On this week’s Partner Meeting episode we cover the following topics:

  • Last week's jobs report
  • Economic historical norms
  • The war in Ukraine
  • Blockchain interoperability and Cosmos
  • Work-life integration
  • The importance of customer insights and how to use that data to help inform the direction of your business

Transcript (this is an automated transcript):

MPD: Welcome everybody. I'm Mark Peter Davis, managing partner of Interplay. I'm on a mission to help entrepreneurs improve society, and this podcast is part of that effort. Last week was our first time doing the partner meeting format, and I was pretty into it. We got a nice response. This is our second version of it, so I think it's a pretty good shot.

We have a lot of stuff for everyone, so I hope you enjoy. Before we jump in, I wanted to share some of my own thoughts, things I'm thinking about and the topic I wanted to go into today for just a minute is the concept of work life integration. Now, it's a phrase that gets thrown around a lot today, but you're gonna hear over and over as I'm getting a little bit more freestyle on the podcast, I'm a big history nerd and work life integration was actually the norm for all of human history until the industrial Revolut.

You woke up, you forged for food, or once there was a farm, you went out and collected eggs or whatever else, and sustenance and survival were integrated into your social daily routines. When the industrial revolution hit, we introduced the time of the concept of the clock really being part of the day.

The dependency on it, and now we're all used to it. If your alarm set in the morning, You know what time you're supposed to be at work and there became a line in the sand between what was work and what was personal that didn't exist until 150 years ago, which is not long in our collective history.

I think that line is now blurring. The technology we have allows us to be on all the time, which is both delightful and terrible. It's leading to all the addictive behaviors where people can't look up at the dinner table cause they're looking at their phone. I might be guilty of that sometimes. But I also think it's creating this wonderful opportunity where if you have a role, you perform in society, a calling and work that gives you meaning.

It's the opportunity to live your fullest life all the time. While still making space for your personal needs, which don't always happen at nights, on the weekends, sometimes you need to see a doctor on a Tuesday afternoon. So I really believe work life integration is increasingly the way forward for a sophisticated work environment.

And it's something I'm thinking a lot about at Interplay. This is why it's relevant. When I'm thinking about the types of activities we're building within our. I'm thinking more than, Hey, what's gonna make the most money? What is the next move in the puzzle piece to build our operation? I'm thinking about this additional shade, this additional color of what is going to create the work life integration that everyone on our team wants to live.

So we're really excited. We're gonna be ramping up our events program which we think will have wonderful business benefits. But it's also a great blurred gray area. When you're going out to work events with people, you would find intellectually stimulating people you work with, who you care about.

It's a wonderful way to merge those two parts of life. So for the managers out there, the executives who are trying to figure out, how you handle time on, time off, take a moment, step. And see if you can reimagine a better life where work and life are integrated, but people still have sufficient personal space.

All right, now that my monologue is out of the way without further ado, let's jump into this. We got a lot for you today. Enjoy,

Chris. Chris, what's going on in the world, in the markets? Pleasure to be here, 

Chris Zhang: Mark. It's been a very interesting week. Again, we started off on a very strong footing in the US market, really on the back of a software than expected manufacturing data, s and p, for instance. A rallied basically the two day rally we had Monday, Tuesday was as strong as we had in since April this year or in fact since 20.

And Mark was really trying to find the balance between. Short covering by momentum and expectations of future data coming out which usually is, good news is bad news and bad news. Good news. Today, arguably we had the most important data coming out this this week, which the week of as I speak, Friday of October 7th nfv, which is non-farm payroll largely regard the most important job data in the us.

Came out stronger than expected at 2, 260 3000 new jobs added. And that brought down our unemployment rate to 3.5%, still historically low number. It's important to know that as you delve into these datas private sector jobs is stronger than ever. The number's, actually 288 K. So a public sector job is what suffered in the month of September.

And average hourly earnings is actually stronger again, month on must about point, 0.0, 0.3% on a yearly basis. A year on year, that's about 5% stronger. What that means is the strength of the labor market is again giving the fed more reasons to stay on course of the current hiking cycle.

The next fed meeting is first week of November and. Mark is largely pricing in yet another 75 basis point of a hike to complicate things going forward. Next week is the start next week. The week of October 10th is the start of earning season in for q for q3, q2 we have seen stronger than expected data pretty much across all sectors.

