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Benedict's
Newsletter

This is a weekly newsletter of what I've seen in tech and thought was interesting. I work at Andreessen Horowitz.

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🗞 News

Facebook pivot: Mark Zuckerberg wrote a blog post proposing a pretty fundamental change in Facebook's strategic direction: the future is person-to-person messaging, which will be the 'majority' of use, and Facebook will build end-to-end encryption for all messaging, so that neither it nor anyone else will have 'your' data (with the messaging back-end unified between Messenger, WhatsApp and Instagram). There are lots of specific questions here (How far can you use metadata to stop child exploitation if the messages themselves are encrypted? Where/what is the ad inventory? Do the client apps do targeting (or trust-and-safety checks), since they will still see what you're writing? Where does the blockchain payment project fit into this?)

But the bigger point is the pivot away from FB having your data and the pivot away from the newsfeed itself. This looks very like Microsoft's pivot towards trusted computing in the late 1990s: when you discover that the whole premise of your product gives opportunities for bad people to abuse it, you can add filters (tens of thousands of human moderators now, virus scanners etc then), but you can also change the premise so that those opportunities don't exist. Russians can't go viral in the newsfeed if there is no newsfeed and no one-to-many sharing. 'Researchers' can't scrape data if FB doesn't have it. Facebook has changed its whole premise a few times (the newsfeed was a Big New Thing too, once), and this is another: something to watch.   Link

Tech regulation: Elizabeth Warren, a US politician and presidential candidate, published a proposal for very wide-ranging regulation and breakup of big tech companies. It's an odd combination of both very specific and very vague: the basic idea seems to be that you can't both have a 'platform' and have a business on the platform. So, Amazon cannot both have Marketplace (wholesale access to its ecommerce and logistics platform, which is now around half of volumes) and sell its own products that compete with that. But what does that mean? Is Amazon not allowed to sell on its own behalf at all and still have Marketplace - so it has so kill half of the business? Or does this only apply to private-label products? Does that mean Walmart and every other retailer have to shut down private-label products as well (invented c.150 years ago)? Then, Apple isn't allowed to both have an app store and have apps in the app store... so does that mean when you turn on your phone there are no apps and you have an 'choose which App Store to use' screen? Does Apple have to shut down Final Cut Pro (now sold on the Mac App Store)? Or what?

Again, there's a specific and a general point here. 'Break up tech' sounds good, but when you ask what it actually means you very quickly get into nailing-fog-to-the-wall territory - maybe there is no there there. But the general point: regulation of 'tech', however it's done, is now firmly part of the political agenda in most developed countries and will be as much a part of the next few years of the industry as machine learning or blockchain. Link

Folding phones: this year's Mobile World Congress, the main annual mobile trade show (110k people), was all about 5G (see my blog post here), with a few flagships announced, but the biggest thing to actually see was the wave of folding smartphones, with Huawei, Samsung, TCL and a few others showing prototypes that are notionally on sale for several thousand dollars. There is a tech breakthrough behind this - we can now make high quality colour screens that can be flexed, bent and cut to any arbitrary shape. This is a big deal for product design in general (no more flat black rectangles on car dashboards), but it's not yet quite clear how to use it in smartphones: opinion as to how practical the demo units would actually be was pretty divided. I hope it doesn't turn out like 3D screens (a fad at MWC maybe 5 years ago), and there is certainly something here, but it's still a few years away from mass-market consumer products (much like 5G). Deeper point: we are at the end of the smartphone S-Curve and well into diminishing returns on innovation. Link

The 'Huawei is a national security threat (especially in 5G)' debate rumbles on. The UK's signals intelligence unit, GCHQ, published a balanced piece on assessing the threat (link), Germany decided to deploy Huawei kit in 5G, and the US made threatening noises. Subtext: wide consensus at MWC that the Huawei 5G equipment is amongst the best (not just cheap). 

Google's 'Duplex', which lets your phone call a restaurant, talk to whoever answers and make a booking entirety using computer voice, has been deployed in 43 American states. This was demoed at the IO developer conference last year and aroused a certain amount of concern as to whether this was deceptive (plus the scope for abuse), so there is an opt-out and the system introduces itself. Link 

Google's Waymo autonomy unit is going to sell the proprietary LIDAR unit it has created to other research orgs, as long as they're not working on cars. Interesting way to try to get volumes up.  Link

Airbnb (a16z portfolio company) bought Hotel Tonight. Link

Amazon hired a head of real-estate from a discount grocery chain. Those physical store experiments aren't going away. Link

Amazon has stopped selling Dash buttons. Link

Bolo, a Google speech recognition app to help Indian children to learn to read. Link

Microsoft has a new smartphone feature that lets you take a picture of a printed table and import it into Excel. This is the greatest step forward for financial analysis since the spreadsheet. Link

Intriguing move for the NHS: a new digital transformation agency. Given the NHS is apparently the world's largest buyer of fax machines, this could be a big change. Link

Apple execs appear to be quite uncomfortable with the fact that modern hit TV shows tend to be edgy and not family-friendly. Where do they want to take the brand? Link 

More real-world applications for Google's Deepmind: they managed to get a 20% efficiency saving out of Google's wind energy platform. Link

Facebook has open-sourced an LTE software stack. Build your own cellular network. Link

🔮 Reading 

Eugene Wei on Status as a Service (good read). Link

Fascinating interview with Jorge Paulo Lemann, co-founder of 3G capital, a PE firm that owns a bunch of consumer CPG/FMCG brands, including Kraft Heinz. "I'm a terrified dinosaur. I’ve been living in this cozy world of old brands, big volumes, nothing changing very much, and you could just focus on being very efficient..." Link

A nice thread digging through the S1 for Ruhnn, a Chinese social media influencer manager. Link

"How to launch a D2C beauty brand for $1.5m". Link

Apple versus Qualcomm. Link

As we all talk about fake news on social media, a worthwhile look at how traditional media spread the Momo hoax in the last few weeks. Link

Deepnews: building an 'angle detector' for news coverage. Link

How Russia arrests people based on their Facebook and Telegram posts. Link

One of a growing trend in pieces on 'ethical AI'.There are important points, here, but I also I think it is unhelpful to use the term ethical AI to describe both the question of what we don’t want people to use ML for and mechanical challenges with making ML work as intended. ‘Bad intent’ is not the same problem as ‘not working as intended'. Link 

Nice technical overview of how the 'follow you around the room' camera in Facebook's Portal works. Link 

Munchery's bankruptcy filing. Lots of interesting discussion of the mechanics of the business. Link

Study from the UK financial regulator (FCA) on how and why consumers buy cryptocurrencies today. Link

The 'wild east' of WhatsApp groups in India. Link

Fun speculation on driver/pedestrian behaviors in an autonomous world. Link 

😮 Other reading

Homelessness in America's gilded cities. Link

Grow your own furniture. Link

📊 Statistics

Pew study of social media use in the USA in 2018. Link

Shopify report on the state of Ecommerce. Link

Long Bain/Google study on ecommerce in MENA. Link 

TikTok passed 1bn downloads. The first Chinese consumer app to go really really viral? Link (See also: it got a fine for ignoring child safety. Link)

The state of EV battery prices. Link  

China's economy is 12% smaller than official statistics. 😳 Link
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