Web 3 & The End of TRUTH
By Keith Teare • Issue #279 • View online
Donald Trump is launching a social media platform just as Facebook is closing one down. Facebook’s proposed name change is an indication that Web 2 has reached the end of the road. Social Media is dead, long live Web 3. What Web 3 is, is still being written. But it is not Facebook, or TRUTH.
Contents
- Whatchamacallit?
- TRUTH and Lies
- Web 3: Blockchain Marches On
- Twitterverse
- Strangulation Regulation
- Venture Trends
- Wild Horses: Apples M1 Pro and Max
- Global Trends
- Startup of the Week
- Tweet of the Week
Editorial
Donald Trump is launching a social media platform called TRUTH just as Facebook is considering giving up on its name in order to define a post-social-media future. Who is most prescient?
The market liked Trump’s announcement, with the DWAC (Nasdaq) SPAC going from under $10 a share to over $90 a share, valued at about $3 billion
Snap fell more than 27% on news that Apples new privacy features had resulting in a miss on earnings. Facebook and Twitter were also impacted.
As we discussed last week, the web is undergoing a transformation to its next phase, sometimes called web 3. Web 3 will support many of the characteristics of Web 2. Messaging, Payments, Sharing, Storing, Querying, Talking, Working, Playing, will all evolve in new ways. But the old user interfaces and underlying protocols, not to mention the ownership and rewards structures will all change.
The future of social media can no longer be a headline conference topic. The real topic is what replaces it? This is the beginning of the end of social media and web 2.0.
This week Bitcoin grew in value to become the 13th most valuable currency in the world, replacing the Swiss franc. The super-smart Sam Altman launched WorldCoin to enable a global universal income infrastructure. Andreessen Horowitz grew to 170 investing professionals as the next version of venture capital emerges.
The overall message is all-change. But Trump’s TRUTH is no change. It may garner a cohort of bitter republicans intent on holding back progress. It does not and cannot represent the future of tech, nor of politics.
While all of this is playing out the Democratic party, while failing to progress its voting rights bill or its spending plans, is moving forward with proposals to shackle “Big Tech” and regulate or perhaps strangulate the Web 2 winners. As always it is fighting battles from the last war at the same time a new canvas is being drawn. Wherever those regulatory efforts end up, it is sure that they will have no impact on what comes next. It is already too late for that.
Video
Whatchamacallit?
Facebook is planning to rebrand the company with a new name
Facebook is planning to change its company name next week to reflect its focus on building the metaverse, according to a source with direct knowledge of the matter.
The coming name change, which CEO Mark Zuckerberg plans to talk about at the company’s annual Connect conference on October 28th, but could unveil sooner, is meant to signal the tech giant’s ambition to be known for more than social media and all the ills that entail. The rebrand would likely position the blue Facebook app as one of many products under a parent company overseeing groups like Instagram, WhatsApp, Oculus, and more. A spokesperson for Facebook declined to comment for this story.
Facebook, Twitter and digital ad stocks drop sharply after Snap earnings
KEY POINTS
- Social media and digital advertising stocks dropped after hours after Snap reported it missed revenue expectations in the third quarter.
- Snap said that Apple’s iPhone privacy changes disrupted its advertising business.
- It also warned that supply chain interruptions were stifling short-term demand for advertising.
Why Facebook is rebranding — by Casey Newton
Facebook is changing its name. Perhaps you heard. The news was broken by Alex Heath of The Verge on Tuesday night, and I’ve since confirmed it with sources of my own. The news could come as late as Oculus Connect, next Thursday; or as early as Facebook’s earnings call, coming this Monday. The most remarkable detail I’ve heard, from two sources now, is that CEO Mark Zuckerberg has not settled on a final name. Facebook is fully back in its old move fast mode here, and I expect whatever happens next to come together very quickly.
Why rebrand? Why now? The company has been seriously discussing the move for at least the past two months, sources said. Antonio Lucio, the company’s former chief marketing officer, pushed for Facebook to begin separating the corporate brand from its apps three years ago — changing the corporate name to something like “FB Inc.,” or an all-caps “FACEBOOK Corporation.” But the company’s metaverse ambitions were less formed then, I’m told, and he was overruled.
