This week we look at the Internet in War Time. Ukrainians are using it effectively. Meta, Youtube, and others are banning Russian content. Coinbase and Binance are not banning Russian content. Big Tech seems compliant with government requests. Is the Internet for good or for bad?
- The Internet and War
- This Week in Venture Capital
- The SEC and NFTs
- Uber Expands
- Amazon’s $31bn Advertising Business
- Apple Games
- Tesla Competition Heats Up
- Essay of the Week — Ukraine Crisis and the West
- Startup of the Week
- Tweet of the Week
Let’s start with this week’s Tweet of the Week. It seems that I am about to become a Doctor. My University — Kent University in the UK — has announced that it is honoring me at a ceremony to be held in Canterbury on April 1st (ominous I know). I am assured it is not an April fools trick. But I am kinda surprised, while very grateful.
My focus on change was fuelled at Kent. I studied British Constitution and Politics with Sociology. I did minors in Social and Economic History and Economics including Statistics.
When I arrived in Kent as a 19 year old I was already a rebel focused on change. The atmosphere in 1973 was full of Vietnam, Ireland, Immigration and Racism, Nationalism and the collapse of the Eastern Bloc soon followed.
My classes provided ample opportunity to develop ideas and debate them. I loved every minute. I never completed my Ph.D. because I became focused on being an activist (Workers Against Racism and the Irish Freedom Movement) and started writing, speaking, and being active on issues. Kent always encouraged my critical thinking, questioning and problem solving against the world’s biggest problems. I learned to code in the first year of my Ph.D. and never looked back.
When I published Under Siege (using the nom de plume Keith Tompson) in 1988 and then The Easy Net Book in 1995 I was in transition from politics to technology as the primary focus for helping create change.
in 1994 EasyNet was the first consumer ISP in Europe and CYBERIA the world’s first Internet Café. After EasyNet’s IPO I moved to Palo Alto in 1997 and RealNames was the first attempt to allow keyword navigation on the Internet, including keywords using Chinese, Korean, Japanese, Hebrew, Arabic, Cyrillic, and other non-Latin characters as web addresses.
Being part of the founding of TechCrunch, and now the CEO of SignalRank, my whole life so far has been about making change.
I owe a lot to Kent University for making that possible. Thank you for that. And being honored with a Doctorate is really a testimony to the institutions’ impact on me.
This week we look at some big themes. The Internet and War is a section that covers the role of Big Tech in the Ukraine invasion. In the video this week we will talk a lot about how these companies have chosen sides and impacted the perception we have of it.
Another big week in Venture Capital also. Homebrew announced it will not raise the 4th fund but will invest the principal’s own money (permanent capital). SV Angel announcing its first-ever growth fund Ali Partovi launching Neo as a challenge to the new Y Combinator, describing it as closer to the original YC vision. All of these things amplify some of the themes we have previously spoken about on That Was The Week. This week’s Essay of the Week is a video essay from Chicago University. If we are to get full context on Ukraine it is really important to watch, even if you disagree with it. The first casualty of War is the Truth. This is a contribution to seeing through the fog to the real causes.
More in the video.
The Internet and War
In 1942, smokers of one of the leading cigarette brands noticed a change in the packaging. The green background on Lucky Strike boxes was now white. The American Tobacco Company’s official explanation was that copper, used to produce the green pigment, was at a premium during wartime. To support the Allied troops, the cigarette maker “sacrificed” by abandoning the green dye. In what might be called midcentury virtue signaling, the firm rolled out a massive ad campaign with the slogan, “Lucky Strike Green Has Gone to War.”
How much will it matter? Notes on the platforms in wartime
Over the past decade, the biggest tech companies came to feel less like traditional corporations and more like quasi-states: borderless empires whose decisions increasingly had geopolitical consequences, to the growing frustration of the nation-states in which they operate.
During the rise of former President Trump and other authoritarians around the world, global attention sensibly focused on the worst aspects of this arrangement. As they grew, companies acquired a vast civic responsibility that they were reluctant to accept. The platforms were motivated primarily by growth and profits, and many were structured to make their leaders unaccountable even to their own boards. In the meantime, platforms were exploited by adversaries — along with domestic politicians, led by Trump — spreading lies and sowing dissent in the United States and abroad.
