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A reminder for new readers. That Was The Week collects the best writing on critical issues in tech, startups, and venture capital. I selected the articles because they are of interest. The selections often include things I entirely disagree with. But they express common opinions, or they provoke me to think. The articles are only snippets. Click on the headline to go to the original. I express my point of view in the editorial and the weekly video below.
This Week’s Video and Podcast:
Thanks To This Week’s Contributors: @CowboyVC, @aileenlee, @allegra_v2, @jeffbeckervc, @packyM, @shauryamalwa, @IanAllison123, @Jessicalessin, @openai, @finkd, @jaypeters, @gruber, @daringfireball, @aiishamalik1, @marlizevr, @adhutchinson
Contents
Editorial: Unicorns and Face Masks
Killing Eve’s creator brings his antiheroine back to life in a Substack serialization
Apple’s App Store policies now let US developers link to outside payments
Apple previews new entertainment experiences launching with Apple Vision Pro
Apple Vision Pro to launch with 150 3D movies, immersive films and series, Disney+, Max and more
Aileen Lee and her team at Cowboy Ventures published an update on the topic of Unicorns this week. It coins new labels: ‘ZIRPicorns’ and ‘Papercorns’. Here is a good summary of how their team sees the landscape:
It’s a bloated herd that will thin in coming years (likely to about 350) because…
• A whopping 93% are ‘Papercorns’ - privately valued companies.
• 60% are ‘ZIRPicorns’ - their last valuation is from ‘20-22, when interest rates were near zero.
• Many are running out of runway. Many are on the cusp: 21% are valued just at $1B (sorry?!)
• ~40% are trading below $1B in secondary markets.4
• BUT. There is lots of substance in this herd.
• And we see evidence of a Software Unicorn Power Law - the US will be home to more than 1,000 unicorns by 2033.
The biggest change since the original article is the ratio of exits. IPOs and Acquired companies. In 2013, 66% of the 39 Unicorns had exited. Today, it is only 7%, hence the term ‘Papercorns’.
And the 2020-2022 investing frenzy means many, perhaps most, are worth far less than the most recent investors paid for them.
Despite that, the Cowboy team guesses that due to a correlation between Moore’s Law and Unicorn growth, there will be over 1000 new US Unicorns by 2030. I’m willing to bet they are right, and the rise of AI will be a large catalyst for that.
This is in a week when Apple (today) opens up pre-orders for the Vision Pro. That is accompanied by news of what you can do with it. The most interesting for me is that Apple has recorded some intimate music sessions with major artists that can be viewed as if you are in the room with them, using spatial audio and video. That indicates a future of new and novel media experiences.
The Killing Eve creator turned to Substack this week to publish new episodes in writing. Creative use of new platforms is not slowing down.
My favorite Essays of the Week are from Jeff Becker and Packy McCormick. Jeff writes about venture capital and asks: Indexing works for the S&P, why not for VC?
In answering his own question, he posits that the venture business has to change and that the incumbents will have an innovator dilemma so that the change will come from outsiders:
The problem is, even if you wanted to, there is no infrastructure to simply buy the asset class. At least not without becoming an LP in dozens of funds and/or funds of funds with additional layers of fees.Or at least there hasn’t been one yet.
That’s because there are fundamental challenges to doing it effectively:
How do you create infrastructure to evaluate 500,000+ founders annually and decide on which 5,000 to back?
Who has both enough capital & a long enough time horizon to deploy $50B over 10 years?
How do you support 50,000 companies?
How do you rebalance the fund toward the most valuable companies to produce outsized returns, like the S&P index?
And with companies like Apple, Microsoft, NVIDIA, etc earning 99% of their value after their IPO’s, how do you extend your time horizon to 20, 30, or even 50 years?
All of this is possible, it’s just going to take some time.
And so:
LP’s … need to change. Traditional high net worth individuals are not the right customer for reinventing venture capital. Sovereign funds, public money, and economic development groups are.
This is not the hope & pray for a 10X fund game. The early-stage game is about transforming the world through technology, while creating economic opportunity and global prosperity. It’s about creating new businesses, new jobs, and bringing a reasonable quality of life to every corner of the globe. Sovereign funds, public money, and economic development groups possess the capital, long-term time horizon, and economic goals that align to the reinvention of VC.