There are two basic reasons why the company’s stance changed. One is that the Facebook’s reputation began taking sustained damage in the wake of the 2016 election and, fairly or not, never really recovered. The Cambridge Analytica data privacy scandal; the FTC investigation; the Congressional antitrust inquiry; a parade of former employees denouncing the company on their way out the door, culminating in Frances Haugen’s whistleblowing; activism around hate speech and misinformation on the platform from the left; activism around censorship and deplatforming on the right.
It added up.
Facebook’s name change plan reflects its real priorities
Facebook CEO Mark Zuckerberg at the European Commission in 2020. | Kenzo Tribouillard/AFP via Getty Images
Political scrutiny isn’t stopping Mark Zuckerberg from building the metaverse.
Facebook’s plan to change its company name, as first reported by The Verge, comes at a peculiar time. The nearly $1 trillion company that owns Instagram and WhatsApp is facing its biggest scandal in years over damning internal documents leaked by a whistleblower, as well as mounting antitrust scrutiny from lawmakers and regulators.
So what’s really going on? Is the name change meant to be a distraction from its bigger problems? A sign of more company changes to come? And when did Facebook first come up with this idea?
TRUTH and Lies
Trump to launch social media platform to compete with Twitter and Facebook | Ars Technica
Former US president to go public with TRUTH Social via merger with SPAC.
Donald Trump is launching a social media platform called TRUTH Social, which will go public via a merger with a blank-check company, as the former US president seeks to capitalize on his popularity among a large chunk of Republicans.
The move comes after months of speculation about whether Trump would launch a media company to compete with Twitter and Facebook and set the stage for another presidential run in 2024.
Trump, who used Twitter extensively during his 2016 campaign and four years in office, was banned from the platform, along with Facebook, YouTube, and other big social media networks in the wake of the January 6 attack on the US Capitol.
The former president said in a statement on Wednesday that the new app would be controlled by Trump Media & Technology Group.
“I created TRUTH Social and TMTG to stand up to the tyranny of Big Tech,” he said in a statement. “We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American president has been silenced. This is unacceptable.”
Company Overview | TMTG
In the year 2021, the media pendulum has swung dangerously far to the left. Silicon Valley, the mainstream media, and Big Tech have begun to forcibly silence voices that do not align with their woke ideology. Big Tech platforms demonetize, throttle, and cancel those who stray from the mainstream narrative. They are not just censoring content — they are determining what can and cannot be said. By controlling how information is shared, they control the narrative. They control the future. They control you.
To counter this dangerous exercise of Big Tech monopoly power, President Donald J. Trump and TMTG are building a media and technology company rooted in social media, digital streaming, and more. TMTG intends to even the playing field by providing people with open media platforms where they can share and create content without fear of reputational ruin.
Shares of Trump-linked SPAC close up 350% following news of social media deal
Trump has a planned social media platform,“TRUTH Social,” which is allied with the SPAC company Digital World Acquisition Corp.
KEY POINTS
- The stock of SPAC company Digital World Acquisition Corp. skyrocketed on extremely heavy trading volume after news of a merger that would launch former President Donald Trump’s planned social media platform.
- DWAC’s stock surged 357% Thursday and trading was halted multiple times due to volatility.
- DWAC was among the top 10 most popular names on Reddit’s WallStreetBets chatroom, even exceeding meme stock GameStop’s mentions.
Web 3: Blockchain marches on
Bitcoin Surpasses Swiss Franc To Become World’s 13th Largest Currency
At the time of writing, Bitcoin has surpassed the Swiss Franc (CHF) in market capitalization as the world’s thirteenth largest currency, according to data from Fiatmarketcap.com. There are only 12 world currencies left for Bitcoin to overcome.
Fiatmarketcap.com takes a Bitcoin standard approach to analyze currencies. It measures the world’s biggest currencies in terms of market capitalization as priced in BTC, the best form of money ever created but still lagging in perception.
