JDR’s Newsletter – #11

Hello there,

This is a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.

In case you haven’t already subscribed, you can do so through Tinyletter. You can find an archive of this and previous issues of my newsletter at news.jdr.fyi.

Thoughts, opinions and typos are my own.

My blog posts and articles

I had the week off from Mattermark and had some pressing things to work on last week, so I didn’t get a chance to publish anything new. In light of the recent coup attempt in Turkey, I thought it’s worth revisiting a couple of posts from May 2015.

A (Very Incomplete) Conceptual Toolkit for Designing Rebellious Software

Here, I perform a brief survey of subversive technologies and design patterns that can be implemented in software. In addition to providing brief explanations of patterns and techniques like decentralized systems architecture, end to end encryption, and ephemerality / “forgetful systems”, I provide links to additional reading materials about each topic and explore how each of these components are mixed and remixed in the software used by protest movements.

Cloaking the Swarm

This was originally submitted a paper for a college class, but I adopted it for my blog. I compared the kinds of software tools used in post-Arab Spring protest movements. My thesis was that in comparatively repressive regimes or in situations where the right to free speech is not protected, protesters will turn to private and decentralized messaging apps to organize as a pre-emptive hack around government surveillance, whereas in countries with strong free-speech protections, public platforms are the primary medium of organization. I covered the use of Facebook and Twitter in the Ferguson, MO riots and the use of meshnet app Firechat in the Hong Kong protests of 2014.

The Real Reason Why Line’s IPO is Interesting

Japanese messaging application company Line went public on Friday in both US and Japanese markets. The IPO was deemed a major success by the media, closing 27% higher than its IPO price in US trading, and raising some $1.3 billion for the company.

It seems like good news all around: Line shareholders get the liquidity event they wanted, tech investors and private company CFOs have some confidence that the market for tech IPOs is getting better, and, importantly, journalists and researchers will (hopefully) get a better look at the economics of running a large messaging platform.

Tencent’s WeChat, Facebook’s Messenger, and (to a much lesser extent) Apple’s iMessage are revenue-generating products produced by publicly traded companies. But, each platform’s parent company tends to keep revenue figures close to the chest and aggregated with other revenue figures in their balance sheets and income statements. Line, a standalone messaging application, doesn’t necessarily have the luxury of other product verticals to hide behind.

As we could see in Line’s F–1 filing with the SEC, there was a fair bit of granularity in the list of operating expenses. And, one could hope that subsequent income statements break out Line’s revenue streams a bit more, such that analysts can get a better grasp on Line’s performance and that of the mobile messaging market as a whole.

Further Reading on Messaging Platforms

Start with a16z partner Benedict Evans’s essay “Messaging and mobile platforms” and/or “Three phases of messaging”

Pew Research’s 2015 report on Mobile Messaging and Social Media is a bit dated at this point, and it underestimates Snapchat’s impact on the market, but it still has some good statistics gathered by sound survey methodology.

The Mobile Ecosystem Forum’s 2016 report is a little more up-to-date.

To learn more about WeChat, check out Connie Chan’s “When One App Rules Them All: The Case of WeChat and Mobile in China” for the a16z blog is good. And, WalkTheChat’s 2016 WeChat Impact Report has a lot of extremely current statistics about the Chinese messaging behemoth.

Other news and links

Best Of

If you are in San Francisco, or if you’re a fan of beautiful food photography, design thought and Marshall McLuhan puns, check out The Message is Medium Rate. Do not do so if you’re hungry.

Try your first meeting with the AI VC. Its programmer(s) really hit it right on the nose here.

After a 7,000 km trek through Kyrgyzstan, Tajikistan’s GBAO region and China’s western provinces, Jan Chipchase shares “61 Glimpses of the future” he experienced on the trek. It’s full of observations and short anecdotes like, “You can comfortably travel here for a month, on one month’s San Francisco rent,” “Pretentious people are inherently less curious,” and “The first time you confront a leader, never do it in front of their followers, they’ll have no way to back down.”

Pokemon Go Is a Thing

Note: I have not yet played the game.

Pokemon Go is blowing up. Niantic’s big game is driving Central Park stampedes and billions of dollars into Nintendo’s market cap.

Nasdaq published a great article from Maks Financial Services about monetization in Pokemon Go.

According to Slice Intelligence, purchases in Pokemon Go surpassed he rest of the mobile gaming market on July 10, 2016 and accounted for nearly 47% of the entire mobile gaming market on that same day.

People are even saying that “Pokemon Go represents the best of capitalism.

You might want to check out Pitchbook’s list of the top ten VC investors in the mobile gaming industry.

Other Tech News & Industry Commentary

Leo Plovets, the Coding VC, says that technical due diligence is a waste of time in seed stage deals because market risk is a bigger threat than technical risk these days, and that most companies aren’t trying to solve big technical problems.

Github user Magoo shared the Blockchain Graveyard, their collection of dead cryptocurrency companies, complete with postmortems.

On that note, The Economist published a new report on the state of dark web cryptomarkets.

Go Fish Digital shares some new Snapchat stats. My favorites: Snapchat’s mobile bandwidth usage now exceeds Twitter. And, 37% of college-aged users claim to use the app for “creativity”. Comparatively, 27% and 23% of those surveyed use it for “keeping in touch” and because “it’s easier than texting”.

JDR’s Newsletter – #10

Hello there,

This is a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.

In case you haven’t already subscribed, you can do so through Tinyletter. You can find an archive of this and previous issues of my newsletter at news.jdr.fyi.

Thoughts, opinions and typos are my own.

My blog posts and articles

This week I wrote two articles for the Mattermark blog.

Series A Rounds Slip In Q2 As Dollar Volume And Deal Velocity Recede (Mattermark)

In line with the title, I find that Series A investing has slowed down significantly in Q2 of 2016 as compared to Q1, both in terms of dollar volume and the number of deals struck.

However, despite this, I also found that the median Series A round size remains basically unchanged since 2014, meaning that the fundamentals of the market for Series A-stage equity remain as strong as they were in the good ol’ days. However, this may change a bit.

