June 2023 - Pleasure, Property & The New Pandemic:

This month, we distinguish the difference between happiness and pleasure, dive into UK mortgages, and explore single-use vapes through a financial lens.

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Jun 29, 2023

The Double Nudge: A relatable guide to personal growth

The words in this newsletter are entirely our own, but the insights and ideas have been inspired by others. Our goal is to synthesise the best information we have consumed each month and relate it to our everyday lives.

This is our attempt to get better each day, and we would love for you to join us.

Quote of the Month: “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” - Theodore Roosevelt

Our Challenge of the Month - Happiness vs. Pleasure:

It is easy to confuse happiness with pleasure. In the summer, the lines get blurred further as we are exposed to our friends and family on holidays, living the life.

This stream of content, typically via social media, tricks our brains into thinking that this is the ultimate goal, and what life is all about.

This month, I arrived back from an amazing holiday and like many of us, found it difficult to rebuild the energy to get back into the rhythm of normal life.

That exact feeling is why I sometimes dread taking time off, already thinking about the low-point and mental gymnastics I will do on my return to spring me back into motion.

The reality is, I’m disappointed that I let myself mistake happiness for pleasure. To me, happiness is a feeling of contentment, something that can be maintained and by its very nature, is mellow. Pleasure is a feeling of joy, an intense emotion that is enjoyed in short bursts.

In the weeks following my time off, I have worked hard at reconnecting with my own happiness.

Building a start-up feels like rolling a heavy ball up a hill. Sometimes, you don’t have the strength to do it. Other times, people help push it with you. Most of the time, it’s the challenge that drives you and the excitement of what comes beyond the hill.

That’s certainly the case for me. This month started with a holiday, was filled with days where I felt overwhelmed, and ended with wind in our sails as a business following some big wins.

That feeling I had last Friday was as good as any cold beer, sunbathing or dancing I did on my holiday. Not because I didn’t love my time away, but because both of those feelings are valid and important to me.

Understanding the difference, and cherishing them both is the key.

Both pleasure and happiness can exist in whatever quantities work for you, but acknowledging that difference is essential if you are to lead a life filled with contentment.

If you are seeking happiness, and fill your own bucket with pleasure, the inevitable result is quite the opposite - a rollercoaster of emotion, or a leaky bucket.

I encourage you all to distinguish the two in your own life, and seek out the balance that works for you.

Our Trend of the Month - UK Mortgages:

With much of our readership either newly on the property ladder or aspiring to be home-owners, the continued UK interest rate hikes piqued our interest once more.

Central bankers have been fighting hard to tame inflation by increasing interest rates. Globally, headline figures have responded favourably and fallen (albeit volatile food and energy prices have been stripped out and currently sit at multi-decade highs).

But in the UK, inflation has proved stubbornly high, last reading 8.7%, so the Bank of England has continued to push rates higher.

The knock on implications for homeowners of variable rates is higher repayments. In fact, UK mortgage rates have tripled in the last year, according to Bloomberg.

Consequently, within the next 18 months, 2.4 million UK homes will need to refinance, 800k of which fall within the next 6 months.

If the Bank of England keeps rates high to tame inflation:

People will potentially lose their homes
The price of homes will decrease
This knock-on impact will hurt lenders (banks)
Consumers will be forced to cut spending
The UK economy will be negatively impacted

This would certainly tame inflation but the social angst caused as a result would, in my opinion, lead us back to more stimulus.

Since 2008, ZIRP (zero interest rate policy) and central bank policies have pushed asset prices sky-high by consistently reducing interest rates and expanding the money supply.

The see-saw looks a lot less fun when it moves the other way.

Start-Up / Founder of the Month - Terry Clune of CluneTech:

One of the most underrated, or perhaps just lesser known, entrepreneurs in the country is Terry Clune.

He is the founder of a collection of global companies that make up CluneTech. They employ over 1500 people and have created billions of euro in value since Clune left Trinity College in 1996.

His entrepreneurial journey began following a summer working abroad in Germany, when he realised just how difficult it was to claim back the tax he overpaid. With support from his mother and girlfriend (now wife), he launched Taxback.com, the first of many FinTech businesses that would make up the CluneTech group.

Since then, the group has launched TransferMate, TaxBack, Sprintax, Benamic, VisaFirst and Immedis which was acquired at the start of this month for just shy of €600M.

