Confronting Advertising and Tracking Companies


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That Was The Week, #35

None of us like being tracked I assume. And we like our iPhones and iPads. Apple has inserted itself into the emotional space that we inhabit between love of our devices and the Internet and hatred of advertising. It's promise? If you are using iOS 14 on an iPhone or iPad, or Safari on a Mac, you can stop all knids of privacy incursion. Developers will be forced to ask your permission to collect information about your life.

The chance that many people will agree is low. If you have ever seen ads that offer you the product you were just looking at, using a technology called retargeting, you will know how irritating it is, not to mention dumb. I often see ads for things I literally just purchased and will never purchase again.

Apple announced that they were going to enable us to prevent third parties from tracking us by changing the way the IDFA identifier is used. IDFA is a method used to identify a specific device. Instagram CEO Adam Mosseri, impacted by the decision, told CNBC:

[Instagram] will need to “make our case as strongly as we can” to Apple, the public, policymakers, influencers and academics, but said the company does “own the majority of the market here in the U.S.” as it pertains to smartphones and ”[controls] the ecosystem end-to-end.”
“They have an immense amount of power,” he said. “They can just decide we can’t launch new apps at any given moment. We’ve seen a series of articles and even some lawsuits and their influence and power over developers over the last couple months.”

Attempting to turn Apple into the bad guy here is pretty hard. The war between Apple and advertising-led platforms is a war between business models. On the one hand, clickbait and ad revenue and on the other subscription and pay as you go.

Neither model will go away, but Apple can make it very hard for the tracker/advertiser companies due to the number of individuals who use an iPhone. In this sense Apple and Google are on opposite sides. Google's entire revenue stream depends on advertising, and particularly on targeted ads. Android can never go as far as iOS in preventing unwanted intrusions into content consumption.

Personally I side with Apple as an individual. I can't wait to not be shown fake news from OutBrain and others whilst reading an online news site.

That said I do support Facebook, Instagram, Google and Amazon against this story in Harpers:

Jeff Bezos, Sergey Brin, Larry Page, and Mark Zuckerberg enjoy much the same power as God did in Babel. We live in the world they manufacture for us. Their vision for what we should do, where we should go, how we should think, and who we should be is now our vision, too. As their manipulation machines increasingly deliver different information to each member of the public, it becomes harder for people to engage in debate and have any chance at bringing these companies under control.

These are not monopolies and we are not somehow bamboozled by them. They provide useful tools and services that we choose to use for their convenience and value. We might dislike the ads, but we tolerate them because we want the experience the apps deliver. Our lack of concern is why when Apple turns off the lights, we will not protest. Just as we don't really protest at the ads. Our desire for engagement, convenience and fun will trump everything. And that is bad news for Facebook, Instagram and Google. We just don't care to save their business model.

Best Keith.

Enjoy. And if you do please consider a paid subscription

This week's video is here:

Topic of the Week: Trade Wars and Privacy Wars

Reads of the Week

Startup of the Week

Raising Cash and Going Public

Politics and Technology

Venture

Startups

Podcasts of the Week

Tweet of the Week



--Topic of the Week: Trade Wars and Privacy Wars

Instagram CEO says Apple has ‘an immense amount of power’ as app makers worry over impending iPhone software update

CNBC

  • Instagram CEO Adam Mosseri said the company will push back on a planned change to Apple’s iPhone operating system that would impact how it and other mobile advertisers track users.
  • “We believe that there’s a way to be really responsible and give people control over their data and transparency into their data but without cutting off our understanding and therefore operating blind,” he said Friday on CNBC’s “Squawk Box.”
  • Mosseri also pointed to Apple’s power over app makers since it controls the only way apps can be used on about 1 billion devices.

Apple's iOS update will be bad news for developers, but a boon for users

Technology | The Guardian

  • And yet Apple is an exceedingly powerful monopolist in two areas: its App Store, and iOS , the operating system for iPhones and iPads.
  • iPhone users got apps that had been vetted; developers got 70% of the price without having to get involved with credit cards and the paraphernalia of e-commerce; Apple maintained quality control of the app ecosystem; the chaotic free-for-all of the Android app ecosystem with its rampant malware was avoided; and Apple could claim that the 30% cut compensated it for the costs of running the store.