My 2c. Indexing Venture needs a data infrastructure to select which private companies go into an index. That can enable differentiation between poor performers and the best. It also needs capital and access to those differentiated companies. It needs to find a public interface enabling retail investors to allocate to it later once the sovereign and others have initiated it. That is the journey SignalRank is on. - to select, access, and then open up later-stage venture-backed companies to index investors.
Packy McCormick has the headline of the week - You need to f*** around to find out. This references the negative pushback that the Rabbit AI Agent (see the video of the week) received from naysayers. I will leave the last word to Packy - it’s great.
Responding to the video:
The longer answer, which we’ll explore today, is that the beauty of the system lies in millions of people trying new things, most of which will fail outright, some of which will succeed spectacularly, and many of which will survive only in pieces, contributing a new mechanism, concept, or feature to the pile of Lego bricks that the next group of tinkerers can play with.
This is true for products, research, and ideas, even the ones you disagree with. Especially the ones you disagree with.
The point isn’t to play it safe and get it right the first time; if any one person or group of people had The Answers, we might as well give real communism a try.
The point is to experiment with wild, clever, creative, novel things, get feedback from the market, and iterate until, maybe, something emerges that improves society in a fundamental way.
Halleluja.
Aileen Lee, Allegra Simon. (@CowboyVC, @aileenlee, @allegra_v2).
With a Slide Deck - https://www.cowboy.vc/cowboy-ventures-unicorn-analysis-companion-deck
Cowboy Ventures had just gotten started. To inform our investment strategy, we assembled and studied a dataset of US-based, VC-backed startups that had grown to be worth $1B+ within ten years, using ‘unicorn’ as a shortener to capture their magic.1
Our original analysis found just 39 unicorns out of thousands of startups funded. Some highlights:
The majority (62%) had “exited” - gone public or been acquired.
Most were consumer-oriented: ~80% of the value, ~60% of companies.
Enterprise-oriented companies had great capital efficiency (26x), 2.4x better than consumer companies.2
One company in a decade became a “superunicorn” (worth >$100B): Facebook.
Contrary to the prevailing stereotype, average age at founding was 34; 38 for enterprise software companies.
Co-founding teams of 3 with common work, school and tech experience were the majority.
The Bay Area was unicorn HQ (70%). NY, home to 3, was the second largest hub.
There was very little diversity - no female CEOs, just 5% had a female co-founder.
Historical returns, growing markets (social, mobile, cloud, commerce, security, crypto, AI…), COVID-era effects and low interest rates attracted 3x more capital ($580B more!) to VC funds between 2013-2021 (btw, that’s also $11B+ more in VC fee income).
This enabled established VC firms to raise record-breaking funds; public “crossover” funds joined the party too. Over a thousand newer firms also raised funds. The industry gained thousands of new investors with fresh ‘checkbooks’ and limited mentorship or oversight, given the pace.
2021 was a perfect storm of near zero interest rates while much of the world spent their days behind screens (zooming, shopping, streaming, trading, therapizing…), immersed in tech. Due diligence processes were rushed, round sizes and valuations broke records, and a huge herd of unicorns was crowned.
In March 2022, the Fed raised rates, triggering a multi-year downward effect on public multiples and enterprise budgets. Although big VCs continued to raise big money (64% of 2022 VC raised went to >$1B funds), investors mostly froze (~40% of VCs stopped dealmaking in 2023). Companies refocused on margins and profitability, cutting costs in several waves. Unicorns started to fall via down rounds, public delistings and shut downs.
Sadly, we’re far from done. It’s a dynamic time to snapshot and learn from unicorns.
To note: last-round valuations are an imperfect gauge, and likely inflate current herd size and value (Cerebral, Clubhouse and OpenSea may be examples). And, point-in-time methodology misses some companies. For example, Stripe was founded in 2010, Zoom in 2011, Snowflake and Coinbase in 2012. None was a unicorn in 2013, and are now more than 10 years old, so excluded from this dataset.
Unicorns ballooned 14x in the past decade, from 39 to 532! They now serve a wider array of sectors (we’re tracking 19) from climate and crypto to vertical SaaS.
The pendulum swung hard to enterprise (78%), the inverse of 2013.
It’s a bloated herd that will thin in coming years (likely to about 350) because…
• A whopping 93% are ‘Papercorns’ - privately valued companies.
• 60% are ‘ZIRPicorns’ - their last valuation is from ‘20-22, when interest rates were near zero.
• Many are running out of runway. Many are on the cusp: 21% are valued just at $1B (sorry?!)
• ~40% are trading below $1B in secondary markets.4
• BUT. There is lots of substance in this herd.
