But I don't wanna live in a dystopian world!!!

Bryan Fogel’s “The Dissident” was too hot to handle.

The documentary about the murder of Jamal Khashoggi, the journalist and political activist who was allegedly killed in 2018 on the orders of the Saudi Royal Family, was one of the hottest films at last year’s Sundance. It had glowing reviews, a ripped from the headlines subject, and a big-name director in Fogel, fresh off the Oscar-winning “Icarus,” a penetrating look at Russian doping that got the country banned from the Olympics.

And yet, Netflix, which had previously released “Icarus,” and other streaming services such as Apple and Amazon steered clear of “The Dissident.” Without any interested buyers, the film languished until last fall. That’s when Briarcliff Entertainment, an obscure distributor run by former Open Road CEO Tom Ortenberg, announced it would release the movie on-demand.

Fogel thinks the subject matter was too explosive for bigger companies, which have financial ties to Saudi Arabia or are looking to access the country’s massive population of well-to-do consumers. Using interviews with Khashoggi’s fiancee Hatice Cengiz, as well as friends and fellow activists, Fogel creates a damning portrait of Crown Prince Mohammed Bin Salman’s apparent involvement in brutally silencing the writer and thinker and the country’s crackdown on free speech. Thanks to previously unreleased audio recordings, “The Dissident” draws a direct line between Khashoggi’s assassination at the Saudi embassy in Turkey and the Saudi government’s anger over his outspoken criticism of the country’s human rights abuses and mismanagement.

“The Dissident” is currently available on-demand, but its rather muted release isn’t the way Fogel had dreamed of provoking a larger conversation around Khashoggi’s murder. He spoke to Variety about the difficulty of making “The Dissident” and then getting it seen and why he thinks his new movie had the major streamers running scared.

Why did you want to make “The Dissident”?

After the success of “Icarus,” I felt a great burden and social responsibility to make a worthy follow-up. I was looking for a story regarding human rights, regarding freedom of speech, freedom of press, journalism. I also wanted a story that had real world implications that could create real world change through social action or political action.

As the investigation into the murder of Jamal unfolded, my ears perked up and I immediately started reading more about this man. I hadn’t heard of him, but I found out how trusted and regarded he was as a voice on the Middle East. He was also being presented in many media circles as a terrorist sympathizer or member of the Muslim Brotherhood or a friend of Bin Laden. This was not true. He was a moderate, who was fighting for free speech for his country and believed women should have rights. He believed Mohammed Bin Salman’s policies were putting the country on the wrong direction.

Was it difficult to get his friends and fiancee and family to speak to you?

It was very very difficult. This is where the accolades and recognition of “Icarus” and the Academy Award really changed the conversation. In those weeks following his death every journalist was after Hatice. As I approached her and other people, they were able to see my prior work. Hatice invited me about a month after his murder to come and meet with her in Istanbul. I didn’t bring a film crew. I spent the next five weeks there just building trust. It was a harrowing time in her life and I just kept explaining that I was not there for a day or a week or a month. I told her: if we do this, we’re going to go on this journey together. I promised that if she let me into her life, I was going to protect Jamal.

At the Sundance premiere, you challenged distributors to “…not be fearful and give this the global release that this deserves.” How did that turn out?

[Netflix CEO] Reed Hastings was there that day and so was Hillary Clinton. We had a standing ovation. People were wiping tears from their eyes as Hatice took the stage. It was the same scene at each one of our screenings. We were blessed with incredible reviews from all of the trades. In any normal circumstance, you’d think of course this film is going to be acquired and distributed. And yet not only was it not acquired and distributed, there was universal silence. Not a single offer. Not for one dollar or not 12 million dollars, which was what was paid for another documentary title at the festival. Nothing. It was literally as if nobody knew me. It was that startling and that shocking.

Six months later Tom Ortenberg and Briarcliff Entertainment stepped forward and said, hey we want to distribute this film. That’s wonderful. People will be able to rent this film on-demand. But what I wanted was for this film to be streaming into 200 million households around the world. I wanted people to have easy access to it. Instead we pieced together global distribution here and there.

Will this have a chilling effect on movies that want to tackle these kinds of controversial subjects?

This is a depressing and eye-opening moment that any filmmaker that wishes to tell a story like this needs to pay attention to. These global media conglomerates are aiding and abetting and silencing films that take on subject matter like this despite the fact their audiences want content like this. I was told that “Icarus” has had somewhere in the neighborhood of 700 million views. I don’t know if that’s accurate, but I know it was substantial. The decision not to acquire “The Dissident” had nothing to do with its critical reviews, had nothing to do with a global audience’s appetite to watch a docu-thriller, but had everything to do with business interests and politics and, who knows, perhaps pressure from the Saudi government. Netflix did remove Hasan Minhaj’s episode of “Patriot Act” [at the Saudi government’s request] in 2019 and defended that decision by saying, “we’re not a truth to power company. We’re an entertainment company.” It has been a struggle to get this film into the world and to shine a light on the human rights abuses that are happening in that kingdom. These companies, that have chosen not to distribute this film, in my opinion, are complicit.

Have you had conversations with these companies about why they didn’t want to release “The Dissident”? If so what has been their response?

It has been to not respond.

Is this about money? Are they wary of angering the Saudi Royal Family because they have money from Saudi Arabia or want to access their market?

My guess is both. Decisions are being made that it’s better to keep our doors open to Saudi business and Saudi money than it is to do anything to anger the kingdom. Netflix released a statement regarding Black Lives Matter that is in direct contrast to their statement regarding Hasan Minahaj. One stands behind truth to power and the other says we’re not a truth to power company, so it appears they are a truth to power company when it is convenient. But when their business doesn’t align with that or it might impact their subscriber growth, they’re not. The same can be said for all the streaming companies. In the film, there’s Jeff Bezos on the stage with Hatice. Jamal worked for Jeff Bezos [at the Washington Post, which Bezos owns]. So the same can be said of Amazon. I don’t want to point a finger at anyone because it’s all of them. This is a situation where business, subscriber growth, investment was more important than human rights. There’s got to be greater accountability. Not just on a business level, but on a political level. Trump vetoed the desire of both the House and the Senate to hold Saudi Arabia accountable for this crime. He continued to sell them weapons. He’s trying to get the Justice Department to grant Mohammed Bin Salman immunity from prosecution.

Would you still work for Netflix or the other streamers who declined to release “The Dissident”?

Listen, this is my career. This is my work. I’m sure that I will have other projects that might not take on subject matter like this and are not at odds with their business interests. When those projects come along, I will be glad to work with any of these companies. Look, I love Netflix. I really, really do. I’m so grateful to them because without Netflix, “Icarus” would not have become what it became. I’m not insulted by this. I’m not personally offended. I don’t view anything that is happening as personal. I just view it as business. I can understand it on a business level. I don’t agree with it, but I get it. I’m not mad. I’m disappointed.

What message do you want viewers will take away from the film?

There’s a hashtag #JusticeForJamal and the question has to become what does justice mean? We know that Mohammed Bin Salman will not stand trial for this murder. We know that the henchmen he sent are unlikely to truly stand trial. We have to look to the future. So what I hope people will take from the film is knowledge, because knowledge is power. Just like “Icarus” or “Blackfish” or “The Cove,” I hope this film has the ability to change hearts and minds. As more and more people come to “The Dissident,” I hope there’s a call to action. I hope that takes place on social media or through writing letters to congressmen or senators. The first thing I hope is people will spread the word. The second thing is I hope they will use the power of free speech that we have in this country and are so blessed to have to change the narrative. The Arab Spring happened because of Twitter, the Black Lives Matter and #MeToo movements took hold because of social media. We’ve seen that through combined action, change can come.

Disclosure: SRMG, a Saudi publishing and media company which is publicly traded, remains a minority investor in PMC, Variety’s parent company.

Unnecessary Arguments - Breaking up the FAANG Companies like Facebook

Person #1: Let’s just agree on one thing - Facebook is trash and will lead to the end of society. Facebook content is trash. Facebook ads are trash. The algorithm is trash, everything about it is horrible, and we would all be better suited torching it and starting over

Person #2: You know that we post these on Facebook, right?

Person #1: Speaking of trash, Instagram is also trash. I look forward to seeing the government put its foot down and tell these tech companies that they can’t take control of the world without consequence. This is unregulated capitalism. This is the reason we have things like the horrific treatment of factory workers at the hands of Apple, or the atrocities committed in the Amazon warehouses

Person #2: Do you actually dislike any of these tech companies, or are you just jealous that you came nowhere close to getting job offers from them?

Person #1: I have always advocated for collections of large open source communities. Let’s do away with these large corporations

Person #2: You mean like Google, the company that has arguably done more for the open source community than any other tech company?

Person #1: That’s completely untrue

Person #2: And how much of an idiot are you? Seriously. All you had to do on that Amazon challenge was use the string find function. Check to see if you get npos. And for the love of everything holy, why did you think it was a good idea to use an array of size one billion instead of the standard unordered map?

Person #1: I was implementing my own unordered map

Person #2: That’s like asking a staff member to please grab you 1000 whiteboard markers during the interview, then throwing 999 away in front of him. But let’s be completely honest here. Do you use Google, Amazon, and Facebook?

Person #1: Yeah, because I have no choice

Person #2: What do you mean? You absolutely have a choice. Delete Facebook. I dare you

Person #1: Ugh

Person #2: Yeah, you can’t. Because they’re the best. At the end of the day, and this is an argument you will never win, they have the best products. We use Google because the most searched result on Bing is how to delete Bing. We use Facebook because myspace was a massive pile of garbage. If we demand that these companies produce lower quality products, then Silicon Valley will no longer be Silicon Valley. Another country, perhaps China, will emerge as the new tech giant. Can you imagine a world where the most popular form of social media is TikTok? TikTok is the worst thing to come out of China since-

Person #1: DON’T SAY IT

Person #2: ...I was about to say “The Great Wall,” starring Matt Damon

Person #1: It wasn’t even bad

Person #2: And what about all the good they’ve done? Google, granting access to all the world’s knowledge thanks to a constantly evolving set of search algorithms. Apple, with its improving hardware. Amazon, with its-

Person #1: Amazon, with its rapid conquest for world supremacy. Amazon doesn’t just deliver the products anymore, it strives to be all the products. Did you know that 13% of their revenue is from AWS? 33% of all cloud is on AWS. So now we have these Amazon foot soldiers who control our goods, our means of production, our delivery, our network infrastructure, and pretty soon our media and our banking

Person #2: I don’t know what you’re talking about with the last one

Person #1: You will soon. An investigation uncovered a private email Zuckerberg sent to his team, describing Instagram as a serious threat that needed to be neutralized

Person #2: I’ve heard that, and I don’t see how it’s damning. Shortly before he died, Steve Jobs asked the Dropbox founder to sell the company. When he refused, Jobs said he would destroy him

Person #1: Case in point

Person #2: No, that’s just how business works. You have a big company. Some smaller company emerges and tries to cut into your market. So you eliminate them

Person #1: Sounds pretty evil to me

Person #2: It’s kind of funny...I’m getting Microsoft vibes from this. Why is Microsoft not part of FAANG? Oh, that’s right, because it’s a BS term that has more to do with the stock market than REAL value

Person #1: Wut

Person #2: The government couldn’t stop Microsoft then because they had no case

Person #1: They couldn’t stop Microsoft then because tech companies are now, in this horrible dystopia we’ve allowed to come into being, more powerful than the government. Democrats hate FAANG companies because they’re such large entities. Republicans hate FAANG companies because they censor the truth

Person #2: What do you mean “censor the truth”?

Person #1: Type “What percent of Trump supporters are racist” into google. It will instantly give you back 50%

Person #2: No it won’t

Person #1: Really? Huh. It used to

Person #2: No it didn’t. And tech companies are just that...Facebook isn’t the news. If you get 100% of your news on Facebook, you deserve to believe that Epstein didn’t kill himself

Person #1: Epstein definitely didn’t...okay I’m not touching that one. You may think this is all a joke now, while there are still little start-ups and such. Not for long. These tech companies will buy out the world like the titans leaving the confines of the walls

Person #2: Did you just make a reference to...stop, I haven’t watched any of the new seasons yet. But if I bend down to your level and use the reference, why not just let the titans fight it out?

Person #1: Google tried to do that with Google+

Person #2: What’s Google+?

Person #1: Exactly

Person #2: Have you seen the Facebook campus? I didn’t even really want to go, I was in a bad mood that day...and it lifted my spirits. All-you-can-eat buffet. The campus is modeled after Disneyland. they had their own ice cream parlor...like, just kind of had this 9-5 ice cream parlor employees could go to whenever they wanted with its own hired staff

Person #1: Stop making it sound like I’m jealous

Person #2: You suck at Leetcode. I get it. Well there’s this book called “Cracking the Coding Interview,” you should definitely check it out instead of just complaining that we should destroy the companies that don’t hire you

Person #1: Enough with your personal attacks

Person #2: You’re right. I want to watch that new Netflix original about that talking panda with a drinking problem

Person #1: See? See what’s happened? Tech is in so many places we’ve forgotten what the Internet is supposed to be about

Person #2: Fine...what is the Internet supposed to be about?

Person #1: Free speech! Free information

Person #2: Well it’s succeeded at that. And it’s only going to get better from here

Person #1: The nightmare is just beginning and the only hope we have is that these lawsuits against Facebook and Google will go through

Person #2: I’ll be sure to Google what you’re talking about later

Pluralist, your daily link-dose: 24 Feb 2020

Today’s links

How “Authoritarian Blindness” kept Xi from dealing with coronavirus: Zeynep Tufekci in outstanding form.

The Snowden Archive: every publicly available Snowden doc, collected and annotated.

Key computer vision researcher quits: facial recognition is a moral quagmire.

My interview on adversarial interoperability: you can’t shop your way out of late-stage capitalism.

81 Fortune 100 companies demand binding arbitration: monopoly and its justice system.

I’m coming to Kelowna! Canada Reads is bringing me to the BC interior, March 5.

A flat earther commits suicide by conspiracy theory: conspiracies are comorbid with corruption.

This day in history: 2019, 2015, 2010, 2005

Colophon: Recent publications, current writing projects, upcoming appearances, current reading

How “Authoritarian Blindness” kept Xi from dealing with coronavirus (permalink)

Xi Jinping’s refashioning of the Chinese internet to ratchet up surveillance and censorship made it all but impossible for the Chinese state to use the internet to detect and contain Corona Virus, writes Zeynep Tufekci in The Atlantic. Tufekci talks about “authoritarian blindness,” where people too scared to tell the autocrat the hard truths makes it impossible for the autocrat to set policy that reflects reality.

https://www.theatlantic.com/technology/archive/2020/02/coronavirus-and-blindness-authoritarianism/606922/

(Cue Mao telling China to “eat 5 meals a day” because his apparats were too scared to warn him of impending famine, then selling off the nation’s food reserves for foreign currency because he thought it was surplus. Food production collapsed.)

Before Xi, a certain amount of online dissidence was tolerated because it helped root out dangerously corrupt local leaders before they could do real damage. It’s always hard to make autocracies sustainable because corruption and looting leaves them hollow and brittle.

When Xi took power in 2012, he restored “one man rule” and began a series of maneuvers, including purges, to consolidate power for himself. The rise and rise of China’s mobile internet made this far more effective than at any time in history.

“Authoritarian blindness” kicked off the Hong Kong protests because the state so badly misjudged the cause and severity of the grievances there. The same thing happened in Wuhan when doctors and netizens faced retaliation for describing early virus outbreaks.

The reality-debt built up by official denial always results in reality bankruptcy, eventually – so finally, the reports of the virus were so widespread and alarming they could no longer be suppressed. But by then, the virus had proliferated. This is an important point: “the killer digital app for authoritarianism isn’t listening in on people through increased surveillance, but listening to them as they express their honest opinions, especially complaints.”

That’s how you stabilize the unstable: by using digital authoritarianism to fine tune the minimum viable amount of good governance to diffuse public anger. It’s how you maximize your looting without getting strung up by your ankles.

The Snowden Archive (permalink)

The Snowden Surveillance Archive collects “all documents leaked by former NSA contractor Edward Snowden that have subsequently been published by news media.”

https://snowdenarchive.cjfe.org/greenstone/cgi-bin/library.cgi

It’s indexed and searchable, created by Canadian Journalists for Free Expression and the Politics of Surveillance Project at the Faculty of Information at the University of Toronto. (Canada is a “Five Eyes” country that partners with the NSA on global mass surveillance)

There’s a “Portable Archive” version – a tarball with all the docs so you can create your own mirror:

https://snowdenarchive.cjfe.org/greenstone/collect/snowden1/portablearchive.html

They provide instructions for turning this into a kiosk they call a “Snowden Archive-in-a-Box.” Costs about CAD120.00

Key computer vision researcher quits (permalink)

Joseph Redmon is the creator of YOLO (You Only Look Once), a key Computer Vision technology. He’s just announced his resignation from computer vision work, citing ethical concerns with Facial Recognition.

https://twitter.com/pjreddie/status/1230523827446091776

His thread is really important, calling out the gap between what ML researchers SAY they want to do about ethics and how they actually deal with ethical issues: “basically all facial recognition work would not get published if we took Broader Impacts sections seriously.”