Making Sense of Why Series A Investment Is Slowing (Mattermark)

In this post I try to make sense of the declines I identified in the first one. I cite global macroeconomic uncertainty as a likely cause of the slowdown in startup investing, while also delving a little deeper into the historical data on Series A investment over time. (i.e. If you want to see some nice longitudinal charts, this is the post to read.)

On The “Blanding” of Web & Mobile Design: Some Light Reading (jasondrowley.com)

Here I provide some really brief background on “flat” design and links to a couple of interesting articles. I suggest reading Charles Thaxton’s “Whither The Webpage” if you’re not going to click through to look at the other resources.

Against life hacks

Laurie Penny’s critique of life hacks and guilt-inducing “wellbeing ideology” for The Baffler is delightfully (or, depending on your disposition toward this sort of thing, depressingly) caustic but ultimately redeeming. She asserts that the Instagram photos of kale smoothies, post-workout selfies and self-congratulatory proclamations about mindfulness and spirituality is a symptom of a broader social disease, but ultimately ends up echoing the ideas David Foster Wallace touched on in his Kenyon commencement speech, “This is Water” (a full audio recording of which can be found here). The path toward sustainable wellness is not paved with yoga mats and washed with asparagus water, but found in the more quotidian and humdrum activities we perform, like getting out of bed every day to do something that furthers our goals and makes the world a slightly better place.

Other news and links

Best of

DuckDuckGo CEO & founder Gabriel Weinberg posted a list of dozens of mental models he repeatedly finds useful on Medium. The list is incredibly helpful if you’re looking to expand your cognitive toolbox, or to brush up on concepts that you’re a bit rusty on. Weinberg even included a how-to guide for using the list and links each concept to more resources (usually Wikipedia but often to blog content and essays from elsewhere).

Tech industry news & commentary

If you liked the pieces I wrote for Mattermark this week, you should check out Elad Gil’s post, “End of Cycle?” In it, he provides contrasting interpretations of the bloom in variety of companies that are receiving funding from VCs. On the one hand, it could mean that lots of industries are ripe for takeovers by tech companies, but on the other, it could just be a signal of desperation by investors thirsting for the next new thing. There’s a lot more in there, but I don’t want to bury the lede.

Bitcoin’s block reward halved on Saturday, meaning that every ten minutes, half as many bitcoins now enter circulation (12.5 bitcoins now) as compared to, say, Friday and the few previous years. This caused a significant spike in Bitcoin’s exchange rate over the past month or so. But, for one brief moment, Bitcoin was a less volatile currency than the post-Brexit British Pound.

Nieman Lab covers Audible’s rollout of Channels, its new mobile application that features curated audio content in, well, channels like “The Daily Rush”. This appears to be Audible’s first serious foray into the podcasting space, and it will be interesting to see whether its original content is attractive enough to get new subscribers for the Amazon-owned service.

bobg of Lab41 – the interdisciplinary lab in which the US’s intelligence agencies come together to discuss and work on problems related to Big Data – explains why there is a need for a a bullshit detector in conversations about artificial intelligence.

Maybe bobg should read Stephen Merity’s article, “It’s ML, not magic: simple questions you should ask to help reduce AI hype”, which was posted on July 3rd.

This week, The Atlantic revisited a January 2016 analysis from the Wall Street Journal which found that despite Millennials’ celebration of entrepreneurship and startup culture, business ownership by the under–30 set in the US is at a 25-year low. Derek Thomson, the Atlantic journalist behind the piece, concludes that student debt and reduced risk appetite among young people is to blame, but that there are also some bright spots.

In a breezy but informative post, Nidhi Shah explores the evolution of mobile application design from 1994 through 2016 for Growthbug. Major highlights include the lexical shift from “features” to “apps”, the simple but functionality-rich apps of the pre-smartphone era, Apple’s release of the iPhone and App Store and Google’s rollout of Android and Google Play stores, and the evolution of the mobile app and mobile game businesses. Worth checking out if you want a refresher.

Other design stuff

In a time when AI and “conversational UIs” are all the rage, Intercom published their 8 principles of bot design. Among them are the following guidelines: “Don’t pretend to be a human”, “Use [bot] interactions sparingly”, and “provide an escape hatch” (e.g. a human fallback) for when conversation between human and bot inevitably breaks down. (For a case study of good bot design, I recommend checking out X.ai, a scheduling bot I frequently use.)

UCLA designer Perre DiCarlo believes – and proves – that porting paper forms to the web is more complicated than copying and pasting. This is one of the most meticulous case studies of web form design I’ve seen yet.

JDR’s Newsletter – #9

Hello there,

This is a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.

In case you haven’t already subscribed, you can do so through Tinyletter. You can find an archive of this and previous issues of my newsletter at news.jdr.fyi.

Thoughts, opinions and typos are my own.

I was interviewed on the subject of virtual reality!!

A few weeks ago I was approached by the editor of PCM, a payments industry trade magazine published by Payments & Cards Network, a recruiting service and jobs board for the payments, financial technology and e-commerce professionals.

My interview starts on Page 11.

I was asked to expand and follow up on an article I wrote on my blog last year in which I speculated on the role biometric data will play in making the experience of making payments in VR a seamless experience.

Overall, I’m very happy with how the interview turned out. I got to spend a lot of time discussing the history and current trends in VR, as well as further speculate on the subject of payments as it relates to VR.

Note: the piece was edited for professional tone, which kind of breaks up the cadence in parts. I’m hoping to publish the unedited version on my site soon.

My blog posts and articles

Which VCs Have The Most Portfolio Companies With $100M Or More In Funding? $250M?(Mattermark)

This week on the Mattermark blog I revisited a post from the blog’s early days. In September 2014, Mattermark CEO Danielle Morrill wrote a piece identifying the 110 venture capital firms invested in four or more companies with total funding of $100 million or more. Her goal was to identify the investors that were most “complicit” with enabling high burn rates in big startups. Needless to say, things haven’t improved much.

