Do Democrats Understand Growth and Tech?


That Was The Week, #44


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Editorial: Intel After Apple, Tech After Biden


I usually do not like to talk about politics in That Was The Week. After all, tech and politics are very different worlds, and most of us do not determine our tech preferences based on politics.

That said, the rise of massive corporations valued over $1 trillion and the calls from all sides of the political spectrum for anti-trust measures against them makes it hard to ignore politics in tech.

As we say goodbye (good riddance) to President Trump, and hello (phew) to President-Elect Biden, it is worth reflecting on how it will change the landscape in Silicon Valley. The consensus is well summed up in this week's News of the Week section dedicated to the topic.


--News Of The Week: Tech After Biden


Hope might be the keyword. But we may have to question that. Democrats have made clear their plan to go beyond changing Section 230 and launch a full-blown anti-trust challenge to big tech.

The Democrats seem to not understand that innovation requires substantial investments and scale and that economic growth - progress - requires innovation. Without thinking too hard, it is evident that Amazon, Google, Apple, and Facebook have all been crucial to digitizing life and work. This is without mentioning Twitter, Tesla, Salesforce, Microsoft, and other giants.

Attacking these companies and punishing their success will not help an embattled US Economy. It will certainly not allow the new Jeff Bezos, Larry Page, Sergey Brin, Mark Zuckerberg, or Steve Jobs to embrace the Democrat's vision for the future.

Single-payer health care, free education without student loans, social welfare, and more are all made possible by economic growth and productivity gain. The wealth they create makes shared social systems possible. Any progressive agenda for change should champion innovation and wealth creation, not penalize or criminalize it. I voted for Biden, and I am glad to see the back of Trump, but I also want to believe in progress, and that does need support for investment, innovation, and the freedom to be successful, and yes, big.

As Trump was ceremoniously abandoned by the majority this week, Intel had the same experience at Apple's hands as it announced its M1 chip and three Apple computers that will host it. Big Sur shipped today and already can run on the M1 chip while remaining compatible with Intel code via Rosetta 2.

The M1 is a system on a chip with compute, memory, and dedicated processors for graphics, machine learning, and more. It handily outperforms the competition. Intel and consumers are slowly being prised apart, and soon business users will too. Apple almost immediately released Final Cut Pro and Logic Pro as universal apps could take advantage of the M1. Other developers are following fast. The end of Intel should be as smooth as the end of Trump. Both the Whitehouse and Apple will be fine.

News of the Week covers this via two pieces from Ben Thompson and James Allworth. Allworth - a protege of Clayton Christensen - explains how Intel is a victim of the Innovators Dilemma. Ben Thompson focuses on how Apple always uses its hardware gains to outperform while delivering great software on top of it.


--News Of The Week: Intel After Apple


And the rest is here:

--News You Can Use:


--The Best of the Rest:


Startup Of The Week:


Podcast of the Week:


Tweet of the Week:


  • Brian Fung - @b_fung - "Don’t expect Biden to go any easier on Big Tech than Trump has. Here’s what to expect from a Biden administration, according to policy analysts following the tech industry closely."
  • Hunter Walk - @hunterwalk - "hot take: the best podcast companies selling for between $100-$300m is a chilling effect upon additional venture dollars going into the industry."

--Talking Point of the Week



--News Of The Week 1: Intel's After Apple


Apple’s Shifting Differentiation

Stratechery by Ben Thompson

  • What is fascinating is that while modern Apple is indeed characterized by the integration of hardware and software, the balance of which differentiates the other has shifted over time, culminating in yesterday’s announcement of new Macs powered by Apple Silicon.
  • What makes the timing of this move ideal from Apple’s perspective is not simply that this is the year that the A-series of chips are surpassing Intel’s, but also the Mac’s slipping software differentiation.

Intel’s Disruption is Now Complete

James Allworth

“Look, Clayton, I’m a busy man and I don’t have time to read drivel from academics but someone you told me you had this theory… and I’m wondering if you could come out to present what you’re learning to me and my staff and tell us how it applies to Intel.”

So begins the story that Clay Christensen would love to tell about how Andy Grove of Intel famously came to be a convert to the theory of disruption. Christensen shared with Grove his research on how steel minimills, starting at the low end of the market, had gained a foothold and used that to expand the addressable market, continued to move upmarket, and finally disrupted the giant incumbents like US Steel.

Grove immediately grokked it.