How TikTok got caught in the middle of a trade war with China

Engadget

  • After weeks of threats, the president delivered an ultimatum to TikTok and its owner ByteDance: sell the app’s US operations to an American company or it would be banned.
  • Less than three years after merging with Musical.ly, TikTok looked like it might just achieve something many have tried but few have accomplished: becoming an actual competitor with Facebook and Instagram.

--Reads of the Week


Masa Madness (Audio)

Not Boring by Packy McCormick

  • Flush with cash, Masa transformed SoftBank in the 1990s, taking the first steps towards turning it into a finance company: 1994: Went public on the Tokyo Stock Exchange at a $3 billion market cap.
  • That’s what I’ll try to bring today, by covering the three ways to look at SoftBank: Bullish: Masa has a vision that no one fully appreciates and trades at a discount Neutral: Masa is Lennie from Of Mice and Men for Tech Companies (I’ll explain) Bearish: Masa is just a WallStreetBets Trader with a lot of other people’s money SoftBank is a reflection of its founder.

The Long Term Stock Exchange launches

Eric Ries

A public market with a mission to support companies and investors who share a long-term vision

Nine years ago, I proposed the idea of a Long-Term Stock Exchange in the epilogue of my book The Lean Startup. The objective was to create a public market designed for trading the stocks of companies organized to sustain long-term thinking.

The concept arose from the many conversations I had while researching the book. I heard from fellow company founders and executives, long-term institutional investors, managers, workers and others, who all told me their stories about the problems we see in the public capital markets today.


Why Tesla's Battery Day Will Live Up to Elon Musk's Hype

Marker — Business News and Articles for Startups and Leaders - Medium

  • By 2009, Musk was running the company, and it had produced a souped-up electric car called the Roadster.
  • The result has been obsessive speculation on Wall Street and among EV and battery nerds as to what he will say, including a forecast that he intends to create a business feeding the electric grid and another that he will start selling his batteries and power train to competitors.

First it was Zoom now there’s a boom

Telegraph.co.uk

Credit - Daily Telegraph

When Arthur Wu worked at the data mining company Palantir, he spent years flying across the US so that his team, dotted around the country, could meet up in person. The jaunts came at great expense, both financial and social, and Wu had all the digital tools such as Slack and Zoom meant to cut down on such meetings. But he and his staff did them anyway....


The Big Tech Extortion Racket: How Google, Amazon, and Facebook control our lives

Harper's Magazine

In the 1970s and 1980s, Robert Bork, Richard Posner, and other neoliberal Chicago School legal scholars set out to overturn America’s antimonopoly regime, targeting the traditional prohibitions on discrimination that common carrier laws had established. Their scholarship later played a major role in the writing of Section 230 of the Communications Decency Act of 1996. In that bill, Congress simultaneously exempted internet platforms from any responsibility to police the content on their sites, and failed entirely to impose on them any requirement to provide equal and just service to all who depend on their networks.
As a result, Amazon, Google, Facebook, and other platforms were free to develop business models that treated every seller and buyer—every citizen—differently. These corporations exploited this license to the fullest, and have used their power to reorganize entire realms of human activity. Amazon, Google, and Facebook match individuals to specific shoes and clothes, specific restaurants and hotels, specific movies and music, specific jobs and schools, specific drugs and hospitals, specific sexual partners, and even specific books, articles, speakers, and sources of news.
These companies are the most powerful middlemen in history. Each guards the gate to innumerable sources of essential information, services, and products. Yet thus far no governmental entity in the United States has signaled any intention of limiting the license these corporations enjoy to serve only the customers they choose to, at whatever price they decide.

Marc Andreessen On Productivity, Scheduling, Reading Habits, Work, and More

Andreessen Horowitz

  • What I’ve discovered is the number of people who can write something in the middle zone — when they’re trying to explain something that happened last week, month, a year or even a decade — and who I trust to actually give me an objective read on the situation is just a really, really short list.
  • Basically working on exactly one thing all the time until you’re exhausted and collapse.

