Government & Advertisers at war with ‘Big Tech’?
Should ‘Big Tech’ be broken up? Should free speech in social media be constrained? Should advertisers block spending on Facebook and Twitter? Are Facebook and Twitter media companies or platforms, or something new? Will the advertisers win as their money speaks? Will video on the Internet become a commodity and if it does who will win? Will it be Zoom? Should we all be asking ourselves “what are the most important problems in our field?” and be working on them?
This week’s “Reads of the Week” section sitting at the top of the newsletter. covers these issues with probing and questioning from the LA Times, Wall Street Journal, David Kirkpatrick, Benedict Evans, Sam Altman, TechCrunch, Deeplinks and Chamath Palihpitiya
I have organized everything into sections: Reads of the Week, Politics & Tech, Venture, and Startups. Hopefully it will be easy to navigate.
That Was The Week, #24
Reads of the Week
- Those who exercise free speech should also defend it — even when it’s offensive – Suzanne Nossel, LA Times Op Ed
- Unilever to Halt U.S. Ads on Facebook and Twitter for Rest of 2020 – Wall Street Journal
- Is FB a Media Company? It’s Not Mark’s Call. David Kirkpatrick – Techonomy
- Ex-Facebook VP Chamath Palihapitiya thinks governments will go after Big Tech and break them up within a decade – CNBC
- What comes after Zoom? – Benedict Evans
- Researchers & Founders – Sam Altman
- Universal Fiber Broadband Plan We Should Get Behind – Deeplinks
- PACT Act takes on internet platform content rules with ‘a scalpel rather than a jackhammer’ – TechCrunch
Politics & Tech: #BlackFoundersMatter, #BlackFundsMatter, #BlackLivesMatter
- Trump stops Visa program
- Board Diversity – Fred Wilson
- The Valence Funding Network: Connecting Black Talent with Capital – Brad Feld
- Will Silicon Valley face up to its diversity problem? The Economist
- Racism in the Valley: Why tech investing has not changed. Financial Times
- Venture Capital’s Elite Must Knock Down Barriers for Black Founders – Kapor Capital
- Podcast – BLCK VC Founder Brian Hollins
Venture: Unicorns, Direct Listings and Fund Raising
- NYSE examines direct listings with capital raises
- Canva – $6bn valuation – how did they do it?
- Lessons in SEO from Canva
- Unicorn Deals Drive Valuations to Record Highs – The Information
- A VC’s Guide to Investing in Black Founders – Harvard Business Review
- Harlem Capital hiring 4-6 Interns
Startups: Advice & News
- What do you need for a VC to properly evaluate a pitch?
- Redpoint SaaS Survey results
- Sales Teams & Subscription Models
- Can a founder sell shares at a funding round?
- How to overcome fear of failure
- Traction & Revenue – are VC’s realistic?
- H1 2020 Funding reports from Fenwick & West and ETech
- Startup Genome review of top 30 tech hubs – Crunchbase News & VentureBeat
- African VC hits record higConnect Ventures $80m new Fund
- Changes at ADV?
Tweet of the Week
- Paul Graham
Reads of the Week
Those who exercise free speech should also defend it — even when it’s offensive – Op Ed
Suzanne Nossel – LA Times
Protests sparked by the murder of George Floyd and systemic racism have been boisterous, righteous assertions of the constitutional liberties of free assembly, expression and speech — even as police have too often breached those rights. Yet as a wider precept, free speech is losing ground. As activists take to the streets demanding systemic change, they should consider that a robust defense of free speech is crucial to their goals.
In recent years, the right has tried to claim the upper hand on free speech, decrying political correctness run amok. President Trump has invoked the 1st Amendment in defending gun-toting marauders in Charlottesville, Va., raging against Twitter for flagging his incendiary tweets and threatening to withhold funds from colleges that undercut speech protections.
Unilever to Halt U.S. Ads on Facebook and Twitter for Rest of 2020
Consumer goods giant Unilever UL -0.48% PLC said it will halt U.S. advertising on Facebook Inc. FB -7.42% and Twitter Inc. TWTR -7.60% for at least the remainder of the year, citing hate speech and divisive content on the platforms, a significant escalation in Madison Avenue’s efforts to force changes by the tech companies.