• And we see evidence of a Software Unicorn Power Law - the US will be home to more than 1,000 unicorns by 2033.
There’ve been very few exits - only 7% (35 companies) vs. 66% a decade ago.
Capital efficiency declined significantly.
Read on dear reader, for deeper insights, explanations and predictions.
JEFF BECKER, JAN 15, 2024
a year ago · 3 likes · 1 comment · Jeff Becker
TLDR: Proposed principles for building a competitor to the S&P 500. And as byproducts, a global community for the most ambitious people in the world and a mechanism to fund nearly every meaningful technology company on the planet.
I wrote, in part, about how venture funding for founders and for fund managers had pulled back significantly, and how big of an opportunity that is for both to gain market share in a down economy.
For example, 2,725 VC funds disappeared last year at the same time that Antler was growing itself methodically to becoming one of the most active funds in the world, according to Pitchbook.
I also mentioned why the early-stage game shouldn’t be lumped in with the rest of PE & VC.
While total early-stage deal volume is expected to be 16,000-20,000 per year, there are really only about 5,000 companies started each year around the world that are venture-backed and worth competing for as an early-stage investor. The 4X delta in that number is primarily bad checks and the massive volume of angel investments.
But if you only focused on the top 5,000, and you gave each of them one million dollars, you could own a significant stake of nearly every meaningful tech company in the entire vintage for $5B.
Said differently, for $5B per year, you could seed the vast majority of meaningful tech companies for 8 years with the amount of money Elon Musk spent on Twitter.
All of that to say, it’s not a lot of money in the context of private equities.
And, as an asset class, early-stage venture has produced 19.7% IRR’s historically.
The problem is, even if you wanted to, there is no infrastructure to simply buy the asset class. At least not without becoming an LP in dozens of funds and/or funds of funds with additional layers of fees.
Or at least there hasn’t been one yet.
That’s because there are fundamental challenges to doing it effectively:
How do you create infrastructure to evaluate 500,000+ founders annually and decide on which 5,000 to back?
Who has both enough capital & a long enough time horizon to deploy $50B over 10 years?
How do you support 50,000 companies?
How do you rebalance the fund toward the most valuable companies to produce outsized returns, like the S&P index?
And with companies like Apple, Microsoft, NVIDIA, etc earning 99% of their value after their IPO’s, how do you extend your time horizon to 20, 30, or even 50 years?
All of this is possible, it’s just going to take some time.
To start, we have to build the infrastructure to evaluate and back founders as early as possible. And I’m not talking about accelerating companies that already exist as that’s a pretty well-defined business model.
I’m talking about making entrepreneurship accessible to every single ambitious person on the planet. Specifically, I think access to entrepreneurship should be as ubiquitous as education. The backlog of code that needs to be written and the number of companies that need to be built is endless with respect to our human potential, and yet there are still more coal miners in the US than there are founders.
Inevitably, that is backwards.
And the reason is basically because it’s too risky to be a founder.
You make no money. You’re putting your family and your livelihood at risk.
You have no team. Everything, the entire burden, is on your shoulders.
You have no clear path to success. It’s not linear or straightforward, but rather an endless journey of unknowns.
So the world needs a destination for these people. A destination for future founders. A place for people who have the ambition but lack the capital, community, and coaching.
Historically, the industry just doesn’t know how to support that.
Instead, we send these people to Harvard Business School for $150,000, to a studio where they give up 30-90% of their business on day one, or to an accelerator where they don’t receive enough money to last the company a year.
The fact is, 99% of the talented people in this world do not have the kind of resources or risk appetites that those paths require, but VC funding has been set up to invest in those who do. It’s been set up to fund the founders who went to the good schools, or paid for the MBA. The ones who have great networks developed by virtuous cycles of good fortune and family ties.
And you can’t exactly blame the VC’s either, they’re putting many millions of dollars into each company, so there needs to be some method of underwriting and risk reduction. And truthfully, that model worked quite well until now.
But unfortunately, models built for the 1% don’t work for the 99%.
That’s why, the infrastructure, this destination so-to-peak, needs to be built to provide the time, space, and resources for founders to demonstrate their potential rather than continue to be a dog and pony show of pedigree-sourced and pedigree-based investing.
First, residencies need to replace accelerators.
A residency gives founders the community & resources required to de-risk the endeavor of becoming a founder in the first place. Lowering these barriers to entry for the smartest people in the world will increase both the volume and quality of new companies generated. Greater volume of better deals would allow an expansion of VC into more specialization with the ability to pay lower valuations due to supply, and simultaneously produce meaningful returns with smaller exits.
