Welcome to the weekend. I spent Thursday afternoon at PayPal this week for Village Capital’s FinTech Accelerator, I must say I was impressed with the companies I saw there. Also, for those who are interested, check out the full conversation between myself and Susan McPherson on Profit & Purpose at the Atlantic’s Power of Purpose conference last week.
Happy Thanksgiving week. I hope you enjoy time with family and friends.
30.7 B – This year’s Singles’ Day, a retail holiday created by Alibaba a decade ago, led to a record $30.7 billion in sales. But momentum is slowing: The 27% increase was the lowest year-over-year growth in the event’s history.
7.1 MM – New York is a genuine tech hub (and that was before Amazon). By 2020 New York will have 7.1 MM square feet of office space occupied by big tech companies – Google (5MM), Amazon (1.4MM), Facebook (700 K).
80 – At the peak earlier this year, “blockchain” was mentioned 173 times in earnings calls. The number has since fallen as much as 80%.
What is AI?
What is Artificial Intelligence, exactly? The question may seem basic, but the answer is kind of complicated. As it currently stands, the vast majority of the AI advancements and applications you hear about refer to a category of algorithms known as machine learning. These algorithms use statistics to find patterns in massive amounts of data. They then use those patterns to make predictions on things like what shows you might like on Netflix, what you’re saying when you speak to Alexa, or whether you have cancer based on your MRI. Machine learning, and its subset deep learning (basically machine learning on steroids), is incredibly powerful. It is the basis of many major breakthroughs, including facial recognition, hyper-realistic photo and voice synthesis, and AlphaGo, the program that beat the best human player in the complex game of Go. But it is also just a tiny fraction of what AI could be. The grand idea is to develop something resembling human intelligence, which is often referred to as “artificial general intelligence,” or “AGI.” Some experts believe that machine learning and deep learning will eventually get us to AGI with enough data, but most would agree there are big missing pieces and it’s still a long way off. AI may have mastered Go, but in other ways it is still much dumber than a toddler. Check out this informative flow chart to understand what AI is. MIT Technology Review (7 minutes)
Sex & Mobility
Researchers who study hospitality and technology in the United Kingdom teamed up this year to explore how advances in automated transportation could reshape tourism around the world. They found that autonomous vehicles have the potential to unleash far more than robot-guided Uber rides. It’s only a natural conclusion that sex in autonomous vehicles will become a phenomenon with the removal of the front-seat chaperones. Free of driver costs, companies could invest more in the customer experience. Interiors may become more spacious. Cabs could come with bedding or perhaps a massage chair, analysts forecast. Passengers might tap an iPad to hear Marvin Gaye. Enter hotels-by-the-hour on wheels. A fleet of rolling love dens. Tourists could summon one on yet-to-be-invented apps. Washington Post (6 minutes)
M-Pesa Goes Global
Kenya’s biggest mobile money service M-Pesa is going global in a deal with Western Union that would allow users to send money all over the world. M-Pesa’s over 23 million active subscribers in Kenya will also be able to send and receive money through their phones and be connected to WU’s 500,000 global agents. The deal to take M-Pesa global also boosts Western Union which has faced tough competition from fintech startups like TransferWise and WorldRemit that offer cheaper and faster online transfers—forcing the company to cut prices and shift to a digital strategy. Quartz (6 minutes)
Less is Better
One hundred and forty-three students from the school were monitored for three weeks after being assigned to either limit their social media use to about 10 minutes per app (Facebook, Snapchat and Instagram) per day or continue using it as they normally would. They were monitored for a baseline before the experimental period and assessed weekly on a variety of standard tests for depression, social support and so on. Social media usage was monitored via the iOS battery use screen, which shows app use. The limited use group showed significant reductions in loneliness and depression over three weeks compared to the control group. Both groups showed significant decreases in anxiety and fear of missing out over baseline, suggesting a benefit of increased self-monitoring. The findings strongly suggest that limiting social media use to approximately 30 minutes per day may lead to significant improvement in well-being. TechCrunch (5 minutes)
Harari in the Valley
