How FaceBook and Twitter are losing their role as platforms and becoming publishers.


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That Was The Week, #40

Editorial:

Publishers or Platforms? The Answer Matters.


It seems as if some questions will not go away. This week Mark Zuckerberg, after vociferously resisting for a long time, announced that he was OK with banning any Holocaust denial on the FaceBook platform. Opinions about mass killings of other ethnic groups could proceed without challenge. Later in the week, Facebook and Twitter acted when a post and tweet linked to a New York Post article containing hacked documents from Hunter Biden's hard drive.

Facebook and Twitter said they will be limiting the distribution of or blocking a New York Post story making unverified claims about former vice president Joe Biden. Buzzfeed News, October 14, 2020, at 12:57 p.m. ET

The whole episode got more confusing when Jack Dorsey, the Twitter founder, and CEO, tweeted his anger at the company's response:

Aside from the perpetual moving ball that both companies are playing with, it is clear that neither has a solid policy about its duties and responsibilities. And both are slowly but surely creeping towards editorial decision making about what their platforms can allow.

Of course, as private companies, they can do what they want, as Kara Swisher said so elegantly on CNBC Squawk Box on Thursday morning. The piece is 6 minutes but well worth watching.

And when they do "do what they want," reasonable people can react as John Battelle from @TheRecount did:

Excuse me while I point out the most fucking obvious thing in the world when it comes to what an editor actually does: We draw lines about what is and isn’t acceptable, either as fact, as truth, as hypocrisy, or what is in the public interest. That’s the damn job of journalists: To call bullshit. And regardless of Facebook’s longstanding claims to not be a publisher or a journalistic entity, the truth is, these actions prove the company understands it is an arbiter of facts, truth, and the public interest. The  simple reality is this: The company has tried to have it both ways for Too. Fucking. Long. It’s time we treat Facebook for what it is: A media company, subject to the norms, responsibilities, and behaviors we all expect and demand from our media providers. BatelleMedia, 13 October 2020

The real decision here is whether the world can cope with platforms where a person or organization can express any legal perspective. The human race is diverse, as are its beliefs and opinions. Facts, of course, are facts, but thoughts and ideas are not. Can we collectively handle the existence of open platforms that can encompass the wide breadth of real-world points of view? Facebook and Twitter can choose to be platforms, or they can choose to be publications - that is up to them. And the trend seems to be headed towards publications with editorial policies. But in my opinion (just my idea) that is a mistake. Human beings are certainly capable of understanding that a platform, by definition, is open to all views. We can distinguish between ideas we agree with, ideas we disagree with, opinions, facts, and beliefs. We can collectively discuss and debate these points of view, and we can change or become more entrenched. And together we can influence each other by contributing facts, ideas, opinions and beliefs.

What is the alternative to this open approach? It can only be that some people designate themselves as more capable of truth than others and impose that truth on everybody. Such a 'benevolent', big brother, brave new world, approach goes against any sense of freedom and democracy. It reminds me of Plato in his Republic, placing all decision making power in the hands of philosopher kings so as not to have to trust the people. It does not end well.

Now (Thursday evening) the FCC has moved to state that it intends to act on Trump's Executive Order regarding the interpretation of Section 230 of the Communications Act. Chairman Pai said that "the FCC has the legal authority to reinterpret Section 230". The Verge pointed out:

Pai’s decision to move forward with rulemaking follows a series of moderation decisions on Wednesday made by Facebook and Twitter against a New York Post article regarding former Vice President Joe Biden’s son, Hunter Biden, who has been the subject of political attacks from the right throughout the 2020 presidential election. Facebook reduced the reach of the story, saying that it was eligible for third-party fact-checking. Twitter went even further, banning linking to the story entirely. In a thread Wednesday night, Twitter cited a 2018 rule against posting hacked information as justification for its decision. The Verge, 15 October 2020

This discussion is rapidly morphing into active policy.

