How to Break the Internet

That Was The Week, #43

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Editorial: My Take

The Internet is a fantastic thing. All we have to do is remember how things were before to grasp how awesome it is. Finding a book, shopping, buying a ticket, sending a message, and many other things were challenging and time-consuming. I remember waiting for my wife at a London tube station on an early date. She was almost an hour late. No text, no email, no mobile phone. I just had to wait and hope. She did come :-)

In 1995, as a founder and CTO at EasyNet - the first consumer ISP in Europe - I remember the police visiting and asking if we could monitor what was published on the newsgroups and who by. We refused to do so. The point of view was that the Internet was like the real world and that snooping was wrong. The right to free speech should be assumed and law breaking, as in the real world, should be punished by the law. Surveillance by Internet companies should not be part of it, especially secret surveillance.

Later that year and the next, the USA passed section 230 of the Communications Act. It explicitly excused internet companies from being responsible for what their users published via their services. Even if an internet company chose to delete or modify something, it did not, by doing so, become responsible for all content.

Since 1996 Section 230 has enabled internet services to offer consumer platforms and open up publishing to everybody. The services all have terms and conditions, and they try to enforce them. But they are not subject to the law for everything you or I publish.

This week I highlight contributions from a wide range of points of view. Some call for the modification of Section 230. Others want it to remain untouched. Some want it ended altogether.

My take is to leave it untouched. Allow the platforms to implement their policies. A publisher, even an individual, should be responsible for what they publish, not the platform they choose to publish on.

If that small win is modified, the Internet will become surveillance central, and Internet norms will be seriously violated.

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This week's video is here:

--News Of The Week 1: Regulation and the Internet

--News Of The Week 2: IPOs, SPACS etc

--The Best of the Rest

Startup Of The Week:

Podcasts Podcast of the Weekhe Week:

Tweet Tweet of the Weekhe Week:

----News Of The Week 1: Regulation

SEC Changes Crowdfunding Regulation

Crunchbase News

  • Accredited investors previously had to meet certain income and wealth requirements.
  • Previously, entrepreneurs had a limit of $1.07 million for regulation crowdfunding.

Market definitions and tech monopolies 

Benedict Evans

One of the basic building blocks of any competition case is market definition. If you’re claiming that a company has market dominance, and that it’s abusing that dominance, what market are we talking about? Very obviously, the company being prosecuted tries to draw the definition as widely as possible - ‘we compete with the entire planet!’ - and the prosecutor tries to draw it as narrowly as possible - ‘Ferrari has a monopoly of rear-engined Italian sport cars with horse logos!’

The fun part of this is that both of these definitions are true, and so you have dig rather deeper and work out what problem you’re trying to solve to work out what definition to use, because very often, picking the definition decides the outcome of the case, before it’s even started.

These questions come up a lot in talking about Amazon. If you read the accounts and do the numbers, you can work out that it has about 40% of US ecommerce (I wrote about this here). But US ecommerce is only part of total US retail - it was about 16% in 2019 and this year, with lockdown, it’s spiked to a bit over 20%.

Now and Always, Platforms Should Learn From Their Global User Base


  • Meanwhile, social media users elsewhere are subjected to even more dangerous misinformation from their countries’ leaders, with little or slow response from the platforms that host it.
  • We support the right of platforms to curate content as they see fit, and it is understandable for them to want to remove violent incitement — which can cause real-world harm rapidly if allowed to proliferate, particularly when it comes from public figures and politicians.

Congress Fails to Ask Tech CEOs the Hard Questions


  • The Senate Commerce Committee met this week to question the heads of Facebook, Twitter, and Google about Section 230, the most important law protecting free speech online .
  • Section 230 has become a lightning rod this year: it’s convenient for politicians and commentators on both sides of the aisle to blame the law — which protects a huge range of Internet services — for the decisions of a few very large companies (usually Google, Twitter, and Facebook).

Facebook and Twitter Are Rethinking Their Share Buttons

Big Technology

  • But giving people more information before they share is becoming increasingly popular inside social media companies — Facebook even has a name for it: “Informative Sharing” — and the practice will likely influence information quality on social platforms more than any measure the current content moderation debate covers.
  • Facebook’s added notification screens making people pause, just for a moment, and consider some context before they share Covid-related posts and images (with the exception of posts from recognized global health organizations like the WHO), and outdated articles as well.

Section 230: Mend It, Don’t End It

David Sacks, Medium

The First Amendment Provides a Path to Peace for Social Media

Once again, the CEOs of Twitter, Facebook, and Google found themselves in the hot seat on Capitol Hill last week, grilled by the Senate Commerce Committee. As I predicted in my last post “RIP Section 230,” Twitter and Facebook’s ham-handed censorship of the NY Post has cemented a bipartisan consensus that these tech behemoths are too large and powerful, pose a threat to democracy and free speech, and need to be reined in for the good of America. To that end, a growing chorus of legislators on both sides want to repeal or gut Section 230, the law that governs speech on tech platforms.