Silicon Valley is in love with its principle Doomsayer. How can Silicon Valley be so infatuated with Yuval Harari, yet what Yuval is saying undermines the premise of the advertising- and engagement-based model of their products. Part of the reason might be that Silicon Valley, at a certain level, is not optimistic on the future of democracy. The more of a mess Washington becomes, the more interested the tech world is in creating something else, and it might not look like elected representation. Rank-and-file coders have long been wary of regulation and curious about alternative forms of government. A separatist streak runs through the place: Venture capitalists periodically call for California to secede or shatter, or for the creation of corporate nation-states. Mr. Harari, thinking about all this, puts it this way: “Utopia and dystopia depends on your values.” New York Times (12 minutes)
If you’re a first-time founder, here are four questions to consider when valuing your startup: 1) What are comparable companies worth? Look for a company that shares the same or similar: (a) industry, sector or subsector; (b) geography; (c) business model and/or revenue model; and (d) growth rate. 2) What is the investor’s target return? Assume 10x 3) How viable is the customer acquisition strategy? What is the pipeline, cost of acquisition and customer lifetime value? Is there somebody on the team experienced enough to execute on the strategy? 4) Are expectations set too high? It’s a startup founder’s role to “manage expectations” and walk the tightrope of being aspirational with the company’s vision and goals while not setting them too high that they routinely miss them. Westaway Review (8 minutes)
In Pursuit of the Interesting
The really fascinating, and even admirable, thing about Richard Feynman was that if he ever had a goal, it was simply this: to learn as much as possible in any direction that his innate curiosity took him. His orientation was pointed towards the most interesting thing he could find. The pursuit of interestingness, I think, solves the predicament that is inherent in goal-setting. It’s vague and nebulous enough to be honest about the unpredictability of the future, without being hopelessly lost in the chaos of pure luck and randomness. Interestingness isn’t hedonism or materialism or the chase of anything new and shiny that seeks to distract us. It’s deeper than that. It’s taking on that random project you had no plan to take on because you have a feeling that you might just learn something you didn’t know about yourself. It’s seeing a person you just met not as a potential partner or someone who can do something for you but simply as an individual who may open up a new, unknown, and unique dimension in your life. Medium (7 minutes)
I don’t believe that we should have a federal regulatory body determining what is good and bad for the market. We have a court system to determine that, and 50 state legislatures, as well as many federal ones. Who gets to determine what is good and bad that this regulatory body will then enforce? The market should determine that. Surely Google has had a good run, but that does not mean that other search engines are not going to exploit the bad press and bad market taste that poor or destructive algorithms of Google will have. – Stephen Casey
Since I now live in WA state and as a climate person, I studied the Carbon Tax proposal 1631 (and I have studied taxation in general for getting shifts on environmental issues), I would like to push back gently on your choice of article. I don’t think it’s fair to take this MIT article example as evidence that the people don’t want a carbon tax. The fossil fuels industry poured a whopping $30M+ into an aggressive anti carbon tax campaign that was, IMO, outright misleading and cynical with fear-mongering add campaigns that were very effective even if not reflective of the actual Bill. In addition to the ad campaign, it looks like the oil industry had (bought?) the owners of influential news companies on their side. In reality and in effect, WA citizens, like American citizens are paying a hefty carbon tax already, only indirectly. In other words, citizens are subsidizing pollution not only with their tax dollars but with their health (see the latest WHO) report on the health effects of air pollution. As you pointed out, “EVERY economist believes taxation is the right way to address the issue”. Indeed, Professor Nordhaus, this year’s economics Nobel Prize winner, has demonstrated in every conceivable way that taxation is the most effective and efficient way to change human consumption behaviors and values, which is exactly what is needed if we are to have a chance. What the WA rejection of the carbon tax shows is that money in politics leads to policies that benefit corporations and screws citizens by taxing them several times. I would point to Citizens United as a culprit in making out 53-year-old wonky democracy less democratic. –Gilonne d’Origny
We did not domesticate wheat; wheat domesticated us. –Yuval Harari
About the Weekend Briefing
Photo by Jonny Caspari.