FTC: Not Competent

That Was The Week, #48

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In April 2012, when Instagram was acquired for $1 billion, I commented on the acquisition in TechCrunch: "It's Not About Instagram, It's About Mobile."

"The key takeaway from the last week is that Web 2.0 is now firmly in our rear-view mirror. Consumer adoption of powerful mobile computing devices and their adoption of the services that the mobile era brings means that innovation and value will now largely be found in mobile software and services, and mobile's disruption of real-world businesses as well as of web 1.0 and 2.0."

Later, in February 2014, also in TechCrunch, I wrote about Facebook's Whatsapp acquisition. The title - "Mobile Is From Mars, Facebook Is From Venus, And WhatsApp Is Ephemeral".

In it, I characterized the deal like this:

"You can only admire Mark Zuckerberg. If the game is Whack-A-mole he is prepared to whack them, small, medium or large – no matter the cost. Whacking moles is the only way to earn points and points translate into life."

The point of both pieces was that Facebook was vulnerable, first to mobile then to messaging. It is hard to remember, but Facebook was mainly a web site at that time, and mobile was growing fast. Instagram represented more than a potential competitor, it represented a bridge from the web to the mobile era. As for WhatsApp, it brought Facebook into the messaging era. Messaging was replacing social networks as the essential glue between people and did not depend on a centralized social graph. This was also a bridge, from social posting to one-to-one and group messaging. Neither represented a consolidation of monopoly power. Both represented survival.

Now, eight years after Instagram and six after WhatsApp the FTC, having once approved the mergers, is saying it got it wrong and wants a do-over. This at a time when Facebook only has one market - advertising. A market that it has no monopoly in. Facebook is not a monopoly, and the FTC is not competent; therefore makes a good title this week.

The key to understanding the Facebook suit and the reaction to it is to grasp the current zeitgeist. Both left and right of the political spectrum are angry at Facebook for being big and powerful and often badly behaved. There is a tolerance for misusing language - monopoly, antitrust, abuse of power - to serve what is really a social purpose - to bring down big tech, just because it is big. Equating bad behaviour with illegal activity is where it all plays out and then crosses over into a desire to fix or regulate or worse, punish. The victim here is Facebook. And beyond Facebook, innovation. Small is good sounds wonderful but is actually a worse world than the big tech world we live in.

This week shines a light on the benefits of successful innovation. The IPOs of Doordash, AirBnB and C3.ai all produced very valuable companies. Airbnb is valued over $100 billion, Doordash $70 billion and C3 over $12 billion. Airbnb has transformed travel accommodation for hundreds of millions of property owners and visitors. Doordash has made the pandemic less horrible by allowing food to be cooked, sold and delivered. As these companies acquire and grow, they serve needs. Just as Facebook serves our need to connect and interact with family and friends. They work because of what they give us, not what they take away. Big is definitely good, at least for now. That does not mean bad behavior should not be punished, just that it should not be punished via a bogus antitrust suit.

--News Of The Week:




And the rest is here:

News You Can Use: For Founders

The Best of the Rest: For VCs

Startup Of The Week: Hopin

Tweet of the Week:

--News Of Tfhe Weekhe Week: Regulation

FTC Sues Facebook for Illegal Monopolization

Federal Trade Commission

Video Here

  • Following a lengthy investigation in cooperation with a coalition of attorneys general of 46 states, the District of Columbia, and Guam, the complaint alleges that Facebook has engaged in a systematic strategy — including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developers — to eliminate threats to its monopoly.
  • The Federal Trade Commission today sued Facebook , alleging that the company is illegally maintaining its personal social networking monopoly through a years-long course of anticompetitive conduct.

