Jobs, Cities, Buildings, Wall Street, Publishing, IPOs, Money and even FaceBook
That Was The Week, 2021, #3
Disrupting Jobs, Cities and Buildings - Economics
Disrupting Wall Street: r\WallStreetBet and Robinhood
Disrupting Publishing - Twitter, Revue , Andreessen and Clubhouse
Disrupting Social Media: Apple, Facebook and Privacy
Disrupting IPOs: SPACs, Direct Listings and CoinBase
Disrupting Money: Crypto
Podcast of the Week: Reid Hoffman
Tweet of the Week: AOC
This week's That Was The Week has an obvious theme - disruption. The news of Gamestop's crazy stock - growing by hundreds of per cent due to a Reddit group r\WallStreetBets - is evidence enough. But the out of control stock is only one story. Clubhouse - an audio drop-in chat platform - has raised capital valuing it at over $1 billion. Andreessen Horowitz has announced it intends to become a media powerhouse, Twitter has bought Revue and intends to go into newsletters (I tried but failed to use it for the first time here). On top of that, it is reported that almost 20% of San Francisco households have left the City and almost 75% of Offices are going to transform from traditional fixed desk workplaces into newer remote working spaces, used very differently. Last but not least, Apple is adding new notifications to apps, informing consumers of how they are being tracked and forcing them to opt in. Facebook is in Tim Cook's firing line.
Disruption is always good. It is, as they say, a learning opportunity.
When Robinhood and TD Ameritrade blocked purchases of Gamestop and AMC Entertainment it taught us what Robinhood is. It is not democratising Wall Street. It seems to be supporting Wall Street's fat cats. This was noted by @AOC on Twitter, as shown in this week's Tweet of the Week.
And when Apple forces app developers to alert us that they are tracking us, that is another learning experience. For us, and mainly for developers, and especially consumer app vendors such as Facebook.
My take on these issues is, as always, in this week's video interview with myself and Andrew Keen. That said here is the short version - offices really will never be the same again, ask ChargiFi. Work is going to change forever. San Francisco is going to need to up its game if it wants people to live there. Clubhouse is probably a fad but will make investors lots of money. Andreessen Horowitz will not become compelling listening, reading or watching despite throwing money at trying, sorry. Twitter might make newsletter writers some money by integrating a tool that helps, but having tried to use Revue this week, I am not optimistic. We will mostly allow Facebook to track us because most of us don't care. But we will like Apple for trying.
This week's lead is an article from Protocol (an excellent publication) on automation as the secret to economic success. I chose it because it is right. Gifting the human race the freed up time and money currently spent on tasks that could be automated will enable new endeavours.
See you all next week.
Disrupting Jobs, Cities and Buildings: Economics
The key to American economic recovery? Automation.
- In order for President Joe Biden to usher in an era of long-term economic growth, he will need to lean on one of America’s historically core industries: manufacturing.
- Specifically, Biden should name a Cabinet-level working group to develop a set of broad initiatives to encourage the integration of automation technologies in the manufacturing industry.
Post-Pandemic Silicon Valley Isn’t A Place
Where are tech companies going to go once the pandemic subsides as vaccines reach more and more Americans?
I wanted to provide granular data to the question of how concentrated the technology in the Bay Area will be after the pandemic. I’ve been tracking data on this question for several years internally within the Initialized Capital portfolio, both through annual founder surveys and in looking at the geographic composition of company headquarters across funds. Typically, we get around 90 companies responding per survey.
Peak Bay Area was seven years ago in 2014.
The meme right now is that the pandemic has finally kicked the Bay Area off its pedestal. Rents are down 24 percent year-over-year, according to Zumper. Local sales tax collections are also down by more than 40 percent.
But the reality for us and our portfolio is that the Bay Area’s share of companies in our portfolio has been declining for seven years.