Silicon Valley entrepreneur Sam Altman wants to scan your eyes in exchange for free cryptocurrency
KEY POINTS
- Tech millionaire Sam Altman’s new start-up Worldcoin uses orb-shaped devices to scan people’s eyes in exchange for free cryptocurrency.
- The company has so far amassed over 100,000 users globally already, and aims to hit the 1 billion user milestone by 2023.
- Worldcoin CEO Alex Blania hinted Worldcoin could be used as “infrastructure” for a universal basic income one day.
Meet the New Owners of the Wu-Tang Clan’s One-of-a-Kind Album — The New York Times
Seven years ago, the Wu-Tang Clan’s one-of-a-kind album “Once Upon a Time in Shaolin” was created as a protest against the devaluation of music in the digital era. Before long it got caught up in a tale of capitalist villainy when it was purchased by Martin Shkreli, the price-gouging young pharmaceutical speculator who was later convicted of securities fraud.
Now the album has found yet another life on the frontier of digital art and cryptocurrency, having been sold for $4 million to PleasrDAO, a collective that has existed for less than a year but has already built a reputation for acquiring high-profile digital works.
In a complex deal with multiple parties, one of whom remains unidentified, PleasrDAO acquired “Once Upon a Time” after its sale in July by the federal government, which had seized the album to satisfy the balance of a $7.4 million forfeiture money judgment against Mr. Shkreli that was part of his sentencing in 2018. (Mr. Shkreli is still serving out a seven-year prison sentence.)
Twitterverse
Twitter acquires group chat app Sphere — TechCrunch
Twitter has acquired London-based Sphere, which operates an eponymous groups chat app, the latest in a series of recent moves from the social network as it looks to aggressively broaden and improve its product offerings. Sphere — founded by Tomas Halgas and Nick D’Aloisio, who previously founded news summary app Summly, which he famously sold to […]
Twitter algorithms bias toward right-wing content — Protocol — The people, power and politics of tech
Twitter is sharing research today that shows that the platform’s algorithms amplify and are biased toward tweets from right-wing politicians and content from right-leaning news outlets more than content from the political left.
Strangulation Regulation
Google lowers Play Store fees for subscriptions and music streaming apps — The Verge
Google is lowering its app store fees. Ebooks and music streaming apps will now only pay a 10 percent cut, while all subscriptions are getting cut to 15 percent. It’s a response to regulatory pressure.
Consumer Agency to Probe Tech Giants Including Apple, Facebook
Big tech companies are about to face questions from the government on another front: how they use consumers’ financial and other information.
The Consumer Financial Protection Bureau is poised to examine consumer data practices at Amazon.com Inc., Apple Inc., Alphabet Inc.’s Google and Facebook Inc. and other firms, according to people familiar with the matter. The move would open a new front in Washington’s scrutiny of the firms.
The bureau is expected Thursday to issue orders seeking information from the companies, the people said. All of the companies are engaged in consumer-facing financial services or have ambitions to expand in that sector.
A CFPB spokesman declined to comment.
The Senate is ready to take on Big Tech competition now — Protocol — The people, power and politics of tech
A bipartisan group of senators will introduce a bill prohibiting Big Tech platforms from giving preference to their own offerings, according to a release from Sen. Amy Klobuchar, the Democrat leading the group.
The measure, which currently has six co-sponsors, means that the growing bipartisan frustration with the competitive practices of Apple, Amazon, Facebook and Google has now produced proposals with sign-on from top legislators in both chambers of Congress.
“Our country faces a monopoly problem, and American consumers, workers, and businesses are paying the price,” Klobuchar, who chairs the Senate panel on competition, said in a statement. “We must put policies in place to ensure small businesses and entrepreneurs still have the opportunity to succeed in the digital marketplace.”
The bill will prohibit “dominant platforms from abusing their gatekeeper power by favoring their own products or services, disadvantaging rivals, or discriminating among businesses that use their platforms in a manner that would materially harm competition on the platform.”