“There is almost no upside and enormous downside risk.” That’s some serious Oppenheimer stuff right there. The kicker? “For most of grad school I bought in to the myth that science is apolitical and research is objectively moral and good no matter what the subject is.”

My interview on adversarial interoperability (permalink)

The Firewalls Don’t Stop Dragons podcast (which offers information security advice and analysis for non-technical people) just posted part 2 of our interview on Adversarial Interoperability, Right To Repair, and technological fairness.

http://podcast.firewallsdontstopdragons.com/2020/02/24/adversarial-interoperability-part-2/

Part one went live last week:

https://twitter.com/doctorow/status/1229842619380858885

In this one, I try to explain how John Deere’s war on farm-based repairs is connected to Apple’s war on independent repair, and how consumer choices can’t solve either problem — but collective action can!

It’ll take a movement, not individual action. Thankfully, such a movement exists. EFF’s Electronic Frontier Alliance, a network of groups nationwide working on local issues with national coordination. It’s the antidote to individual powerlessness.

https://www.eff.org/electronic-frontier-alliance/allies

81 Fortune 100 companies demand binding arbitration (permalink)

Binding arbitration was originally created as a way for giant corporations to resolve their disputes with each other without decades-long court battles costing tens of millions of dollars. SCOTUS ratified the principal in 1925: firms of similar size and power could use binding arbitration as an alternative to litigation.

http://www.onthecommons.org/magazine/we-now-have-a-justice-system-just-for-corporations

In the century since, corporations have eroded the idea of arbitration as something reserved for co-equals and have turned it into a condition of employment and of being a customer.

In an era of both monopoly and monoposony, it can be hard to find a single employer OR vendor who will conduct business with you unless you first surrender the rights your elected lawmakers decided that you are entitled to.

Today, the largest corporations in the world require you to “agree” to binding arbitration before you can conduct business with them: your monopolistic ISP or cable operator probably does.

As do Walmart, Uber, and Amazon (and not coincidentally, all three have crowded out all the competitors you might choose to take your business to if this strikes you as unfair).

In 2019, SCOTUS ratified the practice.

https://www.cnn.com/2020/02/13/business/binding-arbitration-consumers/index.html

81 out of the Fortune 100 non-negotiably require binding arbitration if you want to conduct business with them. “Arbitration is often confidential and the outcome doesn’t enter the public record” – if you get screwed you won’t know if it’s a one-off or a pattern.

This is especially pernicious in the realm of US health care. There is ONE pain specialist in all of Southern California that my insurer covers who doesn’t require binding arbitration. When I took my daughter to the ER with a broken bone, they threatened not to treat her unless we signed an arbitration waiver – and that ER is now owned by a PE firm that bought every medical practice in a 10mi radius and now they all do it.

We are literally replacing public courts with private corporate justice, where the “judge” is paid by the company that maimed you, or ripped you off, or killed you.

I’m coming to Kelowna! (permalink)

I’ve never been to Kelwona, BC or anywhere in BC apart from Victoria and Vancouver, so I am SO TOTALLY EXCITED to be appearing in Kelowna for Canada Reads on Mar 5. Please come and say hello! (it’s free!)

https://www.eventbrite.ca/e/cbc-radio-presents-in-conversation-with-cory-doctorow-tickets-96154415445

The event is a collaboration between the Kelowna Public Library and CBC Books, and I’m being emceed and interviewed by Sarah Penton. It’s going to be recorded for airing later as well (I’ll be sure to fold it into my podcast, which you can get here: http://craphound.com/podcast/)

A flat earther commits suicide by conspiracy theory (permalink)

A(nother) flat-earther has tried to prove that the Earth is disc-shaped by launching a homemade rocket. This one (“Mad” Mike Hughes) killed himself by pancaking into the desert.

https://www.nbcnews.com/news/us-news/daredevil-mad-mike-hughes-dies-homemade-rocket-launch-filmed-tv-n1141286

This is awful. Jokes about “Darwin Awards” don’t change that.

When you scratch a conspiracist, you generally find two things:

Someone who knows chapter-&-verse about real conspiracies (e.g. “If you think antivax is so outlandish, let me tell you about the Sackler family”)

Someone who has been traumatized by conspiracies (belief that the levees were dynamited during Katrina to drown Black neighborhoods are often embraced by people whose family were flooded out in 58 when the levees in Tupelo were dynamited to drown Black neighborhoods).

A belief that the aerospace industry engages in coverups and conspiracies is not, in and of itself, irrational. Aerospace is the land of conspiracies and coverups. Look at the Boeing 737 Max!

Conspiracies are an epiphenomenon of market concentration. “Two may keep a secret if one of them is dead”: the ability to conspire is a collective action problem, wherein linear increases in the number of conspirators yield geometric increases in the likelihood of defections. When an industry is reduced to 3-5 giants, the likelihood is that every top exec at each company worked as a top exec at one or more of the others (to say nothing of the likelihood of intercompany friendships, marriages, etc). Moreover, an industry that concentrated will almost certainly be regulated by its own former execs, as they are likely the only ones qualified to understand its workings.

Many of us were appalled by the sight of the nation’s tech leaders gathered around a table at Trump Tower after the inauguration.

But we should have been even more alarmed by the realization that all the leaders of the tech industry fit around a single table.

We are living in both a golden age of conspiratorial thinking and of actual conspiracies. The conspiracy theories don’t necessarily refer to the actual conspiracies, but “conspiracy” is a plausible idea with a lot of explanatory power in 2020.

We spend a lot of time wondering about how we can fix the false beliefs that people have, but some of our focus needs to be on reducing the plausibility of conspiracy itself. Make industries more competitive and diverse, make regulators more accountable.

Put out the fires, sure, but clear away the brush so that they don’t keep reigniting.

I strongly recommend Anna Merlan’s REPUBLIC OF LIES for more.

https://boingboing.net/2019/09/21/from-opioids-to-antivax.html

This day in history (permalink)

#15yrsago: Labour MP Brian Sedgemore excoriates his own government’s terror laws in the speech of his lifetime: https://web.archive.org/web/20050227035611/http://www.publications.parliament.uk/pa/cm200405/cmhansrd/cm050223/debtext/50223-21.htm

#10yrsago: How ducks, Nazis and themeparks gave America its color TV transition: https://www.theguardian.com/technology/2010/feb/23/digital-switchover-bbc-spectrum

#5yrsago: Alex Stamos, then CSO of Yahoo, publicly calls out then-NSA Director Adm. Mike Rogers on crypto backdoors: https://arstechnica.com/tech-policy/2015/02/yahoo-exec-goes-mano-a-mano-with-nsa-director-over-crypo-backdoors/

#5yrsago: A chronology of the Canadian Conservative Party’s war on science under PM Stephen Harper: https://scienceblogs.com/confessions/2013/05/20/the-canadian-war-on-science-a-long-unexaggerated-devastating-chronological-indictment

#5yrsago: Citizenfour, Laura Poitras’s movie about Edward Snowden, wins the Academy Award for best documentary: https://www.aclu.org/press-releases/edward-snowden-congratulates-laura-poitras-winning-best-documentary-oscar-citizenfour

#1yrago: Every AOC staffer will earn a living wage: https://www.rollcall.com/2019/02/22/alexandria-ocasio-cortezs-call-for-a-living-wage-starts-in-her-office/

#1yrago: Richard Sackler’s “verbal gymnastics” in defending his family’s role in killing 200,000 Americans with opiods: https://arstechnica.com/science/2019/02/sackler-behind-oxycontin-fraud-offered-twisted-mind-boggling-defense/

#1yrago: German neo-Nazis use Qanon memes to signal-boost their messages: https://www.thedailybeast.com/how-fringe-groups-are-using-qanon-to-amplify-their-wild-messages

#1yrago: French courts fine UBS €3.7b for helping French plutes dodge their taxes: https://www.thelocal.fr/20190220/breaking-french-court-hits-swiss-bank-ubs-with-37-billion-fine-in-french-tax-fraud-case

#1yrago: Apple to close down its east Texas stores to avoid having any nexus with America’s worst patent court: https://www.macrumors.com/2019/02/22/apple-closing-stores-in-eastern-district-texas/

#1yrago: Small business cancels its unusably slow Frontier internet service, Frontier sticks them with a $4,300 cancellation fee: https://arstechnica.com/information-technology/2019/02/frontier-demands-4300-cancellation-fee-despite-horribly-slow-internet/

#1yrago: Fast food millionaire complains that social media makes kids feel so entitled that they are no longer willing to work for free: https://amp.news.com.au/finance/work/careers/muffin-break-boss-fury-over-youth-who-wont-work-unpaid/news-story/57607ea9a1bbe52ba7746cff031306f2

#1yrago: Apps built with Facebook’s SDK shovel incredible quantities of incredibly sensitive data into Facebook’s gaping maw: https://www.cnbc.com/2019/02/22/facebook-receives-personal-health-data-from-apps-wsj.html

#1yrago: Super-high end prop horror-movie eyeballs, including kits to make your own: https://fourthsealstudios.com/

#1yrago: EU advances its catastrophic Copyright Directive without fixing any of its most dangerous flaws: https://arstechnica.com/tech-policy/2019/02/european-governments-approve-controversial-new-copyright-law/

Colophon (permalink)

Today’s top sources: Four Short Links (https://www.oreilly.com/feed/four-short-links), Slashdot (https://slashdot.org), Naked Capitalism (https://nakedcapitalism.com/”).

Hugo nominators! My story “Unauthorized Bread” is eligible in the Novella category and you can read it free on Ars Technica: https://arstechnica.com/gaming/2020/01/unauthorized-bread-a-near-future-tale-of-refugees-and-sinister-iot-appliances/

Upcoming appearances:

Canada Reads Kelowna: March 5, 6PM, Kelowna Library, 1380 Ellis Street, with CBC’s Sarah Penton https://www.eventbrite.ca/e/cbc-radio-presents-in-conversation-with-cory-doctorow-tickets-96154415445

Currently writing: I just finished a short story, “The Canadian Miracle,” for MIT Tech Review. It’s a story set in the world of my next novel, “The Lost Cause,” a post-GND novel about truth and reconciliation. I’m getting geared up to start work on the novel now, though the timing is going to depend on another pending commission (I’ve been solicited by an NGO) to write a short story set in the world’s prehistory.

Currently reading: I finished Andrea Bernstein’s “American Oligarchs” this week; it’s a magnificent history of the Kushner and Trump families, showing how they cheated, stole and lied their way into power. I’m getting really into Anna Weiner’s memoir about tech, “Uncanny Valley.” I just loaded Matt Stoller’s “Goliath” onto my underwater MP3 player and I’m listening to it as I swim laps.

Latest podcast: Persuasion, Adaptation, and the Arms Race for Your Attention: https://craphound.com/podcast/2020/02/10/persuasion-adaptation-and-the-arms-race-for-your-attention/

Upcoming books: “Poesy the Monster Slayer” (Jul 2020), a picture book about monsters, bedtime, gender, and kicking ass. Pre-order here: https://us.macmillan.com/books/9781626723627?utm_source=socialmedia&utm_medium=socialpost&utm_term=na-poesycorypreorder&utm_content=na-preorder-buynow&utm_campaign=9781626723627

(we’re having a launch for it in Burbank on July 11 at Dark Delicacies and you can get me AND Poesy to sign it and Dark Del will ship it to the monster kids in your life in time for the release date).

“Attack Surface”: The third Little Brother book, Oct 20, 2020.

“Little Brother/Homeland”: A reissue omnibus edition with a very special, s00per s33kr1t intro.

The Amazon-ification of America

By Steven Miller 8-14-2020

Last week, tech leaders spoke to Congress on Capitol Hill. Google’s Sundar Pichai, Facebook CEO Mark Zuckerberg, Apple CEO Tim Cook and Amazon CEO Jeff Bezos all spoke from prepared remarks. As the US economy shrank by 32.9%, Amazon’s share price rose by half, and Facebook’s growth rate approached 60%.

Congresspeople were supposedly “grilling” these uber-capitalists, but they were politely slobbering at their wealth. Since COVID began, American billionaires have made $637 billion, while 50 million people have lost their jobs. Timidly asking these billionaires questions about monopoly practices, the politicians refuse to address how this mega-wealth could be used to help people out in the greatest collapse in the history of capitalism.

Tech capitalism is fomenting the Amazon-ification and the Google-ization of America, right now in real time. This will culminate in a major re-organization and the State. This is class warfare on the rights of humans to control their own basic needs to live and thrive. Private property is on the march to seize every resource of the public and to re-organize society in its own image.

Microsoft has controlled the Pentagon’s cloud computing efforts since October, 2019. Big tech is constantly making inroads into the military, including $11 billion in contracts in the last 3 years.:

“’As we continue to execute the DOD Cloud Strategy, additional contracts are planned for both cloud services and complementary migration and integration solutions necessary to achieve effective cloud adoption,’ the Pentagon said”. (https://www.reuters.com/article/us-pentagon-jedi-idUSKBN1X42IU)

Then just look at what we are already seeing! Capitalism’s massive collapse as a result of COVID means that an estimated 40% of African-American business will not open. One-third of restaurants will never open again.

What happens when the restaurants close? People increasingly order online. Big Tech becomes ever more dominant. Then Big Box stores enter the scene and become the only places that provide the distribution of the necessities of life. Private equity corporations and hedge funds actively finance this extermination. Amazonification aims far higher than replacing mom and pop stores. It also rises to counter the demand for the domination and extension of public property to benefit everyone..

Then Rent Apocalypse is about to hit, with multi-billion dollar corporations waiting to evict up to 28 million people by Thanksgiving. This tidal wave is lead by Blackstone, the world’s largest private equity management corporation. Blackstone works closely with Blackrock, the world’s largest asset-manager, and shadow bank to the world, which was founded in partnership with Blackstone in 1988. While Blackstone proclaims that the rentership society is here, Blackrock manages the government multi-trillion bailout for financial speculators and the financial industry. By driving millions out of their homes, these criminals will keep the homes empty, and turning them into rentals, in an attempt to extract more wealth from our communities..

“Today the fast-growing ETF (“exchange-traded funds) sector controls nearly half of all investments in US stocks, and it is highly concentrated. The sector is dominated by just three giant American asset managers – BlackRock, Vanguard and State Street, the “Big Three” – with BlackRock the clear global leader. By 2017, the Big Three together had become the largest shareholder in almost 90% of S&P 500 firms, including Apple, Microsoft, ExxonMobil, General Electric and Coca-Cola….

“Giant pension and other investment funds largely control the stock market, and the asset managers control the funds. That effectively puts BlackRock, the largest and most influential asset manager, in the driver’s seat in controlling the economy.”

(https://www.counterpunch.org/2020/06/24/meet-blackrock-the-new-great-vampire-squid/)

These corporations are hell-bent on impose extractive capitalism on our communities and families. This model that vacuums wealth and information out of communities and sends it to the top. Oh yes, and what about the morality of evicting people to live on the street in the middle of a pandemic? Oh well, it’s just collateral damage.

That, of course, is what the Amazon-ification of America is all about. No longer even pretending to offer jobs, the capitalist class, lead by Big Tech, is re-organizing the economy and the government to extract wealth and give it to themselves.

Before COVID hit, the government had already authorized “Opportunity Zones” in 2017 to re-invest in impoverished American communities. Such predatory gentrification and dispossession is beloved by both Jared Kushner and Gavin Newsome. The giant capitalist equity companies and hedge funds are now in charge.

From “Displacement Zones: How Opportunity Zones Turn Communities into Tax Shelters for the Rich”:

“Boosters promised Opportunity Zones would help bring capital to the neighborhoods that most need it, but in reality allow wealthy investors to benefit from huge tax breaks while they speculate at the expense of the most vulnerable communities. The structure of the Opportunity Zones program was designed with the interests of speculators, not communities, in mind. Communities living inside many Opportunity Zones across the country are already experiencing rapid changes. Unregulated speculative investment will throw even more fuel on the fire. The Opportunity Zones program will exacerbate an already unbearable

“Opportunity Zones were created by the rich, for the rich.