--News Of The Week 2: Tech After Biden


What does a Biden presidency mean for tech?

Protocol - @issielapowsky

  • If the Biden administration leveraged the transformational capabilities of technology to support the public good or prioritized closing the digital divide, these topics would add the potential reform of the nation’s Universal Service Fund to the list of tech policy priorities, ensuring more ubiquitous broadband access for rural, urban and tribal communities.
  • We expect focus in 2021 on competition policy such as modernizing antitrust; digital consumer protections such as privacy, content moderation and algorithmic fairness; national security imperatives including 5G, updated export controls, cybersecurity and supply chain resilience; and new societal paradigms, such as supporting the gig economy, STEM education and lifelong learning platforms.

Biden’s victory was just what tech wanted. Now what?

Protocol - @k__mcallister

  • Joe Biden’s election as the 46th president of the United States gives the tech industry a reason to breathe a brief sigh of relief, following a days-long count of ballots during which Facebook and Twitter raced to contain a swell of misinformation, much of it coming from President Donald Trump himself.
  • The industry has butted heads with the Trump administration at almost every turn of his presidency: over immigration , trade , net neutrality and, more recently, content moderation on social media .

Trump Broke the Internet. Can Joe Biden Fix It?

Wired, @GiladEdelman

  • So whether we’ll see bold, aggressive, consequential antitrust enforcement and rulemaking against Big Tech during the Biden administration, or just modest, incremental, possibly-doomed-in-the-courts stuff, is still up in the air.
  • That means one of the Republicans will have to retire or return to the private sector in order for Biden to get to install a majority that will enforce his priorities.

--News you can use


Big Tech should worry about the EU’s Amazon antitrust fight

Protocol

  • This Wednesday: What other companies should take from the EU’s antitrust complaint against Amazon, what’s inside Apple’s new Macs, and why tech is all over the Biden transition team.
  • Sign up here to get Source Code every day.) The Big Story Antitrust comes for Amazon The U.S. Justice Department may be focused on Google and Facebook — with Congress mostly interested in yelling about conservative bias on social networks — but the antitrust fight is coming for Amazon anyway.


SaaS LTV Calculator



Visualizing the Evolution of Global Advertising Spend (1980–2020)

Visual Capitalist

  • Reaching $160 billion in one year, digital display advertising — a broad category including banner ads, rich media, advertorial and sponsorship, online video and social media — accounted for the largest global ad expenditure in 2019.
  • Social media and digital ad spend also corresponds with a steady uptick in global smartphone ownership and usage.

The Anatomy of a Startup Organisation

Dave Bailey, @davesuperman

  • They typically lead all non-product operations, project management, and, in earlier-stage companies, functions like HR, finance, and legal.
  • Growth teams usually take an iterative, experiment-based approach and they’re often composed of product managers and engineers, as well as performance marketers and SEO experts.

How to Bootstrap to $5M ARR in Less Than a Year

SaaStr, @miadia

  • She said the Flodesk team focused on the ideal experience of their ideal customer, knowing those people would go out and tell others, i.e., Instagram, and the result would be customer-led company growth.
  • Bitar said they like to talk with customers who recently joined Flodesk and those who recently left and ask both, “Why?”

--The Best of the Rest


The Network Effects Manual: 13 Different Network Effects (and counting)

NFX


Thread by @dunkhippo33 on Thread Reader App
Thread by @dunkhippo33: Some thoughts on network effects and how it’s a double edge sword: First, what are network effects? Most people get this wrong, so it’s important to establish definitions upfront Read on >> ...…

  • For instance, each new seller (supply-side user) on a 2-sided marketplace like eBay directly adds value for buyers (demand-side users) by increasing the supply and variety of goods.
  • It’s also true that the protocol creator doesn’t typically capture most of the value from the development of the network, as they normally do with other direct nfx.

‘TikTok Says the Trump Administration Has Forgotten About Trying to Ban It, Would Like to Know What’s Up’

Daring Fireball

All eyes are on their election-loss pants-wetting tantrum, but the Trump administration continues to embarrass itself, and alas, the nation, in other ways. Remember too that they claimed this TikTok controversy was a national security issue.


VCs Say IPO Pipeline Looks Robust And These Companies Could Still Go Public in 2020

Crunchbase News

  • Among the other companies that could go public before year-end, according to Kennedy: Poshmark and Wish (which have both already filed confidential registration statements to go public), along with Qualtrics , Payoneer and Robinhood .
  • Among the high-profile companies that have gone public already this year are Palantir Technologies , Asana , Snowflake and Lemonade .