--Startup of the Week


Observations from raising a Series A in 2020

Medium

  • Angel and Seed rounds are often largely, if not entirely, conviction based whereas Series A is probably the last round where conviction can play the leading role in an investment thesis — then usually backed with strong data, although maybe not the exact revenue and growth benchmarks mentioned above.
  • Throughout April and May much of my time was spent on conversations with VCs, tracking progress through 5 funnel stages: Connection established Intro call Ongoing diligence Strong interest Term sheet About a dozen funds made it to the “Strong interest” stage in this process.

--Raising Cash and Going Public

Monthly Funding Recap August 2020: 10 Unicorn Companies File To Go Public

Crunchbase News

  • As of last month, 31 unicorn companies are valued at $10 billion and above, with four of them raising funding at decacorn valuations in August.
  • Robinhood , the zero-commission stock trading company based in Silicon Valley, raised a $200 million round led by D1 Capital Partners that valued it at more than $11 billion .

A Buffett of Snowflake

On my Om

  • Three major cloud providers — Amazon, Google, and Microsoft — also have big data offerings in Redshift, BigQuery, and Azure SQL.
  • Berkshire Hathaway might have a propensity for more traditional businesses — after all, people still want to buy insurance, fast food, and homes — but they are being transformed by technology and data.

The 15 Largest Global Startup Funding Rounds of August 2020

AlleyWatch

  • Investors in the round: Battery Ventures, Coatue Management, Index Ventures, NextWorld Capital, Norwest Venture Partners, Salesforce Ventures, Sequoia Capital, Thrive Capital, Wing Venture Capital Industry: Artificial Intelligence, CRM, Information Technology, Machine Learning, Sales, Software Founders: Amit Bendov, Eilon Reshef Founding year: 2015 Location: San Francisco Total equity funding raised: $333.0M
  • Founded by Amit Bendov and Eilon Reshef in 2015, Gong has now raised a total of $333.0M and is backed by Salesforce Ventures, Sequoia Capital, Norwest Venture Partners, Battery Ventures, and Wing Venture Capital.

Snowflake Sets IPO Price Range

Crunchbase News

  • Data cloud warehouse company Snowflake has set a price range of between $75 and $85 per share for its upcoming IPO, according to a new regulatory filing.
  • If Snowflake prices at the midpoint of that range ($80), it would give the company a valuation of $22.3 billion.

--Politics and Technology


Trump deploys YouTube as his secret weapon in 2020

POLITICO

  • Joe Biden and the Democratic National Committee joint committee, by comparison, have spent about $33 million on YouTube and Google during the entire campaign.
  • So the Trump campaign has to create a more positive narrative to keep their supporters engaged and energized,” said Nu Wexler, a Democratic strategist who has worked at Google, Facebook and Twitter.

Facebook’s Sandberg Says TikTok Ban ‘Very Unusual’ in Business History

The Information

Facebook Chief Operating Officer Sheryl Sandberg says the White House’s order to ban TikTok was “very unusual in the history of business” and wasn’t something Facebook had called for.


Read Epic’s new, full argument why a court should force Apple to reinstate Fortnite

The Verge

  • There was no question that Epic would file for a preliminary injunction against Apple in an attempt to force the iPhone maker to bring Fortnite back to the App Store — hearings were already scheduled for September 28th.
  • As we reported last week, some of Epic’s other games are no longer available to re-download, and Epic says that its Shadow Complex Remastered has been removed from the Mac App Store, too, after Apple terminated Epic’s developer account.

Apple Has 'Lost Sight of the Tech Industry's Founding Principles,' Says Epic Games CEO

MacRumors

  • He then reiterated some of the rationale behind why Epic Games began the campaign against Apple's ‌App Store‌ policies, stating that "creators have rights." Sweeney concluded by strongly disputing that the entire disagreement was about money, instead saying it is a more fundamental fight for change.
  • Presumably they're just posturing for the court, but if Apple truly believes the fight over the App Store 's distribution and payment monopoly is a "basic disagreement over money," then they've lost all sight of the tech industry's founding principles.

--Venture


Bessemer Venture Partners Open Sources Investment Memos

Bessemer

ike the knight’s sword, the firefighter’s hose, and the lumberjack’s ax, venture capitalists courageously wield the memo.