Techdirt - a respected publication - responded Friday morning by questioning the FCCs power to do any reinterpretation of law:

This is bullshit. And what's worse is that Pai knows it's bullshit. And he's still doing it. Because he's a coward. He saw what happened when his fellow Commissioner Mike O'Rielly -- who was effectively fired for daring to point out that the 1st Amendment blocked forcing internet websites to carry his propaganda -- and Pai folded like a cheap suit.
Pai is wrong in almost everything he says above. The FCC has no jurisdiction over internet websites. Previous lawsuits have already held that. Furthermore, the FCC has no jurisdiction over Section 230, which was explicitly written to deny the FCC any authority over websites. The FCC has no power to reinterpret the law.
The final paragraph is the most ridiculous of all. He is correct that social media companies have a 1st Amendment right to free speech. And Section 230 as was written and properly and regularly interpreted by dozens of court decisions -- none of which the FCC has ever said a word about -- helps guarantee that right is not diminished through frivolous, bogus, and mis-directed litigation. That Pai would ignore all of that to keep a whiny President happy should tarnish Pai's legacy much more than his dismantling of net neutrality. The fact that he now goes back on everything he has ever said in the past about the FCC and regulations on the internet is just the fetid, rotten cherry on top of a giant pile of bullshit that he has created over the years.
Also, the claim that the immunity is "denied to other media outlets" is straight up wrong. ANY outlet is protected from liability for 3rd party content on their websites. It's why Fox News and Breitbart can have comments on their websites. It's why things like Parler and Gab can exist. Pai knows this. He's just being disingenuous.
In terms of actual impact, all this will serve to do is rile people up, waste a ton of time, and not actually change anything. Because it can't. But it will create a huge mess in the meantime, distracting everybody, and wasting a ton of resources.
As a final note: we've long disagreed with Pai about his stances on many issues, regarding net neutrality, the digital divide, municipal broadband and more. But at least he was consistent. I'd previously believed that he was misguided, but stuck true to his principles. That is clearly no longer the case. He's a lying hypocrite with no principles, no backbone, and should be regarded as a complete joke. No one can even say that his stance on net neutrality was a principled "small government, fewer regulations" stance any more, because this moves proves it was not. He has no problem moving for regulating the internet when it's politically convenient. And that's just pathetic.

So, Mark, Jack, please hold on to open platforms and resist the temptation to intervene, especially when offended. Do not continue down the path of editorial and publisher control. Trust us, humans, to be smart. And tell the FCC that you are Platforms not Publishers.

Late Update: @Jack was busy yesterday I suspect.

According to the statement Twitter now supports the following:

We believe that labeling Tweets and empowering people to assess content for themselves better serves the public interest and public conversation. The Hacked Material Policy is being updated to reflect these new enforcement capabilities.

For my part I am sympathetic to @freedomhawk:

and @BW

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This week's video is here:

Top of the Week: Platform or Publisher?


Reads of the Week: Get Rich Quick, Or Slow?


Startup of the Week: Paystack


Raise of the Week: True Ventures


Politics and Technology: Amazon is innocent!


Venture: Get a Job


Startups: Data, Pipelines and Pay Cuts


Podcasts of the Week:


Tweet of the Week: Age


Emerging Topic of the Week: Encryption and Surveillance


--Top of the Week - Platform or Publisher?


FCC will move to regulate social media after censorship outcry

The Verge

The decision comes after a whirlwind moderation debate
By Makena Kelly @kellymakena  Oct 15, 2020, 3:39pm

FCC Chair Ajit Pai Testifies Before Senate On Agency’s Oversight

On Thursday, Federal Communications Commission Chairman Ajit Pai said that the agency will seek to regulate social media platforms like Facebook and Twitter at the behest of the Trump administration’s executive order signed earlier this year.

“Members of all three branches of the federal government have expressed serious concerns about the prevailing interpretation of the immunity set for in Section 230 of the Communications Act. There is bipartisan support in Congress to reform the law,” Pai said in a statement Thursday. “Social media companies have a First Amendment right to free speech. But they do not have a First Amendment right to a special immunity denied to other media outlets, such as newspapers and broadcasters.”