‘It’s Hard to Prove’: Why Antitrust Suits Against Facebook Face Hurdles

Mike Isaac and Cecilia Kang, New York Times

New York’s attorney general, Letitia James, announced the suits against Facebook on Wednesday. Some legal experts said the cases were far from a slam dunk.Credit...via New York State attorney general's office

SAN FRANCISCO — When the Federal Trade Commission and more than 40 states sued Facebook on Wednesday for illegally killing competition and demanded that the company be split apart, lawmakers and public interest groups applauded.

Senator Richard Blumenthal, Democrat of Connecticut, said, Facebook’s reign of unaccountable, abusive practices against consumers, competitors and innovation must end.” Senator Josh Hawley, Republican of Missouri, called the lawsuits “a necessity” and said Facebook’s acquisitions of nascent rivals “were meant to be anti-competitive, and they should be broken up.”

But lawmakers and consumer advocates did not address a hard-to-deny factor: The cases against Facebook are far from a slam dunk.

Antitrust laws are complex and were put in place before the advent of modern technology. The F.T.C. and state attorneys general now face an uphill battle to prove their allegations, some competition experts said.

Silicon Valley feared Facebook’s bullying tactics years before they came to the attention of regulators

The Washington Post

  • The negotiations — when Facebook was a much smaller player — are early evidence of the hardball tactics to neutralize competition that got the social network to where it is today: a platform that counts more than a third of the world’s population as monthly users of its family of apps, which include WhatsApp messaging and the photo-sharing service Instagram.
  • Although Zuckerberg made promises of independence to the founders of WhatsApp and Instagram when he purchased the companies, today those apps are fully merged into Facebook, making a breakup technically challenging.

How the Facebook case will test the limits of antitrust law


  • The federal government and states are alleging that Facebook abused its dominance in the digital marketplace and violated the law with acquisitions of two nascent competitors, Instagram and WhatsApp. The cases, alongside the DOJ’s case against Google , could enable the courts to finally drag antitrust law into the 21st century, recognizing that data has monetary value and consumers are harmed when their online privacy is eroded.
  • “For almost a decade, Facebook has had monopoly power in the personal social networking market in the United States,” claims the case from the state attorneys general.

Section 230 is Good, Actually


  • This gives many more people access to the content that others create than they would ever have otherwise, and it’s why we have flourishing online communities where users can comment and interact with one another without waiting hours, or days, for a moderator, or an algorithm, to review every post.
  • This makes it possible for sites and services that host user-generated speech and content to exist, and allows users to share their ideas — without having to create their own individual sites or services that would likely have much smaller reach.

DOJ’s Facebook suit is a last gasp swipe at both immigration and Big Tech


  • The Department of Justice filed a one-two punch of a lawsuit against Facebook on Thursday in a last-gasp attempt to follow through on two of the Trump administration’s core promises: to limit high-skilled immigration and crack down on Big Tech.
  • The suit, which follows a two-year investigation by the DOJ, accuses Facebook of failing to adequately recruit and hire U.S. workers for some 2,600 jobs, and instead holding those jobs open for foreign workers Facebook was sponsoring for green cards.

Publisher or Platform? It Doesn’t Matter.


For the former, group, the passive distributors, there could be no liability unless they knew, or should have known, of the libelous material. For the latter group, the publishers, they were treated the same as the original speakers they quoted.

--News Of The Week: IPOs

Tom Siebel takes a victory lap after C3.ai’s blockbuster debut on Wall Street


  • Alongside startups that offer industry-specific applications, AWS, Google and the other tech giants of the world also stack AI-based products on top of their bread-and-butter cloud computing software.
  • I don’t know where the competition is going to come from.” The secret weapon, according to Siebel, is what he calls “model-driven architecture,” a form of software development that Siebel claims he’s protected with a patent .

Airbnb Tops $100 Billion on First Day of Trading, Reviving Talk of a Bubble

The New York Times - @eringriffith

SAN FRANCISCO — Over the last decade, Airbnb has upended the travel industry, riled regulators, frustrated local communities and created a mini-economy of short-term rental operators, all while spinning a warm narrative of belonging and connection.