From 2016 to 2021, then, it was only natural that pro-democracy forces largely came to believe that social networks could only have a corrosive effect on the world. Algorithms built to identify and promote the angriest and most outrageous sentiments would, over time, polarize populations and pave the way for their countries to be taken over by strongmen. Weak, largely outsourced content moderation would make it easy for authoritarians to rule through misinformation and incitements to violence. Social networks seemed to play a key role in democracy’s doom loop.
Perhaps they still will. But it has been striking, watching the horrific invasion of Ukraine that Vladimir Putin’s Russia began on Thursday, the degree to which social networks have been used in efforts to preserve democracy.
After being widely credited for Trump’s election in 2016, and preparing to initiate the biggest war of the social network era, Russia might have been expected to excel at information warfare. Instead, like the rest of the war, it has gone quite badly for them. It is Ukraine that has been masterful in its use of social media — and while that may not prove decisive in whether or not it overcomes Russia’s superior military, at the very least it complicates our understanding of big tech and democracy.
Today, let’s talk about how.
Binance, the world’s largest exchange, said “unilaterally” banning users “would fly in the face of the reason why crypto exists.”
Faced with a request by Ukrainian leadership to freeze the accounts of all people in Russia and Belarus, major crypto exchanges are steadfastly refusing, saying the tactic would unfairly harm civilians and “fly in the face” of the crypto community’s libertarian ideology.
In a tweet, Vice Prime Minister of Ukraine Mykhailo Fedorov publicly asked the world’s major crypto exchanges over the weekend to freeze all accounts of the Russian people, as well as the people of Belarus, a Putin ally, rather than only those entities who have been legally sanctioned, thereby placing additional domestic pressure on Russia to end its war on Ukraine.
Instead of joining the military defense, the U.S. and European Union have attempted to cripple Russia’s economy by aggressively sanctioning Russian banks, sovereign debt, and leadership, leading the Russian ruble to plunge in value. At the same time, cryptocurrency has emerged as a site of contest, with millions of dollars in crypto being donated to Ukraine while observers wonder if Russia will turn to the blockchain to escape sanctions.
A spokesperson for U.S.-based exchange Coinbase told Motherboard that the company will not comply with the request to ban all Russian users, citing “economic freedom” and the harm that a ban would bring to average Russians, but that it is complying with existing sanctions.
“Given the exceptional nature of the current situation, we will be restricting access to RT and Sputnik.”
Facebook parent Meta will restrict access to Russian state media on its platforms across the EU in response to Russia’s unprovoked invasion of Ukraine, Facebook’s vice president of global affairs Nick Clegg announced Monday.
Why it matters: European Commission President Ursula von der Leyen a day earlier said the EU will ban Russian state media to stop their “toxic and harmful disinformation.”
The big picture: “We have received requests from a number of Governments and the EU to take further steps in relation to Russian state controlled media,” Clegg tweeted.
- “Given the exceptional nature of the current situation, we will be restricting access to RT and Sputnik across the EU at this time.”
Facebook said it had disrupted a minor disinformation operation targeting Ukraine. But it faces a bigger debate about whether to ban popular Russian state media pages.
Squeeze tightens on RT and Sputnik.
Google’s YouTube said Tuesday that it would block Kremlin-backed media outlets RT and Sputnik from Europe following similar bans by Facebook and TikTok.
“It’ll take time for our systems to fully ramp up. Our teams continue to monitor the situation around the clock to take swift action,” Google’s video streaming service said in a statement.
YouTube’s ban — following an announcement from the European Commission that it wanted to remove these Russian media outlets from the EU — would apply within the European Union and the U.K.
The steps from social media companies come as Western leaders put increasing pressure on these tech firms to limit how Moscow can spread its propaganda, mostly via government-controlled media outlets, to an international audience.
Previously, the firms had stopped the likes of RT and Sputnik from earning money from advertising on their YouTube channels, or from buying ads to promote themselves on Facebook.
As Ukraine crowdsources millions of dollars worth of digital currency to fund its defense against Russia, the nation’s early adoption of crypto appears to be paying dividends.
Ukraine’s government has so far raised more than $13 million worth of bitcoin and other tokens, according to data from Elliptic. “Stand with the people of Ukraine,” tweeted Mykhailo Fedorov, the country’s vice prime minister and minister of digital transformation. “Now accepting cryptocurrency donations. Ethereum. Bitcoin and Tether (USDTtrc20).”