Blatant Hypocrite Ajit Pai Decides To Move Forward With Bogus, Unconstitutional Rulemaking On Section 230

Mike Masnick, TechDirt
from the that's-not-how-any-of-this-works dept

Thu, Oct 15th 2020 12:05pm — Mike Masnick

For years, FCC Chair Ajit Pai has insisted that the thing that was most important to him was to have a "light touch" regulatory regime regarding the internet. He insisted that net neutrality (which put in place a few limited rules to make sure internet access was fair) was clearly a bridge too far, and had to be wiped out or it would destroy investment into internet infrastructure (he was wrong about that). But now that Section 230 is under attack, he's apparently done a complete reversal. He is now happy to open a proceeding to reinterpret Section 230 to place a regulatory burden on the internet. This is because Ajit Pai is a hypocrite with no backbone, and no willingness to stand up to a grandstanding President.


Facebook Is Finally Admitting It’s A Publisher

John Battelle's Search Blog

  • Excuse me while I point out the most fucking obvious thing in the world when it comes to what an editor actually does: We draw lines about what is and isn’t acceptable, either as fact, as truth, as hypocrisy, or what is in the public interest.
  • Witness this quote, from Zuckerberg himself, in his recent post framing why Facebook will now ban Holocaust denial from the platform: “Drawing the right lines between what is and isn’t acceptable speech isn’t straightforward, but with the current state of the world, I believe this is the right balance.”

Facebook and Twitter's Inconsistencies Are Turning the 2020 Election Into a New Nightmare

Big Technology

On Wednesday, Facebook and Twitter faced their first major test of the 2020 election. The New York Post published a story with illicitly obtained emails from Hunter Biden’s hard drive, obtained in the most sketchy of methods: Rudy Giuliani shared the material after a computer repairman gave it to his lawyer. Steve Bannon had tipped off the Post to its existence.

The story made questionable claims about Biden and his father based on improperly obtained documents, and the platforms took action. Facebook almost immediately decreased its distribution. Twitter blocked the link. And then conservatives went ballistic.

“The most powerful monopolies in American history tried to hijack American democracy by censoring the news & controlling the expression of Americans,” said Missouri Senator Josh Hawley, distilling the wave of criticism into a tweet.

Rather than a grand conspiracy against Republicans however, what’s happening inside these companies is simpler: They’re desperately trying to avoid being caught up in the type of post-election controversies they were in 2016, and are making it up as they go. With no consistent content moderation strategy, they're struggling to explain their decisions, opening themselves up to the type of criticism we’re seeing this week, and previewing what could be a disastrous Election Day, where a disputed result seems inevitable.


The platforms spy a hack-and-leak

Casey Newton, Platformer

  • Today let’s talk about that New York Post story about a laptop that might have belonged to Hunter Biden, Facebook and Twitter’s efforts to reduce the story’s distribution, and why they matter.
  • And so when the New York Post dropped its story about a laptop of dubious origin containing what purported to be incriminating documents related to Joe Biden and his son, the Spidey senses of platform integrity teams all began to tingle in harmony.

Twitter suspends accounts for posing as Black Trump supporters

Technology | The Guardian

  • Twitter has suspended a network of accounts claiming to be owned by Black supporters of Donald Trump and his re-election campaign due to spam and platform manipulation, it said Tuesday.
  • NBC News also reported spam operations from fake accounts posing as Black Trump supporters in August.

Facebook Limited The Reach Of An Unconfirmed Story About Joe Biden’s Son Hunter. Twitter Blocked It.

BuzzFeed News

  • "In many countries, including in the US, if we have signals that a piece of content is false, we temporarily reduce its distribution pending review by a third-party fact-checker." While Facebook is limiting the spread of the stories, Twitter moved to block them outright, blocking links to or images to the stories in line with its policy on hacked material , according to a company spokesperson.
  • Facebook and Twitter said they will be limiting the distribution of or blocking a New York Post story making unverified claims about former vice president Joe Biden.