And with all the supply chain destruction and all the weakness in the market, it's largely expected that Q3 earnings will show through some of these numbers. Of course, we also have cpi next week, October 10th October 10th, and we're going to see all eyes will be on that data alone.

And from that point onwards, we'll have expectations set forward in November. 

MPD: Isn't there a positive silver lining in this narrative? You're saying, Hey, we had inflation. We had a 20 year period where we had interest rates at the federal level below historical norms. Yeah. They've now started turning those interest rates back up to his historical norms, and despite that, the economy is remaining.

It's affected for sure. But the underlying KPIs of the strength of the economy are so robust. It's so strong that there, it's not collapsing on itself with this new pressure. And yes, the Fed will probably raise interest rates and that will inevitably slow down the economy and have other consequences.

But isn't this a story that like, Hey, the American economy is so strong that the. Fed is able to recalibrate the interest rates back to historical norms without causing some sort of widespread depression. And we're able to recalibrate all of the different pieces in our market around what is a more historically sustainable federal interest rate.

Isn't that the macro narrative? We all hate the short term. It's a, It's screwing everybody up. It's a lot of frictional bone resetting. For the collective economy. But the story, if you're gonna zoom out from a historical perspective is Americans are making things, innovation is happening, right? Jobs are being created.

And yes, there's a lot of dislocation and people are losing jobs. And I'm not dismissing that is per on idiosyncratic level, the pain is very real and people see their stock portfolios going down. But it is not a catastrophe. It is not 1920, it is not 2008. This is a healthy entity having its bones reset in a way that it's enduring really well.

Isn't that the macro narrative that we're seeing? Yeah, 

Chris Zhang: I definitely agree with that. In, in, as investors in risky assets we get really. We get, you really used to listening, get, letting the fed dictate the tone in the market. And what the Fed has been projecting to all of us over the past really 10, 15 years, is that there is this neutral rate that they're trying to get to.

That's somewhere in, around two to 3%. Of course. Currently we're over that. So it's the expectation as a Fed is trying their best. To slow down the economy, of course, in a soft landing way possible. But it's what they're really trying to do is to, of course come inflation at the cause of potential higher unemployment, higher than historical average, where again, at his historically low numbers in unemployment and cool demand, cool wages, we haven't seen that yet.

So the expectation is that Fed will continue to tighten. And that will impact really all things. In, in it's some cashflow model. The nuer ended in the dominator in many different ways. So it's IPO impossible not to price in some sort of short term, medium term shock. But also everyone's still trying to keep in mind the long term feature, long term picture here, which is what exactly what you said.

We're still in a really good. As a country and also as species, we're just continue to innovate and make new frontiers possible. 

MPD: All right. I'm gonna throw a curve ball at you here. Sure. As I'm a big history nerd. I've listened to any history podcast and get my hands on.

I think I finished Dan Carlin's Hardcore History. I'm a good way through Martyr made both great podcasts for those who are interested in history. There's a bunch of other great ones out there. It's hard to be a history nerd without paying attention to historically significant moments, and we're clearly living through one right now.

Biden just recently said that we are at the greatest risk of nuclear experiment like a nuclear attack since we've been in, since the Bay pick. Doesn't necessarily mean on American soil. I listen to people who are smart around this space. I'm personally very attuned cause I think things are getting pretty real right now.

And I have heard a couple of big insights about recent events that I wanna understand the extent to which you're seeing them priced into the market. So the first thing is, The actual bombing of the gas pipelines between Russia and Europe is more than a mere milestone in this conflict. It has been described by people I respect and that seem to be wise in the matter as a historical moment where there is a complete severing of how Western Europe.

Is going to actually build its infrastructure and get oil and energy from Russia, it's not gonna happen anymore. The odds of those being fixed, and they're probably irre, fairly irreparable, is what I was told, is very low. So we, they have just severed, basically a one land mass, but two like continents of some level and how their economies function, their codependency.

It may be a hundred year historical. What just happened? The second thing is I heard another person say, Hey, the odds of Putin using nuclear weapons in Ukraine, in one person's opinion, has reached about 70%. So more likely than not that he's going to use some sort of weapon, a mass destruction in Ukraine.

