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Year: 2017

A Tale of Two Titans

A Tale of Two Titans

Last week, Travis Kalanick, ahem, tendered his resignation as CEO of Uber, the company which he co-founded, and of which he is a 30% shareholder. No mean feat holding on to that much equity, considering the many rounds of funding that the company has received – $8.8B in 14 rounds, according to Crunchbase. It took a shareholder revolt on the part of investors representing roughly 40 percent control of Uber to accomplish the task, according to NewCo.

Then again, he’s Travis Kalanick. Taking a walk down memory lane, here are 13 Instances Where Uber Screwed Up (A Brief Throwback), demonstrating a bit more ubris than was advisable or legal, including class actions; sexist comments (and Susan Fowler’s blog post that started it all); surge pricing; criminal behavior on the part of drivers who were supposedly vetted; falsifying numbers; what to speak of the number of executives who departed the company in quick succession. Uber may not have been Uber without Kalanick’s personality to drive it (no pun intended), and while it has been said that there’s really no such thing as bad press, well, there are many Silicon Valley mantras that are in need of revision.

Uber has always been a predatory, take-no-prisoners corporate culture. They cut corners (drivers were not all properly vetted, it seems; agencies that do background checks do not all follow the same set of rules), and to reach Uber-size in the amount of time it took the company to accomplish its current market share (they’ve been around since 2009 and yes, market share has been falling off of late, which has given its closest competitor a big lift – pun intended: “Uber’s US market share fell from 84% at the beginning of this year to 77% at the end of May, according to  research firm Second Measure. Meanwhile, Lyft’s bookings were up 135% year-over-year in April, according to PYMNTS.com,” says Business Insider), you have to be employing measures that simply do not pass the sniff test (Uber drivers underpaid in New York City for years). Read More...

Amazon/WholeFoods: The Gorilla in the Grocery Chain

Amazon/WholeFoods: The Gorilla in the Grocery Chain

We all saw @ChicagoPhotoSho’s tweet:

Bezos: “Alexa, buy me something from Whole Foods.”
Alexa: “Buying Whole Foods.”
Bezos: “Oh, Shit.”

In case you’ve been hiding under a rock, last week Amazon acquired Whole Foods in a deal valued at $13.7B, including the debt. Read More...

The Winds of Change

The Winds of Change

In case you missed it, The five biggest tech stocks lost nearly $100 billion in value on Friday. It was decidedly not a good day for FANG (Facebood, Amazon/Apple, Netflix, Google) stocks, now called FAAGM, although we prefer AGFAAM (Alphabet/Google, Facebook, Amazon, Apple, Microsoft) – rolls better off the tongue (NOTE: Netflix was left out of the original FANG in the Goldman Sachs report released on Friday, “since its impact on the S&P 500 is still too small). As CNBC noted, “Facebook, Apple, Amazon.com, Alphabet, Microsoft all fell more than 3 percent Friday as investors rotated out of the stocks. The group has been the market’s leaders and is behind about 40 percent of its performance this year… While they may be loved, today’s tech darlings aren’t without potential flaws…During the bubble, the five largest tech names were trading at almost 60 times two-year forward earnings, with the cheapest stock trading at 36 times. Now FAAMG trades at 23 times forward two-year earnings with only one, Amazon, over 30 times.”

Walter Mossberg refers to them as the “Gang of Five.”

What was not said, and attention must be paid: the stock market, especially tech stocks, have been overheated/overvalued for quite some time, and we all do well know that what goes up, must come down. At some point. And as soon as the valuation of a sector – especially tech – at least somewhat begins to right itself, it isn’t long before the word ‘bubble’ is top of mind once again. Read More...

The Real Deal on Fake News

The Real Deal on Fake News

The term ‘Fake News’ has been bandied about for a while now and quite a few of you have asked us to address it.

There are at least two categories of so-called fake news: staged fake news, which should be more accurately called a dramatization in some cases and marked as such, but not always, as in the case of ‘Rathergate, when former news anchor Dan Rather falsely reported a story, using faked documents to get his narrative across – documents which were proven to have been faked, yet which Rather later called ‘skewed but accurate’ (with his credibility shot, he ‘resigned’ from his anchor spot a year before his contract was over). This ‘Oxymoronic Journalism’ very much fits in with the latest iteration of the Fake News rubrick, which is something of a misnomer.

Truth be told, many media outlets and social networks/information sources, including both Facebook and Google, have an unmistakable agenda. Just this week Marc Andreessen stated that “Silicon Valley is extremely left-wing, extremely liberal,” claiming that the technology industry’s libertarian stereotype is largely inaccurate, and…criticiz(ing) his community for turning a blind eye at the middle of the country. “It’s really hard for a lot of people in Silicon Valley to even articulate the other side,” he said. Read More...

The Arianna Effect

The Arianna Effect

We all know the Three Big Lies, although the third is changeable, depending on the audience/circumstances:

  1. The check is in the mail
  2. Of course I’ll still respect you in the morning
  3. I’ll make it up to you in the IPO

Of course, not many companies are going public these days, and tech founders have pivoted on the third point. What company doesn’t do a pivot or two after all, and the new talking point is a bit fluid, as always: We’ll make it up to you on the backend, or We can’t commit right now, but of course we’ll make it up to you.

In case you missed it, New York City enacted a new freelancer law -the “Freelance Isn’t Free Act” (FIFA) – that is now in effect, and it applies to businesses outside of New York that hire New York workers, too. According to Entrepreneur, “If a business hires a freelancer for $800 or more worth of work over six months (for either one project or a cumulative series of projects), a written agreement must be put in place. The term “freelancer” covers an independent contractor or any other worker not in a traditional employee-employer relationship” – which we assume applies to consultants as well. You can find more information here. Read More...