Second, capital deployed by residencies needs to be commensurate with both the runway required and the risk being taken.
Specifically, founders need two years of runway or more, and investors need reasonable valuations to maintain the health of their business model. These two things cannot be at odds with one another or the entire system breaks down. At Antler in the US, we commit $250K to companies so they can burn 15-20K during the exploration phase for 12-24 months, and then we commit another $250K in capital that is matched 50 cents on the dollar to new money in which both makes it easier for founders to raise, as well as easier for us to rebalance toward the fastest growing companies. For our LP’s, it is also a mechanism by which the founder can prove the value of the business with the inclusion of additional investors, and without us over-committing capital up front.
…Much More if you click the link
JAN 16, 2024
Last week, Rabbit dropped its $199 AI device, the r1.
It sold out 40,000 devices across four pre-order batches, good for $8 million in booked revenue, tout de suite. It also launched a thousand tweets arguing that “it should have been an app,” that it would never work at $199, that it didn’t have a real use case, and that it was a solution in search of a problem.
Look, I don’t know the Rabbit founders, they don’t need me to defend them, and they’re laughing all the way to the bank as we speak. But some of the reactions to the product are the latest in a long line of commentary I’ve noticed that amounts to:
“Why didn’t they simply do the perfect thing on the first attempt?”
The short answer is: that’s not how this works. Things are not linear or clean. We can only asymptote towards perfection through trial and error.
Even Steve Jobs, the Steve Jobs, launched the ROKR E1 in partnership with Motorola before the iPhone, as Michael Mofina pointed out to me. I had memory holed it. It was a total bust.
You don’t have to watch that whole video, but if you want a little hit of cringe, start at 10:50, where Steve lets the COO of Cingular Wireless come onstage to do a corporate standup comedy routine. No one gets this stuff right every time, not even ~*Steve*~.
The longer answer, which we’ll explore today, is that the beauty of the system lies in millions of people trying new things, most of which will fail outright, some of which will succeed spectacularly, and many of which will survive only in pieces, contributing a new mechanism, concept, or feature to the pile of Lego bricks that the next group of tinkerers can play with.
This is true for products, research, and ideas, even the ones you disagree with. Especially the ones you disagree with.
The point isn’t to play it safe and get it right the first time; if any one person or group of people had The Answers, we might as well give real communism a try.
The point is to experiment with wild, clever, creative, novel things, get feedback from the market, and iterate until, maybe, something emerges that improves society in a fundamental way.
Let’s turn to the Pace Layers.
I like to think of the top layer of Stewart Brand’s Pace Layers, the fashion layer, as the Experimentation Layer.
This is my favorite layer, the fuel that keeps the engine of progress humming, the raw material from which society is sculpted. It’s where new things and ideas come to play, airlocked from hurting the deeper levels, free to compete for the right to change them for the better. As Brand writes (modified with our new name):
The job of experimentation is to be froth—quick, irrelevant, engaging, self-preoccupied, and cruel. Try this! No, no, try this! It is culture cut free to experiment as creatively and irresponsibly as the society can bear. From all that variety comes driving energy for commerce (the annual model change in automobiles) and the occasional good idea or practice that sifts down to improve deeper levels.
Jan 18, 2024 at 4:51 a.m. PST
Updated Jan 18, 2024 at 5:07 a.m. PST
May 29-31, 2024 - Austin, Texas
BlackRock’s (BLK) spot bitcoin (BTC) exchange-traded fund (ETF) hit the $1 billion assets under management mark on Wednesday, becoming the first of the recent cohort of bitcoin ETF providers to hit the milestone.
The asset manager's iShares Bitcoin Trust (IBIT) started trading on Jan.12.
“We are excited to see IBIT reach this milestone in its first week, reflecting strong investor demand,” Robert Mitchnick, Head of Digital Assets at BlackRock said via an email. “This is just the beginning. We have a long-term commitment focused on providing investors access to an iShares quality ETF.”
IBIT’s holdings consist of 99% bitcoin, and nearly $60,000 in fiat, data shows. The fund held 25,067 token per an updated on Thursday.IBIT closed Wednesday trading at $24.41 and trades at a slight premium of 0.42% relative to spot bitcoin. The fund has recorded an average daily trading volume of 14 million shares so far, the data shows.