“Opportunity Zones are an invention of the Silicon Valley millionaire-backed Economic Innovation Group, and contain some of the most generous tax breaks currently available. The program gives capital gains tax exemptions that scale up based on the length of time an investment is held, eventually culminating in a 15% reduction in the taxable basis of the principal, and complete tax exemption of any profits made on the investment after 10 years. Because the distribution of capital gains income is highly unequal, the overwhelming majority of these tax benefits will flow directly to the richest investors in the country. Indeed, 90% of all capital gains income in the United States is owned by the wealthiest 10% of people, and 70% of all capital gains is owned by the wealthiest 1%.”         (www.saje.net/.../2019/11/SAJE_DisplacementZones.pdf)

This was before COVID. The virus is now aggravating and amplifying every tendency that existed before its advent. It should be no surprise, therefore, that New York Andrew Cuomo recently invited Google and Microsoft into the state to “re-imagine” the new world where Big Tech companies seize control of telehealth, public education and the entire society.

In other words, Cuomo is abrogating the responsibilities of government to guarantee a safe and healthy environment for everyone and turning this charge over to corporations. They, of course, will place private profit above the public good.

“This is a future in which, for the privileged, almost everything is home delivered, either virtually via streaming and cloud technology, or physically via driverless vehicle or drone, then screen “shared” on a mediated platform. It’s a future that employs far fewer teachers, doctors, and drivers. It accepts no cash or credit cards (under guise of virus control) and has skeletal mass transit and far less live art. It’s a future that claims to be run on “artificial intelligence” but is actually held together by tens of millions of anonymous workers tucked away in warehouses, data centers, content moderation mills, electronic sweatshops, lithium mines, industrial farms, meat-processing plants, and prisons, where they are left unprotected from disease and hyperexploition. It’s a future in which our every move, our every word, our every relationship is trackable, traceable, and data-mineable by unprecedented collaborations between government and tech giants.

“If all of this sounds familiar it’s because, pre-Covid, this precise app-driven, gig-fueled future was being sold to us in the name of convenience, frictionlessness, and personalization.”         (https://naomiklein.org/the-screen-new-deal/)

The Social Response

Yes, the US capitalist class could have responded to the virus by taking steps, similar to Europe, to make things easier, but it didn’t. Now that the capitalist class is doubling down to make ever greater political and private profit from the crisis, we have already seen a decisive social force take the political stage. Two new generations have now mounted the stage of history. The great mass of protestors, though not all, in the massive George Floyd rebellion came from these new generations.

Millennials are roughly those who were born after 1980 and came to political awareness in 2000 or after, and who came into political maturity around 2000. This year they would be 40 years old. Rising behind them is he generation that came to political maturity with the Parkland Massacres in 2018, often called Gen Z by the corporate media. There are 74 million people in the US in this group who were born between 1995 and 2015.

These generations intend to assert their agency. They understand that their future will be there long after the Boomers have passed on. They intend to take control of the situation. For these generations, the American Dream is a hollow antiquated notion. They understood already that their future was imperiled with Climate Crisis. They already were the primary casualties of the digitally-driven laborless-production that is sweeping through every branch of the economy. Somehow, they must survive the Gig Economy that is consuming them. They are a substantial part of a new proletarian class, one that is being replaced by digitally-driven production.

The new social force already clearly holds government for guaranteeing the safety of the public. This issue began with the murder of Trayvon in 2012, and escalated with the response to Michael Brown’s and Eric Garners murders, to name a few. It expresses itself as righteous rage at white supremacy and police murder. And it correctly holds the government and the State accountable. This rising demand for the public good threatens to overflow the narrow limits that the Democratic Party tries to impose. Voices from myriad directions have been asserting that if government cannot do the job, we know very well how to govern ourselves and society.

This new proletarian class has much to learn, but objectively it cannot back down. We are witnessing the concretization for our times of Lenin’s famous statement that revolutions begin when the working class cannot live in the old way and the ruling class cannot rule in the old way.

As society is drawn further into political crisis with re-opening schools, massive voter suppression and an election that may well be suborned, the social response, sooner or later, will build its political consciousness. As Engels observed long ago, the people today are transforming themselves into the people of tomorrow:

“You will have to go through 15, 20, 50 years of civil wars and national struggles not only to bring about a change in society but also to change yourselves, and prepare yourselves for the exercise of political power.” [Revelations concerning the Communist Trial at Cologne]

Steven Miller

August 9, 2020

Steven Miller is a retired public school science teacher in Oakland, California

Do As Buffett Does

Warren Buffett, the best investor of our lifetime, gave an interview on CNBC this past week. While he may still advocate passive investing for you, his personal choice is anything but. He runs a concentrated investment portfolio with one position, Apple, now over 25% of his investable assets.

Here’s what he shared in his interview:

US economy is humming.

Operating earnings, cash flow and free cash flow are very strong.

Inflationary pressures are intensifying.

Trade issues will be resolved.

Stocks are easily his asset class of choice over bonds and real estate.

He is buying stocks.

He is still having trouble buying whole companies, as the premium to buy is almost prohibitive. This comment is telling as he is really saying that the private value of companies far exceeds their current public values, hence today’s prices are undervalued.

Corporations, such as Apple, are huge buyers of their own stock and would welcome any price weakness to buy more shares at lower prices providing downside support.

Buffett is a true investor with a long-term perspective, but we can assure you that he hates losing money so if he is buying today, that says a lot. He mentioned buying back some Berkshire shares recently, too, under their new company guidelines to shrink the cap as long as it is under the intrinsic value of the shares rather than using stated book. That action is meaningful as Berkshire is essentially a giant holding company owning a cross-section of America ranging from insurance to rails to energy to retailing to housing to chemicals to aerospace components and so on.

So when the Oracle speaks, you better listen. No one has a better read on the economy or a greater sense of value than he. If Buffett sees opportunities in the stock market today, you should too. But always keep reserves and never use leverage to be able to take advantage of dips. Do as Buffett does.

Thank you, Warren, for your common sense and well-thought out view of the investable landscape. We resoundingly agree.

The markets finished the week and month on a high point for the year despite all the noise about trade and troubled areas abroad. If you traded based on all the continuous sound bites, you would have gotten whipsawed! The pundits keep crying wolf although the domestic house keeps hitting on all cylinders. This is not to say that we, as well as Buffett, are not cognizant of all the issues/potential problems and risks facing us. We factor them all in taking a longer term view looking over the valley owning great companies with winning strategies regardless of what may happen. And we outperform all indices, too.

Let’s take a look at what was reported around the globe during the normally slow, summer ending week:

1. The US continues to be the engine of global growth with strong consumer demand along with acceleration in business real and nominal growth, profitability, cash flow; and capital spending. Yes, the US is hitting on all cylinders as we move into the fall. We expect very strong Christmas retail sales.

Inflationary pressures are intensifying as Buffett mentioned, but we expect them to moderate as productivity accelerates offsetting wage increases next year. The all-important core PCE index, excluding food and energy, rose 0.2% in July from June and 2% from a year ago. We have not altered our view of Fed policy expecting a hike in the Federal Funds rate in September and most likely again in December.

We expect second-half real growth around 3% and only slightly less real growth next year. S & P earnings are likely to exceed $162/share in 2018 and $175/share in 2019. We see inflation hanging around 2% excluding any one-time impact from trade tariffs, which we do deem transitory as trade deals are reached.

2. Trade issues remain the number one news story around the world as it impacts everyone in some manner. The US successfully concluded a deal with Mexico but failed to cross the finish line with Canada. Politics rather than economics seems the over riding issue preventing a deal. The simple truth is that Canada needs a deal much more than the US, which plays into Trump’s hand. Exports to the US are three quarters of total exports and nearly one fifth of their total GNP. We wished that Trump took a more conciliatory tone towards our neighbors, as it would only improve the chances of closing a deal.

The US will mostly likely impose tariffs on an additional $200 worth of Chinese goods shortly. China is unable to reciprocate in kind but will most likely use other tactics to show that they are not paper tigers. We still see a chance that negotiators from the Eurozone and Japan will join with us dealing with China on trade, the WTO and protecting IP but only after deals are reached with each one.

We remain optimistic that trade deals will be reached with our allies over the next 6-9 months followed by one with China next year after our elections. As trade deals are reached, we expect acceleration in growth in those regions. Global growth has been stunted by all the trade talks, as businesses need some certainty before moving forward on hiring and spending plans.

3. China’s manufacturing gauge surprisingly picked up slightly in August. We continue to believe that China’s economy will decelerate meaningfully over the next six months despite government actions to stimulate growth by accelerating bank lending reversing earlier policies to strengthen the financial system, cutting taxes and pushing local governments to increase infrastructure spending.

China needs a deal more than us, so don’t believe all the government bravado that the country can sustain its growth despite US trade tariffs. In fact, there is some dissension in the ranks and cracks in President Xi’s stance on China 2025.

By the way, there is a bill in Congress doubling our funding for big infrastructure projects around the world to over $60 billion to counter China’s ambitious One Belt, One Road Initiative. Someone apparently woke up in DC.

4. India, the world’s 6th largest economy, reported a sensational second quarter with real growth over 8 percent. PM Modi has done an outstanding job promoting pro-growth, pro-business policies that are finally showing positive results throughout the economy. Walmart, Amazon and Alibaba’s focus on India is just one indication of the country’s future potential.

5. Eurozone economic activity and inflation weakened in August as anticipated. The ECB has no alternative but to maintain an overly easy monetary policy as growth in consumer demand/employment is not sufficient to offset weakness in exports. The Eurozone no doubt needs a trade deal before growth can re-accelerate. We remain concerned that Germany is moving to increase its dominance over the ECB to the detriment of its southern partners, especially Italy.

Let’s wrap this up.

We agree with Buffett that the US is the place to invest for all the reasons mentioned previously. In fact, our markets are undervalued based on S & P earnings over $167/share over the next twelve months with 10-year treasury bond yields under 2.85%. The truth is that the market multiple should be north of 19 today as financial risk factors are down with bank capital and liquidity ratios at all time highs. The market is selling with a Trump discount due to his unpredictability as he brings uncertainty into the marketplace. While we agree with most of his financial and economic policies, we hate his delivery and bully tactics dealing with our friends and foes alike. But that creates opportunity too for long-term investors like Buffett and us willing to look over the valley and invest for the long term.

Listening to the eulogies Saturday for John McCain only reinforced our belief that both parties need to come together for the common good of the country over party. He was a rebel with a cause that was to make America a better place, a beacon for all. We need many more like him. God bless him.

Paix et Prospérité has not altered its asset mix nor risk controls over the last several months. We remain long stocks, short bonds and have gone to a neutral dollar position as we expect dollar strength to weaken as trade deals get closer a la Mexico and overseas growth reaccelerates later in the year into 2019.

Our portfolios continue to be concentrated in the strongest US financials gaining market share; global capital goods and industrial companies; technology stocks selling at a fair multiple to growth; low cost, market dominant industrial commodity companies generating huge free cash flow; consumer nondurable and healthcare companies with strong unit growth and expanding pipelines; and many special situations where internal change will add to shareholder value. The common thread is great management, great financials and market leading technology selling at a discount to intrinsic value like Berkshire.

So remember to review all the facts; pause, reflect and consider mindset shifts; look at your asset mix with risk controls continuously; do independent research and…

Invest Accordingly!

Bill Ehrman Paix et Prospérité LLC

Wall Street Rebels Against Exxon The little Engine … Exxon Mobil suffered a stunning loss at its annual shareholder meeting yesterday, as a small new activist investor focused on climate change, Engine No. 1, won at least two seats on its 12-member board. To corporate America, the upset was a clear sign that company boards and leaders need to pay attention to environmental, social and governance issues (known as E.S.G.) — or suffer rebukes. A big splash for a tiny fund. Exxon was the first activist campaign for Engine No. 1, which was founded last year by the energy and tech investor Chris James. Its head of active engagement is Charlie Penner, a veteran hedge fund executive who helped lead campaigns against companies like Apple while at Jana Partners. It was a victory long in the making. Engine No. 1 began agitating against the oil giant in December, calling on the company to diversify away from fossil fuels and reduce its carbon emissions. But it began work on the campaign last March, courting large investors like public pension funds that held far larger stakes in Exxon, and thus had more sway. That’s how it parlayed a stake of just 0.02 percent into seats on the oil giant’s board — a truly remarkable feat. Exxon’s shares rose 1.2 percent yesterday. Sources with knowledge of the matter told DealBook that the fund was betting on a confluence of events, including longstanding investor dissatisfaction with Exxon’s corporate governance and a growing appreciation on Wall Street for E.S.G. In a note explaining why it backed three of Engine No. 1’s board candidates, BlackRock — which owns nearly 7 percent of Exxon — said the company’s directors “need to further assess the company’s strategy and board expertise against the possibility that demand for fossil fuels may decline rapidly in the coming decades.” Exxon largely played down Engine No. 1’s concerns, and pressured the firm to drop its challenge after a much bigger hedge fund, D.E. Shaw, called off a campaign. But Engine No. 1 persisted, and also benefited from timing: It began its campaign while oil prices were still depressed by the pandemic. Had oil not rebounded in recent months, Engine No. 1 executives believe, all four of its directors might have been elected. Big Oil is facing a reckoning. A Dutch court ruled yesterday that Royal Dutch Shell must speed up its efforts to cut its carbon emissions. And Chevron shareholders backed a proposal to compel the company to help customers reduce their own emissions. One question we have: Is Darren Woods, Exxon’s C.E.O., who pushed back forcefully against Engine No. 1, now at risk of losing his job? HERE’S WHAT’S HAPPENING The Justice Department opens an inquiry into Archegos. Prosecutors have asked some of the fund’s lenders for information about its meltdown, Bloomberg reports. The rare blood clots associated with Covid-19 vaccines may have a fixable explanation. German scientists theorize that a feature of the AstraZeneca and Johnson & Johnson shots, one they say could be modified, may be responsible. Russia puts pressure on U.S. tech giants. Moscow’s internet regulator now regularly demands that Facebook, Google and Twitter comply with its content restrictions and data storage requirements, or risk losing access to Russian users. It’s the latest instance of governments squeezing Silicon Valley companies. Ford pours billions more into electric vehicles. The company will increase spending on the technology by a third, to $30 billion. It now expects 40 percent of the vehicles it produces worldwide to be electric by 2030. Purdue Pharma’s restructuring plan is set for a vote. The judge overseeing the OxyContin maker’s bankruptcy case said he would let the company’s proposal — in which it would become a nonprofit, and both it and its founding Sackler family would be shielded from future legal liability — be voted on by 614,000 claimants. A culture of fear at the Gateses’ investment firm Bill Gates’s longtime money manager, Michael Larson, bullied co-workers, made sexually inappropriate comments and engaged in a broad pattern of inappropriate workplace behavior, an investigation by The Times found. For the past 27 years, Larson has run Cascade Investment, also sometimes known as Bill and Melinda Gates Investments (B.M.G.I.), which manages the Gateses’ enormous fortune. Among The Times’s findings: Larson made inappropriate comments about female employees. At a work party in the mid-2000s, he asked male employees which of three female colleagues they would want to have sex with. In another case, he asked an employee who was on a Weight Watchers program, “Are you losing weight for me?” Larson denied making any of the comments. A racist comment from Larson led to an internal investigation. When a Black employee mentioned on Election Day that she had not had to wait in line to vote, Larson replied, “But you live in the ghetto, and everybody knows that Black people don’t vote.” A spokesman for Larson, Chris Giglio, denied that he made the remark. At least one employee reported it to human resources, resulting in an internal investigation. Larson was known for “Larson bombs.” In emails, he sometimes called colleagues “stupid” or their work “garbage.” Some employees were moved to different floors in order to put distance between them and him. “Years ago, earlier in my career, I used harsh language that I would not use today,” Larson said. “I regret this greatly but have done a lot of work to change.” “Any issue raised over the company’s history has been taken seriously and resolved appropriately,” said Bridgitt Arnold, a spokeswoman for Bill Gates. Courtney Wade, a spokeswoman for Melinda French Gates, said, “Melinda unequivocally condemns disrespectful and inappropriate conduct in the workplace. She was unaware of most of these allegations given her lack of ownership of and control over B.M.G.I.” Today in Business Updated  May 26, 2021, 4:06 p.m. ET “During his tenure, Mr. Larson has managed over 380 people, and there have been fewer than five complaints related to him in total,” said Giglio, Larson’s spokesman. “Any complaint was investigated and treated seriously and fully examined, and none merited Mr. Larson’s dismissal.” Overdraft math lessons Yesterday, the Senate Banking Committee held a three-hour hearing with C.E.O.s from the country’s six biggest banks. It lacked much of the heat of sessions in the aftermath of the financial crisis, when Congress routinely castigated Wall Street chiefs. (The C.E.O.s gather again today for a hearing in the House.) The most contentious moment came when Jamie Dimon of JPMorgan Chase felt the wrath of Senator Elizabeth Warren, Democrat of Massachusetts. Warren was a teacher before entering politics; she revealed her roots when she took Dimon and others to task for charging overdraft fees during the pandemic. The four biggest banks took $4 billion in overdraft fees from customers last year, Warren said. She singled out Dimon, asking him how much his bank, the nation’s largest, collected in 2020. “I think your numbers are totally inaccurate,” he countered. Dimon noted that JPMorgan waived fees upon request, didn’t go into overdraft at the Fed (which had waived its fees for banks), and provided $120 million in Covid relief. The senator kept pressing and finally provided the figure herself: “It’s $1.463 billion dollars.” “I did the math for you,” Warren said, calling their claims about stepping up during the pandemic “about $4 billion dollars’ worth of baloney.” When challenged to return the fees, none agreed. She asked Dimon directly twice, and he said “no” twice. Amazon, MGM and the streaming wars Amazon said yesterday that it would acquire the 97-year-old film and television studio MGM for $8.45 billion — about 40 percent more than what other potential buyers, including Apple and Comcast, were willing to pay. The deal reportedly made MGM’s owner, the hedge fund Anchorage Capital, a $2 billion profit. DealBook talked with Brooks Barnes, a reporter at The Times who covers Hollywood, about why Amazon was willing to pay so much and what this means for the streaming wars. Are Amazon’s motives different from other streaming platforms’? Amazon is mostly in the Prime membership business, whereas Netflix wants to sell subscriptions purely to its TV and movies. If you’re Amazon, you want to bolster Prime Video to make people even happier to pay for a Prime membership. Is there a risk that regulators won’t allow the deal? The regulatory scrutiny will be considerable. Representative Ken Buck and Senator Amy Klobuchar, both of whom have important antitrust roles, immediately voiced concern because Amazon is Amazon. But the deal is unlikely to be scuttled because MGM is relatively small and so is Amazon Studios. What does the acquisition mean for the streaming wars? If you’re Apple, you’re probably looking around and thinking, well, we don’t have a library, we don’t have a big franchise of our own. Do we need to go out and buy? People think that it will increase the pressure on other streaming services to bulk up. And that’s becoming harder, right? It’s becoming harder, which is partly, I’m sure, how Amazon justified some of the price. Disney isn’t for sale. Sony has repeatedly said its TV and movie operation is not for sale. It’s also becoming harder in part because the corporate sibling studios are not licensing out as much — they’re supplying their own streaming services. More takes on the deal: Jason Hirschhorn, a former MGM board member, has been thinking out loud on Twitter about the deal, including the intriguing possibility that Amazon could buy out the family that controls MGM’s James Bond franchise, gaining more freedom to expand the Bond “universe.” Brad Stone, the author of the new book “Amazon Unbound,” shared Jeff Bezos’s 12 ingredients for hit shows. MGM owns the rights to “The Apprentice,” including unaired material that some claim contains unflattering footage of the reality show’s former host, Donald Trump. The tapes’ contractual status is unclear, but the notion that they might belong to Bezos, a frequent target of Trump’s ire when he was president, has set tongues wagging. THE SPEED READ Deals HSBC plans to sell or close most of its U.S. retail branches, as it focuses on Asia. (WSJ) Investors in Bill Ackman’s $5 billion SPAC are increasingly worried that it won’t strike a deal. (Institutional Investor) Politics and policy How Covax, the multibillion-dollar global vaccination program backed by governments and drug makers, ran aground. (WSJ) Tech Best of the rest A record number of American workers tested positive for marijuana last year. (Insider) The white woman who called police on a Black bird-watcher in Central Park last year sued her former employer, Franklin Templeton, for firing her over the incident. (NYT) We’d like your feedback! Please email thoughts and suggestions to [email protected]. Source link Orbem News #Exxon #rebels #Street #Wall