House Democrats’ Sec. 230 bill takes aim at algorithms — Protocol — The people, power and politics of tech
Top House Democrats unveiled a bill Thursday that would force big online companies like Facebook and Twitter to face liability if the algorithms that shape their sites push content that drives harm in the real world.
Rep. Frank Pallone, who chairs the House Energy & Commerce Committee, is spearheading this proposal to change Sec. 230. Online services value the legal provision, which protects them from facing legal liability over the content of user posts, and say it protects free speech while allowing them to clean up the worst content. Yet Democratic lawmakers increasingly say the law gives social media companies and other websites too little incentive to police harmful posts.
The bill from Pallone and the chairs of three of his panel’s subcommittees would allow services to face liability “when an online platform knowingly or recklessly uses an algorithm or other technology to recommend content that materially contributes to physical or severe emotional injury,” according to a news release accompanying the bill.
Venture Trends
Andreessen Horowitz Investment Staff Grew 170% in Four Years
One of the running jokes among Silicon Valley venture capitalists is that, eventually, all of them will become partners at VC firm Andreessen Horowitz. That hyperbole underscores how, amid a singular boom in private tech investment, Andreessen Horowitz has left its nearest VC rivals in the dust — at least when it comes to head count.
As of Monday, Andreessen Horowitz’s investment team had grown by about 170% to 70 in the past four years, or more than quadruple the pace of hiring by blue-chip VC firms including Sequoia Capital, General Catalyst, Accel and Lightspeed Venture Partners, according to an analysis by The Information. Four years ago, these firms roughly had the same number of investment staff as Andreessen Horowitz.
www.theinformation.com • Share
The Story of a Cap Table: GitLab
How Khosla Ventures, August Capital, GV, and ICONIQ landed investments in GitLab
Khosla was the largest single GitLab shareholder outside of Sijbrandij, according to GitLab’s IPO filing.
At the time of the IPO, Khosla owned 14.1% of the company. The firm had 19 million shares.
At GitLab’s current stock price, Khosla’s stake is worth about $2 billion. The firm invested $12.75 million in GitLab altogether, including some pro rata in the Series B.
That’s a more than 150X return for Khosla.
Meanwhile, Katz, the August Capital associate, remained excited about GitLab’s promise, though he seemed skeptical a deal would ever come together at August and worried that GitLab could have trouble competing with GitHub. Still, Katz brought up the company regularly inside August Capital.
Then in May 2016, Villi Iltchev joined August as a partner after working as an executive at Box, LifeLock, and Salesforce. Importantly, Iltchev had looked into GitHub as part of Salesforce’s acquisition of Heroku.
Katz and Jones introduced Iltchev to the company and finally the firm had a partner prepared to fight for the deal.
Within 50 days of joining August Capital, Iltchev brought the deal to his partners. “I was like, ‘Guys I think we should do this. This seems really exciting.’”
Sources told me that August Capital’s partnership was decidedly of mixed minds about making an investment. Notably, David Hornik, who had been the first investor in Splunk, had some reservations about the deal, sources told me.
The SaaS Metrics That Matter
One of the best features of SaaS businesses is how easy they are to measure. Only a handful of metrics really matter. This post breaks down those key performance indicators (KPIs), and provides the benchmarks that we at Craft like to see at the Series A stage in order to lead a new investment.
We’re also releasing our internal tool, SaaSGrid, which we’ve used to analyze KPIs for hundreds of SaaS companies, as a free publicly-available tool to help founders calculate metrics (anonymously if they wish) for their own startups.
Turning the ratchet — understanding anti-dilution rights in venture capital Blog Big Deal
What are anti-dilution rights?
Anti-dilution rights are a form of economic protection for an investor against the valuation of a company dropping following its investment.
To reduce venture capital investment down to its crudest level, investors invest money in companies to help them develop and to drive the valuation of the company up. However, to borrow from A Midsummer Night’s Dream, the course of true love investment never did does not always run smooth.