Why Facebook Can’t Fix Itself

The New Yorker

When Facebook was founded, in 2004, the company had few codified rules about what was allowed on the platform and what was not. Charlotte Willner joined three years later, as one of the company’s first employees to moderate content on the site. At the time, she said, the written guidelines were about a page long; around the office, they were often summarized as, “If something makes you feel bad in your gut, take it down.” Her husband, Dave, was hired the following year, becoming one of twelve full-time content moderators. He later became the company’s head of content policy. The guidelines, he told me, “were just a bunch of examples, with no one articulating the reasoning behind them. ‘We delete nudity.’ ‘People aren’t allowed to say nice things about Hitler.’ It was a list, not a framework.” So he wrote a framework. He called the document the Abuse Standards. A few years later, it was given a more innocuous-sounding title: the Implementation Standards.


--Reads of the Week - Get Rich Quick, Or Slow?


4-year founder vesting is dead

Medium, Jake Jolis

We recently invested in a team of co-founders who had voluntarily made their own vesting longer than four years. Four-year vesting is the industry standard. Why would someone voluntarily make it longer for themselves?

Their answer: “These days, with companies taking seven to 10 years to reach exit, it would make sense for founders to be on a similar schedule.”

This matters because the four-year co-founder vesting schedule frequently harms startup founders’ interests. Sometimes it damages their startup irreparably.

A growing number of founders are starting to realize this. I talked to quite a few about this over the last two years. Mostly, the “longer-than-four-years-vesting” founders share a similar story as well as logic. Almost always they are repeat, experienced founders. Often scarred by a co-founder separation in their prior startup, they are determined to set things up smarter in their next company.


Chamath Palihapitiya addresses some concerns surrounding Clover Health SPAC

YouTube

Chamath Palihapitiya on why he's taking Clover Health public through a SPAC

YouTube


SoftBank prepares to launch a SPAC

Axios

SoftBank is planning to launch a blank check acquisition company in the upcoming weeks, according to comments made today at the Milken Virtual Conference by senior SoftBank executive Rajeev Misra.


Why We Are Never Really Going Back to the Office

SaaStr

  • Stewart Butterfield threw out an interesting statistic in a recent interview with Fast Company … over 20% of Slack employees have been hired since Covid-19 hit and the shelter order in SF went into place.
  • It’s time to start planning that way.

--Startup of the Week: Paystack


Stripe acquires Nigeria’s Paystack for $200M+ to expand into the African continent

Fundings & Exits – TechCrunch

  • Stripe is acquiring Paystack , a startup out of Lagos, Nigeria that, like Stripe, provides a quick way to integrate payments services into an online or offline transaction by way of an API.
  • For Paystack, the deal will give the company a lot more fuel (that is, investment) to build out further in Nigeria and expand to other markets, CEO Shola Akinlade said in an interview.

--Raise of the Week: True Ventures


True Ventures Raises Two Funds Totaling $840M - FinSMEs

FinSMEs

  • Similar to previous Select Funds, True Select Fund IV will provide follow-on capital to existing portfolio companies with high growth potential and large-scale opportunity.
  • Consumer platforms including Peloton, Madison Reed, Splice and Yousician, as well as microsatellite startup ICEYE, infrastructure automation company HashiCorp and material innovator Zymergen have all received follow-on capital from previous Select Funds.

--Politics & Technology: Amazon is Innocent!


Leave Amazon out of Big Tech regulation — it doesn’t have a monopoly

MarketWatch

  • Amazon also has a significant presence in tech via e-commerce, cloud and its smart-device businesses with Ring and Nest.
  • Amazon Amazon’s presence among this group seems to be more based on its size than any verifiable anti-competitive behavior.

Opinion | Don’t Let Amazon Get Any Bigger

The New York Times

By Stacy Mitchell
Ms. Mitchell is a co-director of the Institute for Local Self-Reliance.

  • Amazon produces clothing and advanced computer chips, dispenses a growing share of the nation’s prescription drugs, markets surveillance services to police departments, and runs a rapidly expanding advertising business.
  • This is why the most important of the Judiciary Committee’s recommendations is its call for legislation that would effectively split up big tech platforms like Amazon by breaking them up in “structural separations” and forbidding them from operating in adjacent lines of business to those they are already dominant in.

How Amazon Makes Its Money

Visual Capitalist

  • While a majority of Amazon’s revenue comes from online sales, the company has several other business segments that generate billions of dollars in revenue
  • Amazon is now the proud owner of multiple billion-dollar revenue streams—but what are these different business segments, and how much does each unit contribute to the company’s overall revenue mix?