The percentage of companies in our portfolio based in the Bay Area topped out in the 2014 fund at a little more than three-quarters. Following the 2008 financial crash, the region was both substantially cheaper and had a strong corps of technical talent. But by the mid-2010s, the stresses and pressures of the rising cost of living became widely known, it became much harder to compete against Big Tech companies on recruiting and so this trend began reversing as companies began spreading out. By 2018, fewer than half of our companies in the fund beginning that year were based in Northern California.
U.S. Postal Service Data Suggests Significant Population Decline in San Francisco
- The United States Postal Service received 124,131 change of address requests originating in San Francisco zip codes between March and November 2020
- 94109 (Polk Gulch/Nob Hill), 94110 (Inner Mission), 94107 (Mission Bay), and 94103 (South of Market) recorded the greatest number of outbound requests
- Among those that moved, a large majority relocated outside of the City with Las Vegas, Florida and Denver among the most common out-of-state destinations
Disrupting Wall Street: r\WallStreetBets, Robinhood and Gamestop
How a bunch of Redditors made GameStop’s stock soar
- The user pointed out that the hedge funds that take on big risks can get a bailout — as one of the ones shorting GameStop did — whereas everyday investors generally can’t: “We don’t have billionaires to bail us out when we mess up our portfolio risk and a position goes against us.
- An army of traders on the Reddit forum r/WallStreetBets helped drive a meteoric rise in GameStop’s stock price in recent days, forcing it to halt trading multiple times and causing a major headache for the short sellers betting against it and banking on the stock falling.
What Robinhood got wrong
- GameStop’s wild stock ride on Wall Street got so crazy recently that Robinhood and other platforms had to press pause on any more trades in those shares, as well as other affected stocks.
- So right now, Robinhood’s actual customers, the people who actually pay them, are telling them, “Hey, could you slow down this kind of trading?
Robinhood Restricts GameStop Trading — in a Bid to Save Itself
- It’s the latest in a long arc of accusations that Robinhood’s playful interface makes buying and trading stocks too easy, and downplays the downside risk.
- “They’ve gotten a lot of criticism that it makes it too easy to trade, too much fun to trade,” says Jim Angel, who specializes in market structure and regulation at Georgetown University’s McDonough School of Business.
Robinhood, and its role in the GameStop saga, explained
- At the center of the GameStop stock trading frenzy is Robinhood, a trading app for regular investors that says it’s out to “democratize finance.”
- These fees presented a barrier to entry to many retail investors, who are regular people who are trading stocks — largely thanks to apps like Robinhood.
Chamath Palihapitiya Says GameStop Saga Proves Retail Traders Are As Smart As Hedge Fund Managers
- Chamath Palihapitiya, CEO of venture capital firm Social Capital, says the Reddit-fueled GameStop stock frenzy shows retail traders are smart enough to take on Wall Street.
- In an interview with CNBC, Palihapitiya says that the crowd of users on the subreddit are just as capable of playing the trading game as giant Wall Street hedgefunds are and that the GameStop pump is just one example of that.
WallStreetBets’ founder on GameStop: ‘I didn’t think it would go this far’
- This week WallStreetBets was at the center of a full-scale war between Wall Street and an army of small investors over GameStop, an ailing video games chainstore, that has shaken financial markets, angered billionaire bankers and made unlikely allies of political enemies.
- Not withstanding the overarching purpose of making money, Rogozinski says it is correct to interpret the forum as part of an effort to democratize Wall Street, just as other forms of social media have played a part in democratizing politics.
Why brokers chose to halt trading in short squeeze names like Gamestop
It was the move heard around the world. Trading in GameStop (NYSE:GME), AMC (NYSE:AMC), Koss (NASDAQ:KOSS), Bed Bath and Beyond (NASDAQ:BBBY) and others was halted by major U.S. brokers
Google salvaged Robinhood’s one-star rating by deleting nearly 100,000 negative reviews
Google is actively removing negative reviews of the Robinhood app from the Google Play Store, the company confirmed to The Verge. After some disgruntled Robinhood users organized campaigns to give the app a one-star review on Google’s Play Store and Apple’s App Store — and succeeded in review-bombing it all the way down to a one-star rating — the company has now deleted enough reviews to bring it back up to nearly four stars.