Now, the rationale the person presented was, Look, Putin is not going to lose the war. The more success Ukraine has, the more Putin is gonna escalate it to win. To be clear doesn't mean that if he uses a new in Ukraine, that we will have global nuclear warfare or even a World War. Okay? But it's certainly is historically significant.

If there, we haven't seen new's used in a long time since World War. If with these things happening, to what extent do you feel like the geopolitical framework is being priced into the market? And to what extent do you feel as you bridge from public markets to the private sector where interplay lives and innovation, these factors are already integrated into our economic realities?

Are they, are we already living through it? Or they're not really priced in, they're not really affecting business the way business is done. 

Chris Zhang: That's a great question, and frankly, to cover all that, it will take hours to really delve into the details. But I, what I can say is at this point, it's safe to say that the market is not priced in anywhere close to a full on nuclear confront.

Easy evidence of that is if you just look at how the US market has been doing where say, and the major indice are, we're still right around the same level of December, 2020. Earnings haven't gone up much, but the world is a much worse place in terms of liquidity, in terms of geopolitical conference confrontations.

Look we're not, We definitely are not pricing a nuclear war for con confrontations. The market is still processing what's happened with the gas pipeline. We don't know what will happen with the winter in Europe. I think, there's some definitely expectation that things will be difficult.

Which is why you see movements in currency movement in rates move the volatility that was introduced into the market in the last couple of weeks. But in terms of pure asset price levels, we're nowhere near to be fully priced in on any of these big confrontations. And not to mention, risk in China, risk in South America.

Really Correct. Exactly. All over the place. It's impossible to price all these same perfect. It will take a few mo few more months for market to digest the information that we're currently receiving. 

MPD: Just so not to scare people when we're talking about nuclear confrontation here, we're not talking about every NU gets fired on the planet and earth is uninhabitable.

There is no risk level for that, right? That then the stock market doesn't matter. Yeah. We're talking about a local tactical nu used in Ukraine, not triggering a nuclear response, but that and of itself. I think has psychological ramifications for how everyone perceives the global safety security dynamics.

Yeah. There's just a lot of, there's a lot of interesting things happening right now that are pretty scary. 

Chris Zhang: Yeah. Hundred percent. As you always say, we also want to think about a long term, rosy future of humanity in general. So it's, let's not forget that all these things we're talking about hopefully are for medium and short.

There's still innovations going on all over the place, 

MPD: so Yep. I'm an optimist I think will rise above it, but this is an interesting moment. This is a, certainly a significant moment in time. Yep. And for those who are putting pooing it, I think this moment will be a chapter in the history books.

It's already significant enough. Yep. Thank you, Chris. Always a pleasure. Brett. What's up buddy? Let's dive in. What do you got? All 

Brett Palatiello: right. Yeah. This week I wanna talk a little bit about interoperability and blockchains. One of the, or a few of the purported benefits of using public blockchains is interoperability and composability, right?

That, no matter what it is, any sort of value or anything that's owned can share the same rails, right? I can own a piece of art and throw that into defi. I can have an NFT in a game and throw that somewhere else. This generally works very well within a blockchain. But that this has proven quite difficult when we're talking about communicating between blockchains, right?

Consider if I have assets on Ethereum and I wanna move those over to Solana, how do I do that? Efficiently and also most, most importantly, safely. And currently the way most people do that is through a process called bridging. And it's easy to think of it as basically locking up tokens on one chain and then either unlocking or minting or creating a representation of that token on another.

Yesterday actually, Binance Smart Chain the chain run by the big exchange Binance was hacked for at least a hundred million on their cross chain bridge. But actually about 600 million was withdrawn. From of bnb from the chain. So it could have been much worse, but they luckily apparently were able to halt the chain before anything worse could happen.

And now this is a big problem chain analysis. They came outta with a study and said that this year almost 70% of all stolen crypto was from hacked bridges, which is about 2 billion. So it represents a real weak point in the ecosystem. And that includes, earlier this year, we saw actually Infinity side chain which connects to Ethereum, was hacked for about 600 million bucks.

