Sep 27, 2024 · 54m · more-or-less
#66: Meta Connect, the Hardware Renaissance (or Not?) and Special Guest Dan Feder · More or Less Podcast
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In this episode of More or Less, hosts Brit Morin, Dave Morin, and Sam Lessin welcome University of Michigan endowment allocator Dan Feder to discuss Meta's latest hardware lineup, institutional venture capital dynamics, and cultural contrasts between American tech startups and Japanese industrial longevity.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 82.5% of the talking time here. How this is scored →
The hosts as informed peer 4.9 Guest teaching 2.6 Guest disagreement 1.5 The hosts pushing back 2.9
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 9:00 Dan rejects VC DPI obsession
Dan directly challenges the prevailing venture hype around DPI slogans, warning that people are over-emphasizing DPI and mistaking lack of liquidity for genuine performance issues.
Hardest push from the hosts ▶ 50:15 Sam challenges the hosts on Japanese internet companiesSam refuses Dave and Brit's romanticization of Japanese business culture by bluntly pressing them to name even one globally dominant modern internet company.
Biggest teaching moment ▶ 9:05 Dan explains endowment spending mechanicsDan educates the hosts on how university endowments manage marks, showing that Michigan uses a 28-quarter rolling average which makes short-term mark drops far less consequential than VCs assume.
The host holds their own ▶ 25:45 Sam articulates Meta's hardware platform calculusSam demonstrates deep strategic knowledge of Meta's hardware margins, long-term capital allocation, and why investing five percent of market cap to bypass Apple's platform tax is a rational play.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| Opening Theme and Title Sequence: More or Less | 1 | 0 | 0 | 0 | Introductory banter and welcoming guest Dan Feder to the pool house. Everyone is polite, friendly, and joking about Michigan football. | |
| The Movie Rudy and Defining the American Canon | 2 | 0 | 1 | 1 | Sam riffs on watching Rudy and building an American canon of movies. Dan makes a dry joke asking if Rudy is all about VC, but there is no combativeness or real pushback. | |
| AI Summarization, Attention Spans, and the Vanishing Middle | 3 | 1 | 0 | 1 | Brit asks about AI summaries shortening long-form storytelling. Sam and Dave weigh in on consumer attention spans and the vanishing of the middle form-factor. | |
| Dan Feder on LP Realities: DPI and Valuation Marks | 5 | 7 | 4 | 4 | Dan provides clear LP pushback against the current venture obsession with DPI, explaining how university spending rules actually insulate endowments from mark-to-market fluctuations. Sam defends DPI focus as the only hard metric, while Dave adds thoughts on public market liquidity. | |
| Endowment Strategy: Network-Driven Investing over Market Timing | 4 | 6 | 3 | 2 | Dan explains his philosophy on network-driven fund investing rather than trying to act as market-timing pickers across geographies. Brit and Sam inquire into his background and strategy. | |
| Sam's Shitposting Habits and the Bear Notes App | 4 | 5 | 3 | 3 | Sam articulates his seed investing analogy of being a trapper rather than a hunter. Dan gently pokes fun at the pitch and questions whether trawling can actually catch non-consensus outliers in poor ponds. | |
| Meta Connect: Ray-Bans, Quest, and Orion AR Prototype | 8 | 1 | 1 | 2 | Sam breaks down the Meta Connect announcements, detailing the business case for Ray-Ban glasses, Quest VR, and Orion AR prototypes. Dan jokes that he is a complete Luddite, leaving the technical breakdown entirely to the hosts. | |
| Debating Digital Collectibles and Scarcity in AR and VR | 7 | 0 | 0 | 6 | Sam pushes back hard against Brit's suggestion that AR/VR will reignite digital collectibles and crypto, arguing digital scarcity is fundamentally artificial. | |
| Deep Tech Hardware: Industrial and Medical Robotics Innovations | 6 | 5 | 2 | 2 | Dan redirects the hardware conversation from consumer gadgets to industrial and medical applications. Sam and Dave validate this by sharing firsthand stories of seeing Zap Technologies and Zipline. | |
| The Hardware Renaissance Debate: Big Tech Versus Consumer Fatigue | 7 | 1 | 0 | 5 | Dave and Sam push back against Brit's framing of a broad hardware renaissance, distinguishing between big tech platform exhaustion and consumer hardware startup realities. | |
| Japan Deep Tech Tour and Physical Innovation | 6 | 3 | 2 | 2 | Dave reports from Tokyo on deep tech, while Dan adds observations about Japanese engineering precision. Dave contrasts Japan's collectivist craftsmanship with American startup individualism. | |
| Debating Japan's Success in the Global Internet Economy | 7 | 0 | 1 | 7 | Sam forcefully challenges Dave and Brit's romantic view of Japan by demanding they name a single globally dominant Japanese internet company, calling out Line and Yahoo Japan as weak counterexamples. | |
| Cultural Durability, Media, and Building for the Long Term | 4 | 5 | 2 | 3 | Dan reframes the Japan debate around company longevity, consensus, and durability rather than quick venture-backed exits. The episode wraps with warm closing jokes. |
Statements from this episode (20)
Lessin: Media bifurcates into TikTok and serialized TV, eliminating two-hour movies
“Well, there's even longer stuff, like the Game of Thrones serialized, goes on forever type shit, which is like a thousand hours, and then there's like the TikTok, but the middle drops out, right? And movies as a format is the middle”
Feder: UMich endowment spending uses a rolling 28-quarter average, not current marks
“In the case of Michigan, our spending rule is based on a rolling 28 quarter average value. So we're really not spending off those current marks.”