Robinhood came under intense scrutiny on Thursday, after the stock trading app announced it would block purchases of GameStop, AMC, and other stocks made popular by the r/WallStreetBets subreddit, and some users have already replaced their deleted one-star reviews with new ones to make their anger heard.
Robinhood’s Hero to Zero Moment: The Information’s Tech Briefing
Talk about self-immolation. Robinhood’s decision to restrict trading in GameStop and other “meme” stocks seems guaranteed to alienate a big chunk of its user base. Who would go back to a trading platform responsible for losing them money, no matter the explanation?
Disrupting Publishing: Twitter, Revue, Andreessen and Clubhouse
Publishing is Back to the Future Journalism cannot afford to be divorced from business realities; that applies to Austral…
Ben Thompson (@benthompson) retweeted:Publishing is Back to the Future Journalism cannot afford to be divorced from business realities; that applies to Australia, the New York Times, and even Andreessen Horowitz.
Andreessen Horowitz, a Silicon Valley venture capital behemoth, plans to eat the media
- Except that this job isn’t with a magazine or news website — it was posted earlier this month by Andreessen Horowitz, a leading Silicon Valley venture capital firm known for its early investments in companies like Facebook, Airbnb, and Slack.
- As first reported by technology writer Eric Newcomer and tech insider publication The Information, the company is hiring an executive editor and an opinion editor as part of a push into the mediascape.
Twitter vs Substack
- Many in the technology press believe that Revue will allow Twitter to compete with Substack and Medium, a publishing platform started by Twitter co-founder Evan Williams.
- Instead, Twitter bought Revue, an also-ran, Netherlands-based email publishing company.
Twitter acquiring newsletter publishing company Revue
- Twitter on Tuesday said it has acquired Revue, a newsletter platform for writers and publishers.
- The writers “are a valuable part of the conversation and it’s critical we offer new ways for them to create and share their content, and importantly, help them grow and better connect with their audience,” said Beykpour and Park.
Twitter’s future is newsletters and podcasts, not tweets
- In just the last few months, Twitter has rolled out Fleets, a Stories-like feature; started testing an audio-only experience called Spaces; and acquired the podcast app Breaker and the video chat app Squad.
- The initial 140-character limit that became associated with the platform was a technical limitation — required to fit everything into a text message, then the quickest way to reach people — not a statement about brevity being the soul of anything.
Clubhouse: Most Interesting Consumer Startups of 2021 (Part 1)
- Twitter missed capturing a lot of its organic behavior (for example small business CRM use cases, long form content, messaging via DMs etc.) so it is not a done deal for Clubhouse yet either.
- This post is the first in a small series on the new wave of hyperinteresting consumer tech products that are most likely to have had society-level impact in 5 years.
The Clubhouse Investment Boom: The Information’s Tech Briefing
Just when you think the stock market excesses couldn’t get any crazier, along comes GameStop. In the space of a few hours today the stock, which was trading at $20 two weeks ago, more than doubled to a high of $159 before collapsing back to $76.79.
Investing in Clubhouse
- The pair was launching a new product to bring people together, this time over audio, making it easy for people to both talk and listen.
- Clubhouse started out like many new Silicon Valley apps do, with friends and family in the tech community trying out an alpha or beta product, but it quickly grew as Paul and Rohan built new features at a rapid clip.
Clubhouse announces plans for creator payments and raises new funding led by Andreessen Horowitz
- While we try to track down the actual value of this round and the subsequent valuation of the company, what we do know is that Clubhouse has confirmed it will be introducing products to help creators on the platform get paid, including subscriptions, tipping and ticket sales.
- Buzzy live voice chat app Clubhouse has confirmed that it has raised new funding — without revealing how much — in a Series B round led by Andreessen Horowitz through the firm’s partner Andrew Chen.