For VCs, learning from mistakes is easy. In fact, we make so many that we’re experts on what not to do. What’s hard is to learn from success. How did we spot those baby unicorns in the wild? Did we just get lucky? Because we really want to find more of them.

To glean patterns from those particularly beneficial early-stage decisions (and sometimes just to nourish our fragile egos), we find it helpful to publish and scrutinize the Investment Recommendation Memoranda that we circulated years ago. One pattern that consistently emerges is that Bessemer’s best investment decisions centered on people. In retrospect, the early products themselves are barely recognizable today. Rather, passionate, analytical and relentless founders zigged and zagged their way to that elusive “product-market fit”, and these memos provide a glimpse of those winning entrepreneurs before they were famous. They are the prequels of our heroes, as inspirational to us as The Hobbit, Solo, Batman Begins, and Better Call Saul.

Because, really, who doesn’t love a good memo?


Swaypay: Not Boring Memo (Audio)

Not Boring by Packy McCormick

  • Here’s a reply that Swaypay’s VP of Growth, Maggie, got to a cold outreach yesterday: Retailers respond to Swaypay because by offering discounts in exchange for social sharing, they can increase conversion at checkout, acquire new shoppers while generating margin on the first sale, and drive stickiness by working with shoppers.
  • Product: Frictionless Savings for Sharing Swaypay is the first payment method that plugs into eCommerce storefronts and lets shoppers convert their “sway,” or social influence into currency for online purchases.

Why We Invested In Klue

Craft Ventures - Medium

  • Today Craft Ventures is excited to announce that we are leading the $15 million Series A in Klue , a competitive enablement platform that allows companies to collect, curate and distribute competitive insights in real-time.
  • Klue transforms competitive intelligence into real-time , accessible and actionable insights with their competitive enablement platform.

A Look at 2020 Venture Funding Across U.S. Regions

Blog – Crunchbase

  • Quibi HQ: Los Angeles New Funding: $750 million private-equity round Total Venture Funding: $1.8 billion Quibi is a media company developing short-form media content designed for smartphones.
  • To provide salespeople a better understanding of where pockets of opportunity may exist in the second half of 2020, we focused on the Southern, Western, Northeastern and Midwestern regions.

AngelList pioneers rolling VC funds in pivot to SaaS

TechCrunch

  • When AngelList first launched rolling funds, an investment vehicle that raises money through a quarterly subscription from interested investors, the company looked at it as a bet.
  • But early interest from emerging fund managers indicates that rolling funds might be more of the future of the company, according to AngelList CEO Avlok Kohli .

How one VC firm wound up with no-code startups as part of its investing thesis

Fundings & Exits – TechCrunch

  • The short gist of chats I’ve had with investors and founders and public company execs in the past few weeks is that market awareness of no-code/low-code terminology is starting to spread more broadly.
  • According to Mathew, Accel had made large investments into companies like Qualtrics, for example, when they were already pretty big and had found product-market fit.

--Startups


Unity To Raise Up To $1.05B In IPO

Crunchbase News

  • Unity was one of several tech companies to file to go public late last month as the IPO market remains hot.
  • Unity set its price range for its upcoming IPO between $34 and $42 per share, setting the company up to raise as much as $1.05 billion.

Angels as Lead Investors in Seed Rounds

Startup Grind - Medium

Do angel investors actually lead rounds? Are lead investors required prior to pitching Angels? Which one comes first… Continue reading on Startup Grind »




What Venture Capital Websites Allow Submission Of Pitch Decks

Techstory

  • A pitch deck is a short presentation that aims to give the viewer a summary of your business plan.
  • The Jett Ventures firm targets early-stage companies in different capital-intensive industries with market opportunities for recurring revenue.

Don’t Raise VC Money Before You Understand Unit Economics

Crunchbase News

  • Not long ago, investors rewarded high-growth companies, without looking at the costs.
  • If your LTV/CAC ratio is lower than three, investors will question the scalability of growth and spend needed to grow larger.

--Podcast of the Week

The Startup Pivot

Stories by Greylock on Medium

  • Reid Hoffman shares the history of PayPal’s many pivots & offers guidance for startups.
  • This week, the Company announced that Figma is opening a hub office in London, which will serve as the HQ for the EMEA region.

--Tweet of the Week