By Jessica E. Lessin Jan 18, 2024, 5:00pm PST
When a year or so ago tech companies including Amazon, Meta Platforms and Google announced broad layoffs—in some cases for the first time in their history—tech workers were on edge.
But as 2023 wore on, there was a little sense of relief. It started to feel like the post-pandemic themes of “rightsizing” and “removing layers of management” that defined the “year of efficiency” had passed.
Now there is this. The year is but a few weeks young, and the layoff announcements are mounting. A few cuts at Instagram. Some trims at YouTube and quite a few at Amazon. Further large cuts from smaller companies, like Unity and Discord.
Jon reported Wednesday night that Google CEO Sundar Pichai warned the company—which already announced it is laying off around 1,000 workers this year—to expect more cuts throughout 2024.
The waves of new cuts have created a big sense of unease. People who thought these companies had already corrected for any pandemic-era overhiring don’t understand why they are necessary. Are the businesses weaker than expected? Are companies replacing workers with automated tools?
I think it is a mix of both, but probably more of the latter.
Let’s not forget the world’s largest tech companies are tech companies through and through. Of course they are going to turn to technology to take costs out of their business so they can move faster. That just seems inevitable.
A representative from Google recently said that whether a human or AI wrote an article doesn’t affect its ranking in Google News. That’s an interesting statement, even setting aside what that will do to the quality of journalism people read.
Does Google care whether a product is built by a human coder or a computer?
I think not. It’s another reason I think tech investors should be happy. Tech workers, on the other hand, should be worried.
We’re working to prevent abuse, provide transparency on AI-generated content, and improve access to accurate voting information.
January 15, 2024
Protecting the integrity of elections requires collaboration from every corner of the democratic process, and we want to make sure our technology is not used in a way that could undermine this process.
Our tools empower people to improve their daily lives and solve complex problems—from using AI to enhance state services to simplifying medical forms for patients.
We want to make sure that our AI systems are built, deployed, and used safely. Like any new technology, these tools come with benefits and challenges. They are also unprecedented, and we will keep evolving our approach as we learn more about how our tools are used.
As we prepare for elections in 2024 across the world’s largest democracies, our approach is to continue our platform safety work by elevating accurate voting information, enforcing measured policies, and improving transparency. We have a cross-functional effort dedicated to election work, bringing together expertise from our safety systems, threat intelligence, legal, engineering, and policy teams to quickly investigate and address potential abuse.
The following are key initiatives our teams are investing in to prepare for elections this year:
We expect and aim for people to use our tools safely and responsibly, and elections are no different. We work to anticipate and prevent relevant abuse—such as misleading “deepfakes”, scaled influence operations, or chatbots impersonating candidates. Prior to releasing new systems, we red team them, engage users and external partners for feedback, and build safety mitigations to reduce the potential for harm. For years, we’ve been iterating on tools to improve factual accuracy, reduce bias, and decline certain requests. These tools provide a strong foundation for our work around election integrity. For instance, DALL·E has guardrails to decline requests that ask for image generation of real people, including candidates.
We regularly refine our Usage Policies for ChatGPT and the API as we learn more about how people use or attempt to abuse our technology. A few to highlight for elections:
We’re still working to understand how effective our tools might be for personalized persuasion. Until we know more, we don’t allow people to build applications for political campaigning and lobbying.
People want to know and trust that they are interacting with a real person, business, or government. For that reason, we don’t allow builders to create chatbots that pretend to be real people (e.g., candidates) or institutions (e.g., local government).
We don’t allow applications that deter people from participation in democratic processes—for example, misrepresenting voting processes and qualifications (e.g., when, where, or who is eligible to vote) or that discourage voting (e.g., claiming a vote is meaningless).
With our new GPTs, users can report potential violations to us.
Published Jan. 18, 2024
By Andrew Hutchinson Content and Social Media Manager
While it still remains focused on its longer term metaverse initiative, AI has become a much bigger focus for Meta, with Zuck and Co. looking to latch onto the latest tech trend, which it believes will have a transformative impact on how we interact, in almost every way.
With that in mind, Meta will this year look to boost its AI projects, via increased investment in its back-end technology, which could result in some significant new AI elements across its various platforms.
Mark Zuckerberg provided a basic overview of its AI plans in a post on Threads today, in which he gave some vague hints at the next steps.
Zuckerberg sees generative AI merging into all areas of our daily lives, with the introduction of an AI assistant in its Ray Ban Stories glasses being just the start of this systematic melding.