Here’s a TL;DR version of what I found:

  • The number of investors with four or more portfolio companies funded at $100 million or more tripled in 19 months: from 110 to 334.
  • This is the craziest statistic I found: The number of individual tech-focused investment rounds sized at $100 million or more closed in the last nineteen months is more than the number of similar sized deals from the entire decade preceding the original article.
  • The number of firms that participated in just three or more $100 million rounds is greater than the number of investors mentioned in Danielle Morrill’s original article.
  • Because $100 million is not what it used to be, I made a list of the 86 investors with four or more portfolio companies funded at the quarter billion dollar level or higher.

Surveying Last Week’s Bitcoin News (My blog)

I haven’t really touched on the subject here in this newsletter, but Bitcoin is a very interesting area to me. It’s been an area of research work and financial experimentation for a long, long time now. And although I’m not currently involved in the cryptocurrency space on a day-to-day basis anymore, I still try to keep up with the news.

In this post I cover:

  • The amended S-1 filed by the Winklevoss twins for their Bitcoin Investment trust
  • An update to my post from December 2015 in which I found that the Bitcoin network runs 11,000 x faster than the sum peak performance of the Top 500 supercomputers. Hint: it’s running about 2x faster than before.
  • A great article from the New York Times that dovetails nicely with academic research I did on the subject of the Chinese Bitcoin ecosystem.

Other links

Best Of

I am a big, big fan of business history and educational videos. “Business Casual” is a new, small Youtube channel with fewer than 2,000 subscribers. So far, there are only five videos, but the content is consistently interesting. My favorites so far are the profiles of FedEx and IBM. Show this guy some attention so he keeps making them!

This week I learned

As the IEEE reported, Thomas Edison was the first to use the term “bug” in the context of technical malfunctions, and, yes, his did involve actual insects. (This runs contrary to the popular story about Grace Hopper finding a moth in a vacuum tube of the computer she was programming, which I always thought was the origin and first use of the term.)

JDR’s Newsletter – #8

Hello there,

This is a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.

In case you haven’t already subscribed, you can do so through Tinyletter. You can find an archive of this and previous issues of my newsletter at news.jdr.fyi.

Thoughts, opinions and typos are my own.

My blog posts and articles

A Beginner’s Guide To VC (Mattermark)

This week, I compiled a list of some of the best resources I’ve used to learn about the venture capital industry over the past couple of years. It contains over 60 links to books, academic articles, explanations of common terminology and a list of influential VC blogs and podcasts. If there is anything that I may have left out, please let me know and I’ll be sure to add it if it’s a good fit.

3 Places To Start Learning About Marketplace Businesses (jasondrowley.com)

After the Mattermark piece, I received a lot of requests to provide resources on specific industry verticals. In what’s probably going to be an occasional series on my blog, I start with marketplace businesses. Here, I identify my essential list of readings from Version One Ventures, Benchmark’s Bill Gurley and product maestro Rishi Dean, all of which provide their own analytical frameworks for understanding and evaluating marketplace businesses.

Notes on Twilio, Line, and the Open (?) Window (jasondrowley.com)

On Thursday, Twilio, the cloud communications company, made its public debut on the NYSE. And boy what a debut it was. Priced at $15, opening at $23.99 and closing nearly 90% above its IPO price, investors from Sand Hill Road to Wall Street may feel tempted to proclaim the tech IPO window is open. ? But as I point out in this post, one data point does not a trend make, and the next company on the IPO docket, Line, may curb some of that enthusiasm.

Brexit: History, Market Failure, Threat (jasondrowley.com)

Thursday’s vote for the United Kingdom to exit the European Union was certainly interesting. It’s tragic for some, and a point of elation for others… exactly what you’d expect from a highly contentious referendum. To me, though, the most interesting aspects of Brexit is the failure of prediction markets to anticipate the outcome and the impact the move may have on the scientific and tech communities in the UK and EU going forward. In this brief post, I share some of the best analysis of the prediction markets and science stories that I could find.

Other Tech News

Boston Dynamics Debuts SpotMini

Robotics company Boston Dynamics unveiled their new model, SpotMini in a Youtube video on Thursday. This smaller, nimbler successor to Big Dog and other models moves even more smoothly and has an attachable “neck” that can be held stable in space as the body moves around it. The unit in the video has a (presumably detachable) neck with a “mouth” that can grasp and manipulate delicate objects, but this mouth module could presumably be replaced by a camera or other sensor array. We’re definitely creeping into Uncanny Valley territory here.

After watching the SpotMini video, you might want to read this essay about the Uncanny Valley from n+1.

Elon Musk’s Company Bids For Elon Musk’s Company

In a move that would make even the best due diligence team die a little, Elon Musk’s Tesla announced a bid to acquire green energy installation company Solar City, of which Elon Musk is largest shareholder. Remember that Tesla is trying to expand its network of car battery charging stations and expand its “Power Wall” battery business, so the missions of the two companies are well aligned. This would move Tesla further down the road toward becoming the generalized energy infrastructure company it aims to be, if and only if SolarCity shareholders, Tesla shareholders, and in all likelihood some court feels as though there’s no conflict of interest here.

Other news and links

Best Of

Like most Chicagoans, I like giardiniera, the spicy mixture of pickled veggies and hot peppers usually served with Italian beef sandwiches. I made a batch using this recipe and it is diabolically good.

Patrick van Hoof published a guide to AI for designers. And, while on the subject of AI, it might be fun to check out The Scientific American’s reporting on Facebook’s AI and machine learning efforts. The piece goes into significantly more detail than reporting in the big tech press.

Tech Trends & Industry Commentary

In an essay on Medium, software engineer Laura Montoya helps to unpack the tension between diversity and “cultural fit” in the tech business.

Leigh Honeywell’s post about the problem of “rock stars” in the tech business is amazing. If you’re reading this, you’ve probably seen an a job listing or heard someone describe someone as a “rock star [developer/designer/sales person]”. According to Honeywell, a senior staff security engineer at Slack, this sort of characterization breeds the culture of narcissism and arrogance that tech is known for and even celebrates. I agree, and you should read her post.