Wormhole, which was another popular bridge was hacked for about 300 million bucks, Nomad 200 million. So it's a really big a really big problem. And it also starts to get politicians involved because again, that same study estimated that a billion dollars worth of it has been stolen from by North Korea.

This sort of, ties into why a lot of institutions are hesitant about stepping into the space and it really doesn't look good overall for the for crypto and blockchains in general. We are optimistic that somebody's going to figure it out. Which leads to my, my second piece of news, which is that there are some blockchains that are trying to figure this out one of which is Cosmos.

So Cosmos was built to natively allow. Sovereign blockchains to communi communicate with each other via the cosmo. They call it the cosmos hub, which basically coordinates all the different communications between these different blockchains. They call it, a network of networks or an internet of blockchains.

So anybody that uses the Cosmo software to create their blockchain, Natively is capable of speaking to other blockchains that, that use this software. But the problem is even if I use the Cosmo software and I'm embedded into the other ecosystem of blockchains, I need to bootstrap my own validator set.

To secure my own network. And for smaller blockchains that's quite difficult, right? Especially when you have a large number of other validators or ecosystems out there that you can tap into. So last week, Cosmos released their white paper for Cosmos 2.0. And amongst other things they're adding the ability to have interchange security.

So essentially what that means is newer blockchains can get up and running and be embedded into the Cosmo's ecosystem. But without having to initially worry about having security, they can outsource it to the Cosmos hub. So this is a really big deal. It, it was a problem for some of the smaller chains.

So now not only do you natively get interoperability, but you get a shared layer of security as well. And why is all of this important? One of the things we believe is gonna happen with all this technology is that it's gonna get abstracted away. And developers and, potentially institutions that are deploying on these chains, they're the ones that are gonna be either choosing or seeing that layer.

Consumers are not right. I just have my money here or I have my assets there. I it doesn't matter. I just am able to do again am able to do something better or more efficient that I couldn't do before. So one of the big to create, the fabric of the space and a mesh of different blockchains, you need to have interoperability.

And it's super important for us to get that right. 

MPD: I love topics like this. Because I think when everyone thinks blockchain, they still think the first application, which was the currency, the crypto. Yeah. And when we start talking about this type of infrastructure, it illuminates the bigger mission of building this layer of technology that will power a lot of software in the future.

Yeah. It just makes so much intuitive sense. Yeah. Let me ask a question. I think this foundational. That I have a feeling some people are probably wondering is why do we need more than one blockchain? Why not just have Yeah. Everyone teaming up and building, within the Ethereum blockchain, something else.

Yeah. Why isn't there a winner take all Yeah. Yeah. Why do we, the reason, why do we, why are we creating this interoperability? 

Brett Palatiello: Yeah. That a lot of people ask that. And there's actually been a lot of chatter now about app specific chains, which sort of takes it even, further to, to the extreme in terms of, being solely focused on one, one application.

But the reason this happens is, Ethereum, for example, It's quite expensive to be, because people are competing for block space. So for security, people might be willing to pay more to use Ethereum, right? But then there's some other applications like let's say algorithmic trading where latency, speed and sheepness of transactions is important.

So these are different types of trade offs that are made at different different blockchains that are more well suited to different applications. So it's important for, let's say a gaming company who very much, can sacrifice, let's say security for allowing, a hundred million people to be able to transact concurrently across that network.

They need that bandwidth. Some applications they have. Data requirements. For example there's a data limit to post onto Ethereum. There might be other blockchains that are more data intensive or app applications that need to be able to post more data to the b the base layer.

So there, there's a number of trade offs that aren't specific, can't be specifically addressed by a single block. It only makes sense to outsource that to either its own app, specific chain or, to another chain. Let's say, salon is very popular with high frequency traders for the simple reason that throughput and transaction fees are throughputs high, but transaction fees are so low.

And so that's why you can envision this world of a whole bunch of different chains. 

MPD: Super helpful. Thanks for coming on. 

Brett Palatiello: Yeah, thanks Mark. 

MPD: All right, Fong, what do you have for us this week? 

Phuong Ireland: Hey Mark, how are you? So today I wanted to talk to you guys about customer insights and the importance of really understanding your customer so that you can best position your product to suit their needs.