How SPAC-Offs Can Sweeten Merger Deals

The Information, @rossmatican

When Porch.com, a marketplace for freelance handypeople, late last year was considering whether to go public via a merger with a SPAC, it heard from two special purpose acquisition companies interested in doing a deal.


Spotify hints at subscription podcast service

The Verge

  • Spotify appears to be interested in launching a subscription podcast service that would offer access to original shows or exclusive episodes for a monthly fee.
  • But the fact that Spotify is surveying users means that it’s likely considering launching some sort of subscription podcast plan, even if it doesn’t necessarily end up taking any of the exact forms described here.

Here comes the next IPO wave

Fundings & Exits — TechCrunch

  • Moving along, the Ant Group IPO termination by the Chinese government was probably the biggest tech story of the week, though as the company is worth a few hundred billion, it’s not really a startup event.
  • Upstart’s IPO filing brings a fintech IPO to the fore, and overall its numbers are pretty good if you discount worries about its customer concentration.

Framework: Not All LPs Invest In Emerging VCs For The Same Reasons

Oper8r, Welly Scully, @wsculley

  • As a VC, your fund is your product, and your LPs are your customers
  • As an emerging VC, you have the opportunity to shape your fund to solve specific problems for your LPs
  • We outline some use cases we observe LPs solving by investing in emerging VCs, and provide a framework for understanding LP’s preferences
  • Both VCs and LPs can use this framework to improve how they go to market

Startup Of The Week:


IVP, Tiger Global Lead Hopin’s $125M Series B

Crunchbase News

Virtual events provider Hopin announced a $125 million Series B round of funding. This is the London-based company’s third venture-backed investment this year—and its largest funding to date—to bring its total to more than $170 million raised since February. We covered both its seed and Series A rounds.

Existing investor IVP and new investor Tiger Global led the round and were joined by Coatue, DFJ Growth as well as other existing investors Accel, Northzone, Salesforce Ventures and Seedcamp. The company plans to use the new funds to continue scaling and on product development.

In the past eight months, Hopin has been busy growing: it went from 5,000 registered users to 3.5 million users and from 1,800 organizations hosting events to more than 50,000, the company said. It now has more than 200 employees in 38 countries, up from eight, and plans to hire 150 more people by the end of the year.

In addition to the funding, the company unveiled the soft launch of Hopin Explore, which has amassed 15,000 monthly events that users can via a worldwide search and discovery tool.

  • Berlin-based electric scooter company TIER Mobility raised $250 million in a funding round led by the SoftBank Vision Fund .
  • Existing investor IVP and new investor Tiger Global led the round and were joined by Coatue , DFJ Growth as well as other existing investors Accel , Northzone , Salesforce Ventures 1 and Seedcamp .

Introducing Seedcamp V

Seedcamp

  • What’s all the more special is these exceptional founders have put their trust back in us and the continued success of Seedcamp by investing in our new fund and our future founders.
  • A tiny ‘micro-fund’ coming out of those unknown European gates with 2.5MEuros in cash from a handful of trusting investors; limitless ambition and a belief that European entrepreneurs could, and should, have the chance to compete on a global scale.

Podcast of the Week:


Gillmor Gang: Check, please

Steve Gillmor — TechCrunch

  • When we recorded this Gillmor Gang, it was Day Four post-election, or midweek in counting the late incoming mail and other provisional ballots.
  • As we sit yet another day later, the perception that Trump will never concede is matched by the equal feeling that we could care less.

Reid Hoffman | Choosing Bad Competition

Greymatter

If you can find a valuable market which has been overlooked, or where your competitors are lazy or stuck in their ways, you can beat that competition, no matter how big or rich those other players might be.


Episode 8: The Business of Venture Capital

Fabrice Grinda, @fabricegrinda

Most entrepreneurs merely see venture capitalists as a source of capital without understanding how venture capitalists operate. Jeff Weinstein, who co-heads investing at FJ Labs, and our resident venture capital nerd, joins to explain the history of venture capital.


Tweet of the Week:



Talking Point of the Week:


Why Twitter Finally Needs a New Business Model

Stories by Scott Galloway on Medium

I’ve been telling Twitter a move to subscription would be the single most accretive action in the firm’s history, and the stock popped just on the announcement in July that they were exploring a subscription model.