It turns out that Uber drivers don’t make a lot of money, according to reporting on leaked internal data by Buzzfeed’s Caroline Donovan, but that shouldn’t have surprised anyone. Average wages: less than $13.25 per hour.

JDR’s Newsletter – #6

Hello there,

This is a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.

In case you haven’t already subscribed, you can do so through Tinyletter. You can find an archive of this and previous issues of my newsletter at news.jdr.fyi.

Thoughts, opinions and typos are my own.

My Blog Posts

Nothing new to share this week, but there will be a new Mattermark article next week.

My Quick Take re: Meatware & Cotton Gins

Seattle-based journalist Mark Harris took a deep dive into the world of “crowd-working” in a recent post on Backchannel. Now, it’s been more than a decade since Amazon launched Mechanical Turk to outsource small tasks that couldn’t be performed by a computer, and the growth of crowd-working platforms (run by companies like TaskRabbit, Uber, AirBNB, zCrowd, etc) has only accelerated.

Harris states that in the last three years, between 2012 and 2015, participation in crowd-working platforms has increased tenfold and payouts to crowd-workers increased by a factor of 54. However, for those working on purely digital tasks, like those offered through Mechanical Turk or zCrowd, the work is often grueling and low-paying.

Harris’s conclusion, that this kind of work is not going away any time soon, is bolstered by a post from Greylock partner (and former Mozilla CEO) John Lilly, published this week. Somewhat problematically, Lilly seems to make a comparison between software and the cotton gin, which as we know massively increased demand for (slave) labor. Lilly intended to say that the cotton gin increased demand for labor is analogous to the automation revolution today only insofar as this revolution is unlocking pent-up demand for software. However, when placed up against Harris’s essay, we’re reminded that those tasks which lie just beyond the edge of computational ability need to be done by someone, typically low-paid.

If you’re interested in the nature of work at the lowest end of the digital economy, and the liminal space between man and machine in the race to automate everything, both articles are definitely worth your time.

Other things I found this week

Best Of

Someone made list of all the books Marc Andreessen mentioned on Twitter.

Jessica Guzik shares an Illustrated Guide to Using the Sht Out of Your Notebook*.

Stratechery’s Ben Thomson analyses the current state of the podcasting industry and offers his thoughts on the risks that consolidation and “Facebookization” of the space pose to listeners and content creators.

Stanford’s “Hacking For Defense” class had its demo day recently. Steve Blank shares the presentations and reflections on the effort to bring entrepreneurial thinking and methodology into the military and intelligence space.

Tech Trends And Industry Commentary

Those who enjoyed M.G. Siegler’s account of his “magical” experience of being prompted to order an Uber through Facebook Messenger might want to learn more about messaging as a new platform and UX paradigm. Check out a16z partner Benedict Evans’s 2015 essay on “Messaging and mobile platforms” or Evans’s a16z Podcast appearance, recorded just after Facebook’s announcement of the new Messenger platform.

My former classmate, Güimar Vaca Sittic, collaborated with Fabrice Grinda on a piece about AI-driven marketplaces. The piece predicts the rise of service marketplaces as well as product marketplaces,

Venture capital pioneer, Thomas J. Perkins, died Thursday at the age of 84.

FastCo Design takes a peek into Alphabet’s project, Sidewalk Labs, and its plan to make 70 American cities smarter. Their claim: previous bespoke solutions for specific cities fall flat, and what cities need is an open “a kit of parts that apply to cities all over the country.”

San Jose blocks a real estate developer’s move to construct new offices in Santa Clara because “[the offices] would add far too many jobs, exacerbating the region’s housing shortage.” (via Vox)

TechCrunch profiles Flexport, a YC-backed startup that’s aiming to optimize the freight forwarding business, part of the trillion-dollar global logistics industry.

Design & Culture

Leah Schnelbach’s essay for Tor.com’s Cyberpunk Week explains how David Foster Wallace’s Infinite Jest and Neal Stephenson’s Snow Crash each predicted our cyberpunk present. (For those wondering what “cyberpunk” is, check out Neon Dystopia’s Cyberpunk Project for an overview.)

As a follow-on to the cyberpunk essay, there has recently been a lot of interest in brutalist web design. Inspired by brutalist architecture’s ethic of frank representation of construction materials, brutalist web design embraces the simple HTML and “freeform” graphical expression of the early web. Check out this tumblr’s collection of brutalist websitesVox’s recent essay on the subject, or listen to Nora Young’s interview with the Fucking Webmaster himself, Justin Jackson, on CBC Spark.

Jerry Cao and Eileen Conway unpack 3M Health’s disciplined user experience design practice for FastCo Design. Lots of interesting notes on their team structure, research process and other methods.

Director Sean Slobodan made a beautiful video: “The Color of California”. Although Chicago (my hometown and where I live now) is really nice, it doesn’t have California’s beautiful landscape, which Slobodan highlights deftly.

Zagat’s Youtube channel profiles small, family-owned specialty salt makersIt’s so engaging to watch people so devoted to doing the simple very well.

Personal Finance / Job Hunting

80,000 Hours aggregates and shares all the best advice it could find on getting a job.

JDR’s Newsletter – #5

Hello there,

This is a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.

In case you haven’t already subscribed, you can do so through Tinyletter. You can find an archive of this and previous issues of my newsletter at news.jdr.fyi.

Thoughts, opinions and typos are my own.

3.5 Lessons From The Theranos Debacle

This week, Theranos CEO Elizabeth Holmes’s net worth has been marked down to market value: $0 on the Forbes rich list, down from $4.5 billion.

Lessons learned:

  • Companies should have domain experts on their board. (This applies to more than just life sciences companies, obviously.)
  • Corollary: run for the hills if the politician:expert ratio exceeds .2 on a startup’s board of directors.
  • Startup success is often inversely correlated with the fawning sentiment it receives in the tech press. (See, for counter-examples: Facebook, Snapchat, Amazon, and Uber, all of which have weathered a lot of media skepticism yet continue to outperform their peers.)
  • Life sciences companies should be more transparent to regulators. It doesn’t really matter if some social media app proves to be vapor-ware, but there were probably real health decisions made on the basis of tests that may have proven faulty. That’s the real tragedy.