Unilever, whose many household brands include Dove soap, Hellmann’s mayonnaise and Lipton tea, joins a growing list of companies that are boycotting Facebook for varying lengths of time, including Verizon Communications Inc., Patagonia Inc., VF Corp., North Face, Eddie Bauer and Recreational Equipment Inc.
“Based on the current polarization and the election that we are having in the U.S., there needs to be much more enforcement in the area of hate speech,” said Luis Di Como, Unilever’s executive vice president of global media, in an interview.
“Continuing to advertise on these platforms at this time would not add value to people and society,” the company said. Its Facebook ban also will cover Instagram.
Facebook is facing, finally, the historic moment that many of its critics, including me, have long expected. Its true customers–advertisers–are saying Facebook cannot continue to pretend to be “neutral” about dishonest and hateful speech. The resulting societal harm is too great. That opinion had already become something of a consensus for many influential societal actors, including government leaders in most democratic countries, human rights advocates, journalists who cover the company, and much of the public. Even many Facebook employees have come to agree.
But up until now, the most important and influential group had mostly kept silent. Facebook is a near-miraculous environment for advertisers large and small. Its ability to target users based on fine-grained information about their personality and preferences often yields extraordinary results for companies. That is the primary reason the company’s revenues have grown so quickly—in 2019 they exceeded $70 billion. That, unbelievably, is almost 10X what revenues were in 2013. And Facebook’s net margin last year was over 33%–meaning that for every dollar of revenue it kept 33 cents, after all expenses and taxes. Very few large companies have ever been so profitable.
Ex-Facebook VP Chamath Palihapitiya thinks governments will go after Big Tech and break them up within a decade
- Former Facebook executive Chamath Palihapitiya told the CB Insights conference that regulators are going to come down hard on Big Tech in the next 10 years.
- Palihapitiya said Big Tech firms undermine what the regulators want — power.
- He believes regulators will tax companies like Facebook, Google, Apple and Amazon “to death.”
What comes after Zoom?
- Just as for video, VOIP had been around for a long time, but Skype solved a lot of pieces of friction, in both engineering and user experience, and by doing so made VOIP a consumer product.
- Taking this one step further, a big part of the friction that Zoom removed was that you don’t need an account, an app or a social graph to use it: Zoom made network effects irrelevant.
Researchers and Founders
I spent many years working with founders and now I work with researchers.
Although there are always individual exceptions, on average it’s surprising to me how different the best people in these groups are (including in some qualities that I had assumed were present in great people everywhere, like very high levels of self-belief).
So I’ve been thinking about the ways they’re the same, because maybe there is something to learn about qualities of really effective people in general.
The best people in both groups spend a lot of time reflecting on some version of the Hamming question—”what are the most important problems in your field, and why aren’t you working on them?” In general, no one reflects on this question enough, but the best people do it the most, and have the best ‘problem taste’, which is some combination of learning to think independently, reason about the future, and identify attack vectors.
The House Has a Universal Fiber Broadband Plan We Should Get Behind
- For the first time, legislation led by Majority Whip James Clyburn would begin a national transition of everyone’s Internet connection into multi-gigabit capable fiber optics has been introduced and is likely heading towards a vote on the House floor as part of the overall COVID-19 recovery effort.
- The Accessible, Affordable Internet for All Act (H.R. 7302) would create an $80 billion fiber infrastructure program run by a new Office of Internet Connectivity and Growth that would coordinate all federal infrastructure efforts with state governments.
PACT Act takes on internet platform content rules with ‘a scalpel rather than a jackhammer’
- The PACT Act is a new bipartisan effort to reform Section 230, the crucial liability shield that enables internet platforms to exist, approaching the law’s shortcomings “with a scalpel rather than a jackhammer,” as Senator Brian Schatz (D-HI) describes it.
- The act would also limit the scope of Section 230 in protecting companies when they are facing action from federal regulators and state attorneys general, or when they are provably aware of the illegal nature of the content.
Politics & Tech: #BlackFoundersMatter, #BlackFundsMatter, #BlackLivesMatter
President Trump Just Suspended the Tech Industry’s Favorite Visa
- The executive order also suspends for the rest of the year most J-1 visas, designed for research scholars and professors participating in cultural exchange programs; H-2B visas for seasonal nonagricultural workers; and L-1 visas, which companies use to transfer existing employees to offices in the US.
