EIEIO...Believe In Something
“For the strength of the Pack is the Wolf, and the strength of the Wolf is the Pack.” – Rudyard Kipling
“Even the weak become strong when they are united." – Friedrich von Schiller
"Only a life lived for others is worthwhile.” - Albert Einstein
Nothing to see here.
Americans are purging patriotism, running from religion, rejecting reproduction, and coveting cash.
What do they have to show for it? Anxiety, depression, loneliness, and deaths of despair – imagine that.
Our hyper-atomized society is a byproduct of our social institutions falling into total disrepair. These fundamental institutions – families, churches, schools, and communities – are the glue that keeps our social fabric intact.
They are supposed to be the foundations on which individuals can rely from childhood to retirement. They establish and preserve standards while serving as values-aligned support systems that foster peoples’ development into confident and ambitious individuals.
When these systems are strong, they cultivate cohesion among relatives, congregations, students, and citizens. Children and adolescents are empowered to take risks and embrace challenges because they know they have solid support around them.
When they are weak, they give way to fragile, rootless wanderers who have little to seek other than interests of indulgent hedonism and self-advancement. In the absence of standards and support networks, people are told that subjective individualism is what should win the day.
People over-pursue self-serving desires when these networks are weak because they have little else to live for. Not their neighbors, not their teammates, not their (likely non-existent) children, not their God.
Much of society has fallen victim to anomie, a term coined by French philosopher Emile Durkheim in the 19th century that describes a condition of normlessness, lack of moral guidance or shared purpose. This condition gives way to derangement and insatiable will, or as Durkeim calls it, “the malady of the infinite.”
Individuals who have been unmoored from their institutional shackles, free to pursue whatever they want, as much as they want, however they want, become restless, aimless, frustrated and sad.
Consider the condition of anomie with today's rising levels of anxiety. Extreme self-reliance can get overwhelming, particularly when it's backed by very little. What a stressful predicament when all of one’s value is based upon their outward facing success.
It’s exhausting to have to constantly prove your worth to your peers based on whatever the current thing is. What if I don’t get into my top college choice? What if I don’t make it as an influencer? What if I’m single forever? What if my startup doesn’t pan out? What am I going to do and what are people going to think of ME?
Nerve racking.
But this is what happens when people “unchain” themselves from social institutions in search of freedom. They trade their institutions driven by enduring principles in exchange for a mad scramble to keep up with the ever-fluctuating, arbitrary standards that the rest of the world uses to measure them. Just take a look at College Admissions TikTok as an example.
They are forced to keep changing appearances, opinions, and lifestyles while on the endless stationary bike ride in search of validation. Perhaps those chains were moored to an anchor of stability, not repression.
Lucky for us, modern society has delivered a hot, new, hard-hitting solution for all of this anxiety: self-care.
Evidently, the days of suggesting that troubled people reach out to a parent, pastor, rabbi, friend, teacher, mentor, coach, or even therapist are fading. Instead, get yourself out of your deep rut with a bit more me-time.
Take a long bubble bath. Zone out for a while. State your daily affirmations into the mirror - don’t forget to say “I am my own hero.” Bust out your self-care adult coloring book and unwind.
Now to be clear, I’m not saying we shouldn’t take care of ourselves. Getting and staying in shape, sleeping well, and eating healthy makes life so much better. But having that fit body or feeling well rested equips one to take on the problems causing that deep-seated pain, it does not serve as a cure. If it does, why do we have so many anxious and depressed A-list celebrities? They have six pack abs and clear skin.
Most self-care practices are minutes-long bandaid solutions that may work to bring down someone’s heart rate or soothe their migraine, and that’s great. After all, it’s harder to face obstacles with a pounding headache.
However, there are three problems with the self-care craze. First, as I alluded to above, these rituals generally do nothing to address the root cause of the issue. Unless acne is really what has you down, that 10-step skincare routine is unlikely to target and eliminate your debilitating anxiety.
