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Hello, fellow Olio enthusiasts! 👋

Happy Hump Day and welcome to the 54th edition of Weekly Olio - your weekly dose of giggles, wisdom, and a sprinkle of intrigue with our tantalizing thought piece (yes, we're talking about Publisher's Parmesan here). 🤭

Today’s Publisher’s Parmesan talks about WeChat and how it is becoming the default operating system for life and business in China.

Exciting, right? 👏

Will come to that, but let’s first start with the curation.

This edition of Weekly Olio is brought to you by The Economist.

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The Quote󠀢 💭

The Tweet 🐦

Earlier today, we got news that Charlie Munger - one of the most successful investors of our time and a fountainhead of wisdom has passed away at the age of 99. He continues to live on through his famous quotes, quips and one-liners. As a tribute to this legend, today’s thread is a compilation of quotable quotes from the great man. May he rest in peace!

The Infographic 💹

Turns out, the Unites States offer the best return per working hour - there is a reason people from all over the world flock to America. On the other hand, Mexicans need to work harder for a lower wage. Fascinating insights!

The Short Read 📝

The Bunches Principle: why things go right or wrong all at once - by Soumitra Sharma

Imagine life as a game of Jenga. You carefully stack the blocks, creating a tall, precarious tower. But then, one wrong move, and the whole thing comes crashing down. That's the Bunches Principle in action. This article explores the idea that good and bad things tend to happen in bunches. It's like the universe is playing a cosmic game of whack-a-mole. Just when you think you've got things under control, WHAM! Another crisis pops up.

This can actually work both ways. The author provides examples of this phenomenon, from Nvidia's stock price soaring to Zoom's meteoric rise to SVB's sudden collapse. It's a wild ride, and it's all thanks to the Bunches Principle.

So, what can you do about it? Well, the author suggests a few things. First, be aware of the Bunches Principle. Knowing that things tend to happen in bunches can help you prepare for the ups and downs. Second, don't get too attached to either good or bad times. Remember, they're all temporary. And finally, focus on the things you can control. That way, when the inevitable curveballs come your way, you'll be better equipped to handle them.

So, next time you're feeling like life is a game of Jenga, just remember the Bunches Principle. It's all part of the ride.

The Long Read 📜

Generative AI exists because of the transformer - by Financial Times

With VCs salivating over AI startups and top tech companies scrambling to launch their AI initiatives - Generative AI is the flavour of the season. Artificial Intelligence has been a part of the corporate lexicon for some time now - why did it suddenly explode the way it has in the last 18 months? This fantastic infographic + article from FT, tries to answer just that.

Large Language Models or LLMs are at the heart of this generative AI led disruption. LLMs try to model the way a human brain functions to process data. The development of LLMs is underpinned by a seminal paper written by researchers at Google Brain in 2017. This paper called Attention is All You Need developed a breakthrough technology called the transformer model that helps modern LLMs process data like humans. This article is a brilliant step by step breakdown of how it actually works - perfect for all the non-technical nerds out there. In case you want to go really technical, you can find the original paper here.

Publisher’s Parmesan 🧀

WeChat: China’s Operating System

Disclaimer: This content was originally published by Colossus as a podcast, edited and republished as an article here.

WeChat is the default operating system for life and business in China. Founded inside of Tencent in 2011, it is the original super-app, and its 1.3 billion monthly active users can order food, message friends, play games, pay bills, shop and more on the service.

To break down WeChat, Patrick O’Shaughnessy is joined by Connie Chan. Connie is a general partner at Andreessen Horowitz and is well-known across Silicon Valley for her deep knowledge of the Chinese consumer technology landscape.

Patrick: So Connie, today is going to be an opportunity to explore in great detail the many lessons of one of the most important apps in the world, WeChat. Its history, its impact, the ways that some of the ideas inside the technology could be applied here in the West, we're going to have a ton of fun exploring this.