The Innovation Choke Point

The Innovation Choke Point

America has become so anti-innovation – it’s economic suicide, said the Guardian, last week, citing Juicero, the $400 juicer with pre-sold packet of diced fruits and vegetables that the machine transforms into juice. “But it turns out you don’t actually need the machine to make the juice,” the Guardian noted. “On 19 April, Bloomberg News reported that you can squeeze the packets by hand and get the same result. It’s even faster.”

Oops, and thanks for paying (sic).

“$120 million to build an over-engineered juicer says a lot about the state of Silicon Valley today. There’s now so much money sloshing around San Francisco’s technology world that even seemingly outlandish ideas can attract lavish funding,” said Vox, but then again, Juicero is not just any juicer, even if you can get the same results by squeezing the bag by hand: it’s a connected device, and there’s the magic word – ‘connected.’  Juicero will let you know if you’re low on raw ingredients and won’t process the ingredients if they were past the sell by date. What to speak of the fact that if there was a recall on any of the products that happened to have been delivered to you, it wouldn’t work in that case, either. Read More...

How to Defy the Laws of Time and Physics – And (Sometimes) Common Sense

How to Defy the Laws of Time and Physics – And (Sometimes) Common Sense

We were recently asked to give a brief history of the early days of tech in New York. Given the speed of tech, it’s not all that easy to condense even a relatively short cycle into a brief presentation, especially considering internet time: a lot happened quickly, and all at once.

It did, however, strike us that many of the ideas that have made for successful – and not so successful – Silicon Valley companies today were first developed in New York in those early days. We had social networks – Six Degrees, theglobe.com, iVillage – two of which were acquired, while the third (theglobe.com) not only went public, but posted the largest first day gain of any IPO in history up to that date – then crashed spectacularly when the dot com bubble burst.  What also struck us was the on-demand economy. We did have that back then, too, so nothing new and again, what man cannot remember he is doomed to repeat.

In the days of Web 1.0, there was a company called kozmo.com, an on-demand delivery service that promised free one-hour delivery of “videos, games, dvds, music, magazines, books, food, et al, and they would even deliver a pack of chewing gum at 2 am, if there was a call for it – literally. They raised money and lots of it: $250 million, according to Wikipedia, and they burned through lots of it as well: According to documents filed with the Securities and Exchange Commission, in 1999 the company had revenue of $3.5 million, with a resulting net loss of $26.3 million. They, too, spectacularly dot bombed. Read More...

Elvis Has Left the Building

Elvis Has Left the Building

In case you missed it, Investor Chris Sacca (announced that he) is retiring from venture capital. The Lowercase Capital founder, whose investments include Twitter and Uber, et al, blogged about his decision (Hanging up my spurs) and what he sees himself doing next, but forest through the trees, he did very famously tweet not too long ago his irritation about the fact that he has no control over decisions made at Uber, and we’d add one-time feather in his cap, Twitter, to that as well.

“That Sacca — who reportedly owned at least 4 percent of the company at once point (and may still) — has “zero say” in how Uber is run has been “frustrating,” he tweeted in February,” according to the Techcrunch article. “In recent years, Sacca has also distanced himself from Twitter, posting to his active Twitter account in March that, “I haven’t owned TWTR for almost a couple of years. When they failed to get Ev involved again, I lost hope. Love the service, hate the stock.”

In his announcement, Sacca said “startup investing is one of my things, but it is not my everything,” and that if he cannot dedicate all his time towards it, he cannot be part of it anymore. Read More...

TIme for the End of an Error

TIme for the End of an Error

Much attention has been paid lately to the ‘bad players’ of technology. The Atlantic asked, Is the Silicon Valley Dynasty Coming to an End? Ethical lapses at some of the tech industry’s biggest companies suggest a chilling reality of what really matters in the world’s most rollicking economy, while Business Insider reported yet another Uber departure, and the company’s long string of problems/resignations of late.

Both are worth a read, but always worth closer inspection is the forest through the trees. In case you missed it, a man was murdered this past week, and it was streamed on Facebook, which has also streamed live gang rapes in the none-too-distant past. In fact, we now have a new category, according to ABC News: Performance Crime. “(Steven) Stephens’ alleged crime has drawn attention to a number of other illegal acts that have been documented on social media. In recent years, sexual assaults, random attacks and murders have been uploaded to social media platforms, sometimes drawing large audiences,” the news channel reported.

While Facebook founder Mark Zuckerberg expressed his sympathy to the family, noting that more needs to be done, there is no doubt that there’s a rise in the incidents of violent crimes being streamed on the service, and mea innocentia just doesn’t cut it anymore, especially in a world where the Googles and Facebooks are devouring content, vetted or not, and reaping huge financial benefits as a result. While we don’t advocate blanket censorship, what reputable news organization would allow murder or rape/performance crime, to be broadcast? Again, the Silicon Valley elites give themselves a pass: they’re just providing the medium, with all due respect to Marshall McLuen. Read More...

A Handy Guide to the Language of Tech

A Handy Guide to the Language of Tech

Like countries, industries have their own languages/patois, and tech is no exception. According to  Brian Collins, “Time for an update on painful business clichés. I’ve done my best to burn these expressions – some that I’ve used shamelessly – out of my lexicon. I have not always succeeded.”

He did compile a great list, and despite the fact that Collins comes from advertising, many of the expressions are used/overused in tech, at meetings, in decks/executive summaries, on Demo Days, and in pitches to investors. Those of us who tend to be on the other side of the table can probably repeat the list, chapter and verse, without even reading on.

FYI. Read More...

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