Observations From Other People

Aaron Harris on Investing In Tech in Emerging Markets

In his brief post, “Carts without horses”, Aaron Harris helps to reframe the question investors (particularly early-stage investors) need to ask when investing in developing markets. Harris suggests that rather than trying to copy a business model from developed markets, investors should view these markets as the opportunity to “start fresh” using today’s technology. His conclusion: “Developing markets are a kind of mirror of the future, or maybe of the present if things had happened differently. As such, they’re hugely instructive in understanding the types of companies that can be built, and of the founders who can build them.”.

To paraphrase Harris: this mode of thinking allows emerging markets to “leapfrog” over incumbent technologies. For example, it makes more sense to build something like M-PESA in Kenya than to replicate all of the financial infrastructure in a market like the USA in Kenya from scratch.

On the flip side, it’s often the case that emulating solutions from the developing world in developed markets merely results in something that’s nice to have, but not a solution to a deep unmet need. Harris cites Venmo as an excellent example of this. Mobile money is just a convenience in the USA, but it was possible to securely send money using something like Paypal for almost two decades now.

There was more in the article than what can reasonably be summarized here. It’s well worth a read though.

Riva Melissa Tez on Silicon Valley’s “Problem” Problem

Riva Melissa Tez, an entrepreneur, transhumanist and longtime resident of the Bay Area, writes that Silicon Valley has lost its grasp on what the word “problem” means. The goal of Silicon Valley, according to Tez, is to “achieve some form of a fully-automated, seamlessly efficient version of existence.” Anything that stands in the way of that vision (such as needing to run an errand or perform everyday chores) is problematized.

She suggests that “We must stop referring to these things as problems, and instead see them for what they really are,” because doing so cheapens the meaning of the word problem. Just like the boy who cried wolf, calling things like laundry or dog walking problems means that more serious issues – like the “800 million people across the globe [who] have limited access to food or water” she cites – are rendered as banal as the first ones.

Rather than think of menial tasks as problems, Tez suggests reframing the services that allow users to circumvent or outsource inconvenience as privileges. Or, put differently, “They are perks that enable us to further our level of highly efficient living.” This would make the entrepreneurial community more honest with itself and seem less disconnected to those outside of the startup echo chamber. And I for one am all for that.

Conor Sen: The Post-Recession World Doesn’t Scale

Portfolio manager and macroeconomic blogger Conor Sen makes the case that businesses that arose out of the Great Financial Conflagration (GFC) of 2007–08 are experiencing scaling problems, and that post-GFC economic conditions are making scaling difficult. His argument takes the form of a short but well-developed list of businesses and phenomena, from which I sample a couple points and offer my comments here:

  • On demand startups were the solution to mass unemployment and megacity renters who demand services immediately. But they’re finding that as the labor market tightens those workers are getting harder to find, and maybe the unit economics never worked to begin with.” (My comment: This is backed up by recent news that Uber received a $1 billion loan from Goldman Sachs to make subprime leases to new drivers. Bloomberg published an excellent profile of Uber’s subprime arm, Xchange, last week.)
  • Conservatism is finding that the demographic groups that believe in conservatism no longer scale to form a viable national party. Trump will soon find the same to be true for his white working class coalition. The Republican Party needs a new ideology or constituency that can scale to compete with Democrats.” (My comment: The main force that repels me from the Republican Party is the desire to legislate the private lives of Americans. Should the party drop its obsession with sex – gay sex, out of wedlock sex, the resultant risk of pregnancy that stems from abstinence-only sex ed, etc – drugs, and other social issues, I think its platform would be more appealing to younger Americans, including myself.)

I just discovered Conor Sen’s blog this week and have really been enjoying his other posts, mostly because they are shorter and more matter-of-fact than other stuff I’ve found. Other good articles:

Other things I found this week (this time with categories!)

Tech trends & Industry commentary

Probably the best long-read I’ve read all quarter: Jerry Neumann makes the case (published October, 2015) that we’re moving out of an era of “installation” and into one of “deployment”. It’s very long, detailed and well-sourced. Two overarching themes of the Deployment era:

  • “Information and communications technology becomes ubiquitous but invisible”
  • “Innovation becomes ubiquitous but small”

Snapchat surpasses Twitter in daily active users.

Vlad Savov explains that technology is the great luxury destroyer for The Verge.

In a move that came as a surprise to some, Tony Fadell, CEO/founder of embattled home automation company Nest, announces departure.

Dushiant Kochhar explores how Big Data awareness is transforming public transportation, especially rail.

Scott Rosenberg [explains the economic philosophy]neolib that’s “killing” mission-driven companies. Spoiler alert: it’s Neoliberalism.

Design & Culture

Strategic design agency Information Architects (iA) published an article about when designers should use icons vs. labels in their interfaces.

In which writer Ben Thomas explains that artist James Needham’s controversial painting, “Bathroom Selfie”, is not some harbinger of the artistic apocalypse. Needham’s work carries on a very long (like, 40,000 years long) tradition of lewd artistic expression.

The Daily Beast reports on the long and sordid history of… political rallies. Yes, in Victorian times, booze-fueled midnight campaign rallies provided the perfect venue for young Americans to get it on. Oscar, a popular speaker at Lincoln rallies, said the female attention he garnered was enough to “tickle the vanity and rouse the ambition of anyone my age.”

The former CEO of Ticketmaster explains, in excruciating and delightful detail, how and why the market for concert and sports tickets is so messed up.

The Tribune Company’s online content arm has a new name: TRONC. (shudders) Alastair Coote tweeted speculation that the new brand is the result of some, ahem, truncation.

Personal Finance / Job Hunting

Software entrepreneur, blogger and now podcaster Patrick McKenzie talks salary negotiation tactics with Josh Doody, who recently published a book on the subject. The full transcript is worth checking out, but the main takeaway is to not answer the questions about your current or desired salary; instead, do some rhetorical aikido and spend as much time as possible focusing on the value you will bring to the organization. Lots of nitty gritty details follow from there.