--Venture: Get a Job


Announcing our first P9 Family Virtual Summit

Point Nine Land - Medium

  • Instead of hosting the event over a weekend that we usually do for our physical Founder Summit, we use a full week where every day is dedicated to a specific topic.
  • While these were usually shorter events for a smaller group of people, we kept asking ourselves: how can we scale these learnings and at the same time our networking sessions?

Foundry Is Hiring: Head of Network

Foundry Group

  • We’re looking for someone with the vision, background, experience, and skills to help us form the next chapter for The Foundry Network and to continue to grow and adapt how we work with our ecosystem in ways that support and empower our portfolio of companies and VC funds.
  • We also seek to leverage our experience and relationships as fund managers to help the next generation of venture firms create industry-leading investment businesses.

The ultimate guide by Pietro Invernizzi (@pinverrr)

Notion

Getting a job in Venture Capital ("VC") is hard. The industry is small and very unstructured. Jobs are rarely advertised online and no one really knows where to start.

With more and more people looking to break in every day, you can't be like everybody else if you want a seat at the table:

"Venture Capitalists ("VCs") looking to hire you are searching for someone who can help them invest in companies that they otherwise would not have invested in without you." - ****Erik Torenberg

What will it take to be that someone and to stand out from the crowd? Since I broke in a few years ago, I get asked that question a lot.

While my LinkedIn shows a somewhat straightforward path (Investment Banking → Startup Advisory @ The Family → VC Investing @ Stride.VC), it hides a ton of questionable tweets I tried to write; a bunch of social media posts I obliged all my friends to 'like & share'; a couple of failed angel investments; and a massive pile of readings...

I was very lucky to have landed where I did - and what I did is not necessarily going to work for everyone - but here's what I've learned:


Crunchbase News

  • In July, Roblox announced it had more than 150 million monthly active users on its platform.
  • San Mateo, California-based Roblox announced Monday that it has submitted confidential paperwork with the Securities and Exchange Commission pertaining to a potential initial public offering.

My Top 8 Mistakes Investing in SaaS Startups

SaaStr - Jason Lemkin

My biggest mistakes in SaaS investing actually in the end haven’t been truly costly because, in the end, power laws mean your winners overwhelm your losers if you do it right.

  • Investing based on a good deal / cheap price .

The Mispricing of Software Companies by @ttunguz

Tomasz Tunguz

Public software companies trade on forward revenue multiples. Investors contrast the relative value of one business by comparing the enterprise value divided by forward revenue (sum of the next 12 months' revenue) of one business to another. Ten years ago, forward multiples remained in a tight band between 5-10x. Today, they span 2-60x+.

This novel dispersion provides us an opportunity to ask some interesting questions.

Let’s cover one today: does the market price efficiently? We know revenue growth rate correlates most with forward multiples. If we divide the forward multiple by the growth rate, we normalize it, which means we can compare them on a pineapples-to-pineapples basis


Why is Snowflake so Valuable?

Freshpaint Blog

Why is Snowflake so Valuable?
An overview of some of the reasons Snowflake is trading at 150x its revenue.

Two weeks ago, Snowflake had the largest IPO ever for a software company. On the first day of trading, the stock price doubled, giving Snowflake a market cap of over $60 billion. Snowflake became all that everyone was talking about. There was so much hype, my mom, who doesn't even know what Snowflake is, decided to invest in Snowflake.

At first glance, the valuation of $60 billion seems absurd. Not only is Snowflake not profitable, having a net loss of $349 million in 2019, but their revenue is also small relative to their valuation. Their revenue over the last 12 months was $403 million. Based on that, their market cap is around 150x their revenue. So why exactly is their market cap so high? Besides revenue and profitability, there are a number of other metrics that investors look at. Compared to similar software businesses, Snowflake has god-like metrics. In this post, I'm going to go through a number of metrics from Snowflake's S-1, explain what the metrics mean, and give context on just how exceptional Snowflake's metrics are.