(Ir)rational investing

Summary

Human beings are generally not rational, and as an extension of that, they often do not make sound choices.

Emotions do have a place in successful investing.

Our emotions are all-encompassing and need to be acknowledged in our investment-making decisions.

 INVESTORS (AND HUMAN BEINGS) ARE NOT ALWAYS RATIONAL

In particular, those who invest purely on how they feel emotionally about an investment, not an objective assessment by a trained analyst, a witty television personality like Jim Cramer, or even a Wall Street Journal article with a certain hell-bent opinion on your garden variety S&P 500 sector. And the fact that many of our decisions in life are based on our emotions, it can be extrapolated that many investment decisions are driven by emotions as well.  To be sure, ad nauseum, this could be seen in the late 1990's and early 2000’s when by the mere fact that a particular company had a presence on the Internet, which was still considered a new and exciting idea, meant that it was worthy of huge commitments of capital both by retail and institutional investors alike (yawn).

The psychology of rational and irrational investing lies in some concepts such as fight or flight.  Or, more specifically, our adrenal glands which help regulate our response to stress.  An awareness of the fight-flight-freeze response, and thus how our adrenaline helps and hinders our judgements, is important on so many levels, inside and outside of the daily grind of the stock market.  For example, how you deal with your temperamental ten year old not wanting to do his homework every night or trying nicely to ask your significant other to scooch over on the couch so you can stretch your legs a little more.  Both subtle, but real, examples of how we deal with our brimming emotions.  Fight or flight is an unconscious physiological reaction to stress. Basically, most of us are not always aware that we are reacting to external stimuli. At the office, whether it is someone we don’t care for walking by our desk, in the summer, an annoying yellow jacket buzzing around our head, or the dizzying daily events like seeing analysts’ reactions to disappointing guidance by Salesforce and then the stock plummeting 20 points after the session close. We react to these things in different ways, depending on the event, and depending on the person. For example, some folks do not care who walks by their desk at 9 am every morning or whether or not that person is someone they’d like to invite out for a drink after work. Others brood when a colleague of whom does not share the same political views about tax policy or climate change saunters past their cubicle with that same, annoying, shuffling walk at lunchtime every day. That is the essence of fight or flight. An event that causes an emotional disturbance due to our primal nature to save ourselves from being harmed or killed. Yep, that’s the one. When you’re watching Squawk Box one morning and Joe begins (again) to expound on why bond yields are headed upward, your fight or flight response could be: Hyperinflation! Oh geez, let me log on and sell 90% of my position in Tesla, move that into an Aggregate Bond Index fund, and put on a total return swap to hedge myself against a global depression. Is that rational? This investor doesn’t think so, but it’s all relative.

Other market watchers experience that same stimuli and react to it in different ways. It is likely due to a number of factors, including biology, nurture, and nature.  If you’ve been a trader since the 1980’s, your environment has conditioned you to experience stimuli such as this and have a certain, relatively muted, reaction. This could be said even in the event of a terrorist attack, another pandemic, or even a nuclear exchange (potentially). So, what some folks view as rational or irrational, others see it differently.  And rightly so.

Some may remember theGlobe.com which went public in November of 1998. The company was originally founded for programming the website itself. The day of the IPO the share price climbed from $9 to as high as $97, and at the end of the trading day, the company was valued at $840 million. The high valuation did not come from an objective or quantitative assessment. It was based on little more than the excitement and emotions investors had about making a quick buck based on a novel idea, with most not even knowing what the novel idea was, and to an even lesser extent, how the company was going to turn a profit. After the euphoria of the new Internet economy subsided, theGlobe.com stock eventually traded down to 10 cents a share in 2001, thus shrinking the valuation to a mere $4 million in the span of three years. Everyone knows that the dot-com bubble burst, the stock market crashed, and the S&P 500 index went negative for three consecutive calendar years from 2000 – 2002.  Conversely, who could've known the NASDAQ would rebound in 2003 and rise over 50%?  Probably more than you think.

This is not to say that factoring in emotions into investment decisions, or into life in fact, does not have its merits. In mid-2007 Apple released its first iPhone with a similar euphoria to the dot-com era.  The stock has since appreciated from a split-adjusted $5 per share to its current $116 price.  A great long term investment.  Is Apple the exception to the rule?  You could argue both sides.  Many will also remember a certain Mr. Blodget exclaiming that Amazon is on its way to $400 a share (gasp!).  That was December of 1998.  At the time, many said that would never happen and we're headed for a bubble, which we were.  However, we really couldn't have known at the time that Amazon's far reaching influence would include Wholefoods, a streaming service, and selling golden glass roses targeted towards Valentines Day.  And most know that although it took several decades, Amazon stock now trades around the $3,000 per share mark.  So, an extremely (or what seemed to be) emotionally-charged recommendation by a new analyst at the time, made many savvy long term investors a lot of money.  But not necessarily considered savvy investors at the time.  Cisco is a another dot-com survivor.  Their stock price declined 86% from its peak during the bust.  It currently trades at a 14x's multiple with a 3% dividend yield.  Hardly a high flyer.

We can agree on how important our emotions are in our personal lives.  We care deeply about our loved ones.  Some harbor distain for past and present politicians.  Depending on who you ask, is any of this productive? Or, just a plain waste of thought that lasts all of ten seconds.  

As we all know, the emotions leading up to the housing bubble and financial crisis of 2008 caused banks to lower their lending standards.  The bubble came from lenders and homebuyers thinking that real estate would always go up and the exuberance surrounding that.  If a home doubled in value in two years, would you buy it?  The resounding answer was "yes".  Same idea time and time again.  Ultimately real estate went down and the bubble burst. Many large lenders and small homeowners went bankrupt.  Moreover, the left over carnage resulting from our exuberance often goes unnoticed.  Nomadland is a recent movie that won best picture for drama at the Golden Globes.  During the opening it states that in 2011, due to a falloff in demand for sheetrock, a plant was closed in Empire, Nevada after 88 years.  Within six months, "the Empire zip code....was discontinued."  A tragedy for many of whom relied on real estate construction just to stay alive.

The reality is that most investors know they invest at the wrong times and for the wrong reasons, and still do it.  In The Behavior Gap - Simple Ways to Stop Doing Dumb Things with Money, by Carl Richards, the author states, "....friends and colleagues...know their impulses to buy and sell are dangerous."  And during market downturns, Mr. Richards opines, "It's okay to be scared, but it's a bad idea to act on your fear."  Fear may be our most important emotion when it comes to affecting our investing mindset.  How else do you account for such extreme market volatility?  Certainly part can be attributed to fear.  Fear is a byproduct of our fight-flight-freeze response.  Fear was essential to our ancestors for survival purposes.  Faced with a rattlesnake, our fear caused us to do something, instantaneously, preserve our lives, and perpetuate the human species.  A survival mechanism.  But is it still useful?  When it comes to investing, not so much.

So what can our emotions teach us about investing? If we're too exuberant, we can cause bubbles. If we are too fearful, we may burst bubbles.  Maybe too many of us watch too much CNBC (fact), and our emotions may get intensified sitting on the couch as helpless spectators.

The question for most of us? Where are our emotions taking us now?  Are we bubbling up at this very moment?  When is this bubble coming and what will be the focus?  Government debt?  Student loan debt?  According to some, maybe it's a Tesla bubble bursting.  The more we understand our own emotions and how they affect our daily functioning, the better our investing decisions will be.  Keep in mind that we're all different and many folks have the utmost control over their emotions.  Consequently, those who can do that will earn higher incremental returns and live a longer, healthier life, with more fruitful finances. -Neil

Talk To Me When You Scale: Since Big Is Now Favored Over Small, Is It Time To Ignore Startups?

APRIL 30, 2018 INNOV8RS TEAM

Apart from some exceptions, the results for corporate-startup collaboration have been generally disappointing.

But Joe Haslam believes there is hope – and his optimism comes from experience. Not only is he a professor at IE Business School in Madrid, where he teaches founders and MBA students how to scale their startups, he has co-founded and grown a number of companies including Marrakech.com, which raised over $75m in Venture Capital, and Hot Hotels, the first startup founded in Spain to be accelerated by the Techstars program in the USA.

According to Haslam we’ve paid more than enough attention to startups and enterprises, and nowhere near enough to the scaleup phase: how a startup grows into an established, sustainable company.

So what is a scaleup exactly, and what distinguishes it from a startup? And how can corporations identify and work with scaleups in a way that benefits both? At Innov8rs Tel Aviv, Haslam walked us through it.

Startup vs Scaleup

Steve Blank defined a startup as “an organization formed to search for a repeatable and scalable business model.” A startup is not just a smaller version of a big company. It is an organization set up to run experiments.

“When someone sends me a business plan that looks like it’s for a big company, I send it back to them and ask them to give me a list of the experiments they are running, “says Haslam. “What’s your insight, your hypothesis? That’s really all I care about.”

So when does a startup become a scaleup? It has nothing to do with how long you’ve existed as a company, or how many products you have, or even your profitability.

You become a scaleup when you achieve heavy engagement – in other words, product-market fit – and you stop doing what’s not working in order to double-down on what is.

“People ask me to come in for a two-day workshop and at the beginning of the first day I realize they have all these products they don’t need,” says Haslam. “I say ok: you need to snip this product and emphasize the stuff that’s working. That leads to product-market dominance, and that leads to being an enterprise.”

Haslam outlined five ways a scaleup is different to a startup:

1. Startups are about putting out fires – in other words, survival. Scaleups are about lighting fires – looking for and taking opportunities. 2. Startups experiment to find out where they’re strong. Scaleups try to find out where they’re weak. 3. Startups need generalists – people who can do a bit of everything. Scaleups need specialists – people who know more about their particular area than most people in the world. 4. Startups experiment. Scaleups simplify. 5. Startups can make you famous. Scaleups can make you rich.

Growth doesn’t make you a scaleup

Uber. AliBaba. Airbnb. These companies are often brought up as examples of why corporations need to get with the innovation program. But are they the disruptive forces we’ve made them out to be? According to Haslam, the evidence says no.

“Anything that grows really fast can collapse just as fast. And when we actually look at the reality, all that’s happened with these companies is that they’ve grown really fast.”

Uber is considered the most valuable venture-backed technology company in the world; it became the world’s largest taxi company in just nine years, without owning any vehicles. But according to data compiled by Bloomberg, Uber has ‘Peter Pan’ syndrome: though it has reached a stage most startups never realize, it has yet to turn a profit. The company has long been subsidizing rides; in some markets, customers paid just 41% of the true cost of their trip. Deep discounts like this can create an artificial signal about the actual size of a market; in fact, when Uber alerted passengers that fares had doubled, usage dropped by 40%.

If customers are only using your service because it’s priced cheap, and that pricing is not profitable or sustainable, can you really claim success?

“Growth can actually be a destructive thing,” Haslam points out.

“Edward Abbey said: growth for the sake of growth is the ideology of the cancer cell. Innovation is moving quickly – but if it’s not sustainable, then it’s not a good thing.”

That said, Uber has caused disruption in the taxi industry. But what about Airbnb? Several years ago, everyone thought Airbnb was going to turn the hotel industry on its head, if not make it obsolete. But hotels have continued to thrive, with 2017 seeing both hotel occupancy and stock prices climbing.

Small, and want to grow? Big, and want to hold on? Get the basics right. Most companies aren’t disrupted simply because a faster moving, faster growing startup appears on the scene and they’ve failed to keep pace and innovate. In Haslam’s experience it’s bad management that kills companies, not disruptive startups.

“Most companies are disrupted because they don’t see the blindingly obvious. They fail at the general, basic management stuff.

They don’t know how many people work for them, or how many products they have, but yet they want to talk about innovation. Before you start talking about incubators and startups, you have to get your basic stuff right.”

Startups who fail to scaleup fail for similar reasons: good old-fashioned management skills. Haslam says “Everyone thinks they’re a good manager, but I despair at the number of people who just don’t learn the basics: how to interview properly, how to manage people, how to give feedback. It’s seen as a nerdy thing to be good at management.”

But if you want to scale up, you need the nerds. “MBAs generally don’t found startups, but they do generally scale them. If you look at the key moments in a lot of growth companies, generally it was a boring nerdy MBA who started to ask the basic questions. What are our R&D costs? When do we get paid? What are our capital ratios? Maybe they weren’t the person who had the initial inspiration, but they were certainly in there when the company scaled successfully.”

How to succeed at corporate-scaleup collaborations Focus on sustainability, not innovation

Haslam often sees companies, large and small, focus on innovation over sustainability – and to him, that’s completely backwards. “Sustainability, trying to work out how to make something sustainable, is much more interesting than innovation because you’re not trying to sell dollars for 80 cents, which is what innovation is for some companies. Actually applying the principles of sustainability gets you the innovation everyone’s talking about.”

As an example, Haslam cites Madrid-based sustainable clothing company Ecoalf. Founded in 2012, their goal was to create a new generation of recycled products with the same quality and design of the best non-recycled products. Along the way, they basically transformed into an R&D operation, figuring out how to make thread and fabric out of used tires, plastic bottles, old fishing nets, discarded cotton and wool, and post-consumer coffee grounds. In addition to their flagship concept store in Madrid, Ecoalf has recently opened another location in Berlin, launched both their Ecoalf Foundation and Upcycling The Oceans project, and has entered into partnerships with companies like Apple, Swatch, GOOP, Barney’s New York, and Coca-Cola.