- The administration says that, while the US continues to suffer from the economic fallout of the Covid-19 pandemic, nonimmigrant visa programs “pose an unusual threat to the employment of American workers.”
- Most startup boards are made up of a few founders and a few VCs. No wonder you have no diversity on the board.
- And founders should put diverse people (gender, race, life experience, etc) into these independent seats.
This is a topic of great importance and one that we in the tech/startup sector have not done a good job with. We wait until a company is ready to go public and then address it. While that is better than nothing, it is not good enough.
The board diversity problem is a symptom of a much broader problem around lack of diversity in founders that get funded and lack of diversity in VC firms. Most startup boards are made up of a few founders and a few VCs. No wonder you have no diversity on the board.
Here are some suggestions for addressing this situation. I am working on this in my portfolio and USV is working on this in our broader portfolio. We are not control investors so this is a process of advocacy and persistence. This post is a part of that effort.
The Valence Funding Network: Connecting Black Talent with Capital
- If you are a venture capitalist, I strongly encourage you to join the Valence Funding Network to provide Black founders with direct access to VCs. I’ve joined along with a number of my peers.
- Valence launched our beta platform to provide a digital home for Black talent to connect, access opportunities, and aggregate their power.
Will Silicon Valley face up to its diversity problem?
- Yet corporate activism will amount to little if tech firms and their financiers do not change how they operate, says Sydney Sykes, co-founder of BLCK VC , a group on a mission to swell the ranks of black venture capitalists in America.
- The tech industry’s response to the killing of George Floyd has been stronger even than in other parts of the economy T O GET A sense of diversity in tech, take a stroll on University Avenue in Palo Alto, a city at the heart of Silicon Valley.
Racism in the Valley: Why tech investing has not changed
- But Mr Robinson, now a partner at Bessemer Venture Partners, one of Silicon Valley’s oldest firms, focuses on later-stage start-ups, companies that need large investments to push them towards the public markets or an acquisition.
- Black venture capitalists have been sharing stories like Mr Robinson’s since the killing of George Floyd in Minneapolis three weeks ago, igniting a fresh wave of criticism about Silicon Valley’s lack of diversity, which has endured despite long-running pressure from women and other under-represented groups.
Venture Capital’s Elite Must Knock Down Barriers for Black Founders, Says Kapor Partner
Ulili Onovakpuri has been getting a lot of emails lately—mostly from fellow venture capitalists and startup leaders, each with a similar message: “We realize that we have a diversity problem.
A VC’s Guide to Investing in Black Founders – Harvard Business Review
- In order for the energy of this moment to birth change in Silicon Valley and beyond, it’s important to break down the core challenges that ultimately set the stage for why Black founders receive < 1% of venture capital.
- These are the four key things you need to understand in order to get into a deal with a talented Black founder, and maintain a positive working relationship that can take you and them to a successful outcome.
234. Breaking into VC; Excelling at Goldman Sachs; and the Origin of BLCK VC (Brian Hollins)
The Full Ratchet: VC | Venture Capital | Angel Investors | Startup Investing | Fundraising | Crowdfunding | Pitch | Private Equity | Business Loans
Brian Hollins of BLCK VC joins Nick on a special Crisis Coverage installment to discuss Breaking into VC; Excelling at Goldman Sachs; and the Origin of BLCK VC
- What, if anything, did Goldman do to support black investors and founders?
- did you have an opportunity to invest in black and/or underrepresented founders?
Venture: Unicorns, Direct Listings and Fund Raising
Unicorn Deals Drive Valuations to Record Highs
When coronavirus fears sent stocks tumbling this spring, venture capitalists expected startup valuations to follow. Instead, late-stage valuations for U.S. startups have risen in the first half of 2020 as the stock market, shaking off fears of a pandemic-caused recession, rebounded.
Startups: Advice & News
What do you need for a VC to properly evaluate a pitch?
- VCs are less interested that you sold 10 customers, 20, or 100—they want to understand how many you’re selling per week and whether or not that kind of pace would be profitable for your sales & marketing efforts.