For anyone who doesn't subscribe to The Currency, I’d highly recommend it. They have written two exceptional articles on how Terry Clune built his entrepreneurial empire, the journey to his most recent acquisition and his plans for the future here and here.

There are many elements of Terry’s journey that I find fascinating, and make him a role model for any aspiring entrepreneur. Here are some of the learnings I took from his story:

Solve a Problem: He solved a problem he was facing, understood how it impacted others and executed it without any deep experience in the space.
Develop Deep Expertise in an Area: He developed multiple businesses within the FinTech space, applying his learnings from each one and executed at scale for the different brands he was building.
Delegate Effectively: He finds exceptional people to work with, provides them with ownership in those businesses and leverages their different skill sets - he removes founder ego, and cites delegation as key to success.
Have Global Ambition: He is proof that you can build a global, billion-euro business from scratch in Ireland.
Be Resourceful: He relies very little on external investment, and has bootstrapped many of his successful ventures. Constraint breeds creativity and high-performance.
Give Back: He is passionate about supporting Irish entrepreneurs, and creating an ecosystem that can create global companies through his efforts with Connect Ireland.

Investment / Fundraise in Focus - The Next Pandemic, Vapes:

Given the emergence of AI, there has been talk of the necessity for Google to cannibalise its core search business and embrace the AI paradigm shift.

It remains to be seen exactly to what degree AI will be embraced by Google executives and how Bard will play out. However, this month, we wanted to explore how cigarette giants have explored similar strategies.

The tobacco industry has faced obvious headwinds due to increased health consciousness and government action reducing demand.

In 2018, Altria Group (formerly Philip Morris) took a 35% stake in Juul for c.$13Bn. That investment was subsequently revalued at $250m, a 98% write-down, following a series of legal and regulatory hurdles. Yikes.

Since Altria exited Juul, by swapping its minority stake for IP rights to heated tobacco prototypes, the company has made another foray into the e-cigarette market with a c.$3Bn deal to buy Njoy.

There are a number of potential headwinds to their bold move:

Regulatory Scrutiny: A key differentiator this time around is that Njoy enjoys FDA approval. In contrast, Juul was not FDA approved and came under intense scrutiny as their products were marketed at teenagers, with appealing flavour pods and a slick design that Steve Jobs would be proud of.

Smoking off-ramp or Nicotine on-ramp: Vapes have proven to be a useful aid for smokers to quit cigarettes and are more popular than gum or patches, but they are leading to a large uptick in teenagers vaping. An estimated $5Bn worth of the devices were sold last year.

Long-Term Health Impacts: Research show vapes to be safer overall than cigarettes. On the flip side, they are relatively new products and long-term effects remain to be seen. Evidence shows their vapour can cause lung disease, heart disease and cancer, but in smaller amounts than cigarettes.

How do you balance the availability of a healthier alternative for smokers yet ensure new cohorts don't fall foul to nicotine addictions? Have we just swapped the medium for nicotine delivery but now through a device with unknown long-term health effects? Only time will tell.

Content Corner:

Advice for Founders in a Market Downturn: In the closing section of this episode of The All In Podcast, the team discusses failure, perseverance and imposter syndrome in a market downturn for start-ups - a good listen for any founders out there in the arena.
How We Spend Our Time: A sobering reminder of how we spend our time with those we love, illustrated by Sahil Bloom here in six graphs.
The Future of Start-Ups: An interesting opinion here on how AI can enable small, high-performance teams to achieve incredible things at scale.
The Pre-Product AI Company that Raised €105M: Here is the investment memo by Mistral, an AI start-up in Europe, that has caused rip waves across the VC landscape.
The Environmental Impact of Vapes: The FT delivers a shocking breakdown of the impact of single-use vapes on the environment here.
Russia Out Producing the US on Ammo: An interesting article here on Europe’s military industrial capabilities falling short
Kyle Porter Thread of Rory McIlroy: After narrowly missing out on another major, golf writer Kyle Porter wrote a thread here where he expands on the writing “to accept one’s lot in life and rejoice in one’s toil is indeed a desirable but slippery gift.”
WSJ Confirms Wuhan Lab Funded by US: The Wall Street Journal has reported here that three US-funded scientists were working at the Wuhan Institute of Virology at the beginning of the Covid-19 outbreak. This has fuelled suspicion for proponents of lab-leak theory.
The Decision to Close a Start-Up (Peckish Founder, Paul O’Shea): Here is a brilliant article, written by an Irish founder on his decision to wind down his business, and his learnings along the way.