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Category: Distruption

Why You Need to Pay Attention to the Blockchain: A Crash Course in Internet History

Why You Need to Pay Attention to the Blockchain: A Crash Course in Internet History

There was a time when the idea of giving your credit card information online was unthinkable, despite the fact that you’d readily hand it over to a total stranger (aka, waiter) in a restaurant, who would vanish for a few minutes before returning it. Now people don’t think twice about it, despite what we know hacks of Equifax, Yahoo (Every single Yahoo account was hacked – 3 billion in all) and most recently, the massive US military social media spying archive left wide open in AWS S3 buckets. Actually, All the Major Companies Have Been Hacked.

While there have been cryptocurrency hacks, still believe that it’s the blockchain that’s unsafe?

The blockchain is still a relative unknown and, truth be told, terra incognita for most. Think of it as the early days of the Internet, in the days when the web was accessed via the c prompt (C>). It was geek and early adopter territory back then, until Netscape came along, providing a graphical user interface that changed everything. Read More...

The Titans of Tech Went to Sun Valley and All They Brought Me Was this Lousy Hashtag

The Titans of Tech Went to Sun Valley and All They Brought Me Was this Lousy Hashtag

The tech oligarchs gathered in Sun Valley for most of the past week, and besides a few arrival photo opportunities, there was pretty much a media blackout. Or, at least the media was allowed only in certain places at certain times.

They arrived primarily in private jets, despite the fact that they’re the ones who most often sound the alarm when it comes to global warming.

Despite the tight security, most of them also arrived with personal armed guards, if not veritable private armies, despite the fact that they’re supposedly anti-guns. Read More...

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...

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...

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...

The New Pathway to Exits

The New Pathway to Exits

Silicon Valley is fond of exits – isn’t a meaningful exit the dream and endgame of every investor and entrepreneur in tech? You have to admire – or shake your head in total disbelief at – Silicon Valley, when it comes to what they’ve managed to accomplish: namely, disrupt a number of industries, as well as the basic principles of economics and business, to get to those astronomical exits, whether or not they were real, or just so much smoke and mirrors.

When Twitter launched in 2006 and started picking up steam after its debut at SXSW the following year, they had no revenue model, but the company’s investors assured us that there would be a revenue model by 2009. Then came the IPO in 2013 and, as The Wall Street Journal noted, “The San Francisco-based company raised as much as $2.1 billion and ended the day with a market capitalization of about $25 billion. That made the six-year-old company bigger than more than half of the firms in the S&P 500 and larger than well-known brands such as Kellogg Co. and Whole Foods Market Inc.”

That was then and this is now, and the company is now worth well under its IPO price and as Bloomberg News notes on the eve of three-year-old Snap going public, Snap’s IPO to Be Haunted by Twitter and GoPro. As MarketWatch warns, Snap’s cost of revenue has exceeded sales for two years, and could grow more. Which is Silicon Valley newspeak for the company is losing money, in case you’ve never read George Orwell’s 1984 and evidently, we don’t know what the hell they’re teaching out there. As for Twitter’s revenue model (what to speak of the fact that the company is hemorrhaging users), we’re still waiting. Read More...

Robotics, Drones, AI and Autonomous Vehicles: The Fourth Industrial Revolution Is Here

Robotics, Drones, AI and Autonomous Vehicles: The Fourth Industrial Revolution Is Here

Oliver Mitchell of Autonomy Ventures, who also blogs at The Robot Rabbi, spoke at our January 26 Investor Breakfast, and the conversation was column-worthy. After all, the robots are coming and that’s very much Oliver’s domain, and their growing presence on the global landscape, along with other technologies, is being referred to as the Fourth Industrial Revolution, as Oliver pointed out. In fact, the day before the breakfast, The New York Times ran on piece on How to Make America’s Robots Great Again, pointing out how China is investing heavily in the manufacturing of robots, and the US needs to do so as well.

The big fear is that robots will be – and currently are – taking jobs formerly held by lower skilled labor, and the fear is not unfounded. As Oliver noted, they’re also taking jobs in higher skilled areas, even replacing financial analysts and advisors. So are we looking at some relatively far off dystopian future?

“When I was growing up, computers were only used by large corps or government, and with a few highly skilled operators operating them,” said Oliver. “Not until Windows 95 (was introduced) that computers and personal computers became ubiquitous, and really fulfilled the dreams of Bill Gates and Steve Jobs. If I told you a decade ago, or a decade and a half ago, about robots, you’d have thought Robbie the Robot and big industrial robots…Compared to personal computing, we’re standing in 1990 – 5 years before robots become ubiquitous.” Read More...