Go in at the right time (it’s later than you think)

Haslam cautions against letting fear drive partnership or acquisition decisions. Though many think you need to get in with a startup within their first five years, in reality you need to give them plenty of room to grow – even when that growth seems potentially threatening.

“Companies make their real money in their later phases, could take ten years. Peter Thiel argues that the real value of Paypal is yet to be realized! Let these startups grow and, if they manage to get a product-market fit and hire experts, then it’s time to pay attention to them.

Let them do stuff that may threaten you so you can identify their value – there’s plenty of time to acquire them and realize that value.”

In fact, Haslam argues that startups shouldn’t be seen as a threat at all. “Some of the incubators I’ve seen were so far away from anything that was commercially viable. The most interesting companies have people with deep sector knowledge – they spend time working in an area and acquire deep knowledge that very few people have. Do most of these startups have that? Absolutely not.

That’s why the future is about scaleups. It’s about people who can get to a certain stage on their own. Let these startups go, let them prove themselves. Then you can start having the conversations.”

Embrace the era of the big…

Haslam points out that we’ve moved into a new era of exponential technology – self-driving cars, mixed reality, synthetic biology – that heavily favors the big over the small. And these technologies are not ‘startuppable’ in the same way previous innovations have been.

“This is not like Instagram, where you can have five people in a garage making filters and be worth a billion dollars. These technologies are big company things.

They require closer integration with corporates who understand regulation, who have specialists, who can put products using these technologies into their supply chain. We are starting an age where the big is favored over the small.”

…and ignore the startup hype

The shine of the startup is beginning to fade. Why? In part, because starting is so easy.

Haslam recounts how expensive it was to start his first company, Marrakesh, in 1999. As a provider of on-demand spend management solutions for retail and government they had to physically buy servers and build their own data center, and hire marketing planners and buyers. Now, you’ve got Amazon web servers, and can target people on Facebook. But while this drop in cost is good, it has been accompanied by a corresponding drop in quality.

“I thought, going back ten years, that more startups would mean more scaleups. What we’re learning is that more startups just means more startups. It doesn’t mean they’re going to be better.

In general, saying ‘I have a startup’ is about as interesting as saying ‘I’ve joined a gym’. Talk to me when you scale.”

Read this article on the Innov8rs website

#1yrago Why are license "agreements" so uniformly terrible?

An excerpt from The End of Ownership: Personal Property in the Digital Economy, by Aaron Perzanowski and Jason Schultz, coming this Friday from MIT Press.

In the simplest terms, a license is a grant of permission to engage in some behavior that would otherwise be prohibited. You need a license to drive a car, a radio station needs a license to broadcast over the public airwaves, and James Bond needs a license to kill, all for the same reason. Without permission, those activities are against the law. Sometimes that permission comes from the government, and other times from private parties. If you enter your neighbor’s property without a license, you are a trespasser; with a license, you are an invited guest.

But modern license agreements have evolved into something else altogether. They create private regulatory schemes that impose all manner of obligations and restrictions, often without meaningful notice, much less assent. And in the process, licenses effectively rewrite the balance between creators and the public that our IP laws are meant to maintain. They are an effort to redefine sales, which transfer ownership to the buyer, as something more like conditional grants of access.

So what do licenses actually say? Most of us have no idea, and for good reason. License agreements are long, inscrutable, and full of bad news. They are the Lars von Trier films of legal documents. The form and substance of license agreements discourage consumers from reading them, which perversely reinforces their worst attributes.

Let’s start with their length. The current iTunes Terms and Conditions are over 19,000 words, translating into fifty-six pages of fine print, longer than Macbeth. Not to be outdone, PayPal’s terms weigh in at 36,000 words, besting Hamlet by a wide margin. The demands of these prolix legal documents are jaw-dropping. Take Adobe’s Flash, a software platform installed on millions of computers each day. Assume the average user can read the 3,500-word Flash license in ten minutes—a generous assumption given the dense legalese in which it is written. If everyone who installed Flash in a single day read the license, it would require collectively over 1,500 years of human attention. That’s true every single day, for just one software product. Imagine what would happen if you tried to read every license you encountered.

Not surprisingly, the vast majority of us simply throw up our hands and ignore licenses altogether. One recent study shows that as few as one out of a thousand software shoppers even glanced at the text of license agreements. And most who did spent only a few seconds perusing the terms. Even Chief Justice John Roberts, hardly known for his casual disregard for legal obligations, can’t be bothered to read EULAs. It hardly seems fair to expect more from the average person.

License terms are not negotiable. So there’s little to gain from a careful reading. Suppose you carefully examine the Flash license and find some objectionable term. Perhaps it limits you to a single installation of the program or disclaims liability for damage to your computer. What exactly are you going to do about it? Adobe is not going to negotiate a new license with you. They won’t even entertain the idea. So your choice is simple. Either use the product—and live with the license—or don’t. Take it or leave it.

Intentionally or not, rights holders and retailers have managed to nearly universally dissuade their customers from reading the terms that purportedly govern their purchases. And if the public rationally avoids investigating licenses, there is little marketplace incentive to offer more consumer-friendly terms. Better terms would simply go unnoticed. When software maker PC Pitstop included language in its license offering a cash prize to the first user to notice the clause, it took nearly four months before someone collected the $1,000.

When high-quality products are indistinguishable from poor ones, we get what economists call a market for lemons. Even though car buyers would pay more for a vehicle with no mechanical issues, they often can’t tell a reliable used car from a clunker destined to break down in a steaming heap in a week or two. And since they can’t sort the good deals from the bad ones, they are only willing to pay a price corresponding to a low-quality car. But if buyers aren’t willing to fork over extra money for a high-quality car, used car dealers have every reason to stock their lots with the cheapest cars available. So despite the fact that buyers would pay a premium for high- quality cars, the market fails to supply them.

For the same reasons, most EULAs are lemons. Licensors have lots of information about what their licenses say. They drafted them after all. But the average person has very little information. This information asymmetry breeds disengagement and distrust. And if companies don’t gain any advantage in the marketplace from more consumer-friendly licenses, that only serves to further entrench unfavorable terms. Once license terms are adopted, they have a way of spreading. In part, their viral nature is about saving time. Few licenses are drafted from scratch. Lawyers copy and paste liberally.

Somewhat less innocently, the uniformity in license terms is partly about safety in numbers. Once a term becomes standardized, its inclusion becomes a strategy for reducing competitive risk. A company that adopts industry standard terms guarantees that it is no worse off than its competitors. Combined with the lemon problem, this sort of soft collusion helps ensure that we don’t see robust competition on the basis of consumer-friendly license terms.

Instead, we see a growing list of standard terms, almost none of which add to a product’s value from the perspective of users. Some restrict what you can do with the products you purchase. These include limits on making backup copies, prohibitions on bad reviews, provisions permanently tying a product to a particular device, and bans on reverse engineering—the process of discovering how a product works through observing it in action. Other terms eliminate legal rights and remedies. These include limitations on liability, bars to class action suits, and mandatory arbitration clauses. And if the licensor neglected to include some one-sided term it later deems useful, many licenses give the drafter the option to change the terms of the EULA at any time.

But for our purposes, the most important license provisions are ones that try to redefine ownership and limit the transfer of the products we purchase. Across the board, nearly every license agreement for digital content—software, games, music, movies, and books—declares that the product is licensed, not sold. As Apple informs its customers, “the software products made available through the App Store ... are licensed, not sold, to you.” Microsoft says the same thing: “We do not sell our software or your copy of it—we only license it.” Amazon’s Kindle store follows suit as well: “Kindle Content is licensed, not sold, to you by the Content Provider.” Sony’s PlayStation license states: “All Software is licensed, not sold, which means you acquire rights to use the Software ... but you do not acquire ownership of the Software.” The same sort of terms are increasingly attached to hardware devices with embedded software. Most of these licenses preclude you from reselling, lending, renting, or otherwise transferring their purchases.

There are two ways to interpret these kinds of terms. They might stand for the uncontroversial—and frankly obvious—proposition that when you buy a product like Microsoft Office software or an iPhone, you are not acquiring all of the copyright, patent, and trademark rights in that product. To which we say, duh. But these licenses typically mean something beyond that. They mean that you don’t own the thing you buy. You don’t own and can’t transfer the plastic disc, the digital file, or the physical copy of the code embedded in your phone. So when retailers and record labels tell you that the song you purchased is licensed, not sold, they mean two things—you don’t own the copyright in the song and you don’t own the file you downloaded.

The End of Ownership: Personal Property in the Digital Economy [Aaron Perzanowski and Jason Schultz/MIT Press]

https://boingboing.net/2016/11/01/why-are-license-agreements.html

Socially Responsible Investing: Is It Also More Profitable?

Since the Dawn of Mustachianism in 2011, the same question has come up over and over again:

“MMM, I see your point that index fund investing is the best option. But when you buy the index, you’re getting oil companies, factory farm slaughterhouses and a million other dirty stories.

How can I get the benefits of investing for early retirement without contributing to the decline of humanity?”

And in these nine years since then, the movement towards socially responsible investing has only grown. Public pension funds have started to “divest” from oil company stocks, and various social issues like human rights, child labor, climate change or corporate corruption have bubbled to the surface at different times.

And all of this has led to the exploding new field of Socially Responsible Investing (SRI), and a growing array of new ways to do it.

So it seems that this is not just a passing trend – people just might be starting to care a bit more. And since capitalism is just an expression of human behavior, the nature of capitalism itself may be starting to change.

This leads us naturally to the question:

What can I do with my money to help fix the world? And even better, is there a way I can make money in the process of fixing it?

The answer is a good, solid “Probably.”

As long as you don’t get too hung up on getting every last detail perfect, because just like real life, investing is a haphazard and approximate and unpredictable thing. But by understanding the big picture, you can make slightly better decisions on average, which lead to slightly better results. And slightly better results, stacked up consistently over time, can lead to a much better life, or even a much better world.

This is true in all of the main areas we care about – personal wealth, fitness and health, even relationships and happiness. And while your money and investments are certainly not the most important thing in life, they are still worthy of a bit of easy and effective optimization.

So anyway, the first thing to understand with SRI is, “what problem am I trying to solve?”

The answer is, “You are trying to make your investing (especially index fund investing) have a better impact on the world.”

On its own, index fund investing is ridiculously simple. You just get an account at any brokerage like Vanguard, Etrade, Schwab or whatever, and dump all your money into one exchange-traded fund: VTI.

When you do this, you are buying a stake in 3500 companies at once(!), which is both impressive and overwhelming. How do you even know what you are holding?

Well, this is all public information, and easily available with a quick Google search. For example, here’s a list of the top 90 holdings in VTI (click for larger):

Top 90 holdings in Vanguard’s VTI Exchange Traded Fund

As you can see, the biggest chunk of money is allocated to today’s tech darlings, because this index fund is weighted according to market value, and these are the most valuable companies in the US today.

Through a convenient coincidence, the total value of the VTI fund happens to be just under $1 trillion dollars, which means you can just throw a decimal point after the ten billions digit of market value to get a percentage. In other words, about 4.7% of your money will go towards Apple stock, 4.4 towards Microsoft, and so on. Together, these top 90 companies are worth more than the remaining 3,540 companies combined, so these are what really drive your retirement account.

And within this list, you will see some of the usual suspects: Exxon and Chevron (oil), Philip Morris (tobacco), Raytheon and Lockheed (bombs), and so on.

But what about the less-usual suspects? For example, I happen to think that sugar, and especially sugar-packed beverages like Coke, is the biggest killer in the developed world – a major contributor to 2 million of the 2.8 million deaths each year in the US alone. Should I exclude that from my portfolio too?

And what about drug and insurance companies – aren’t they behind the political stalemate and high costs of the US healthcare system? Comcast funded some election disinformation campaigns here in my home town in the early 2010s, should I exclude them too? And if you’re part of a religion that is against charging interest on loans, or in favor of pasta and Pirate costumes, or against a spherical Earth, or any number of additional ornate rules, you may have still more preferences.

The higher your desire for perfection, the more difficult this exercise will become. However, if you are like me and you just want to get most of the desired result with minimal effort, you might simply have a look at the Vanguard fund called ESGV.

ESG stands for “Environmental, Social and Governance”, and in practice it just means “We have tried to avoid some of the shittier companies according to some fairly simple rules.”

And the result is this:

Vanguard’s ESGV Exchange traded fund (ETF) – top 90 holdings

The first thing you’ll notice is that it’s almost the same. In fact, the top five holdings – Apple, Microsoft, Amazon, Facebook, Alphabet (Google) and Netflix not far behind, collectively referred to as the FAANG stocks – are completely unchanged – and this means that there will be plenty of correlation between these funds.

It’s also the reason that the stock market as a whole has recovered so quickly from this COVID-era recession: small businesses like restaurants and hair salons have been destroyed by the shutdowns, but big companies that benefit from people staying at home and using computers and phones are making more money than ever. The stock market isn’t the whole economy, it’s just the publicly traded companies, which are the big ones.

But let’s look at the biggest differences between the normal index fund versus the social version.

The following large companies listed on the left are missing in the ESGV fund, in order of size. And to make up the difference, the stake in the companies on the right have been boosted up to take their place in your portfolio.

Main differences between VTI and ESGV (source: etfrc)

The omission of Berkshire Hathaway was a bit of a shocker, as it is run with solid ethical principles by Warren Buffet, one of the worlds most generous philanthropists. And in fact the modern day nerd-saint Bill Gates is on the Berkshire board of directors, another person whose work I follow and respect greatly.

(side note: Apparently the company fails on the “independent governance” category. And Buffet disputes this category, but in his characteristic way has decided to say, “Fuck it, I’ma just keep doing my own thing with my half-trillion dollar empire over here and you can have fun with your little committee” – I’m paraphrasing a bit but he totally did say that.)

Furthermore, both funds hold the factory meat king Tyson foods, while neither holds Roundup-happy Monsanto, because it was bought by the German conglomerate Bayer AG a while back. Nextera is a giant electric utility in the Southeastern US that claims to be the world’s largest generator of renewable energy. Some do-gooders are against nuclear power, while others (including me) think it’s the Bee’s Knees and we should keep advancing it. And all this just goes to show how nobody will agree 100% on what makes a good socially responsible fund.

But What About The Performance?

In the past, some investors were nervous about giving up oil companies in their portfolio, because while it was a dirty substance, it was also what made the world go round – which meant it was a cash cow.

Now, however, oil is on its way out as renewable energy and battery storage have crossed the cost parity threshold – meaning it’s cheaper to make power (and vehicles) that don’t use oil. In its place, technology is the new cash cow, and tech is heavily represented in the ESG funds. The result:

Traditional index fund (VTI) vs Socially Responsible equivalent (ESGV)

As you can see, the performance has been similar but the ESG fund has done significantly better in the (admittedly short) time since it was introduced at Vanguard.

Of course, we have no idea if this will continue, but the point is that at least our thesis is not a ridiculous one – environmentally sustainable companies do have an advantage, if the world gradually starts to care more about these things. And if you look at the share price of Tesla and other companies that surround it in electric transportation and energy storage, you will see that there are many trillions of dollars already lining up to benefit from this transition. And the very presence of so much investment money creates a self-fulfilling prophecy, as Tesla is now building or expanding five of the world’s largest factories on three continents simultaneously.

So What Should You Do? (and what I do myself)

My latest home-brewed ebike project – this one can reach 42MPH / 67km/hr!

First of all, it helps to remember a fundamental piece of economics: your spending dollars will probably have a much bigger impact than your investment dollars. This is because you are sending a direct message to the world rather than an indirect one:

When you buy a new gasoline-powered Subaru (or a tank of gas for your existing guzzler) or a steak at the grocery store, or a plane ticket, you are telling those company directly that consumers want more of these products, so they will produce more of them immediately.

When you buy shares in Exxon, you are only subtly raising the demand for those shares, which raises the average price, making it ever-so-slightly easier for Exxon to maybe issue more shares in the future. In other words, you are making it easier for them to access capital. But capital is only useful if there is demand for their products. And with oil there is a nearly constant surplus, which is why OPEC and other cartels need to work together to artificially restrict supply, just to keep prices up.

Plus, as a shareholder you are theoretically eligible to place votes and influence the future direction of companies – even companies that you don’t like. If you look up the field of “shareholder activism”, you’ll see this is a tradition that goes way back.

So I have tried to take a few simple steps on the consumer side myself, and I find it quite satisfying: Insulating the shit out of all of my properties, building a DIY solar electric array on one of them, and buying one electric car so far to eliminate local gas burning. And a few electric bikes including a super fast one I made myself.