Second, self-care obsessives often encourage (and seek to “normalize!”) behavior that is flat out selfish. Convincing yourself that, “You know what, I deserve this!” every time you want something is not self improvement. Author Tara Isabella Burton commented on this in her 2020 book Strange Rites: “Self-care has become a marketing slogan, one designed to lend legitimacy to behavior that might, in other moral systems, be considered merely selfish.”
Third, self-care is both a symptom and a purveyor of our pandemic of loneliness.
As society becomes more isolated, people turn further inward in search of happiness. Obsession with self-care further isolates people by reinforcing self-centeredness over other-centeredness, making society lonelier still. Lonely people are more aggressive and contemptuous of others. Loneliness is also linked to early mortality.
Of course, social media has fueled self care mania. Anyone who has scrolled through TikTok or Instagram Reels has witnessed the explosion of content around the “daily routines to swear by” genre. Using infrared saunas, plunging into cold tubs, journaling, tidying up. It seems like if someone could just find the discipline to master these routines, all of their problems would vanish.
Now imagine being dropped off to live out your days on a desert island completely alone. The island has all of the self-care materials you could ever dream of - a full spa, workout facility, library, you name it.
Would this feel like a paradise or a prison?
It’s a scary thought, but unmoored – and thus vulnerable – people are constantly drifting towards these islands. Isolated individuals are more impressionable when it comes to media headlines and prominent figures.
Doomscrolling Twitter and being fed negative headline after negative headline can feel depression-inducing, particularly when the media constantly reminds you of those big, out-of-your-control problems in the world. Problems like global wealth inequality and climate change – challenges that apparently have already passed the point of no return but that you are forced to care panic about.
As for our idols, we have models across the political spectrum attempting to convince us that the life that revolves around serving the self is the good life. And people love to follow the extremes – whether it’s Chelsea Handler or Dan Bilzerian. Neither of these people are happy or fulfilled. And if you don’t believe me, just look at how frequently they feel the need to tell you that they are.
If you don’t think that people are buying what the media and its figures are selling regarding the subjective individualism agenda, take a look at the following charts demonstrating the rise of the DINKs (Dual-Income-No-Kids) over the past 40 years. I suppose I wouldn’t want kids either if I was convinced I was living in a late stage capitalist hellscape while climate change cooks the world.
The data shows that over the past two decades there has been a steep decline in how Americans value patriotism, religion, having children, and community involvement. This has come alongside an increase in how much people value money…but at the cost of an increase in depression and anxiety.
The most devastating chart, however, is the one that shows the significant uptick in deaths of despair. From 2010 to 2020, there was a nearly 90% increase in the number of US deaths associated with drugs, alcohol, and suicide. When the unmooring renders purposelessness, and the purposelessness renders depression, and the depression renders substance abuse, these are the results.
So what do we need to do about all this?
We need to rebuild and improve our social institutions in order to bring people back to the first principles that built successful communities and fostered human flourishing. The despondence we experience without them is a call to action in and of itself.
Reach out and connect with neighbors, friends, teachers or family members who you’ve lost touch with. Get involved with a PTA, a non-profit, or volunteer group. Start and support mission-driven businesses that ignite a company culture based on a shared purpose. Restoring trust in our schools, faith institutions, and community groups will revive the common code of decency we are so clearly lacking.
This does not mean policing thought, limiting freedom of expression, or over-regulating. Instead, it means emphasizing the civic virtues that allow us to build, innovate, educate, and lift each other up while simultaneously being able to rely on those around us when difficulties arise.
Social institutions bring people together on common ground that we all share, and togetherness makes the good days greater, and the storms more weatherable.
When a16z General Partner Katherine Boyle says, “Believe in something, you are not enough”, it is not a put-down. In fact, it's quite the opposite - it's advice; a reminder of how desperately we need to live for more than just ourselves. Remember, you aren’t enough, because no one is.