On Thursday, Airbnb sold investors on an even unlikelier story: that it is a pandemic winner.

The company’s shares skyrocketed on their first day of trading, opening at $146 each, 115 percent above its initial public offering price of $68. That put Airbnb’s market capitalization at $101.6 billion — the largest in its generation of “unicorn” companies and more than Expedia Group and Marriott International combined.

What to Know About Airbnb Ahead of Its IPO

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

  • More precisely, Airbnb’s filing estimates the “short-term stay” market to be worth $1.2 trillion.
  • This gives the company access to the residential real estate market — rather than finding an apartment on StreetEasy or some other platform for apartment searching, consumers are visiting Airbnb and booking a place for a month or more.

DoorDash from application to IPO

Y Combinator

  • Even more impressive is the fact that now, over seven years later, the what and why of DoorDash remains the same, including their commitment to helping local businesses succeed.
  • This quote from their S-1 perfectly matches the application video: “DoorDash has always been about helping local businesses succeed, more so than about food delivery.

DoorDash IPO: Resilience Gets Results

Sequoia Capital Publication — Medium

  • But Tony and the team understood something many did not: While most people in San Francisco and New York already had access to delivery, the suburbs were a massive untapped market.
  • Once again, though, the team’s resilience helped see them through, as they balanced careful planning with optimism, continued to innovate, and stuck to their strategy of obsessively serving merchants, customers and drivers even as new competitors launched.

DoorDash Closes First Day Of Trading with $72B Valuation

Crunchbase News

  • Shares of delivery unicorn DoorDash rose quickly in its first day of trading Wednesday and ended up closing at $189.51, up 85 percent, and delivering an initial valuation of more than $72 billion.
  • The San Francisco-based company priced shares for its initial public offering at $102 each, above the projected range of $90 to $95.

Robinhood Hires Goldman Sachs to Lead Possible $20B+ IPO


Trading app Robinhood has chosen Goldman Sachs to lead the way for an initial stock offering, people familiar with the matter told Reuters.

Sequoia Capital Warned of a ‘Black Swan.’ Instead, 2020 Is One of Its Best Years Ever 


  • Investors in at least two mature yet active Sequoia funds will see 11-fold returns on paper, after fees, according to performance data reviewed by Bloomberg, which haven’t been previously reported.
  • The 2006 fund XII, which contained the first investments in Airbnb and Unity, reported 10.9-fold returns, the data seen by Bloomberg show.

The SPAC Pop Is Now A Thing: More Unicorns Getting On Board

Crunchbase News

  • In the past few weeks, a series of strong debuts from companies in the electric vehicle and autonomous driving spaces offer fresh support for the notion of SPAC mergers as a viable path to public markets.
  • Over the last few months, we’ve seen new announcements of SPACs hitting the market, identifying acquisition targets, or completing mergers pretty much daily.

--News Of The Week: Innovation

a16z Podcast: The ‘Holy Grail’ of Social + Fintech

Andreessen Horowitz

  • In this conversation between fintech partner Anish Acharya , formerly a product manager at Credit Karma, consumer partner D’Arcy Coolican (who himself is a former founder in this space), and host Lauren Murrow , we discuss why the “holy grail” of social plus finance is both so challenging and, potentially, so rewarding.
  • D’Arcy : I think the thing you will likely see is that social plus fintech products will actually come much more from the consumer side of things.

Six Ways New Social Companies Will Monetize

Andreessen Horowitz

  • With this model, emerging social platforms can monetize without relying on creators or exclusive content.
  • Today, many social companies are experimenting with new monetization models, taking a page from China, the gaming industry, and early ad-adverse pioneers like Tinder, Spotify, and Venmo.

The Next Phase of Social? Listen Closely

Andreessen Horowitz

  • In particular, we’re excited to see the emergence of platforms that provide user-generated content, live conversations, and other social interactions; a counterpoint to the highly produced, one-way nature of audiobooks and podcasts.
  • To see how future innovation might progress, it’s helpful to survey the current social-audio product landscape in abstract and break down some of the defining attributes.