I think we have to start with the word super-app, that's a word that you were probably using far before just about anybody else, but it's become a very common word. It's often cited as a board-level strategy for a DoorDash or some of these bigger Western apps, like let's become a super-app maybe Twitter now with Elon Musk, but there was one original in China that you're a deep expert in. Maybe just begin by giving us the broad brush strokes of what that term super-app means to you and why it is so powerful.

Connie: Super-app to me means that you are leveraging all your existing traffic and your existing distribution, and you are helping that customer find other products or services that they weren't naturally coming to you for in the first place. So for example, if you are a chat app like WeChat, they can now be used as a way to find food or to find taxi or to interact with X, Y and Z store down the street.

These are all services and products that are introduced to users inside WeChat. And importantly, they're not necessarily built by WeChat. It's basically they have opened themselves up. WeChat has opened itself up as a platform to work with these third-party developers, where third-party developers can create official accounts or many programs and leverage the traffic that WeChat already has.

And when I think about Western apps that are trying to take the same concept in this insight on business model, there's a couple of use cases already in the West that we're starting to see emerge, ones that you alluded to, for example. And it's this idea that you might know so much about your customer or maybe your customers using your app so frequently.

But even though they're coming to you to order food, maybe you can direct them to also use that same app to order medicine, to order groceries, to order make up, to order basic toiletries, you name it. Or maybe if you're using the Uber app already to hail a ride because you're using it so frequently, you might also think about using it to order your lunch. So this idea of using your existing traffic and distribution and doing lead gen with these third-party partners.

Patrick: You talk about the philosophical difference between, I would say, the West's emphasis on performing individual functions for users through software versus WeChat's emphasis on, what I'll call, owning the user in its entirety. What is important to understand about those two different styles because that seems to sum up how East versus West has been different at the app level?

Connie: When I think about the East versus West framework, I think in the West, we often think of horizontal expansion, meaning we have one feature that's taking off, let's go expand to other countries. And you've seen lots of Western companies do this. They will find something that hits in the U.S. and then they're going after all these other Western worlds, and they're trying to focus on growing their number of users.

For a bunch of reasons, in Asia, oftentimes, they're taking a vertical approach versus a horizontal approach. And the idea is you get the users in Asia, in China, to use your app. But rather than say, okay, now I'm going to go get all the U.S. users to use it and now I'm going to go get all these users in the U.K. and France and Germany and what have you.

They think about what more can I do to serve that user. What more do I know about that user that helps me think about how can I solve their issues around work or ordering breakfast or getting their kid to school versus just the one feature that I'm already servicing them on.

So it’s this vertical approach thinking about the user, focusing not on number of users, but more importantly, how many times a day are you relying on this app. How frequently are you opening this app every day. How core is it to your daily habits.

Patrick: This is a huge business, and it's not a secret anymore and hasn't been a secret for a long time, how powerful it is. And there's definitely people that think that this should exist in the West or even have tried to make it exist. But yet it doesn't. Why do you think that is? I understand the vertical versus horizontal focus of building strategy, but what are the various reasons do you think why we don't have some clean analog in the West of WeChat?

Connie: I think to answer this question, I have to take you back to the history of WeChat. So WeChat started in 2011. And in 2011, China's digital penetration look really different than digital penetration in the U.S. So I mean, back then, it's hard to believe this, but the majority of people in China didn't use e-mail regularly.

They didn't even have an e-mail address. So e-mail didn't have the same kind of penetration that it did here in the U.S. in that time frame. And at the same time, even though people did have text messages, there was tons of texting scam that was happening in China.

When WeChat came on to the scene, messaging wasn't a fragmented problem. Messaging was a very much needed product when people started using their smartphones. In that sense, it was able to very quickly become the dominant communication platform in China. To this day, most of my friends in Asia, I don't have their phone numbers. I don't have their e-mail addresses.

Some of them don't even have e-mail addresses or they check it like once a month. It's basically because everything runs on WeChat, that is my only way of communicating with these people. It's just so different than in the U.S., even 10 years ago, but even more true today, messaging and communication is so fragmented.