In line with this, Meta will be increasing its investment in hardware, which will include building a massive tech stack, arguably larger than any other individual company.
The focus on the horizon is the development of automated general intelligence, or AGI, which is the holy grail of AI development. AGI systems will essentially be able to think for themselves, so they won’t be just responding to human prompts, but they’d also suggest entirely new options and use cases, in order to further enhance the user experience.
…More
JAN 18, 2024
is no stranger to alternative forms of publishing. His Killing Eve trilogy, featuring the murderous adventures of an assassin called Villanelle, first appeared as a self-published series of novellas for Amazon Kindle.
Villanelle—and the story of her entanglement with MI5 agent Eve Polastri—grew an international fandom following the adaptation of the novels into a BBC drama by Phoebe Waller-Bridge, starring Jodie Comer and Sandra Oh. But in 2022 the televised version of the series came to a shocking end, and fans erected makeshift shrines all over the world. Villanelle’s creator, a former journalist, decided to revive her—and in a new way.
“I knew that to steer a new Villanelle adventure through the conventional publishing channels would be a long process,” Luke wrote. “With fine serendipity, I ran into a writer friend who asked me what I knew about Substack, [and] a couple of hours’ research was enough to tell me that the online publishing platform was the right home for my own book. Vitally, I could offer it for free, which I felt I owed readers in return for their loyalty.”
/Apple is still taking its 27 percent cut, even if users buy digital goods and services from a website linked from within an app.
By Jay Peters, a news editor who writes about technology, video games, and virtual worlds. He’s submitted several accepted emoji proposals to the Unicode Consortium.
Jan 16, 2024, 3:48 PM PST
Apple has updated its App Store policies to spell out how developers can link to outside payment platforms, as reported by 9to5Mac. Developers will still owe Apple a cut if they use an outside payment platform. Apple will take a 27 percent cut (as opposed to the 30 percent in many cases) or 12 percent if a developer is part of the App Store Small Business Program, according to a support page about external purchase links.
Section 3.1.1(a) of the App Store Review Guidelines lays down more of the new rules for developers who want to link to alternative payment methods, like how they have to apply for an “entitlement” to enable them. Developers also can’t exclusively receive payments from outside Apple’s walled garden; they’ll also have to offer Apple’s in-app purchase system in their apps.
Apple’s template examples for in-app links to outside payment options. Image: Apple
The updates follow the Supreme Court’s decision not to hear Apple and Epic’s appeals over the Epic Games v. Apple ruling, which required Apple to discontinue its anti-steering rules
….More
Tim Sweeney, on Twitter/X, yesterday at 10:30am:
As of today, developers can begin exercising their court-established right to tell US customers about better prices on the web. These awful Apple-mandated confusion screens are over and done forever.
That take didn’t last long.
Sweeney, yesterday at 7:00pm, after Apple released the details of its intended compliance with the anti-steering (anti-anti-steering?) mandate from the Epic v. Apple case:
A quick summary of glaring problems we’ve found so far:
Apple has introduced an anticompetitive new 27% tax on web purchases. Apple has never done this before, and it kills price competition. Developers can’t offer digital items more cheaply on the web after paying a third-party payment processor 3-6% and paying this new 27% Apple Tax.
[Sweeney’s points 2–4, complaining about Apple’s stringent design, presentation, and privacy demands regarding external links, omitted.]
Epic will contest Apple’s bad-faith compliance plan in District Court.
Sweeney’s description makes it sound as though Apple is demanding its commission from all web sales for apps and services that have an iOS app. They’re not. They’re only demanding the commission from web sales that occur within 7 days of a user tapping through to the web from the new External Purchase Links entitlement in an app. Any app or service that already sells over the web, without paying a cent to Apple, can continue to do so in exactly the same way.
Also, Apple has done this before: what they announced yesterday is almost exactly in line with their compliance with Netherlands regulations pertaining to dating apps in 2022.
Before yesterday:
iOS app developers could sell digital content and subscriptions over the web, without paying Apple any commission.
iOS apps outside the “reader” category could not link to, nor even tell users about, those web purchases from within their apps.
After yesterday:
Apps that wish to link to — or, I think, even inform users about — web purchasing options from within their iOS apps must (a) still offer Apple’s IAP for those items; (b) pay Apple its adjusted 27/12 percent commissions on web sales that come from inside iOS apps; (c) send Apple sales data monthly and submit to audits of their sales; and (d) follow Apple’s stringent design edicts for these in-app links to the web.