Repealing Section 230 would have far-reaching consequences, not just for Big Tech but for numerous small innovators and future startups — startups that may never exist without the liability shield that 230 provides. Before we throw the baby out with the bathwater, we should understand why the law has been so important to the development of the open internet and why its repeal would likely backfire by leading to more censorship, not less.

The Coming Fight for Control of the Internet

Albert Wenger, Continuations

Here are some observations on the most recent iteration of the debate around regulating large tech companies generally, the role of Section 230 specifically and how these relate to speech on the Internet. Topics that I have been writing about for many years.

First, information cascades are real and have been known to be a problem for a long time. Both through low effort enduser actions (such as a retweet) and through algorithmic amplification (one user’s like winds up on others’ timelines) “news” travels fast. As has been well studied the more outrageous it is, the faster it travels.

Second, this problem has been known for a long time and one of Twitter’s and Facebook’s biggest failings has been to do nothing about it, while at the same time suppressing third party efforts. Twitter’s handling of some links last week by simply not allowing them to be posted was a ham fisted attempt to rectify this last minute before an election. A later and broader iteration aimed at slowing down retweets is more of a step in the right direction.

Your Problem Is Not With Section 230, But The 1st Amendment

Free Speech
from the so-good-luck-with-that dept
Mon, Nov 2nd 2020 9:35am — Jess Miers

Everyone wants to do something about Section 230. It’s baffling how seldom we talk about what happens next. What if Section 230 is repealed tomorrow? Must Twitter cease fact-checking the President? Must Google display all search results in chronological order? Perhaps PragerU would finally have a tenable claim against YouTube; and Jason Fyk might one day return to showering the Facebook masses with his prized collection of pissing videos.

Suffice to say, that’s not how any of this works.

Contrary to what seems to be popular belief, Section 230 isn’t what’s stopping the government from pulling the plug on Twitter for taking down NY Post tweets or exposing bloviating, lying, elected officials. Indeed, without Section 230, plaintiffs with a big tech axe to grind still have a significant hurdle to overcome: The First Amendment.

--News Of The Week 2: IPOs, SPACS etc

In Defense of the IPO and How to Improve It, Part 2: Peeking Behind the Pop — Andreessen Horowitz

Andreessen Horowitz

  • During the course of the roadshow that leads up to the final pricing of the IPO, the company may change the initial filing range (and/or the number of shares being issued in the offering) to reflect the indications of demand.
  • More (or less) demand will cause the company to revise upward (or downward) its initial filing range before it ultimately picks a final offering price at which the IPO shares are sold to investors.

Want To Take Your Startup Public? What It Actually Costs To IPO

Crunchbase News

  • While the auditor fees in context of the IPO will be disclosed, there’s often a second accounting firm that advises the company on aspects of the going-public process such as taxes, structuring, HR and compensation.
  • In the past, initial IPO conversations often took place three to six months before an IPO, according to Ran Ben-Tzur, a partner at law firm Fenwick & West , who advises on capital markets and public companies.

Unicorns Get More Magical: 2020 Cohort Shows Huge Increase In Valuation On IPO Day

Crunchbase News

  • What we found for those unicorns that have made exits is that the 2020 IPO cohort offered up a 117 percent increase between the last known valuation for a company and its valuation upon going public — the highest jump in a five-year timeframe.
  • Venture capitalist Tomasz Tunguz of Redpoint Ventures recently wrote on valuations for companies in the private and public markets , noting a surprising shift during 2019 in favor of the public markets valuing high-growth companies at better multiples.

Barry Eggers on the 2020 Election, SPACS & More

National Venture Capital Association — NVCA

  • Barry Eggers , Founding Partner at Lightspeed Venture Partners and Board Chair for NVCA, had was a guest speaker on Harry Stebbings’s podcast, The Twenty Minute VC .
  • Barry Eggers is a Founding Partner at Lightspeed Venture Partners and currently serves as our Chair of the NVCA Board of Directors.

--The Best of the Rest

Will new SEC equity crowdfunding rules encourage more founders to pass the hat?


  • The flow of venture capital in 2020 has been surprisingly strong given the year’s general uncertainty, but while investors have showered plenty of dough on growth-stage companies, seed-stage startups are down 32% last quarter compared to the year before.
  • Additionally, companies can now raise $5 million per year using equity crowdfunding, compared to the previous limit of $1.07 million.

Portland, Maine votes in favor of facial recognition ban


Portland, Maine is the latest in the growing list of cities in the US to ban facial recognition technologies. According to Bangor Daily News, people voted in favor of of passing a new measure that strengthens Portland’s existing ban on the use of fac…

Hustle Fund, a pre-seed firm, closes $30M for a new fund

TechCrunch, @nmasc_ Hat Tip to @MacConwell

Hustle Fund, a pre-seed fund built by former operators and founders, has raised $30 million for a new fund, per SEC filings. Hustle Fund first filed paperwork for this fund, its second to date, in May 2019 with intention to raise $50 million. Its inaugural investment vehicle closed at $11.5 million.