Margaret Hodge calls for ban on social media anonymity

the Guardian

  • The Labour MP Dame Margaret Hodge has said the government must ban online anonymity or make social media directors personally liable for defamatory posts, revealing that she receives tens of thousands of abusive tweets a month.
  • Hodge accused the government of deliberately delaying the online harms bill in order to avoid difficult conversations with powerful social media companies, and said she was prepared to take up a campaign to make sure the law was tough enough.

News You Can Use: For Founders

Why founders should hire a Product Manager after raising a seed round


  • Why founders should hire a Product Manager after raising a seed round A case study from PlayPlay, Bearer, Sqreen, cargo.one and other Point Nine portfolio companies Our mission at Point Nine is to help B2B SaaS and B2B marketplace businesses get from a stage where they have some early signals of Product Market Fit (i.e.“the P9 stage”) to what we call “Go To Market Fit”.
  • The goal of this quick post is to: explain the rationale behind this hire, outline the key missions of a first PM, share a template of a job description, and, link a few Linkedin profiles to the PMs in our portfolio companies.

How This 5X Founder Creates an Internal Culture With a “Crazy Focus” on Storytelling

First Round Review

As David Cancel puts it, they are “obsessed with story internally” at Drift. From the inspiration they’ve taken from the screenplay writing world, to how storytelling training is part of their onboarding, we dig deep into how he created this culture as the CEO.

More than 1,200 Google workers condemn firing of AI scientist Timnit Gebru

Technology | The Guardian

  • Timnit Gebru, who was the technical co-lead of Google’s Ethical AI team, wrote on Twitter on Wednesday that she had been fired after sending an email to an internal group for women and allies working in the company’s AI unit.
  • Hundreds of Google employees and more than 1,000 academic researchers are speaking out in protest after a prominent Black scientist studying the ethics of artificial intelligence said she was fired by Google after the company attempted to suppress her research and she criticized its diversity efforts.

The Best of the Rest: For VCs

The state of European tech 2020: 20 things you should know | Sifted


  • The success of 2020 has been driven by the increase in $100–250 “megarounds” — the top 10 largest rounds alone raised $4.1bn, equivalent to 16% of capital invested in Europe in the first nine months of 2020.
  • Despite the upheavals and uncertainties, 2020 is on track to be a record year for the amount of capital invested into European tech.

The Rebirth of European Venture Capital

Silicon Roundabout

  • Tech ventures existed, but the numbers placed Europe as being some 50 years behind America in terms of capital invested, technological innovation and entrepreneurship.
  • In fact, from being 50 years behind the rest of the tech world, Europe is now investing what the US used to only a decade ago.

2020’s Biggest VC Winners

The Information

When Airbnb and DoorDash go public later this week, it will be a home run for a number of VC firms but particularly for Sequoia Capital, which has been an investor in both companies since their early days.

20VC: Reid Hoffman on Investing in Airbnb and Passing on Stripe

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

  • On the investing side, he is a Partner @ Greylock , one of the leading venture firms of the last 2 decades with a portfolio including Facebook, Airbnb, Dropbox, Figma, Appdynamics and Okta to name a few.
  • What was the story behind Greylock investing in Airbnb?

Startup Of The Week: Hopin

20VC: Hopin, The Breakout Startup of 2020

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

  • In the last 13 months, Johnny has raised over $174M for Hopin from the likes of Accel, IVP, Slack, Northzone, Coatue, Salesforce and of course, 20VC Fund.
  • In Today’s Episode You Will Learn: 1.) How Johnny made his way into the world of startups and how severe health challenges led to his realisation and founding of Hopin?

Tweet of the Week:

Successful people are really good about returning emails. Correlation or causation?

Summation by Auren Hoffman