Apps that do not link out to their web stores from within their iOS apps using Apple’s new External Purchase Links entitlement can continue whatever they were doing before yesterday. For apps that do nothing new, Apple is collecting nothing new.
I’m only surprised that Sweeney was seemingly surprised by any of this. He genuinely seemed to think that Apple not only would, but had to allow links from within apps to the web for purchases without collecting any commission on those sales, and that developers could present those links however they chose.
I’m glad that Sweeney and Epic plan to contest this, because I’m genuinely curious whether Judge Yvonne Gonzalez Rogers sees Apple’s solution as complying with her injunction against their prior anti-steering rules. But I think it does comply.
To be clear, I think Apple should allow apps other than games to just tell users they can pay/buy/subscribe/whatever on the web, without any commission. That the rules which have applied only to “reader” apps since early 2022 should be extended to all apps other than games, perhaps alongside a requirement (which doesn’t apply to “reader” apps) that apps taking advantage of this also offer in-app purchasing.
I’d draw an exception for games — an exception that surely Sweeney would disagree with completely, given that he’s in the games business — because games are different, and hefty un-circumventable revenue commissions to platform owners are clearly standard for the video game industry. The iPhone and iPad are not PCs; they’re consoles for games and apps.
But I’m not sure at all that Apple is doing anything contrary to the law. Sweeney (and other critics of Apple’s stewardship of iOS as a tightly controlled console) believe Apple both shouldn’t and legally can’t comply with the anti-steering injunction this way. I only believe Apple shouldn’t, not that they legally can’t.
..More
Users can turn any space into a personal theater, enjoy more than 150 3D movies, and experience the future of entertainment with Apple Immersive Video
With Apple Vision Pro, users can turn any space into the ultimate personal theater.
CUPERTINO, CALIFORNIA Apple today announced a series of groundbreaking entertainment experiences that will be available on Apple Vision Pro beginning Friday, February 2. With more pixels than a 4K TV for each eye, combined with an advanced Spatial Audio system, Vision Pro enables users to watch new shows and films from top streaming services including Apple Originals from Apple TV+, transport themselves to stunning landscapes with Environments, and enjoy all-new spatial experiences that were never possible before, like Encounter Dinosaurs.
“Apple Vision Pro is the ultimate entertainment device,” said Greg Joswiak, Apple’s senior vice president of Worldwide Marketing. “Users can turn any place into the best seat in the house, enjoy personal concerts and adventures with Apple Immersive Video, interact with lifelike prehistoric creatures in Encounter Dinosaurs, and even land on the surface of the moon using Environments. It’s unlike anything users have ever seen before and we can’t wait for them to experience it for themselves.”
“At Disney, we’re constantly searching for new ways to entertain, inform, and inspire by combining exceptional creativity with groundbreaking technology to create truly remarkable experiences,” said Bob Iger, The Walt Disney Company’s CEO. “Apple Vision Pro is a revolutionary platform that will bring our fans closer to the characters and stories they love while immersing them more deeply in all that Disney has to offer. We’re proud to once again be partnering with Apple to bring extraordinary new Disney experiences to people around the world.”
Aisha Malik @aiishamalik1 / 7:55 AM PST•January 16, 2024
Image Credits: Apple
Apple has detailed a number of entertainment experiences that will be available at launch with its mixed-reality Apple Vision Pro, which goes on sale on February 2. At launch, the headset will feature 150 3D movies, immersive films and series, a Travel Mode feature, streaming services like Disney+ and Amazon Prime Video, and more.
The Vision Pro will allow users to download and stream content from Disney+, ESPN, MLB, PGA Tour, Max, Discovery+, Amazon Prime Video, Paramount+, Peacock, Pluto TV, Tubi, Fubo, Crunchyroll, Red Bull TV, IMAX, TikTok and MUBI. Users can also watch online and streaming video using Safari and other browsers.
Users will be able to watch “Avatar: The Way of Water,” “Dune,” “Spider-Man: Into the Spider-Verse” and “The Super Mario Bros.” and more in 3D. Users can access 3D versions of eligible movies on the Apple TV app, and users who own or purchase movies with a 3D edition will be able to access that version on Apple Vision Pro at no extra cost. Apple says several streaming apps, including Disney+, will offer 3D versions of their new and popular movies on Vision Pro. More titles, including those available exclusively to Disney+ subscribers, will be announced at a later date.