- If I wind up asking for more info, it might result in a founder feeling like they’re getting the runaround, given what the founder believes to be an obviously good idea.
Top 10 Learnings from the Redpoint 2020 GTM Survey
- It contains data on go to market team structure, performance by sales function, marketing spend benchmarks, and customer success priorities.
- 1:1 AE/XDR ratios are the most common in both inside and outside sales teams.
How to Convince Your Sales Team to Adopt a Subscription Model
- To build a recurring-revenue business, an organization needs to change how the product is designed, move from customer support to customer success, and keep the customer’s long-term well-being in mind across every functional area.
- The author describes three challenges that can come up and how to address them: 1) The sales organization lacks confidence in the new solutions.
How Common Is It For Founders To Get Some Liquidity in A Venture Round?
- Founders taking secondary liquidity at lower valuations creates signaling risk — especially at the CEO’s level .
- If a founder really wants to sell at almost any price, it’s a flag.
How to Overcome Your Fear of Making Mistakes
- Here is how to become a more effective worrier: don’t be afraid or ashamed of your fear, use emotional agility to label your feelings and act on your values, focus on perfecting your processes not outcomes, broaden your thinking, recognize the value of leisure time, and avoid judgment-clouding noise.
- Don’t be ashamed or afraid of your fear of making mistakes and don’t interpret it as evidence that you’re an indecisive leader, or not bold, not visionary.
Silicon Valley Venture Capital Flash Report – April 2020 | Fenwick & West LLP
- • The percentage of up-rounds declined modestly from 72% in March to 70% in April, and both were lower than the 83% of financings that were up-rounds in 2019.
- • The percentage of life sciences deals continued high at 25% of all financings, compared to 28% in March.
Early-stage startup deals halved in H1 2020 – ETtech.com
- Early-stage deals halved in the first six months of the year, while the number of technology businesses that were set up sharply slowed, data shared by venture capital industry tracker Tracxn showed.
- The number of technology companies that have been incorporated up to June 15 stood at 449 compared to 3,638 in calendar year 2019, as a slowdown in economic activity due to the Covid-19 pandemic impacted founding of new firms.
Just Released, Startup Genome Report Ranks Top 30 Global Startup Ecosystems
- Startup Genome recently published The Global Startup Ecosystem Report 2020 with some interesting findings.
- Silicon Valley moved from 12 percent to 7 percent of overall venture capital funding over the same seven-year period.
Startup Genome: 80 regions have produced unicorns as tech democratizes
- But while the region still dominates, technology ecosystems have spread around the world, and Asia-Pacific is coming on strong, according to research by Startup Genome .
- Seven of the top 10 companies in the world are in technology, and 2019 saw close to $300 billion in venture capital investments across the globe, Startup Genome said.
Africa sees VC deals surge to reach record dollar total last year: AVCA data
- AVCA’s inaugural VC report – Venture Capital in Africa: Mapping Africa’s Start-up Investment Landscape – said both sectors accounted for 19% of the total volume of VC deals done between 2014 and 2019.
- About $1.4bn was invested in VC deals in Africa last year across 139 deals – double the value of 2018, according to new data from the African Private Equity and Venture Capital Association .
London’s Connect Ventures Closes Its Third Fund At $80 million
(Editor’s Note: This is an article written for Tech.eu by Annie Musgrove and shared with Crunchbase News as part of a news-sharing partnership.)
Connect Ventures, a London-based VC firm focused on seed-stage investments, has announced a new $80 million (£65 million) fund to support product-led founders across Europe.
Accelerated Digital Ventures’ future is in flux after founders lose board seats
- The future of Accelerated Digital Ventures (ADV), the U.K. early-stage investment firm now majority owned by Legal & General, is in flux after three of its founders have lost their seat on the board, TechCrunch has learned.
- Rumours began circulating earlier this month within the London startup community that three of ADV’s founders and members of the executive team, including CEO Lee Strafford, had abruptly left the firm.
Tweet of the Week
As always, this is a free newsletter to subscribers, but there is a paid plan for $9 a month or $90 a year. If you value it please consider paying the 25¢ a day it suggests. Just go to the subscribe link. I aleady have paid-only content and expect that to grow over time. Please let me know if there are things I can be doing to add to the value.