Disrupting Social Media: Apple, Facebook and Privacy
Apple Will Require Apps to Request Permission to Track Users Starting With Next iOS 14 Beta Version
- Apple today announced that its App Tracking Transparency privacy measure will be required starting with the next beta versions of iOS 14, iPadOS 14, and tvOS 14.
- With this change, all iPhone, iPad, and Apple TV app developers will need to receive a user’s permission to track their activity across other apps and websites and access their device’s random advertising identifier, known as the Identifier for Advertisers (IDFA), for targeted advertising purposes or to measure how effective their campaigns were.
Tim Cook takes aim at Facebook’s practices during privacy conference
In a wide-ranging keynote delivered at the (online-only) 2021 Computers, Privacy and Data Protection conference this morning, Apple CEO Tim Cook called for greater scrutiny of businesses “built on misleading users” and data exploitation.”The fact is…
Apple records most profitable quarter ever as sales soar amid pandemic
- Apple finished 2020 with its most profitable quarter ever as sales of its high end iPhones, tablets and laptops soared amid the pandemic.
- Cook said that the results could have been even better if not for the Covid-19 pandemic, which forced Apple to temporarily close some of its stores around the world.
Apple vs. Facebook: The trillion-dollar privacy wars
- Apple’s case against Facebook, grossly oversimplified, goes like this: Facebook collects a massive trove of data far greater than people understand or Facebook requires, and uses it to invade and monetize every part of users’ lives.
- Mark Zuckerberg said essentially the same on Facebook’s earnings call this week: “Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own.”
Disrupting IPOs - SPACS, Direct Listings and CoinBase
As SPACs Hunt Targets, They Could Disrupt VC World — Crunchbase News
- That likely will mean SPACs moving beyond some of the verticals that have proven popular in the last year — the electric vehicle market, for instance, which has witnessed a plethora of companies such as Nikola, Lordstown Motors, Fisker and Canoo go public via SPAC listings — Presser said.
- After a year unlike any other for SPACs in 2020, a vast majority will spend this year on the hunt for their perfect target company — something that could leave many scrambling in an ultra-competitive environment while also disrupting the venture capital market.
Coinbase Chooses Direct Listing Route to Public Markets
- Direct listings have become an increasingly popular way for a company to join the public markets because it gives companies that want to trade their stock on a public exchange a way to get there without the extra money and hassle of a traditional IPO.
- A company doing a direct listing starts trading without a block of shares being sold, and therefore without new capital being raised.
Public Market Verdict: The Unicorn Binge Wasn’t Crazy; It Was Really Profitable
It’s hard to imagine, but there was a time not too long ago when billion-dollar startups were exceedingly rare.
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Back in 2013, venture investor Aileen Lee, founder of Cowboy Ventures, penned an essay coining the term “unicorn” to describe VC-funded companies valued at $1 billion or more. At the time, she could count just 14 still-private companies less than a decade old that qualified for the title.
Since then, of course, the number of private unicorns has steadily ballooned. Today, Crunchbase counts nearly 700 globally with just over 300 in the United States alone. Collectively, the U.S. cohort is valued at around $945 billion, based on last known reported valuations.
Disrupting Money - Crypto
Union Square Ventures to Allocate 30% of New $250M Fund to Crypto-Related Investments
Kevin ReynoldsJanuary 26, 2021, 11:48 AM·1 min readUnion Square Ventures said it will invest roughly 30% of its freshly minted $250 million 2021 Core Fund in crypto-related investments as it has with other recent funds.
Podcast of the Week
Reid Hoffman on Building a Great Startup Board
- The latest Greymatter pod covers the fundamentals of building great startup boards.
- The company also closed the Uber ATG deal, welcoming the new ATG teammates to Aurora this week.
Reid Hoffman | Building Your Startup Board Pt. 2
Part 2 of a two-part series. Greylock general partner and LinkedIn co-founder Reid Hoffman continues his discussion with Blitzscaling co-author Chris Yeh on the all-important topic of startup boards.