This Week in Venture Capital
Renegade Spotlights The world of venture capital is changing dramatically. Over the last few months I’ve spent a lot of time thinking and writing about the forces driving that change. The two most significant I’ve seen are the unbundling and productization
The world continues to change more and more quickly. We’re on internet time now. Venture capital is an industry that has been fairly stable for the last 50+ years. Now every year we see any number of forces that could dramatically change how capital is allocated to startups.
I’ve dubbed the people driving those changing forces as “renegades.” These aren’t just solo capitalists or startup funds. Any fund doing something new and disrupting the status quo in venture can be a renegade. One of my favorite things is to reflect on the impact these people are having. I’m young enough in my career that I welcome radical change. It shakes up the way startups get funded and how companies get built.
As part of exploring these changes I’m excited to start a new series. Renegade Spotlights. When I see investors executing on new ways of disrupting venture I want to think publicly about what this means for venture capital.
The Renegade: Homebrew
Hunter Walk and Satya Patel met while they were both working at Google pre-IPO before raising the first Homebrew fund in 2013. One of the founding insights for Homebrew came from their early experience as angel investors. “Even as one of the smallest parts of the cap table, we were often the first call when it came to product or fundraising advice for founders.“
Fun fact; the name Homebrew isn’t a homage to the team’s love for coffee. The firm is named after a Menlo Park computer club that was popular in the late 70’s described as “the crucible for the entire [personal computing] industry.” Steve Wozniak even credits the first Homebrew meeting as the inspiration to design the Apple I.
The storied angel investor wants to reinvent the elite startup accelerator
Ali Partovi told me he’s been reading my Y Combinator coverage with great interest.
In December, in an interview with YC President Geoff Ralston, I wrote that the seemingly unrivaled startup accelerator wanted to grow to have 1,000 companies in a single batch.
Ralston bragged that he’s “not so interested in the competition” since YC has put itself “in a really unique position of sort of having the first choice, first look at almost every startup that matters.”
Ralston told me, “I worry less about the competition and more about disruption, which is future competition that I don’t understand yet.”
Partovi wants to build something that Ralston should understand.
Partovi wants to create an elite accelerator for coders fresh out of top universities, or a few years into their first coding job. That’s who YC used to mostly attract.
“We are competing with Y Combinator circa 2010 or 2012,” Partovi told me. “Y Combinator today is not what we’re competing with. The top students from top universities aren’t applying to Y Combinator today.”
So today, Partovi is launching a 20-slot program called, the “Neo Accelerator.” It’s part of a fund that he’s been running for the last half decade that has been building a network of technically talented and diverse recent college graduates.
Neo’s accelerator aims to be many of the things YC is not these days. It’s going to be in person. It’s going to be oriented toward students coming out of top U.S. universities. It’s going to be small.
With the launch of SV Angel Growth Fund I, we’re excited to announce Ashvin Bachireddy will be joining the firm as the Managing Partner of our growth fund, co-managing alongside Topher and Ron. We’ve known and respected Ashvin’s style of working with founders since we met him during his days as an investor at Andreessen Horowitz. Beth, alongside Topher, Ron, and Partner Steven Lee, will continue investing in 50–60 companies per year, as we’ve done for decades, and continue to support you as you build what we know will be some of the most influential companies of our time.
We raised $1 billion to fund crypto networks, Web3 protocols, and blockchain-enabled businesses.
We Provide Crypto-Native Support
We are long-term investors and partners to our founders. We have spent the last four years building software and data systems that enable us to participate in Web3 ecosystems. We use the infrastructure we have built to provide liquidity, drive key governance proposals, help teams better understand their ecosystems with our data, and more.
We Invest $1M to $20M in Programmable Money & the Web3 Economy
Since 2018, we have been investing in “programmable money”. We believe that crypto enables a parallel, programmable financial system. Now, a new economy is developing on top of the programmable money stack — DeFi enables permissionless access and innovation, NFTs are digital-native assets, DAOs create a way for communities to allocate resources, Decentralized Infrastructure provides alternatives to centralized tooling, and more. In this article, we outline the key trends we believe will emerge and are looking to fund as the Web3 economy develops.
5 Key Trends in the Web3 Economy
We believe five key trends are emerging:
- DAOs will empower global communities to allocate resources to initiatives large and small.
- NFTs will form the asset layer for Web3 and the bedrock for new types of financial instruments.
- Decentralized Finance will democratize access to financial products around the world.