Every morning when I wake up, I have to look at Signal. I have to look at my Instagram DMs. I have to look at Twitter DMs, LinkedIn messages. My e-mail, my Slack, my iMessage, it's such a mess. You say 10 apps, and that's not even an understatement here. That's a reality for all of us. And because there is this no unifying platform for communication here, it's very difficult for messaging to be that same wedge that can spawn a new super-app here in the U.S.

Patrick: It's interesting that it seems if you compare the things you can do in WeChat, all the functions, with the functions that you can perform in iOS, let's say, on an iPhone. It's almost like the operating system here in the West is down at the hardware level with Apple. And in China, it’s at the software level with WeChat.

Anything that you would react to there? It seems as though maybe that's the answer that basically iOS is our WeChat that all those functions are just in a little different buttons and apps. And this will bring us to the notion of identity and why that's so powerful in controlling an ID, the user ID in just a moment. But any reaction to that difference for that gap?

Connie: Yes. I also think of WeChat as an operating system or like a browser to the Internet. It is the one app you really cannot live without in China. And also, conversely, if I only have that one app, I can fully function in China as well.

Patrick: And I think the way that ID is managed and controlled both for the benefit of the user and the benefit of the developer is really interesting. It's very different. I've got a different login for every one of those damn apps on my iOS, on my iPhone. Very different in WeChat. So maybe describe the system of user identity itself and why a unifying ID allows for some of this interesting architecture?

Connie: The unification of everything happening in WeChat, because WeChat is designed in many ways to still keep a clean interface, actually gives the consumer a lot of control and privacy. And I know that sounds so counter-intuitive when you think about West versus East apps, but hear me out.

On WeChat, when I am subscribing to one of these official accounts, like the Service Account. Say, I'm subscribing to McDonald's Service Account. They can only push me messages four times a month. There's a limit. And if they use that all up the first week, it cannot push me any more messages that entire month. And just contrast that with any e-commerce site you've ever given your e-mail address to and how many e-mails you get from them every day. It's to the point where I almost never look at my promotions tab on my Gmail because it's a mess.

Some of these brands, they literally e-mail you every day or every other day, and there's a lot more controls in these guardrails that are put in place when these businesses are interacting with the end user. In addition to that, if I give my e-mail address to a Western website, I know that e-mail address gets sold to someone else. Or I know my cellphone number gets sold to someone else. And that's why we have all these spam issues in our e-mail and our texts. And increasingly, that's why e-mail marketing is less and less efficient. In Asia, when I'm working on WeChat, if I am interacting with an official account, say, I get too many messages. And again, it's still capped for these Service Accounts at four per month.

And if it's a subscription account, it's separately folded, just like promotions are separately folded in your Gmail. If I ever feel like I don't like this content anymore, I just swipe and I'm unsubscribed, and that company doesn't have my phone number. That company doesn't have my e-mail address, and they can't find me. They cannot contact me. So very strangely, my inbox is so much cleaner on my WeChat than it is on my e-mail by leaps and bounds because I have full control over what kind of content I want to see. And that's some of the insight around how they design their identity.

Another one I'll point out is the ability to use WeChat for interest group conversations. So group chats are very powerful on WeChat. Not only are you using WeChat to communicate with people you already know, like your friends, your family, your coworkers, people you know in real life, like everyone you would normally chat with on iMessage. You're also very often in interest-based groups. Maybe you're in a group of other like-minded people, other people who are hosting great podcasts, other people who love technology, you name it. And the reason why these interest-based groups thrive is, again, because of this control around identity.

When I joined one of these groups, those users don't necessarily know my real name, and those users don't have my contact information. It's very different than if I use WhatsApp, for example, to join a large group. They have my phone number. And that to me is actually very intrusive. I don't like joining a lot of these groups unless it's with people I trust or people where I know it's been curated. I don't want my phone number floating out there. The way that the identity is designed in WeChat allows for more private/direct communication, but also group communication with these interest-based groups, and most importantly, lots of communication and interaction with companies and businesses because that user feels so in control.

Can't get enough of this conversation? Us neither! Check out the full episode below to satisfy your craving for more insights and ideas (directly jump to 13:16 to continue ahead). 😃 

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