Each one of these steps has provided a very high economic return, percentage-wise, but that still leaves a lot of money to account for, which brings us back to stock investing.

As someone who loves simplicity, I have done this:

Bought almost entirely VTI (or similar Vanguard funds) from 2000-2015

Started experimenting with Betterment in 2015, liked it, and have been adding a percentage of my ongoing savings to that account to that since then. (Note that Betterment now also offers a socially responsible portfolio option.)

Switched the dividend re-investing of my old Vanguard VTI over to Vanguard ESGV, to avoid “wash sales” in making the most of Betterment’s tax loss harvesting feature.

Bought some shares of Berkshire Hathaway separately, and also make a few sentimental investments in local businesses, including the MMM HQ Coworking space.

But you could choose to be more hardcore in your ESG/SRI investing:

Buy your own basket of stocks based on the index, but with different weighting based on your own values

Spend more money on other things that generate or save money (a bigger solar array on your house, better insulation, electric car, an ebike to reduce car trips, etc.)

Invest in local businesses of your choice, rental real estate, community solar projects, or other things which generate passive income – publicly traded stocks are just one of many ways to fund an early retirement!

Like most areas of life, investing is not something you have to do perfectly in order to succeed – even socially responsible investing. If you apply the 80/20 rule to get the big picture right, you have probably found the Sweet Spot and you can move on to the next area of life to optimize.

In the Comments: What is your own investment strategy? Have you thought at all about this ESG / SRI stuff? Did this article bring anything new to the table?

from Finance https://www.mrmoneymustache.com/2020/08/22/socially-responsible-investing/ via http://www.rssmix.com/

2020 has brought unexpected distress, pressure, and challenges among the disruptive winners. Start-ups are facing hurdles in addition to limited opportunities. There is an urgent need for solutions for issues like fundraising, cash management, marketing, and staff management. With the terrible impact of COVID-19 on our daily lives, FinTech companies are looking forward to creating opportunities favoring the momentum. It is forecasted that the demand for AI and IoT will remain prosperous post-crisis as the need for digital transformation is on the rise and will continue to surge.

Businesses are looking for investing in technologies that promise to improve and automate financial services, keeping in mind the chances of such unexpected distress. Investing in financial disruption will help evolve financial services into time and cost-saving offerings. Though there will be a possibility for some sectors to go through a rough patch, there is a brighter chance for others to embrace the opportunities at this moment.  

Here are the top Fintech trends that everyone should be aware of in 2020. These Fintech trends will impact everything in the financial ecosystem.

1. The Digital Only era

The COVID-19 crisis has brought cash management as a key player because the government has committed to providing trillions of dollars to SME’s, enterprises, and employees. Moreover, there are major technical and fundamental shifts taking place and becoming the new normal, making investors and potential buyers rethink the new way of perceiving value.

The ‘Digital Only’ is tremendously accelerating to becoming the new norm. This shift is not new as we have already witnessed in developed markets.

With digital-only banks, efficiency and convenience are at its best. Whether creating an account or transferring money, you aren’t required to visit the physical branch, stand in queues, and go through a lot of paperwork.

Digital-only banks are growing in numbers and revenue around the globe. It is expected that there will be a significant drop in visiting branches in the future as digital-only banks are capable of bill payments, expense management, a quick review of the account balance, account transaction history, and real-time analytics to add a few among the other features.

Digital-only banks offer global payments, P2P transfers, contactless payments with no transaction fees, Bitcoin, Ethereum, and other cryptocurrency transactions. Digital-only banks have a deep connection with disruptive technologies like Blockchain and Cryptocurrency, making it one of the top fintech trends for 2020.

Another area where technology disruption has penetrated is digital lending. Financial institutions and banks have become highly competitive to invest in innovations for enhancing their lending service offerings, especially during this crisis. They are struggling to provide a more unified, flexible, robust, and efficient solution for digital lending, especially within the SME market.

There is a new style of getting converted into tech companies from financial institutions to contribute to the digital transformation bandwagon.

Financial institutions are partnering with fintech application development service providers to leverage a multi-channel, self-service digital lending process that includes loan processing, collection, screening, and credit scores. They are expecting an end-to-end process that will provide the customers with a smooth onboarding and approval lending experience.

2. Modernizing Finance with Blockchain

The biggest challenges that haunted financial institutions were identity theft and fraud that cost them billions of dollars annually. Blockchain technology is capable enough to save the industry from such significant losses, especially at this situation where cash management is the biggest challenge. Blockchain has been applied in the financial sector for smart contracts, digital payments, trading shares, and managing identities.

Blockchain has taken the responsibility to change the face of financial transactions globally. Blockchain with promising features like speed, global reach, secure, and low processing fees is on the path of faster adoption by financial institutions.

There is a struggle between the companies to ensure the availability of essential products amidst this crisis. To keep their doors open, companies require trust and transparency in supply chain and contracts. Therefore, using Blockchain not only gains visibility throughout the supply chain but also, takes care of quality control and performance benchmarks

With China and the USA leading with maximum usage of Blockchain technology, global financial services are now looking for faster adoption of blockchain in their systems and searching for opportunities to increase fintech partnerships. This will lead to the incorporation of innovations in their traditional payment methods.

Investors are rushing to fintech development companies to increase the global reach of blockchain services and innovations. They are trying to match-up to the ever-increasing usage of blockchain wallets which has set a benchmark of 40 million users worldwide.

3. AI’s significant contribution is ready to mark its presence

Personalization is one of the best and most used marketing strategies to keep customers attracted and loyal to your business. Banks and financial institutions are embracing AI and Big Data for achieving hyper-personalization on an unprecedented scale, in addition, to help them to process, store, and drive in-depth insights from the data.

Moreover, financial institutions have customers data that highlights customer behavior and social browsing history. To deliver a personalized experience to the customers, AI facilitates real-time omnichannel integration of these insights. But AI is more than providing personalized experiences.

Banks are turning for AI-based solutions and strategies to reduce operating costs and save trillions ahead. Banks are trying to acquire AI professionals having the capability to work with unstructured data as AI is well known for dealing with cybercrime, frauds, and other financial threats. With AI chatbots already ruling, financial institutions will no longer stay behind in serving the customers at their convenience and demand and allow faster and secure transactions wherever they are.

Some important facts that you need to be aware of:

AI is the current choice and will continue to be the favorite for banks and financial institutions handling large transactions to help financial surges.

As banks are focusing on reducing the operational costs, AI will help them to save $1 trillion by 2030.

Banks have leveraged the power of AI for customer service that helps them to serve their customers round the clock through email support, live chats, and social media integration.

Banks and financial institutions are continuously trying to improvise customer service by leveraging the power of AI and gain trust and loyalty for their brands.

4. Payments are heavily driven by Innovations

We have been witnessing multiple components in fintech every day due to the innovations in the payment system. Mobile payments like Apple Pay, Samsung Pay, Google Pay, Venmo, contactless payments like PayPal, MasterCard PayPass, Visa PayWave, Square, mobile wallets like DBS Paylah, OCBC Pay, WeChat Pay, AllPay, smart speaker systems like Amazon Echo, Sonos One, Apple HomePod, identity verification technologies, and using disruptive technologies like AI and ML for security are the result of innovation in payment systems.

Mobile payments ramped up a total of $1 trillion value in 2019, thus, deciding to stay ahead in the competition. Contactless payments are popularized enough to reach a target of nearly 760 million by the end of 2020. Mobile wallets are all set to gain a wider audience with the user’s credit cards, reward cards, and many more attractive features in the wallet. 2019 has recorded about 2.1 billion mobile wallet users around the globe.

After years of reluctance, people are finally opting digital wallets and contactless payments to stay safe during the COVID-19 pandemic as it allows them to pay without physical interaction. Contactless payments are all set to hit the market and become the most preferable payment option.

In a nutshell, payment innovations will continue to penetrate the payment systems to improvise the use of payments and enhance the customer experience. Moreover,

Fintech payment innovations are heavily driven bydigital walletsand mobile payments.

Blockchain will heavily disrupt online payment systems globally.

5. Let’s work together with Smart Contracts

Businesses have a greater impact this year due to COVID-19 breakout. Supply chains and traditional legal contracts are looking to get hold of innovative solutions to get digitized at this time and even for the post-pandemic situation. The smart contract helps the businesses to gain greater performance and response agility in real-time. Since smart contracts are connected to identified data sources, the increase of using these 2nd generation digitised contracts is going to escalate. Smart contracts are all set to reduce operational risks and systemic business to match-up this new norm.

What are smart contracts?

Traditionally, when two parties agree on a transaction, the role of the lawyer is to fix the terms of the contract on two separate pieces of paper and ask the parties to sign their end of the agreement in the presence of witnesses. If any breaches happen from either side, they are liable for legal action against them.

The parties sign smart contracts with a digital signature using cryptographic keys. Rather than paper, the contracts are tamper-proof, encoded programmatic structures. The authenticity of the contracts can’t be breached as witnesses, in the case of smart contracts, are numerous computing devices that receive the same copy of the digital contract. Moreover, these devices monitor the contract execution until the complete terms are satisfied.

Some important takeaways for smart contracts:

Smart contracts will get popularized in Fintech this year.

Smart contracts are virtually accessible to anyone, even beyond national borders.

Smart contracts are famous for their robustness, security, trust, and execution capabilities.

In a nutshell, traditional contract inconveniences can be easily overcome by smart contracts. Also, smart contracts speed up the fintech transactions irrespective of time and place.

6. The impact of regulations

The banking and finance landscape will be continued to be dominated by regulations in 2020. 2019 was a year where most of the banks witnessed a great relief by becoming a regulatory compliant with the introduction of PSD2 to avoid the threats against heavy fines. However, PSD2 wasn’t implemented on a larger scale as it was expected as many banks failed to meet the deadlines.

With this, it is clear that 2020 will be all about implementing PSD2 regulations to gain strong customer authentication (SCA). Since PSD3 is in terms to approach sooner, the businesses will continue to witness a strong regulatory presence. Compliance with regulations should be a mandate as banks should be well acquired with the basics before crossing the hurdles that PSD3 will be bringing for them. With PSD3 regulations, the banks should also be capable of carrying a good precision about the specification of API standards, directory services, and infrastructure to eliminate fragmentation.

The need for a flexible and robust digital strategy implementation is vital when it comes to solving regulatory challenges the banks face. Banks must leverage the power of digital transformation as much as possible to create a greater impact on the entire business ecosystem. This will help banks to evolve as a modular body that continues to increase their focus on financial and operational resilience, and become highly responsive to political and social pressures in multiple environments and financial inclusions with higher sustainability.

7. Automation and RPA

Robotic Process Automation (RPA) is all set to impact and disrupt the financial sector in 2020 as well. You can expect it to help the financial institutions to be more efficient, effective, and robust. RPA will continue to help the financial institutions and automate the human repetitive processes. This will further lower down the risk of common errors and inefficiencies, increasing productivity and ROI.

RPA will also help the financial institutions to meet the regulations and compliance requirements of federal and state. In 2020 and beyond, RPAs will not be programmed to perform any task. They can directly observe what humans do and then put forth their suggestions or automate the entire process. RPA is destined for the customer onboarding process, verification, risk assessments, security checks, data analysis, reporting, and many more in the administrative section.

Wrapping it up!

With continuous technology penetration into the financial ecosystem, the financial services will witness a steady growth resulting in the expansion of fintech to unknown territories. Many fintech startups are trying to contribute to the revolutionization of the financial sector in various ways.

Thus these fintech trends mentioned above are ready to change the face of the financial sector and the way customers interact with your business. Fintech is all set to boost up your transactions by offering your customers a hassle-free and no-fuzz experience.

New Post has been published on https://techcrunchapp.com/the-antitrust-case-against-google-is-gathering-steam-the-verge/

The antitrust case against Google is gathering steam - The Verge

Let’s spend a few minutes today catching up on the antitrust inquiries into Google. There are investigations related to competition underway against most of the biggest tech giants – Apple, Facebook, and Amazon face similar inquiries, and their CEOS are scheduled to join Sundar Pichai for a virtual hearing with the House of Representatives later this month. But there’s reason to believe the case against Google will land the soonest of any of them — in May, the New York Times reported that charges could come “as early as this summer.”

Scrutiny into the company’s business practices has since accelerated. Politico reported last week that California, which sat out an investigation led by 48 attorneys general, is preparing to mount its own inquiry into Google’s competition practices. As Leah Nylen noted in that report: “Alabama is now the only state that is not investigating the company.”

At the same time, reporters are mounting their own investigations of their own, and everywhere they look, they find Google giving preference to its own products over those of its competitors.

In Bloomberg this week, Gerrit De Vynck looked at the company’s decision to ad a fourth ad to the top of search results in 2015. The effect of all those extra paid links has been to reduce organic traffic to many businesses and publishers, making life more difficult for them. These days, when people visit Google, the majority of them get the information they sought from Google itself, and never touch the open web at all. That has strengthened the case of those who argue that the company’s moves, whatever they have brought users in terms of convenience, have harmed competition.

De Vynck notes that Google, like any other company, has to manage the needs and wants of its customers and its businesses. “Users want the best answers,” he writes. “Web developers need eyeballs. Shareholders demand growth.” At the same time, some businesses are now arguing that the mix of extra ads and answers provided directly within Google is eroding the fabric of the web.

De Vynck writes:

Kevin Hickey, chief executive officer of Online Stores Inc., said these changes have forced him to spend more on Google search ads to keep traffic flowing to his e-commerce businesses. More than a decade ago, about two-thirds of Hickey’s Google traffic came from free, or organic, listings. But as Google increased ad slots to the top of results, that mix flipped. Organic results account for about 20% of visitors to his sites now, and he spends about 10% to 15% of his revenue on Google ads. He has raised prices, but his profit margins have shriveled.

“The prices that consumers are paying are now higher because of Google’s business model,” Hickey said.

Google says consumers are simply no longer satisfied with the 10 blue links of days past, and that despite changes it continues to send a firehose of traffic to the open web. A large portion of searches are for commoditized information like weather and sports that hardly differ in their presentation on any one web page; why not just put it all in search results? On the other hand, the idea that Google search has gradually worsened is not new, and for many types of query I find it persuasive. (Search for “shoes” or “furniture” on Google, and then on Pinterest, and tell me which is more useful.)

Elsewhere, the Wall Street Journal on Tuesday reported that Google searches for videos ranked YouTube clips higher than rivals, even when the same clips posted to Facebook, Dailymotion, and other outlets were first posted on those sites, and have many more views. (Google says it does not take into account the number of views a video receives when ranking them in search, which is … weird?)

Sam Schechner, Kirsten Grind and John West write:

Engineers at Google have made changes that effectively preference YouTube over other video sources, according to people familiar with the matter. Google executives in recent years made decisions to prioritize YouTube on the first page of search results, in part to drive traffic to YouTube rather than to competitors, and also to give YouTube more leverage in business deals with content providers seeking traffic for their videos, one of those people said. […]

A Google spokeswoman, Lara Levin, said there is no preference given to YouTube or any other video provider in Google search. “Our systems use a number of signals from the web to understand what results people find most relevant and helpful for a given query,” Ms. Levin said. She declined to comment on the specific examples cited in this article.

Why YouTube showed so strongly in this study is a matter of some debate. For example, if you go to your second-favorite search engine (Bing.com, duh) and query the Tasty videos that BuzzFeed made famous on Facebook, the top links are all from YouTube. Presumably this is not the result of Google interference.

On the other hand, Google can and does promote YouTube in many other ways throughout the product; click “Google apps” at the top of your Gmail inbox and you’ll see it right there, for example. Over time, Google helped YouTube become synonymous with video, and so now it may not even seem suspicious that most searches for videos lead you directly to it. “I’d click the YouTube [link] whether it was listed first or seventh on the screen b/c I trust YouTube more than those other sites,” writes one of the commenters on the Journal story. He meant it as an indictment of the Journal’s reporting — “waste of time and resources,” he called it — but I wonder if on some level he isn’t making the reporters’ point for them.

“Our systems use a number of signals from the web to understand what results people find most relevant and helpful for a given query,” Google told me when I asked about the Journal’s report. “To ensure that these signals are used equally and fairly for all sites, we use signals that are not specific to any one site or platform. Therefore, the number of views, likes or comments a video has received on a given platform is not a factor in our ranking systems. Our video ranking systems use signals from all video sources in the same way— there is no preference given to YouTube or any other video provider.”

And yet, despite all those signals, YouTube still turns up the winner more often than not. Google often talks about search results as if they are naturally occurring phenomena, like gravity, rather than the result of editorial decision making. And yet it’s hard to believe that had the Journal reached the opposite conclusion — that Google searches rarely, if ever, turned up YouTube links — that some Google product manager wouldn’t be tasked with fixing it.