After taking on one round of venture capital investment, early-stage companies may find themselves needing to go through a further funding round where the valuation of the company is lower than the valuation determined by the investors in the previous round — or what is commonly known as a “down round”. It is on down rounds where anti-dilution rights come to the fore.
What do anti-dilution rights do?
Where a company issues additional shares (or convertible securities) to new investors at a price that is lower than the price paid by previous investors, any previous investors who have anti-dilution rights will have the right to receive additional shares at no or minimal cost in order to compensate them for their economic dilution.
Wild Horses: Apples M1 Pro and Max
Apple’s Faster Horses
Some thoughts on Apple’s “Unleashed” MacBook event
Apple has had this funny tendency in recent years. They “upgrade” devices by taking away features that a lot of users — and often professional users in particular — love and/or find useful. When questioned about it, the response is the equivalent of the “Deal with It” meme. Faster horses and all that. But then people complain loudly enough for long enough that Apple relents. And then… gets praise for relenting!
That’s basically the narrative right now about the new MacBook Pros announced today. Which is too bad in many ways because it completely downplays just how amazing the new M1 chips — two of them! The M1 ‘Pro’ and M1 ‘Max’ — would seem to be. If the M1 was an embarrassment to Intel, these two new chips are the pantsing and kick in the groin. Hopefully they’re more like a kick in the ass to Intel, but my god, it’s not pretty. Unless you’re Apple or in the market for a new premium laptop. Then it’s beautiful.
Apple finally listened to the pros
I nearly bought my first MacBook Pro in 2015. It would have been the first Mac I ever personally owned. But I convinced myself to wait another year for faster Intel chips — and in October 2016, Apple took away almost everything I admired about that Mac in one fell swoop.
The comfortable keyboard? Replaced with a too-thin slab that also became a nightmare for many a Mac user over the years, the butterfly switch mechanism so fragile a speck of dust could lay it low. The handy SD card slot for photographers and videographers, and the HDMI port to easily connect to monitors or TVs? Both axed seemingly in favor of selling us more overpriced dongles.
In the quest for ever-thinner and flashier laptops, Apple had seemingly forgotten why people bought the MacBook Pro in the first place — and pros were happy to point that out. They ridiculed the tiny strip of touchscreen Apple built into the keyboard, decried the relative lack of RAM, the missing ports, and how Apple’s choice of GPU didn’t match up to the Windows competition. I collected a bunch of those thoughts right here at the time, and Michael Tsai has more.
Five years later, Apple is giving those pros everything they said they wanted.
Fully loaded
Global Trends
Start of China’s Singles’ Day Season Sees Billions Spent on Livestream Sales — Bloomberg
China’s Li Jiaqi, a top livestream salesman widely known as the “lipstick brother,” sold $1.9 billion in goods on the first day of Alibaba Group Holding Ltd.’s annual shopping festival, as the country’s consumers splash out despite an economic slowdown.
The truth about Africa’s tech talent shortage — Rest of World
Too few local developers, the rise of remote work, and more are making talent agencies like Andela rethink their models.
Italy’s ill-fated dalliance with techno-democracy | Financial Times
Ben Munster writes from Rome on the new mass politics, techno-determinism, blockchain, and the end of Italian “e-democracy”.
Indonesian start-up GoTo poised for $28.5bn valuation in latest fundraising | Financial Times
Abu Dhabi Investment Authority-led round lifts super app’s value by about 60% ahead of listing
Startup of the Week
FTX Raises $420,690,000
FTX has memed itself into another massive funding round.
Sam Bankman-Fried’s Bahamas-based crypto exchange said Wednesday it had raised $420,690,000 in a Series B-1 funding round. Sixty-nine investors — including BlackRock and Tiger Global — joined the fast-growing crypto conglomerate.
Investors valued the exchange at $25 billion, FTX said, a nearly 39% jump over the Series B sticker price from July when it raised a whopping $900 million in crypto’s largest-ever venture capital funding round. FTX says users have grown 48% in that period and trading volume rose 75%.
Surging growth coincided with FTX’s summertime marketing blitz. The new funding round is being announced as bitcoin tops fresh all-time highs.