Market Performance
Q1’23 ended on a positive note, with the Dow up 3.2%, the S&P up 3.5%, and the NASDAQ up 3.4%. The Nasdaq 100 logged its best quarter since 2020, up now 22% from its December lows.
The consensus on the Street is that most of the gains this year have been driven by Big Tech. Without the six largest tech names, the S&P would be down 2% for the year at the end of last week, instead of being up more than 3%. Nevertheless, we’re seeing lots of signals that Growth is back in style. Year to date, Duolingo is up 101%, On Running is up 82%, Spotify is up 63%, and Soho House is up 37%.
While the US debates the TikTok ban (which more than twice as many Americans support than oppose) and Italy bans ChatGPT, China is quietly reemerging as a global leader. One day after Jack Ma resurfaced at a school in his hometown of Hangzhou, Alibaba announced that it is splitting into six groups, signaling a potential “truce” with business.
Over the next 11 days, China will host the leaders of France, Brazil, Spain, and the European Commission, with China’s potential role in facilitating Ukrainian peace talks on the docket. These meetings are fitting way to mark that the BRICS overtook the G7 as the world’s largest GDP bloc. The BRICS now contribute 31.5% of global GDP vs. 30% for the G7.
There are still lots of problems that will worry Mr. Market … but we still think that there is opportunity on the upside. The AI Wave has enabled companies to launch products that would have taken years in weeks, while retaining a renewed focus on profitability. We’re glad the market went through a much-needed cleanse last year, buy we think it will shine in the Spring and the Summer.
GSV’s Four I’s of Investor Sentiment
GSV tracks four primary indicators of investor sentiment: inflows and outflows of mutual funds and ETFs, IPO activity, interest rates, and inflation. Here’s how these four signals performed last week:
#1: Inflows and Outflows for Mutual Funds & ETFs
Source: Yardeni
#2: IPO Market
This Crunchbase piece captures the conventional wisdom today – there’s little evidence of the frozen IPO market thawing out. One indicator to watch is the VIX – above 20 is a “no-go for IPOs,” but if it stays below 20 for Q2, IPOs could resume quickly.
Source: Renaissance Capital
#3: Interest Rates
Friday’s report from the Commerce Department suggests that inflation continues to cool. Consumer prices rose 0.3% from January to February, down from a 0.6% increase from December to January. Measured year-over-year, prices rose 5%, slower than the 5.3% annual increase in January.
Source: Twitter
#4: Inflation
One unusual indicator of US Consumer strength that Jim Chanos is tracking is Las Vegas Strip revenue. Las Vegas Strip properties won over $700 million in February, 19% more than last February.
Source: Twitter
Video of the Week
Chart of the Week
Source: Comparing Stock Comp Intensity of Popular Growth Stocks – Brad Freeman
Chuckle of the Week
EIEIO…Fast Facts
Entrepreneurship: 86% — percent of tech unicorns that have grown headcount in the last 12 months (Source)
Innovation: $150 million — amount of secondaries sold by Hopin CEO Johnny Boufarhat in 2021, more than the lifetime revenue of the company without taking acquisitions into account (Source)
Education: 58% – percent of parents that think political views have no place in public education (Source)
Impact: 28% – growth in tax revenues over the past 5 years in Washington, adjusted for inflation and population growth (Source)
Opportunity: 66% – percent of Americans that see colleges as stuck in the past, not meeting the needs of today’s students (Source)
Connecting the Dots & EIEIO…
Old MacDonald had a farm, EIEIO. New MacDonald has a Startup…. EIEIO: Entrepreneurship, Innovation, Education, Impact and Opportunity. Accordingly, we focus on these key areas of the future.
One of the core goals of GSV is to connect the dots around EIEIO and provide perspective on where things are going and why. If you like this, please forward to your friends. Onward!
Make Your Dash Count!
-MM