The underlying question here is to what extent Google should be given the freedom to present search results as it sees fit, no matter the cost to other businesses. The European Union has fined the company three times over the years for acting in ways it said had harmed competition, most recently for $1.7 billion this year. So far the US government has not formally stated its case. But it’s hard to look at Google search in 2020 and conclude that it has proved conclusively helpful to competition. Whatever signals the company’s algorithms might be taking into account as it ranks search results, it’s somehow always Google that comes out on top.

Pushback

In Monday’s email edition, I said that the United Kingdom has an advertising blackout in the days leading up to the election. That’s not right, as many of you wrote in to point out. One reader put it this way: “Our blackout is on radio and TV only. That means while the polling stations are open on the day of the election, they’re not allowed to broadcast discussions and analysis of election issues.

Other campaigning, including online, is still allowed to happen though. Often, parties hold back a significant chunk of their digital ad spending for the last few days and hours — i.e., you could argue it’s been a way of getting around the broadcast ban.”

A better example for what Facebook is considering might be Australia, which bans broadcasters from running ads from midnight on the Wednesday before polling day to the close of the poll on polling day.

The Ratio

Today in news that could affect public perception of the big tech platforms.

Trending up: YouTube is finally letting creators know exactly how they’re making money on the platform. The company has a new metric called RPM (revenue per mille) which shows a creator’s total revenue (both from ads and other monetization areas) after YouTube takes the cut. (Julia Alexander / The Verge)

Governing

⭐ Ben Thompson makes the case that the United States should take strong action now against TikTok — but also WeChat, Zoom, and other apps. It’s a step necessary to confronting an ideological war that has been under way for 20 years now, he argues:

TikTok’s algorithm, unmoored from the constraints of your social network or professional content creators, is free to promote whatever videos it likes, without anyone knowing the difference. TikTok could promote a particular candidate or a particular issue in a particular geography, without anyone — except perhaps the candidate, now indebted to a Chinese company — knowing. You may be skeptical this might happen, but again, China has already demonstrated a willingness to censor speech on a platform banned in China; how much of a leap is it to think that a Party committed to ideological dominance will forever leave a route directly into the hearts and minds of millions of Americans untouched?

Again, this is where it is worth taking China seriously: the Party has shown through its actions, particularly building and maintaining the Great Firewall at tremendous expense, that it believes in the power of information and ideas. Countless speeches, from Chairman Xi and others, have stated that the Party believes it is in an ideological war with liberalism generally and the U.S. specifically. If we are to give China’s leaders the respect of believing what they say, instead of projecting our own beliefs for no reason other than our own solipsism, how can we take that chance?

The US Immigration and Customs Enforcement and Department of Homeland Security have rescinded a policy that would require international students to take in-person classes in order to remain in the US. The agencies reached an agreement with Harvard and MIT, who filed a lawsuit on July 8th over the policy. Tech companies had spoken out against the negative effects of the draconian policy. (Monica Chin / The Verge)

COVID-19 contact tracing apps have only about a 9.3 percent adoption rate in the world’s most populous countries. The analysis, by Sensor Tower, focused on government-endorsed apps in countries including Australia, France, Germany, and India. (Sensor Tower)

Google is negotiating to invest $4 billion in India’s Reliance Jio. Facebook and other Silicon Valley companies have recently announced a collective $16 billion in the fast-growing telecom. (Baiju Kalesh, Anto Antony, Manuel Baigorri, and Saritha Rai / Bloomberg)

Trump’s reelection campaign is complaining that Facebook’s goal of registering 4 million voters in time for November’s election is an attempt to swing the election in favor of former Vice President Joe Biden. The official position of the Republican party is now that voter registration is a partisan issue. (Eric Newcomer / Bloomberg)

President Trump is using Facebook to microtarget voters, while Joe Biden is using it increasingly to ask for donations. About 68 percent of the president’s ads are seen fewer than 1,000 times — compared to 34 percent for Biden. (Bill Allison and Misyrlena Egkolfopoulou / Bloomberg)

Amazon told employees at a New York warehouse that they won’t be punished for taking extra time to wash their hands. The company also said workers wouldn’t be disciplined for falling short of quotas based on how many tasks they complete each hour. It’s basically a dream job now. (Josh Eidelson / Bloomberg)

Here’s a map of more than 400 hyperpartisan sites masquerading as local news. Many are funded and operated by government officials, political candidates, PACs, and political party operatives. (Jessica Mahone and Philip Napoli / Neiman Lab)

Industry

⭐Black influencers are underpaid, at times making 10 times less than their white counterparts. An Instagram account called Influencer Pay Gap is exposing the pay disparities and pushing for change in the industry. Here’s Ashley Carman at The Verge:

Influencer Pay Gap was created by Adesuwa Ajayi, a Black woman who works at the talent agency AGM and manages influencers. Through the account, Ajayi asks influencers to anonymously detail their past brand campaigns, sharing their engagement rate (what percentage of people interact with their content), how much they were paid, what they had to do, their race, and where they’re based. Ajayi started the account about a month ago, and more than 30,000 people already follow it. She says she receives at least 100 DMs a day, which has led to multiple “sleepless nights.”

“I think sometimes we forget that the influencer space is still in its infancy in comparison to different forms of maybe marketing or whatever it might be,” she says. “So it’s very much unregulated to a large degree, and what has definitely become apparent from the page is just seeing how many influencers need help.”

Snapchat is testing a new navigation experience that allows users to move through public content with a vertical swiping motion — a gesture that’s been popularized by TikTok. The test is focused on content that’s published publicly to Snapchat Discover, not your friends’ private Stories. (Sarah Perez / TechCrunch)

WhatsApp went down for an hour on Tuesday. The cause has not yet been reported. (Tom Warren / The Verge)

Facebook developed a robot to install fiber cables on medium-voltage power lines around the globe. The aim is to make it cheaper for internet service providers to build out their networks using super-fast and reliable fiber connections. (Shara Tibken and Queenie Wong / CNET)

Amazon is testing out a new smart shopping cart that lets you check out without a cashier. The Dash Cart automatically detects the items you’ve picked up. It’s coming first to Amazon’s grocery store in the Woodland Hills neighborhood of Los Angeles. (Nick Statt / The Verge)

Taylor Lorenz explains the cake meme that took over Twitter this week. “Watching a sharp knife slice cleanly through what appears to be an everyday object is surprising and somehow deeply gratifying,” she writes. (Taylor Lorenz / The New York Times)

Here’s a profile on Nikkia Reveillac, Twitter’s new head of research from Trinidad and Tobago. (Narissa Fraser / Newsday)

The growing partisan divide between people who oppose shelter-in-place orders and those who think the restrictions are a public health necessity is playing out on two North Carolina Facebook groups. (Kaitlyn Tiffany / The Atlantic)

Apple told employees that a full return to US offices won’t happen before the end of the year. Retail staff will work remotely as the company shuts down some of its stores again, due to the rising number of coronavirus cases. Apple is also shipping Covid-19 test kits to employees’ homes. (Mark Gurman / Bloomberg)

Startups that never planned on going fully remote are changing their plans amid the coronavirus pandemic. Some are letting leases expire or looking for ways to get out of longer contracts. (Ari Levy / CNBC)

Babysitters and camp counselors are trying to provide childcare on video calls due to the ongoing pandemic. Kids aren’t that into it, though. (Julie Jargon / The Wall Street Journal)

Some of the wild stories on Reddit’s r/relationships are fabricated. This article features stories of people who made up some of the recent viral myths. (Amelia Tait / Vice)

Things to do

Stuff to occupy you online during the quarantine.

Browse the Atlas of Surveillance. Compiled by students and volunteers, the atlas is a database of surveillance technologies used by law enforcement authorities across the United States — including drones, body cameras, facial recognition, and more.

Check out a new demo of mmhmm. The virtual camera, which I profiled earlier this month, will soon allow you to control your Zoom presence with a PlayStation controller.

Download all your old TikToks — while you still can!. A new site called FYP.rip does the trick.

Those good tweets

I’m confused. Is anyone else still in quarantine?

— Danielle Young (@RhapsoDani) July 12, 2020

Talk to us

Send us tips, comments, questions, and suspicious Google search results: [email protected] and [email protected].

Startups rethink what it means to be high-touch during a pandemic

New Post has been published on https://magzoso.com/tech/startups-rethink-what-it-means-to-be-high-touch-during-a-pandemic/

Startups rethink what it means to be high-touch during a pandemic

Glossier NYC, in normal times, is typically visited by more than 2,000 people every day, with lines of people from all over the world curling out the door. And when you enter, it’s tempting to touch, well, everything.

The walls are adorned with flowers, mirrors and giant versions of the makeup company’s flagship product: Boy Brow. Makeup is sold on communal tables, where customers are encouraged to try products. Emily Weiss, the founder of the unicorn startup, calls customer meetups as she sees them: community events.

And, of course, in the store, there are also a few sinks to wash off your makeup (and your hands).

The challenge of running a startup that has a high physical component has become one of the big themes in the world of tech in the last several weeks. Indeed, as companies like Google, Facebook and Zoom do their parts to help people stay connected during the novel coronavirus pandemic, and research for cures, another story has taken shape in a different area of the tech world: startups and larger tech companies with “high touch” models — not just based on customer relationships but literally business models with strong physical components — are facing a world of challenges at a time when people are being asked to stay indoors, and stay away from each other.

To stave off cash shortages and closures, businesses are taking a variety of approaches, and rethinking how they run their businesses, to keep going. In some countries, governments are stepping in to keep businesses from collapsing, while some startups are hoping that their investors will continue to support them as the pandemic continues to spread.

In other cases, startups are quietly coming together to compare notes on how best to tackle legal and other hurdles in an unprecedented environment. (So quietly, in fact, that they didn’t want to talk about this on the record.) When is the right time to talk to insurance companies? How do you negotiate with them and will you ever get anything out of those discussions? What recourse does a company have for forfeiting some payments that are coming due? How do you handle headcount if you lack the liquidity to survive a big dip in your business? What are the best practices for running a business in a reduced or altered form?

“This has been the most difficult five continuous days in all of my team’s careers,” Vibhu Norby, the CEO and founder of b8ta — a chain of retail stores that act as a marketplace between consumers and lots of different hardware and other companies, letting potential buyers try out products before buying — said in an interview. “We don’t have any other business other than our physical one, that’s all we do. But we have an amazing team and there are things that we’re doing that are useful, but there is no playbook for this.”

It’s not all doom and gloom. With people home-bound and spending a significantly higher amount of time online, tech companies that innately support social distancing are getting a huge boost in purchasing. Think in particular e-commerce delivery services such as online grocers, and Amazon. Some are finding that they’ve had to curtail services to be able to meet demand. Others like streaming services are seeing giant spikes in their traffic.

(Haven’t) been there, (haven’t) done that

The trajectory of impact on startups has been a wide one, starting earliest with major events. Conferences and expositions have become something of a cornerstone of how startups come together and do business in a global economy. While we clearly have tech hubs where face-to-face contact is as easy as grabbing a coffee, events become a place where you can catch people from many other corners, or even those who don’t regularly come out of the woodwork.

All of that has changed this year, with just about every major confab this year (so far) getting cancelled. CES, at the beginning of January, just made it through; RSA surprisingly went ahead last month. But many events have been taken off the table: MWC in Barcelona, SXSW in Austin, events from Google, Apple, Facebook and Amazon, E3, GDC and so many more.

People love to complain about how conferences and expositions are a noisy mess, but the fact of the matter remains that they have no rival when it comes to meeting people and doing deals at scale.

The events themselves are tech businesses in their own right, marketplaces that generate billions of dollars in revenues, and connecting hundreds of thousands people for potential B2B sales. “This is going to impact our business for sure,” one exec at a startup (who didn’t want to be named) told TechCrunch when the huge mobile confab in Barcelona was cancelled over coronavirus fears. “MWC is a major event for us…the largest source of qualified sales leads on our calendar. No other event comes close.”

If events businesses were the first wave of “high touch” tech outfits to be impacted by coronavirus, following closely behind has been the transportation and tourism industries — connected to the events business but also far exceeding it in scope.

People have chosen, been requested and sometimes been forced, to stop moving around in an attempt to mitigate the spread of the virus — creating a significant knock-on effect not just for transportation companies, but also the wider tourism industry, “The biggest nuclear winter in online travel,” as one founder put it last week. As people increasingly stay put, Airbnb this week extended its own extenuating circumstances refund policy so that people can rebook already reserved stays that were supposed to happen in the next month.

Transportation, of course, hasn’t only seen restriction for long-distance travel, or even for the carriage of just humans. Uber and Lyft have both cut back on rides, specifically shared, carpool-style services, in an attempt to “flatten the curve” to reduce the frequency of new cases brought on by too much contact, and food delivery services have introduced “contactless” delivery to minimise contact with customers, especially with those who might be infected and are quarantining at home.

“The health and wellbeing of our couriers and customers is our top priority and we think these practices will help give some peace-of-mind to our fleet, while also decreasing the interaction and contact between both parties,” a spokesman for Glovo, a European delivery startup, said last week when the measures were introduced.

But the impact extends beyond obvious sectors like transportation and tourism. Take makeup, for instance.

While Glossier does a majority of its sales online, it temporarily closed its retail locations last week to limit customer interactions. In some ways makeup is innately an industry that requires you (or someone else) to touch your face. Glossier is brainstorming ways to stay in contact with customers, such as FaceTime consultations and Slack groups.

Per Glossier, it hasn’t yet received questions from customers on how to handle the aspect of makeup application in a time when we are told to not touch our faces. It is, however, telling people to wash their hands.

There’s also Revel, which is a marketplace for women over 50 to host and attend small gatherings and stay connected. Given the age group and social aspect of the company, Revel has cancelled all in-person Revel events through at least the end of March.

“The decision to cancel in-person events has an immediate business impact for us,” the co-founders wrote in an email to TechCrunch.

Revel is working on a speaker series over Zoom, virtual walks where members can be connected via FaceTime or audio to go on walks together, and happy hours. The list goes on with book clubs and writing groups.

Similarly, London startup Jolt built a business around a concept of “pay-monthly” business classes that had a strong in-person component: not only was the idea to learn in a physical classroom, but those involved got opportunities to network with other students before and after courses, participate in breakout sessions, work in partner groups with other students and access presentations.

Now with those in-person classes on hold, Jolt has moved up the launch of “Jolt Remote,” an online version that it had previously planned to ship in 2021, which aims to preserve all the dynamics of the startup’s previous, offline efforts. “The company felt it necessary to expedite its rollout in order to keep their students safe, and to reduce the need for their education to be disrupted in the wake of COVID-19,” a spokesperson said.

Jolt‘s teachers will continue to work as they always did, she continued. But instead of their students meeting up in Jolt campuses, they’ll now be able to access the courses virtually.

While Revel’s shifts are likely to have an impact on its bottom line, they said, it was the right decision. Few startups and investors have even started to point at the new innovation that will come out of this pandemic as a bittersweet externality.

Revel, while it only operates in the Bay Area, has more than 200 members from geographies as far as South Africa. They’re planning to join the upcoming virtual gatherings.

The founders say it is helping Revel to build virtual capabilities that they will be able to use in the future when geographic distance, illness or other factors isolate members who need connection.

It’s helping an in-person company think what it means to be in-person.

We’ve seen a precipitous decline in participation in civic organizations in recent years; membership numbers are down for religious groups, labor organizations and non-profits. A cynic could interpret these trends as a sign that we have all become digital hermits, with our noses buried in our highly personalized screens. The reality is that powerful communities are not just alive and well but also booming. They just look different than they did 50—even 20—years ago. They are organized around businesses and brands and providing profound opportunities for companies around the world.

Take Salesforce for example. While you might think its $140 billion valuation is due purely to its innovation of software delivered on demand through the cloud, it has also created a community of nearly 2 million members who support each other, organize events, produce content, and are a critical part of its global operations. This community is an international network of minds, talent, and time, all supporting the success of Salesforce. The company’s annual “Dreamforce” conference, which attracts nearly 200,000 acolytes to San Francisco each year, represents a mecca for its ecosystem to convene, build relationships, and advance its corporate agenda.

Other examples include Harley Davidson, which has created more than 1,400 local chapters around the world for enthusiasts to get together in person and discuss their bikes; Fitbit, which has a community of more than 25 million members, who share and refine their exercise regimes; and HITRECORD, which has brought more than 750,000 artists, writers, and filmmakers together to collaborate on productions, many of which have shown at Sundance. The list goes on.