JDR’s Newsletter #4 (Lots of Funding News Edition)

Hello there,

This is a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.

In case you haven’t already subscribed, you can do so through Tinyletter. You can find an archive of this and previous issues of my newsletter at: http://news.jdr.fyi

Thoughts, opinions and typos are my own.

My blog posts and articles

I was traveling last week and didn’t write anything new, so I decided to spend a bit more time writing about this week’s news and fishing out more links to share.

As an aside, both Portland, ME (where I was last week) and Portland, OR (where I’m at this week for PyCon) are both lovely cities.

My Take on A Few Funding Events

Twilio filed its S1 this Thursday. The provider of VoIP and messaging APIs to business customers like Uber and Box hopes to raise $100 million in its initial public offering. Many tech investors are hoping that Twilio will break open the window for other major tech companies to go public. Apart from Dell-owned SecureWorks, which raised $112 million in its IPO last month, Twilio would be the only other non-healthcare tech IPO so far in 2016.

Good news, right? Maybe not. The company is almost ten years old and has yet to turn a profit, which is not entirely unheard of in Silicon Valley, but Twilio disclosed “uncertainty” regarding future profitability in its filing. Additionally, the company disclosed “a history of losses” including net losses of $26.8 million and $35.5 million in 2014 and 2015, respectively. The company claims to have lost $6.5 million in the first three months of 2016.

Moreover, a full 17% of Twilio’s revenue comes from WhatsApp. According to reporting from Business Insider, Twilio has no long-term contract with Facebook, WhatsApp’s parent company, which means that if Facebook finds an alternative service provider the already unprofitable Twilio would be out over one sixth of its revenue virtually overnight.

Given the adverse market conditions and shaky financial status of the company, I’m skeptical that the IPO will go well for Twilio. But, it’ll give Twilio’s venture investors – Bessemer Venture Partners being the lead on multiple rounds – the liquidity event they and their LPs so badly need right now.

Snapchat Raises $1.8B in Extended F Round. F is For “the Future”.

Earlier in the week, TechCrunch reported that Snapchat was raising more money at around a $20 billion valuation, which is roughly in line with its valuation from previous rounds. In an update to that first story, TechCrunch shared details from Snapchat’s leaked pitch deck and now-released SEC Form D filing:

  • Snapchat raised $1.158 billion of its $1.8 billion Series F round within the last 5 months.
  • The company generated only $59 million in revenue in 2015, and $33 million of that came in Q4’15 alone.
  • Snapchat is projecting 2016 revenue to be somewhere between $250 million and $350 million in 2016 and between $500 million and $1 billion for 2017.
  • Snapchat had 110 million daily active users in December 2015, up 50% from the previous year. Over 55% of those users were outside the US. (Note that DAU numbers have probably grown significantly since December 2015.)

According to other sources:

  • ReCode reported ComScore’s findings that Snapchat has achieved over 65% penetration into the 18-24 year old demographic in the US.
  • ComScore also reported that Snapchat’s monthly time-in-app numbers are second only to Facebook.

So, what to make of this? Seemingly out of nowhere, Snapchat is now the most credible threat to Facebook’s hold on our attention.

Its content format, ephemeral images and videos that disappear after a short while, is almost diabolically well-suited for advertising. Why look away from your screen when you know that whatever you’re watching is going to disappear in a few seconds, or at most 24 hours?

VC investor Mark Suster, who’s also a prolific Snap Story creator and archivist of his own “Snapstorms”, says in his excellent analysis of Snapchat-as-media-phenomenon that “Snapchat is biggest innovation in media right now and the biggest innovator in product design from a user perspective.” Indeed, Snapchat “clicks” with many people, specifically the younger demographic. (This includes Stratechery author Ben Thomson’s 4-year old, who can create and send Snapchats to their mom with little to no interactional friction.)

It also clicks with mobile video consumers. In a profile of Snapchat’s 25 year old CEO Evan Spiegel, ReCode shared that as of the end of April, 2016, Snapchat garners a staggering ten billion video views per day, up fourfold from the previous year. Meaning: on average, Snapchat users consumer almost 80 video clips per day on the platform. And this is before Snapchat’s new media partners have seriously rolled out premium content specifically tailored to the Snapchat format.

Say what you will about it, but Snapchat is not going to be disappearing any time soon.

Observations from Other People

John Light on The Rise of Protocols Over Platforms

Although I think his characterization of major platform providers (the Facebooks, Twitters, Googles and Amazons of the world) as “corporate Death Stars” is a little overwrought, Light does a decent job of explaining the development of open protocols as an alternative to the dichotomy between revenue maximization and more egalitarian cooperative platform models that share revenue or profits with platform members. He suggests that the appeal and utility of open platforms over corporations and cooperatives is that “they are owned by no one”.

What he doesn’t acknowledge is the possibility that some of these “open” protocols end up being more closed and centralized than they appear from the outside. (As I’ve found in previous, currently unpublished work, this is certainly the case with Bitcoin and Ethereum, two major cryptocurrency protocols.) And, although protocols can be “forked and upgraded at-will if they no longer serve the interests of their users,” it’s usually the case that doing so imposes significant switching costs on users. Once a protocol becomes the de-facto standard, it often doesn’t make economic sense for incumbents to upgrade to a different one. As new protocols emerge, though, so does a new crop of upstarts that may upset their predecessors. In this way, innovation and progress in the realm of protocols may be less the dynamic, fluid process that Light and other protocol proponents may want it to be as it is the cyclical, successive process seen in the platform space.

Other news and links

Reddit user rinyfo4 casually explains how to burn your startup to the ground in 15 easy steps.

Pew Research published a very in-depth report on the “sharing economy”. 72% of Americans surveyed have used at least one of 11 different shared and on-demand services. 7% have used six or more. 73% of Americans are not familiar with the term “sharing economy.” 61% don’t know what “crowdfunding” means.

IVP Capital has a set of good questions and a nice Stack-like framework for thinking about change in the evolving TMT space.