Feder: LPs overemphasize DPI in current venture capital discussions
“I think there's maybe an over Emphasis on DPI, and that is probably, you know, if this ever makes it on the air, it's, I'm probably gonna get all sorts of angry phone calls and emails and letters, but I just think that that's not the whole story, but it seems …”
Dave Morin: Staying private long-term harms the startup ecosystem
“People are just Having to deal with this like very janky, very inefficient private market for, I think way longer than is healthy for the ecosystem to some extent.”
Feder: UMich endowment exclusively invests through its own network
“There's nothing in our portfolio that's gotten there without it coming through our own networks.”
Feder: Trying to be a fund picker is ineffective for endowments
“It's really not playing to our strengths to go out and meet everybody who's got a fund and try to be a picker. Being a picker is really, really hard.”
Lessin: Seed investors are trappers, not hunters, casting nets for startups
“You're not a hunter, you're a trapper. Right? And the difference is, what you have to do is you put your nets, you put your traps in the right area, so it really matters, like, where you select your fishing grounds. You don't obsess about the biggest minnow, b…”
Lessin: Europe is definitely not producing robust venture capital returns
“It's definitely not Europe.”
Feder: Outlier venture returns often hide in poor market categories
“And the outliers can be in really poor ponds. And if you're just fishing in that one pond that you think it's the most robust, it's really, you can actually have zero outliers.”
Lessin: Startups cannot compete in AR and VR hardware due to costs
“Not anytime soon, and not for a very long time, because I think it's one of those classic things where, like, the cost of entry to play in these games is too expensive for any startup to go after.”
Lessin: Meta cannot acquire any startups due to DOJ antitrust pressure
“By the way, Meta can't acquire anything anymore anyway because of the DOJ from a, you know, antitrust perspective, regulatory perspective.”
Lessin: Digital collectibles are nonsensical because digital scarcity is completely artificial
“I think you have to go back to the fundamentals of the idea of a digital collectible is, like, in my mind, fairly nonsensible. Like, the whole point of digital technology is you can infinitely replicate things for free, right? So, any scarcity is fundamentally…”
Feder: Industrial, defense, and materials tech are the sensible hardware bets
“Yeah, you know, industrial applications, or military applications, or material sciences, those seems like, those seem like the places where you can actually build a company more sensibly.”
Brit Morin: Jony Ive's LoveFrom has clients paying hundreds of millions
“He's got lots of clients that his agency love from that are paying him hundreds of millions of dollars.”
Morin: Hardware requires rare capital discipline or massive enterprise scale
“To play in hardware, you either have to be the most disciplined startup entrepreneur of all time, and probably somebody who's done it multiple times, and is willing to go through it again, right? And to be extremely capital efficient in the world of atoms, whi…”
Morin: Successful hardware startups require immediate enterprise or defense revenue
“The hardware stuff that does work as a startup tends to have an enterprise use case of some kind that enables it to, you know, really have a business model straight out of the gate. And those tend to be, you know, in the case of zip line, it was healthcare and…”
Lessin: The true global hardware renaissance is currently happening in Ukraine
“The real renaissance hardware, which I actually completely agree with is going on right now in Ukraine more than anywhere else.”
Morin: Apple's design and quality processes stem from Japanese manufacturing philosophies
“Apple, many of its processes, the way it focuses on design and engineering first and quality is really Japanese processes and ways of thinking.”