- Decentralized Infrastructure will allow engineers to build the next generation of applications without a central point of failure or control.
- Accessible user experiences will onboard millions of users to Web3.
Following a year when startups raised record amounts of venture funding and cryptocurrency prices hit historical highs, Palo Alto-based Electric Capital has raised $1 billion to place bets on crypto startups. That total includes a $400 million fund closed last year (unannounced until today) to make equity and crypto token investments, plus a $600 million fund closed last month to make token-only purchases. Prior to these, Electric had raised just $125 million across its first two funds.
UKTN (UK Technology News
London-based tech VC Hiro Capital has launched a €300m (£251m) fund to invest in gaming and metaverse companies in the UK, Europe and North America.
The Hiro Capital II fund will invest in companies at Seed, Series A and Series B round.
Hiro Capital’s previous €115m fund has made 21 Series A and B investments into gaming, esports and metaverse companies since 2019.
They include London-based fitness virtual reality startup FitXR and Frankfurt-based developer studio Keen Games.
The VC, which also has a headquarters in Luxembourg, said it will be announcing the first investments from its latest fund in April
Hiro Capital has been focused on the metaverse — a catch-all term for connected digital worlds accessed by virtual reality (VR) and augmented reality (AR) headsets — since it was founded in 2018.
The SEC and NFTs
The U.S. Securities and Exchange Commission is homing in on creators of certain NFTs and the crypto exchanges they trade on to determine whether the digital assets are being used to raise money like traditional securities, Bloomberg reported Wednesday.
SEC attorneys have reportedly sent out subpoenas over the past few months to demand information on potentially illegal token offerings, with a focus on fractional NFTs . NFTs would be considered securities if they passed the Howey test, a standard used by the SEC to determine if there is an “investment contract” involved in a transaction.
The SEC has been hinting at this inquiry for a while. Commissioner Hester Peirce, known as “Crypto Mom” for her industry-friendly stances, said last December that some NFTs could fall under the SEC’s purview.
“Given the breadth of the NFT landscape, certain pieces of it might fall within our jurisdiction,” Peirce said in an interview with Coindesk TV. “People need to be thinking about potential places where NFTs might run into the securities regulatory regime.”
Uber’s big ambitions
Uber wants to be a super app. The company has never been particularly shy about those ambitions, for what it’s worth: Dara Khosrowshahi has been saying he wants to build “the Amazon of transportation” for a few years now, planning to be as ubiquitous for getting around as Amazon is for shopping.
Explore is the next phase of Uber’s super app plans.
- It launched the feature yesterday as a new tab in the Uber app. You can use it to get quick rides to your typical destinations; personalized suggestions; and offers for stuff to do and eat, and more.
- “Places an Uber can take you” is sort of the unifying theme here, but it’s a much broader play at being the app you open to see what’s going on around you.
Uber’s really not a rides company anymore. It hasn’t been for some time, actually. It now makes more money moving food and goods around through Uber Eats than it does shuttling people through the ride-hailing service. (Turns out everything’s easier when you’re transporting cheeseburgers instead of humans.)
- Eats generated $13.4 billion in gross bookings and $2.42 billion in revenue for Uber in the last quarter of 2021, compared to $11.3 billion and 2.28 billion for ride-hailing.
- Just like Amazon was known for being a bookseller long after that stopped being its core business, Uber will be synonymous with ride-hailing for much longer than it actually depends on that business.
- And as Eats grows, Uber’s turning into a shopping destination of its own. Uber had a Valentine’s Day hub for last-minute purchases, sells Goop products through an integrated store and ships from grocery stores and flower shops all over.
- Even Eats isn’t a broad enough brand anymore, which is why Uber had to run a whole Super Bowl ad about the things you can buy on Uber Eats that you don’t actually eat.
- And you can see where this is headed: Uber’s already playing with Prime-style subscriptions, working on its own payment systems, getting into freight and more. Connecting stuff and people is a big job, and Uber’s trying to bring as much of it in-house as possible.
What Uber really wants to win is local.
Amazon’s $31bn Advertising Business
Nearly all of that $31b is for an “ad” on Amazon itself : that is it’s Amazon collecting billions from the sellers who rely on the company as their main retail channel, who are locked in a bidding war to buy the top spots in search and product pages. Amazon calls itself “Earth’s most customer-centric company,” a slogan that pits the people who rely on Amazon for goods against the sellers who provide those goods, the warehouse workers who pack the goods, and the delivery drivers who drop off the goods.