The US Senate’s Committee on Commerce, Science and Transportation released a report in 2013 explaining how marketers use big data to target poor people. That report is worth revisiting in light of Google’s recent move to ban ads for payday lenders.

Vanity Fair reports on the “dating apocalypse” being catalyzed by apps like Tinder, Bumble and OKCupid.

HBS’s Shoshana Zuboff’s long-form essay on the hijacking of capitalism by surveillance culture. Touches heavily on advertising and sovereignty of entities like Google and Facebook.

Nicola Bortignon published an epic list of reading materials for startup-oriented people.

Sara Jane Coffee argues quite convincingly that startups may have a drinking problem.

Facebook published notes from its closed conference, Networking @Scale, in which some more details of its urban gigabit wireless networking projects, Terragraph and AIRES. Because Facebook’s networking projects are utilizing currently unlicensed network bands, this signals possible interest by Facebook to build its own proprietary wireless networking infrastructure. This contrasts with Google’s Project Fi, which utilizes network architecture owned by Sprint and T-Mobile.

Daniel Albert writes for n+1 about the ethical issues surrounding self-driving cars. It turns out that ethical questions around automobiles are not at all a new thing.

Emer Coleman on technoethics and the future of work.

Wim Rampen asks not what big data can do for the platform provider, but what big data can do for the user.

JDR’s Newsletter – #3 (XL Edition)

Hello there,

This is an extra-large edition of a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.

In case you haven’t already subscribed, you can do so through Tinyletter. You can find an archive of this and previous issues of my newsletter at news.jdr.fyi.

Thoughts, opinions and typos are my own.

Quote of the week

“It is not simply the brightest who have the best ideas; it is those who are best at harvesting ideas from others. It is not only the most determined who drive change; it is those who most fully engage with like-minded people. And it is not wealth or prestige that best motivates people; it is respect and help from peers.”

– Alex Pentland, Social Physics: How Good Ideas Spread-the Lessons from a New Science (New York: The Penguin Press, 2014).

My blog posts and articles

How Much Does Pre-Seed Equity Really Cost? (Mattermark)

What is the price curve of startup equity at the seed and pre-seed stage? In other words, in something like an accelerator program, a certain amount of equity is given up by the company in exchange for the money and services an accelerator provides. Both those numbers ought to vary in some sort of proportion, and I wanted to find that proportion. Using data I gathered from F6S on over 700 accelerator programs in North America and Europe, I derived and compared the cost curves of pre-seed and seed stage startup equity in each of those markets. It’s not perfect by any means, but it’s a good first crack at finding out how much equity in very early stage companies really costs.

Venture Capital Is Boring (Mattermark)

Is venture capital, as an asset class, all that special? As it turns out, no, not really. I examined the venture capital industry from the general partner and limited partner side of the business using a Bloomberg dataset that another researcher passed along. In my analysis, I conclude that venture capital is subject to the same cyclicality, power law distributions, herd mentality and diverse set or returns as other asset classes. Nothing too surprising there.

Quick Takes On This Week’s News

Fed Spooks Creep On Bay

In a revelation that seems straight out of the Cold War, the CBS affiliate in San Francisco reported that the FBI had cast a wide net of hidden microphones (hiding spots include “under rocks… [and] in trees”) for an investigation of potential bid fixing by real estate investors. Jeff Harp, a security analyst for KPIX 5, advises, “if you’re going to conduct criminal activity, do it in the privacy of your own home.”

Now We Know Just How Bad the SF Housing Market Is

Researcher Eric Fischer doubled the amount of San Francisco housing data available to policymakers, economists and journalists bemoaning high rents in the city. His effort, which involved transcribing rent data by hand (I repeat, by hand) from the San Francisco Chronicle produced some startling results: SF rent has increased by an average 6.6% year over year since 1956. As Michael Anderson reported in his excellent analysis of Fischer’s findings, “6.6% is 2.5 percentage points faster than inflation [which after compounding like this for 60 years] means housing prices quadruple compared to everything else you have to buy.”

(Thanks to journalist Michael Anderson for writing about this on Medium.)

Maker of A Device In My Sock Drawer Acquires Another

Engadget reported Wednesday that Fitbit acquires the majority of [Coin]6], the all in one payment card platform that launched on Kickstarter in 2014 and faced many shipping delays. (For the record, I own a base-model Fitbit and a Coin. Both of these devices are now kept safely in the back of my sock drawer, only lightly used.) Fitbit announced that it wouldn’t be integrating Coin’s tech into their products in 2016, so it’s safe to say that Coin’s NFC and card replicator tech will probably find a home in the Fitbit feature set in 2017. Still, I probably won’t be buying another.

Recent Observations from Other People

Benjamin Bratton on The Stack

You should read Metahaven’s interview with Benjamin Bratton about his new book, The Stack: On Software And Sovereignty. I started reading the book last week, and it is easily some of the most gripping reading I’ve done in the last 12 months. The interview and the book is a far reaching, well-executed theoretical work analyzing and connecting the various layers and ramifications of the recent rise of what he’s calling Planetary Scale Computing.

As he defines it: “The Stack is planetary-scale computation understood as a megastructure. The term “stack” is borrowed from the TCP/IP or OSI layered model of distributed network architecture. At the scale of planetary computation, The Stack is comprised of 7 interdependent layers: Earth, Cloud, City, Network, Address, Interface, User. In this, it is an attempt to conceive of the technical and geopolitical structures of planetary computation as a ‘totality.’”

Expect more about The Stack and stack-thinking in future editions of this newsletter as I work through the book.

Charlie O’Donnell On Why I Am Wrong

Charlie O’Donnell, a Brooklynite, self-announced 6x triathlete and early stage VC really, really didn’t like my analysis in the “Venture Capital Is Boring” article I wrote for Mattermark. So much so that he probably spent a couple of hours writing a post explaining why I was wrong. You know, he has a point. He had/has access to more (and probably better) data than what I had to work with. But rather than complain about the quality or kind of data I analyzed, like Mr. O’Donnell does in the title of his post, maybe he as a VC could do more to share insights about the venture capital industry data. I for one would love to see more data-centric coverage of the industry, and I’m sure many others would as well.