--Startups: Data, Pipelines and Pay Cuts


Data Quality — A Primer

Memory Leak - Medium, Astasia Myers, Redpoint VC

  • While the caustic observation, “garbage-in, garbage-out” has plagued analytics and decision-making for generations, it carries a special warning for Machine Learning (ML) since the time it takes to develop a model is significant.
  • Additionally, we’ve heard about bad data leading to product development decisions that have caused corporations to lose millions of dollars in engineering effort.

A better way to visualize pipeline development?

The Angel VC (Christoph Janz archive)

When founders show me their sales pipeline, the data is typically visualized in some variations of one of these formats:



When I see charts like this, I often find it hard to quickly wrap my head around the data and draw meaningful conclusions. Sometimes, important numbers are missing altogether. In other cases, they are there but are shown on another page or in another report.
I then find myself wonder about questions such as:

  • The pipeline is growing nicely, but how much are they actually closing?
  • How long does it take them to move leads through the funnel?
  • Are they purging their pipeline or are they accumulating a lot of "dead" pipeline value?
    With this in mind I tried to come up with a new way for high-level pipeline development visualization, one that makes it easier to quickly get to the key take-aways. If you're interested in the (preliminary) result only, check out this mockup. If you'd like to learn more about my thought process and some additional details, read on.

Silicon Valley Pay Cuts Ignite Tech-Industry Covid-19 Tensions

Wall Street Journal

PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

Tech workers fleeing the San Francisco Bay Area to work remotely amid the pandemic are facing a new reality: pay cuts.

Over the past several months, Covid-19 has shaken traditional notions of where employees can work. In Silicon Valley, which has a relatively high cost of living and an employee base with access to state-of-the-art remote-work tools, companies are devising plans for a future with decentralized staffs. In some cases, changes can include cutting salaries by 15% or more depending on where someone moves.

The nascent pay-cut movement stands to create tension between some of the most profitable companies in the world and skilled employees who enjoy high salaries.



20VC: CRV's George Zachary on His Relationship To Money and How it has Changed Over Time, Why The Best Founders Have Often Experienced Parental or Home Instability and The Stories Behind Investing in Unicorns; PillPack, Yammer and Udacity

The Twenty Minute VC: Venture Capital | Startup Funding | The Pitch

  • George Zachary is a General Partner @ CRV , one of the nation's oldest and most successful early-stage venture capital firms with a portfolio including the likes of Airtable, DoorDash, Dropbox, Niantic and many more.
  • Before joining CRV, George was a General Partner @ Mohr Davidow Ventures for over 6 years.

Tracking the Trends: AI, WebRTC, Crypto, and Full Stack Startups - Andreessen Horowitz
Chris Dixon, Elad Gil, and Sep Kamvar trace the path of forces driving innovation, where they stand today, and how they are converging.

Angel investing at scale

Fabrice Grinda

  • The larger your portfolio the better you do.
  • Have an area of focus: you will make better investment decisions and be more value added by focusing on an area of expertise.

--Tweet of the Week: Age



--Emerging Topic of the Week: Encryption, Privacy and Surveillance


The Inside Story of How Signal Became the Private Messaging App for an Age of Fear and Distrust

Time

  • “We’re seeing a lot more people attending their first actions or protests this year—and one of the first things I tell them to do is download Signal,” says Jacky Brooks, a Chicago-based activist who leads security and safety for Kairos, a group that trains people of color to use digital tools to organize for social change.
  • “Crypto-anarchists thought that the one thing you can rely on to guarantee freedom is basically physics, which in the mid 1990s finally allowed you to build systems that governments couldn’t monitor and couldn’t control,” says Jamie Bartlett, the author of The People vs Tech, referring to the mathematical rules that make good encryption so secure.

Five Eyes governments, India, and Japan make new call for encryption backdoors

ZDNet

  • Members of the intelligence-sharing alliance Five Eyes , along with government representatives for Japan and India, have published a statement over the weekend calling on tech companies to come up with a solution for law enforcement to access end-to-end encrypted communications.
  • Representatives from the seven governments argue that the way E2EE encryption is currently supported on today's major tech platforms prohibits law enforcement from investigating crime rings, but also the tech platforms themselves from enforcing their own terms of service.