While communities generate tangible value for businesses — such as content, events, online advocacy and marketing, technology production, customer support, and education — it is the intangible value that members derive from the experience that makes these environments truly “sticky.” Human beings are fundamentally social animals. Behavioral economics and psychological research have taught us that we fundamentally crave a sense of connectedness, belonging, mission, and meaning, particularly when performing our work. Theresa Amabile’s The Progress Principle and Daniel Pink’s Drive both demonstrated that making progress towards a shared mission is the most motivating force a professional can feel. Communities deliver these benefits, creating a sense of shared accountability and a set of values while preserving individual autonomy.

A Superior Business Model

If a company can transition from simply delivering a product to building a community, it can unlock extraordinary competitive advantages and both create and support a superior business model. Specifically:

Enthusiastic members help acquire new members, resulting in lower customer acquisition costs and a tight viral loop.

Members are loath to abandon the community, resulting in increased retention and therefore improved lifetime value.

Members support one another, resulting in high gross margins due to a lower cost of service.

The result of this are very real network effects: as engagement grows, the community gets smarter, faster to respond, more globally available, and generates more value.

Codecademy is another example of a company that has figured out how to use community to support its business model. Since the company was founded nine years ago, more than 50 million people have taken one of its courses. Beyond its rich catalog of interactive educational content, the secret to Codecademy’s success has been its ability to link learners who contribute to the catalog and collaborate to improve their skills. Users of Codecademy Pro (the company’s paid offering) have access to a Slack group so they can meet, mingle and share best practices with others and gain access to events with industry professionals and peers. More advanced learners mentor the novices. This rich learning environment generates a network effect in the business model for a company that might not inherently have one.

A Sea Change Is Happening

Why is this happening now? One key reason is that technology-based communication platforms are more commoditized and accessible than ever before, building a rapidly growing addressable audience. We now have multiple generations of people who have grown up with technology and especially mobile phones and social media as part of their day-to-day lives. Global smartphone penetration is estimated to reach 45% in 2020, thus nearly one out of every two humans on the planet has the capacity to engage socially with others online.

With the ground seeded, many cheap, scalable tools for building communities both digitally and locally have been developed. These include Discourse, Slack, GitHub, Meetup.com, and WordPress, all of which make it practically effortless to convene and engage like-minded individuals and, as a result, are increasingly popular.

Consumers today also expect different relationships with brands. They don’t just want a customer support email address and a newsletter; they want deeper interaction with the company and fellow buyers of the product or service. It should be no surprise that in a recent survey, nearly 80% of startup founders reported that building a community of users was important to their business,  with 28% describing it as their competitive moat and critical to their success. The top five brands in 2019 — Apple, Google, Microsoft, Amazon, and Facebook — have all invested significantly in digital and in-person community engagement across their various product portfolios.

Seven Success Patterns in Community Building

Motivated by the allure of a superior business model, accessible tools, and an eager and available audience, any company can build a tribe. But this is both a technological and cultural challenge. It’s not enough to set up a platform. You also need to create an environment that incentivizes the behavior you want to see, exposes the value generated, and highlights and rewards great participation.

Successful communities have seven key elements:

1. A shared purpose and values. As former Instagram executive Bailey Richardson puts it, the community must be able to answer the question “Why are we coming together?” 2. Simple, easily accessible value consumption. Prospective and existing members can easily see what they’re getting:  support, events, documentation, the ability to download and use technology, etc. This value is not hidden or buried, it is clearly organized and available. 3. Simple, easily navigable value creation. Members can easily create new value for others in the group to consume. This contribution process is (a) crisply defined, (b) simple and intuitive, and (c) provides almost-immediate gratification. 4. Clearly defined incentives and rewards. Quality contributions (e.g. content, support, technology, etc.) and community-centric behavior (e.g. mentoring, leadership, and growth) are acknowledged and applauded to build a sense of belonging, unity, and satisfaction. 5. Carefully crafted accountability.  There is a clearly defined, objective peer review and workflow — for example, reviewing content, code, and events. This doesn’t just produce better, more diverse results, it also increases collaboration and skills development. 6. Healthy, diverse participation driven by good leadership. When you are intentional about diversity and good conduct and have leaders who embody and empower these important principles, you reduce toxicity and increase value. 7. Open, objective, governance and evolution. There is clear, objective governance, and community members can play an active role in reshaping its structure and operational dynamics together, giving them “skin in the game” and, thus, a sense of ownership and responsibility.

Chief is an interesting case study of an emerging community seeking to embody these patterns of success. The company is a private network designed to support exceptional professional women with a core set of services such as coaching, peer learning and network building. Since its launch in January 2019, the company has grown rapidly and has more than 5,000 names on its wait-list. Value consumption (advice to advance your career) and value creation (peer-to-peer coaching) are obvious and clear, as is the healthy, diverse participation of community members that feel a sense of mutual accountability for their individual and collective success. As the company scales to cities throughout the United States, its community presents a formidable competitive moat, organized around the mission of professional advancement and support for female executives who are members.

Measuring Success

While there is no silver bullet for building a community, success is delivered by tracking a crisp, focused set of metrics and regularly evaluating and making adjustments based on those evaluations. This process is an evolutionary one, where your cross-functional team should repeatedly ask questions about the results they see and hypothesize changes to drive improvements. These changes are then delivered as a series of small experiments that will both move the needle and build internal experience.

For companies building a community initiative, the areas you track should be:

1. Community Consumption and Creation.  This means tracking active participation and the value that members consume and produce. For example, measuring community traffic, sign-ups, individual contributions (e.g. answering questions, running events, improving content), and other areas. 2. Delivery and Execution.  This means looking at how well your company is building community strategy, estimating work, and executing effectively. This is important to ensure planning and execution are aligned and avoid spinning your wheels. 3. Organizational Experience. This involves following the incubation and evolution of community skills and expertise in your business (e.g. reading and reacting to data, mentoring, moderation, conflict resolution, building and delivering incentives, etc.). This is important to ensure the company is what it needs to foster and grow the community, especially as it scales up.

We are in the early stages of truly harnessing the potential of carefully crafted, productive communities. Done well, and when intentionally woven into the fabric of the business, communities can offer a sustainable competitive advantage and drive brand awareness, value production, and therefore overall commercial valuation (oh, and delivering a world-class, personal, gratifying member experience.)

The future of business is a more open, connected, engaging one, and communities are going to change the nature of how we interact with brands, products, and other people.

The Decade's Biggest Technology Disappointments

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The Decade's Biggest Technology Disappointments

Like most teen years, the past decade in technology started out someplace relatively innocent before growing moody, dark and disillusioned. In 2010, we were excited about new iPhones and finding old friends on Facebook, not fretting about our digital privacy or social media’s threat to democracy. Now we are wondering how to rein in the largest companies in the world and reckoning with wanting innovation to be both fast and responsible.

Over the past 10 years, new technology has changed how we communicate, date, work, get around and pass time. But for every hit, there have been high-profile disappointments and delays. That includes overpriced gadgets for making juice, face computers, promises of taking a vacation in space and companies claiming to be saving the world.

The failures served a purpose, acting as reality checks for the technology industry and the people who fund, regulate or consume its products. Tech companies spent the last decade first trying to grasp, then distance themselves from, their impact on society. Facebook’s famously decommissioned “move fast and break things” motto sounded plucky in 2010 and laughably misguided in 2019, when the company had, in fact, broken things.

It was a decade when billions of dollars were thrown at tech companies, and yet many of the promises those companies made never materialized, blew up in our faces or were indefinitely delayed. And while tech failures are nothing new, taken together they brought the innovation industrial complex closer to earth and made us all a bit more realistic – if less fun.

Like proper adults.

The benevolent, world-saving tech company

“Don’t be evil” read Google’s famous motto, which sat atop its code of conduct until 2018, when it was quietly demoted to the last line.

At the beginning of the decade, that is exactly how many of the largest tech companies and CEOs marketed themselves. Their products were not only going to make daily life easier or more enjoyable, but they also would make the entire world better – even if their business models depended on ads and your personal data.

“Facebook was not originally founded to be a company. We’ve always cared primarily about our social mission,” chief executive Mark Zuckerberg said in a 2012 letter, just before the company’s initial public offering. He outlined lofty visions going forward, including that Facebook would create a more “honest and transparent dialogue” about government through accountability.

Instead, the decade turned toward disinformation, and hate speech spread on social media. Facebook, Twitter and Google’s YouTube were used to spread disinformation ahead of the 2016 U.S. election, while Google briefly worked on a search engine for China that would censor content. Companies profited off mountains of user data they collected but failed to protect, as major data breaches hit Equifax, Yahoo and others.

In response, workers are pushing back, growing into quiet armies attempting to redirect their companies toward social goals.

Face computers

Google co-founder Sergey Brin debuted Google Glass in 2012 by wearing a prototype of the smart glasses onstage. Its real PR outing came later that year when skydivers live-streamed their jump out of a blimp above San Francisco during a Google developer conference.

By showing information in front of the face instead of on a phone, Google said, the $1,500 Glass would allow people to interact more with the world around them. Instead, its legacy has been questions about our right to privacy from recording devices, the word “glasshole,” and at least one bar fight. The company stopped selling Glass to consumers in 2015 and shifted it to a workplace product, targeting everyone from factory workers to doctors.

Google was not alone. Microsoft made HoloLens, a technically ambitious piece of eyewear that looked like round steampunk goggles and used augmented reality. Facebook bought virtual-reality goggle maker Oculus for $2 billion and heavily invested in and promoted it as a gaming and entertainment device (and the future of social media). Magic Leap, another augmented reality headset promising immersive and mind-blowing entertainment, managed to raise $2.6 billion and only release one $2,295 developer product.

Eventually we may wear glasses that display useful information on top of the real world, outfitted with smart assistants that whisper in our ears. Google’s early attempt at a consumer face-wearable was not destined to be that device.

A more efficient way of eating

Juice. Colorful, thirst-quenching, packed with vitamins, on-demand juice. It seemed an unlikely thing for Silicon Valley to try to disrupt. But in the 2010s, entrepreneurs’ impatience with preparing and even consuming the calories necessary to survive led to a number of eating innovations.

One of the decade’s most memorable tech failures asked the question: What if you spent $699 for an elaborate machine that squeezed juice from proprietary bags of fruit and vegetable pulp for you? The answer, discovered by intrepid Bloomberg journalists in 2017, is that you could squeeze those packets with your hands instead of overpaying for a machine. That machine was Juicero, and it raised $120 million in funding before shutting down just five months later.

Other food innovations have fallen fall short of their revolutionary promises. Smart ovens became fire hazards; meal-kit delivery start-ups went under; robots tossed salads, mixed drinks and flipped burgers; and pod-based devices for random foods (cocktails, tortillas, cookies, yoghurt, jello shots) failed. And then there’s Soylent – a meal in drink form, designed to save time by cutting out “tasting good” and “chewing.” Soylent has managed to find a small but enthusiastic fan base, and even got into solids recently with a line of meal-replacement bars called Squared.

The decade’s real food change came from delivery apps that pay on-demand workers to bring meals made in actual kitchens to your door. Those companies are dealing with employee protests over low and confusing pay while trying to become profitable.

Non-Facebook social networks

Remember Path? Color? Yik Yak, Meerkat and Google Buzz? And iTunes Ping, Apple’s short-lived attempt at making its music hub social? Start-ups and the tech giants alike launched social products over the past decade, but few succeeded.

In 2010 there was Google Buzz, which was quickly replaced by Google+ in 2011. The service struggled to attract users and experienced privacy issues, such as a bug exposing more than 52 million people’s data. It was finally declared dead this year, though some of its best features live on in Google Photos.

Vine burned bright for too short a time before being closed in 2016 by Twitter, which had bought the company for a reported $30 million in 2012. (Speaking of Twitter, it hung on thanks in part to its popularity with politicians, celebrities and people who are mad online, though it is far smaller than Facebook. Snapchat and TikTok have also carved out niches.)

Facebook dominated at the start of the decade and continues to dominate at the end, in part by buying or blatantly copying any competitors along the way. It acquired Instagram and WhatsApp, integrating both more closely with the Facebook brand. Even with major scandals and fumbles, its global user base grew to more than 2 billion people.

A crowdfunding, DIY revolution

For a short time, it looked as though the next generation of gadgets would come from outside the usual Silicon Valley idea factories. They would be dreamed up by passionate hobbyists, prototyped on 3-D printers and funded by fans instead of venture capitalists (though still manufactured in Shenzhen, China). Despite some notable successes – Oculus, Peloton, Boosted Boards – it turns out getting an idea from your cocktail napkin to market is pretty tough.

Notable failures include the disappointing Coolest Cooler, which featured both Bluetooth and a blender and raised more than $13 million on Kickstarter in 2014. It failed to deliver products to a third of its backers; many that shipped didn’t work. Others never materialized, such as iBackPack, which was supposed to produce a WiFi hotspot. The people behind it raised more than $800,000 and were accused by the Federal Trade Commission of using those funds to buy bitcoin and pay off credit cards. Skarp Laser Razor, a razor with dubious hair-removal technology, managed to get more than $4 million in pledges from interested customers before Kickstarter suspended its campaign for violating policies on working prototypes.

(Kickstarter said the vast majority of its products make it to production and that it aims “to be quite clear about the fact that not all projects will go smoothly.”)

Consumer 3-D printers also failed to live up to the hype. We were supposed to have a printer in every home, spitting out replacement LEGOs and screws, art projects, and even food. The high cost of the devices and the skills needed to use them could not compete with overnight shipping.

Drones dropping deliveries

“Could it be, you know, four, five years? I think so. It will work, and it will happen, and it’s gonna be a lot of fun,” Amazon Chief Executive Jeff Bezos said.

The year was 2013, and Bezos was on “60 Minutes” to unveil the next big thing in package delivery: drones. He said that within that time frame, quadcopters would be able to drop packages from warehouses at customers’ doors within 30 minutes. (Bezos owns The Washington Post.)

In 2016, Amazon showed off its first commercial drone delivery in a rural area of the United Kingdom, a 13-minute delivery of an Amazon Fire TV streaming device and a bag of popcorn. Its latest drone iteration was on display earlier this year at MARS, its weird tech conference, again promising that drone deliveries were coming soon.

But as of the end of the decade, Amazon packages are still being delivered by humans. In fact, Amazon announced in 2018 that it was adding 20,000 delivery vans via third-party delivery partners to its ground fleet. Other companies, including Uber, UPS and Alphabet’s Wing, have also been testing drone deliveries, and it’s possible that we will have boxes from the sky onto porches in the next decade.

Vaping to fix smoking

It was supposed to be safer than smoking and a way to quit nicotine altogether. While vaping has indeed caught on, its biggest selling point has blown up in recent years. Eight deaths and more than 2,500 cases of lung-related illnesses have been linked to vaping in the United States.

Critics say fun-sounding flavors and colorful devices, most notably from the company Juul, have made vaping wildly popular with teenagers – one in four high schoolers vapes, according to the U.S. Centers for Disease Control and Prevention. Now the FDA and lawmakers are investigating vaping companies. But if we draw on experience from the cigarette industry, vaping is not likely to disappear anytime soon.

Amazon’s big phone play

Apple and Google have direct access to billions of people with their smartphone operating systems and hardware – 2.5 billion devices run Google’s Android operating system, and 900 million iPhones are in use.

One company noticeably absent from our pockets is Amazon, but not for lack of trying. After several years of stealth development, Amazon announced its Fire Phone in 2014. The smartphone did not look like much, started at $199, ran on a customized version of Android and was available only on AT&T. Amazon reported $83 million of unused inventory in late 2014, and it discontinued the Fire Phone a year after its introduction.

Now that Amazon is competing against those two companies for voice-assistant dominance, its lack of a smartphone is even more glaring. It has put Alexa in anything with a microphone, from cameras to headphones and, soon, eye glasses. (It is on smartphones, but you have to open the Alexa app first.) Meanwhile Apple’s Siri and Google’s Assistant are already in pockets, built into the core of the devices and listening for their next cue.

Tourists in space

It is no secret that big-name billionaires love space. Despite their passion, the three boldest aspiring space barons have made and missed deadlines for sending people into space this decade.

Richard Branson said Virgin Galactic would fly tourists into space by 2020, but its last test mission was two test pilots and a crew member at the start of last year. Bezos said at an Air Force Association conference in late 2018 that Blue Origin would send a test flight into the upper atmosphere with people on board this year, but the most recent test flight, on Dec. 11, contained no humans. In 2017, Elon Musk announced that SpaceX had taken deposits to fly two passengers around the moon in 2018. That flight did not take place. He has the whole next decade to hit a different goal, set in 2011: sending someone to Mars by 2031.

There are plenty of interested customers. Virgin Galactic has sold tickets to more than 700 people wanting to take a trip to space at $250,000 a seat.

If there is one thing on this list we would not want to rush just to meet a deadline, it is loading civilians into private rockets and hurling them into space.

© The Washington Post 2019

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