In 2020, Apple generated an estimated $13.5 billion dollars in gaming revenue, despite the fact it doesn’t make any games or gaming consoles.
The post Visualizing Apple’s Rise to the Top of the Gaming Business appeared first on Visual Capitalist.
Tesla Competition Heats Up
Hyundai plans to release 17 full electric vehicle models by 2030 as part of its efforts to strengthen its lineup and to catch up to rival automakers. The company’s CEO Jaehoon Chang has made the announcement when he unveiled Hyundai’s electrification roadmap in an investor presentation. Out of 17, 11 models will be under the main Hyundai brand, while 6 will be released under its Genesis luxury brand.
The automaker announced last year that Genesis will switch to electric powertrains completely by 2025, though at the time, it said that it expects to have eight EV models available for sale in 2030. Chang’s latest announcement includes more concrete details about Hyundai’s electrification plans. He said the company is investing 19.4 trillion won ($16.08 billion) in its EV-related endeavors, including setting up more manufacturing plants with the capability to produce EVs. The automaker is also aiming to capture a 7 percent market share in the global EV market and to sell 1.87 million electric vehicle units per year by 2030.
The company has yet to reveal the exact models it’s releasing within the next eight years, but it did say that three of them are sedans, six are SUVs, one is a light commercial vehicle, while the last one is a new vehicle type. The first release will most likely be the IONIQ 6, an all-electric sedan that will be available for purchase this year. In 2024, Hyundai will be releasing the IONIQ 7, as well.
While $16.08 billion is a considerable investment, analysts told Reuters that it’s in in no way “aggressive” when compared to the commitments made by some rival companies. Toyota, for instance, plans to invest 8 trillion yen ($70 billion) for its electrification projects by 2030, while GM had earmarked $35 billion for its EV and automated vehicle investments from 2020 through 2025.
Essay of the Week
Why is Ukraine the West’s Fault? Featuring John Mearsheimer
UnCommon Core: The Causes and Consequences of the Ukraine Crisis John J. Mearsheimer, the R. Wendell Harrison Distinguished Service Professor in Political Science and Co-director of the Program on International Security Policy at the University of Chicago, assesses the causes of the present Ukraine crisis, the best way to end it, and its consequences for all of the main actors. A key assumption is that in order to come up with the optimum plan for ending the crisis, it is essential to know what caused the crisis. Regarding the all-important question of causes, the key issue is whether Russia or the West bears primary responsibility.
To say that America’s support for NATO expansion and a European-aligned Ukraine caused Putin’s invasion is not to say that those policies justified Russia’s war of conquest.
Startup of the Week: Ford
Ford is determined to compete against electric vehicle rivals like Tesla and Rivian, and it’s willing to reorganize the company to improve its chances. The brand is splitting its car manufacturing business into separate EV-only and internal combustion engine (ICE) divisions to help it fight both “new EV competitors” and conventional challengers. The electric unit, Model e, is meant to speed up large-scale development of EVs while producing connected vehicle technology for all of Ford. Effectively, the badge hopes to edge closer to the fast-moving, tech-driven cultures of its EV-only competitors.
The ICE division, Ford Blue, will concentrate on “relentlessly attacking” costs, improving quality and streamlining operations to help turn a profit. Blue will supply hardware-focused engineering and manufacturing to the rest of the company.
Company chief Jim Farley will serve as president of Model e. Apple and Tesla veteran Doug Field, who joined Ford in September 2021, will lead the unit’s development as its Chief EV and Digital Systems Officer.
The split, part of a larger Ford+ strategy, isn’t a complete surprise. Ford EVs like the Mustang Mach-E and F-150 Lightning have seen strong early demand, but Tesla still dominates the US electric market with deliveries of over 1 million cars last year. The move theoretically helps Ford catch up to or surpass Tesla while keeping ICE cars viable — at least, until ICE is phased out.
This approach also mirrors EV-focused strategy changes at some of Ford’s mainstream competitors. GM already plans to become EV-only by 2035, while Stellantis unveiled a “Dare Forward” plan that will see EVs lead sales in Europe and the US by 2030. Even Hyundai was rumored to have stopped developing new combustion engines, although it denied the claim. Electric cars are taking priority across the industry, and Ford doesn’t want to risk being left behind.