Which Countries Have the Most Internet Users?

Visual Capitalist

  • Take China, for instance — while the country has the highest number of internet users worldwide, it also has millions of unconnected citizens, making its overall internet penetration relatively low at 59% .
  • To give some perspective, here’s a look at the top nine countries with the highest number of internet users, alongside their internet penetration rates (which is the number of internet users divided by a country’s overall population):

British Patient Capital reaches £1bn of venture capital funding, — AltFi


  • Judith Hartley, CEO, British Patient Capital, says the number of underlying companies within its portfolio has increased from 322 to 503 over the 12-month period.
  • British Patient Capital has committed more than £1bn to UK start-ups, including c.£130m to fintech, according to figures released by the organisation.

WTF is share of wallet and HTF do you measure it?

Point Nine Land — Medium

  • Level 2: do it on an aggregate level As the number of buyers and suppliers on your platform increases it’s worth looking at the share of wallet on an aggregate level.
  • When measuring the share of wallet, it’s important to take this into account and to focus on measuring the total buyer spend and supplier earnings that are relevant for the category of goods or services on your marketplace and the geographies that you cover.

Building the Next Normal: 5 Key Insights for CMOs Delivering Virtual Events from Someone Who Knows…

Sapphire Ventures Perspectives — Medium

  • However — while Zoom (and Google Hangouts and Microsoft Teams) have served us well for webinars, roundtables and virtual cocktail hours — we quickly realized it would take far more functionality to to deliver the immersive, high-quality experience we wanted for Sapphire’s annual, large-format Even in our initial steps, we quickly realized producing virtual events requires thought, time, organization and planning on par with any similar in-person event.
  • 3. Plan with strategic intent: Virtual events are conversation starters, not deal closers Historically, most marketers think about events as moments in time; they’re programs you produce and then you move on.

You’ll Need At Least Two of These Four Qualifications to Get Hired By a Venture Firm

Hunter Walk

  • So I’ve found that when you’re not already ‘in the door’ at a firm (ie went to school with the senior GP’s kids, worked at a startup they backed) that there are four different types of “qualifications” they are seeking.
  • Qualification #3: You understand a specific complex technology that is a current or emerging investment theme for the firm.

How LPs should really think about GP commits in Emerging Managers

Stories by samir kaji on Medium

  • For LPs focused on GP skin in the game, I’d encourage thinking through the following considerations when assessing incentives (Note that some of the below do gear toward the seed and emerging manager industry): What percentage of the GPs Net Worth is committed to the fund (or in the case of a multi-fund firm, how much has been committed to the franchise)?
  • One of the more heuristic measures is assessing the GP’s alignment with them through the percentage of a fund’s commitments that the general partner(s) themselves contribute — In VC this is typically 1–3% of total fund commitments.

Facebook, Twitter and VC firms consider life outside Silicon Valley as they shift to remote work


  • Robert Sammons, senior director of Bay Area Research at Cushman & Wakefield, says that while newer tech hubs will continue to grow over the long term, he expects Silicon Valley to remain relevant.
  • The company told CNBC, “These hubs won’t be offices but physical spaces where people working remotely nearby can gather to attend important training sessions and meetings — and build community.” Twitter’s labor force is likely to grow as well; CHRO Christie recorded a 10x increase in visits to the platform’s jobs portal after CEO Jack Dorsey’s remote-work policy announcement in May.

--Startup of the Week

Fast, a Startup Backed by Stripe, Discusses Billion-Dollar Valuation

Kate Clark, The Information, @KateClarkTweets

Fast, a two-year-old startup whose technology enables quick checkouts online, is in discussions with investors about a new round of financing between $50 million and $200 million. The deal could value the startup at as much as $1 billion, according to two people familiar with the talks.

The discussions, which are in the early stages and could still unravel, come only one year after the company raised a $2.5 million seed round and seven months after it raised a $20 million financing from Stripe at a $180 million valuation. This unusually rapid pace of fundraising reflects heightened investor interest in financial technology startups, even if they have yet to prove their business model. Fast just launched its core product in September.

--Podcasts of the Week

Gillmor Gang: Shaken Not Stirred — TechCrunch


  • By January 20th, a new influencer architecture based on notifications and live streaming will endow the media with tools it needs to lead the transition to safe, secure, hybrid digital/live events.
  • Streaming will give new artists and entrepreneurs a platform to separate influence and impact from lossleader gatherings online, bolstered by association with food and tools delivery winners like Apple and Amazon.

--Tweet of the Week (not quite a Tweet)

When a venture capitalist says “your TAM is too small” they rarely mean “your TAM is too small”

Summation by Auren Hoffman