So customer insight looks really different depending on your business, right? So when I worked at a chain of retail stores, a lot of our customer insight involved being in the stores, observing customers, seeing how they shopped and engaged with products, and then asking them why they bought or didn't buy.

When I ran an e-commerce company, customer insight came in the form of heat maps and metrics like bounce rate and average session time. We hit up social media comments and dms. There are just tons of ways of gaining customer insights, and you really should be using a range of these methods and making sure that you're choosing the best ones for your business and the type of feedback that you're trying to.

But regardless of how you're doing it, here are three things to keep in mind when you're getting customer insight. Number one, make it as easy and as enjoyable as possible for your customers to give you feedback. So create lots of touchpoints for feedback, chat box, chat bots, surveys, emails. Go to your customer where they are and talk to them when they wanna talk to you.

And remember that user experience matters when you're getting feedback. So if you're conducting a survey, Keep it simple. Keep it easy. Make sure it's well, designed, and representative of your brand and proofread. Look for typos and spelling errors. If it looks like you weren't thoughtful in creating the survey, your customers not to be thoughtful in filling out the answers, or they might just abandon the survey altogether.

And don't make the customer do too much work. So open-ended questions can be really insightful, but they take a long time to answer. So don't ask 20 of them. Number two, don't mistake observations for insights. So observations are exactly that. It's what it's what you hear. It's just raw data. It's just numbers.

Insight is really getting at the core of why. What are the customer preferences and motivations behind the data that you're seeing? Understanding that really requires a lot of empathy. Putting your CU yourself and your customer's shoes and really understanding why they feel the way that they do.

And once you're able to do that, then you can come up with solutions that meet their needs. Now, last tip number three. Customers can't always accurately convey what they experienced or what they want. So for example, a post purchase survey really relies on a customer's memory of a checkup process, which could have happened days or sometimes even weeks ago.

So they may not remember all the details, and the feedback may not be a hundred percent dependable, but it doesn't mean you shouldn't use the surveys. It probably just means you should compliment it with some real time feedback remote user test or something. It's really hard for customers to tell you what they want.

For example, before Instagram it was created, no one would've been able to tell you that they wanted Instagram. So sometimes I find it's easier to ask customers what they don't want, and then couple that with insight on the problem that you're trying to solve. Come up with a solution, show that solution to customers and get their feedback.

This is a topic I really love, so I can go on and on with this list, but I'm gonna stop here. 

MPD: That is awesome. This is a big thing and I'm taking it, abstract it a little bit. Being a data driven CEO management group and team generally is something that not every group does. And when we meet founders that don't know their numbers or don't think about how they're dialing the business to optimize the numbers, it's.

Driving without, with the windshield covered in mud, right? You don't know what's going on. So this is a big thing I think for founders listening who are not instinctually hungry for this type of knowledge, Try to strengthen that muscle by forcing yourself to do it. And if you're just, it's just not your bag, you're not into it.

Compli. Add to your team. Going back to what you talked about last week in the Superman analysis. You need to get someone on the team who's looking at data. Have you seen a lot of founders struggle with this bong? 

Phuong Ireland: I have, I actually have seen founders struggle with the second part. It's not really the i, the data part.

It's actually analyzing the data and getting to the qualitative the motivations and what the data means. That's the part that I think takes a little bit more getting used to. You've gotta, be it's a mix of. Left brain, right brain that gets to be a little difficult.

MPD: And how are you guys doing that in your experience? Are you guys spit balling and saying, Hey, we've got this data. What could it mean? Brainstorming two or three options and then trying to do another test or something to figure it out? How do you get from. Part one to part two. 

Phuong Ireland: Yeah, I think it's a lot of discussing with a team, with your entire team.

So ideas can come from anywhere. Discussing what your entire team, different hypotheses as to why we're seeing the data that you're seeing, and then going back to the customer again and validating that hypothesis. And just, I just talk to everyone about it. It's not just, it's not it's not just a quantitative thing, if I have a hypothesis, I talked to my friends about it, I talked to, other moms.

It's just really getting it's really like a human behavioral thing. So it's great to get feedback from everywhere. 

MPD: Yeah. So the data is the first step, what you're saying? Exactly. In the journey. This was awesome. Thank you. Thank you. Thank you. I will see you soon. Thanks so 

Phuong Ireland: much.