The Innovator’s New Dilemma

The Innovator’s New Dilemma

It has been 10 years since the iPhone first appeared, and when it did, people frankly didn’t know what to make of it. . According to Quartz, “When Steve Jobs stood on the stage 10 years ago today at the MacWorld Expo in San Francisco’s Moscone Center, he started out by saying he was launching three new devices: “An iPod, a phone, and an internet communicator.” In fact, of course, they were a single device—the iPhone, which would lift Apple’s fortunes to unprecedented heights.” Of course, it was so novel, to many it was also the Blind Men and the Elephant.

Then there’s the new innovator’s dilemma, wherein one can innovate just so much, before one is in danger of running out of ideas, in which case, it’s a long-standing tradition in Silicon Valley to simply steal from a competitor, as in the case of Instagram Stories (Instagram’s shameless Snapchat knockoff is doing marvelously well) “Instagram Stories closely mimics Snapchat—users can broadcast short videos to their followers, which disappear 24 hours after getting sent out,” says Quartz. “Upon its launch, Instagram CEO Kevin Systrom said he felt no shame about playing the role of copycat. In an interview with TechCrunch at the time of its launch, he admitted that Snapchat “deserve[s] all the credit” for the concept, adding that copying ideas remains somewhat of a tradition in Silicon Valley. “Gmail was not the first email client. Google Maps was certainly not the first map. The iPhone was definitely not the first phone. The question is what do you do with that format?” Systrom said.”

The iPhone may not have been the first mobile phone, not was Facebook the first (essentially) phone book, but it was not a copycat. If there was one thing that Steve Jobs could do brilliantly, it was to think outside of the dispenser. With larger companies swooping in and literally stealing ideas from smaller players, is it game over? Even the iPhone is losing market share, as we’ve mentioned previously. Read More...

The Emperor’s New, New Clothes

The Emperor’s New, New Clothes

The establishment of any new Industrial Age always brings with it the loss of jobs, or a shifting of them, at the very least, and technology is no exception. But the tech sector did come up with an ingenious solution for certain people who found themselves somewhat disenfranchised or in need of some quick cash: the sharing economy, which gave us the Taskrabbits, Airbnbs and Ubers of the world. Task-related solutions are one thing, but when it comes to a platform like an Airbnb, which enables one to rent out one’s abode for short term stays and a bit of dosh and which has blossomed into quite a cottage industry (pun unavoidable), it can become somewhat of a more thorny issue, and it’s not only due to regulations in certain cities around the world (Airbnb’s plan to compromise with cities as regulatory challenges pile up).

Tech has always had a bit of an ‘us versus them’ brashness to it, and again, Airbnb is the perfect example, disrupting the hospitality industry – and rental market – in ways that the founders, who started by renting out an air mattress and hence the name, had not foreseen. But given technology’s (and its investors’) insatiable appetite for more, more, more, at this stage in the game, as technology and platforms outgrow the startup phase and become seven- and eight-figure businesses, buyer – or renter – beware: it’s only ever really a matter of time before our so-called fellow conspirators become ‘them.’

According to Quartz, Airbnb is no longer the nice guy of the sharing economy. “For almost a decade, Airbnb has stuck carefully by that message, while maturing from a scrappy startup into the world’s fourth-most valuable private tech company. On paper, Airbnb is worth $30 billion, as much as Marriott International, the world’s largest hotel chain. At the same time, the company brands itself to hosts, guests, and investors as a champion of the middle class.” Read More...

Tech, Disrupted

Tech, Disrupted

Silicon Valley Has an Empathy Vacuum, according to Om Malik, whom we know personally (although it’s been a while) and for whom we’ve always had great respect, and who, in our opinion, was being kind, or at least diplomatic. “There is a new economic system emerging that is based on consumer capitalism, that innovates ways to eliminate friction of consumption — goods, services, and more than anything else, content — but is doing everything it can to diminish the consumer’s ability to afford the consumption,” says Malik. In explaining the results of the Presidential election (which shocked the tech sector and which we are not going to get into), said Malik, “Globalization is a proxy for technology-powered capitalism, which tends to reward fewer and fewer members of society.”

Tech loves to disrupt and disintermediate. At the same time, it disenfranchises, and people noticed. Except for those people in the tech bubble, and note that he did not say ‘problem:’ he said ‘vacuum.’ They’ve clearly dissociated from the world outside of their monoculture – a word often associated with Silicon Valley, although ‘cultural hegemony’ might be a bit more accurate, but we’ll let that one sit.

Tech’s language bubble may be part of the problem: It might help if we stop referring to people who utilize tech as users or the product and remember that they’re the customers, plain and simple, whether the product itself is free or not. Whether it’s investors or advertisers who are paying the bills, it’s still about eyeballs, which are almost always attached to people/customers, who are ultimately the reason why someone is paying your bills. Read More...

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