Other news and links

A must-read article: Metropolis Magazine’s “Design Forecast” identifies emerging tech and social trends with leaders in the design field.

Jessica Riskin on the long prehistory of automata, artificial intelligence and the like. Includes descriptions of the pre-Amazon Mechanical Turk and centuries-old defecating duck robots.

OECD study suggests that we need not fear a robot jobs takeover.

Casey Johnston reports on the slow demise of the social media feed as a somewhat neutral platform. Alternate (albeit less catchy) headline: death by a thousand curatorial algorithm parameters.

How Technology Hijacks People’s Minds – Notes from a magician and Google’s Chief Design Ethicist

The LA Review of Books published an excellent long-form review/essay on philosopher Michael Lynch’s new book, The Internet of Us, about the nature of knowledge and our relationship to information in the age of the internet.

Justin Jackson is a fucking webmaster and you should be too

Clever, well illustrated parodies of business culture, inspired by Richard Scarry’s children’s books. My favorites: Venture capitalists & Ride sharing partners

Jerry Neumann points out that “VCs who sneer at ‘lifestyle’ businesses primarily run firms that are lifestyle businesses.”

Another sign of the apocalypse: Dudes In Startup Shirts

John Westenberg on why it took 27 years for him to start taking care of his body.

Tumblr user Bailey links to and excerpts questions from the Wikipedia article about Ben Franklin’s most interesting and under-appreciated creation: Junto clubs.

Gary Vaynerchuk thesis on how to handle feedback both negative and positive

Francisco J. Azuaje on where scientists draw inspiration from

Netflix launches its own, very well designed internet speed testing service at a very nice domain: fast.com

JDR’s Newsletter – #2

Hello there,

This is a (roughly) weekly newsletter experiment containing links to things I’ve written and made, plus links to other interesting articles, reports and essays I’ve come across.

In case you haven’t already subscribed, you can do so through Tinyletter. You can find an archive of this and previous issues of my newsletter at news.jdr.fyi.

Thoughts, opinions and typos are solely my own.

My blog posts and articles

VCs Spark High Times for American Cannabis (mattermark.com)

In my latest post for Mattermark I interviewed a number of folks operating in the rapidly-growing legal cannabis space. Driven by continued legalization for medical and recreational use, both entrepreneurs and investors are looking to capitalize on what some analysts believe could be a $100 billion market within the next decade. Special thanks to Ben Larson, co-founder of Oakland’s Gateway Incubator, and Keith McCarty, founder and CEO of Eaze, for speaking with me.

Recent Observations From Other People

Chris Dixon on bundling and the internet economic loop

The most recent post from Andreessen Horowitz partner Chris Dixon asserts that market and technical conditions are such that big companies are re-bundling (or vertically integrating) services. He cites competition as a key driver of this bundling phenomenon and presents a range of events and trends that may serve as nucleation points for further bundling activity.

(For the record, this is a textbook example of what institutional theorists DiMaggio and Powell call “structural isomorphism” in response to competition. Their 1983 paper is deftly summarized here.)

Mandy Brown on bots

In her latest letter on ro/text/chat bots, designer and media observer Mandy Brown highlights some potentially unsettling trends in the current surge in AI-enabled digital assistants. First, Brown brings up the issue of opacity in some of these interfaces. Unlike more transactionally designed user experiences that offer both textual and visual interaction models, such as Apple’s Siri, it’s more difficult to know where a bot sourced the information it serves as an authoritative answer to a user’s query. This is especially troublesome in interaction models that use solely the spoken word (such as Amazon Echo) or “secondary orality” (text that works like spoken language) such as the messaging-inspired interface of a service like Magic.

Second, Brown cites the caretaker/servant role AI has taken in science fiction and our lives today. Since many AIs are branded with female voices or names – Amazon’s Alexa, Apple’s Siri, and X.ai’s scheduling assistant Amy, all come to mind – Brown argues that this positioning “reveals the expectation that a generation of woman-gendered bots are being created to serve the needs of men.” Regardless of your stance, the gender issue Brown has called attention to is one that designers, engineers and marketers will have to be mindful of going forward.

William Storage on multidisciplinary thinking

In his contribution to an anthology of blog posts, books and academic articles promoting the benefits of multidisciplinary teams and polymathic people, Bill Storage traces the role of multidisciplinary thinking in the process of invention and innovation. He spends a good part of his post rehashing some of the core ideas of this school of thinking. He explains the strength of specialization in fields like research through expanding human knowledge in a depth-first fashion, but he also states that innovation happens when expertise in multiple fields overlaps and collides with one another.

Although what Storage says is not groundbreaking from a theoretical or academic standpoint, it serves as a reference to some good case studies, quotes and anecdotes, as well as validation to those who’ve chosen the more interdisciplinary path.

Podcast episodes of the week

“The Importance of Research” and “Choose Your Own (Negotiation) Adventure” from Nick Disabato and Kai Davis’s self-styled “crappy business podcast”, Make Money Online are two of the most informative podcast episodes I listened to in the last week. Although the advice and subject matter discussed in Make Money Online is geared toward independent consultants, contractors and other itinerantly employed folks, each episode has some strategic nugget that anyone can use.

Other news and links

Mandy Brown’s other writing, specifically her Letters section, is incredibly thoughtful

Square’s Q1 miss may not bode well for IPO hopes of other services with low margins

Julie Zhuo’s “Design, Illustrated in Three Charts”

Anthony Bourdain’s post about his visit to Chicago

Buzzfeed takes a deep dive into some leaked internal documents from Palantir, Silicon Valley’s [most secretive company”

Old but good: A brief history of venture capital and the investors who invest in the VCs on Venture Hacks (2010)

Vanity Fair calls out the tech press for not doing their diligence on Theranos

Y Combinator publishes startup trend analysis from its massive longitudinal dataset of applying startups in their longform blog, The Macro

A scientific look at why whiskey cannot be made to seem older than it actually is