if I put my business analyst hat on I think they should pay Anthropic. Most consumers aren’t me, and Apple will ultimately be both more comfortable and retain the greatest control over its destiny by — from most users’ perspective — magically delivering them a better Siri (powered by Anthropic) than simply giving up and slotting in ChatGPT. Or here’s another idea: finally accept that the company that is most aligned with Apple’s own business interests is the one Apple’s leadership hates the most: Mark Zuckerberg would welcome support for Llama’s development — he’s certainly paying enough!”
(6) Why Skyscrapers Are So Short
“Since legal restrictions place limits on what would otherwise be economical to produce, they have a way of becoming optimization targets. No modern building is a better illustration than the 5 + 2 podium, a type of building that exists almost entirely due to building code provisions. US building codes allow the use of light-framed wood construction for multifamily apartment buildings so long as the wood portion does not exceed 5 (sometimes 6) stories in height. And buildings taller than 7 stories are considered “high-rise” construction, a designation that brings with it many burdensome and expensive code provisions. The result is that multifamily buildings often consist of a “podium” of 1-2 stories of concrete ([with] parking, retail space, or amenities), which has 4 or 5 stories of wood apartments placed on top of it. Because it’s so economical, a large fraction of [US] residential construction in urban areas is podium construction.”
(7) Entrepreneurship Through Acquisition
“In a self funded search, where you have students raising money to buy $1 million-ish EBITDA companies one and a half million dollars and buy them at four times and finance them at 80%, the math is just extraordinary. If you buy something for 4x, you are generating a 25% return on assets before any growth. You lever that at 80% with debt that costs 8 or 10% and the return is astronomical. […] Most people discover that it is a highly personal activity […] they are going to meet people [and] going to go door to door, [they] are [meeting] every business owner in the [market]. […] The vast majority of the value created [is] upfront [because] the magic is in the multiple [and because of] the difficulty of finding a company and getting a transaction done.”
(8) Valve Conquered PC Gaming. What Comes Next?
Valve is an unusual and lucrative business. Its main product is Steam, which is like an App Store plus Facebook plus Reddit for the PC gaming industry. Steam earns about $11M in revenue per employee (compared to ~$2.5M per employee for Apple) and has >60% operating margins. Steam originated from the need for PC game developers to distribute game updates in a way that could avoid piracy, but evolved into a de facto storefront and social network for the fragmented PC gaming industry. The company’s extreme secrecy and operating quirks (e.g., “no hierarchy”) are covered in the article, but I would guess that its success came in spite of (not because of) those oddities.
(9) Hillbilly Elegy – The Culture of White American Poverty
A review of JD Vance’s biography. Vance focuses on the self-perpetuating culture of white rural poverty, and a central theme is the victimhood culture. Their life “happens” to them, rather than being the result of their choices. Some recurring bad choices are a lack of emotional regulation, discipline, planning, and hypocrisy. “Vance’s neighbor growing up was an obese woman whose favorite pastime was sitting on her porch, railing against Democrats and their stupid welfare systems which the poor greedily leeched off of. Meanwhile, [she] had lived off of welfare since the day she had left high school. When pressed, she argued that she was one of the few people who deserved a little help, while most welfare users were abusive parasites.” How he escaped: “The biggest turning point was joining the Marines out of high school. The way he describes it, the Marines acted like a crash course in middle-class culture. That gave him a reliable authority, enforced discipline, and showed him that he had underestimated his own control over his life.”
(10) Against "Brain Damage" - AI Can Help, Or Hurt, Our Thinking
“Our fear of AI damaging our brains is actually a fear of our own laziness. [AI] offers an easy out of the hard work of thinking, and we worry we will take it. We should worry. But we should also remember that we have a choice. […] This principle becomes even more critical in writing. Many writers insist that "writing is thinking," and while this isn't universally true (I generated a pretty good Deep Research report on the topic if you want the details), it often is. The act of writing, and rewriting, and rewriting again helps you hone the ideas. If you let AI handle your writing, you skip the thinking part entirely.”
(0) Miscellaneous Fun
Best European cities. Best restaurants in Antwerp. Regulatory driver of local banking rollups. How duct tape saved Apollo 13. El Salvador’s descent into dictatorship. Death of a fugitive carbon credits broker. The war on rats in NYC. How to buy small private islands in NYC. Why the English language doesn't use accents. The history of the NY Produce Exchange. Critique of stablecoins. The rise of Bad Bunny. Why we should let the LLMs daydream. Creative use of transshipment tariffs. Pivot at Substack. Update on Appointment Trader. Building the SKIMS brand. BrewDog’s preferred stock mess.