The headset will also come with Apple Immersive Video, which is a new entertainment format that features 180-degree 3D 8K recordings captured with Spatial Audio. Apple is making a curated selection of immersive films and series available on the Vision Pro at launch. The immersive films and series include “Adventure,” which follows pioneering athletes as they take on challenges and “Wild Life,” which takes viewers up close with unique creatures. The collection also includes “Prehistoric Planet Immersive” and “Alicia Keys: Rehearsal Room.”
Image Credits: Apple
The Vision Pro will launch with a “Travel Mode” feature that will stabilize visuals for use on planes, along with a “Guest Users” feature that will allow users to share specific apps and experiences with others.
Marlize van Romburgh @marlizevr
Online discussion platform Reddit is moving forward with detailed plans for a March 2024 IPO, Reuters reported Thursday, citing sources familiar with the matter.
The San Francisco-based company has been considering an IPO for at least three years. It filed confidentially for a going-public offering in December 2021, but like many private technology companies, delayed those plans as the business climate turned south the following year.
Reddit’s IPO would be the first from a social media company since Pinterest’s debut in 2019, Reuters noted. It would also follow a prolonged drought for new tech offerings and could help kickstart the IPO market.
Only two major venture-backed startups — Instacart and Klaviyo — went public in 2023, and both have since floundered on the public markets. While industry insiders are hopeful IPOs will resume in 2024, many have said they don’t expect new offerings to substantially gain steam until the latter half of the year.
Other highly anticipated potential IPOs this year include digital payments platform Stripe, and Shein, the fast-fashion giant founded in China.
Reddit plans to sell about 10% of its shares in the offering, per Reuters, but has not yet set a target valuation for the IPO.
January 11, 2024
Circle Internet Financial has circled back around on its hopes to be a public company.
The company, which is behind the USDC stablecoin, said it has confidentially filed (although not all that confidentially since it issued a press release) for a U.S. initial public offering.
Circle said the number of shares it plans to sell has not been determined and no proposed price range was given for the offering. The offering is expected to take place after the SEC completes its review process.
The Boston-based firm is the issuer of USDC, which is pegged to the U.S. dollar and is the second biggest stablecoin behind only Tether. There are more $25 billion worth of USDC in circulation.
This is not Circle’s first attempt to hit the public market.
Circle’s proposed merger with blank-check firm Concord, which is backed by former Barclays boss Bob Diamond, has been its own long and winding story.
The company — an issuer of USD Coin, a type of stablecoin — announced
In July 2021, Circle said it would merge with Bob Diamond’s special-purpose acquisition company Concord Acquisition Corp. in a deal that would value the company at $4.5 billion.
However, USD Coin’s circulation quickly doubled, and in early 2022 Circle terminated its previously announced merger agreement and agreed to new terms that doubled the crypto company’s valuation to $9 billion.
That deal was expected to close in December 2022 or be extended but was instead called off.
“We are disappointed the proposed transaction timed out, however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important,” said Jeremy Allaire, co-founder and CEO of Circle, in a release at the time.
Published Jan. 16, 2024 By Andrew Hutchinson Content and Social Media Manager
It seems that Musk has convinced MrBeast to give his new creator revenue share program a shot, which X has shouted across every channel that it can, as an endorsement of its new “video first platform” strategy.
The X team is super excited this week, because MrBeast (aka Jimmy Donaldson), the most popular YouTuber of all time, has uploaded one of his videos directly to X, as a means to test X’s monetization capacity, according to Donaldson’s post.
This comes after a recent interaction with X owner Elon Musk, in which Donaldson explained to Musk that there’s little point in him uploading content directly to X, because he can’t make as much money from his videos on X as he can on YouTube.
Musk and Donaldson have also interacted at various points in the past, with Musk looking to lure Donaldson to help boost X’s new video push. But in pure revenue terms, Donaldson’s correct, there’s no way that X will be able to match the money that he makes on YouTube.
A reminder for new readers. That Was The Week collects the best writing on critical issues in tech, startups, and venture capital. I selected the articles because they are of interest. The selections often include things I entirely disagree with. But they express common opinions, or they provoke me to think. The articles are only snippets. Click on the headline to go to the original. I express my point of view in the editorial and the weekly video below.
This Week’s Video and Podcast:
Thanks To This Week’s Contributors: @CowboyVC, @aileenlee, @allegra_v2, @jeffbeckervc, @packyM, @shauryamalwa, @IanAllison123, @Jessicalessin, @openai, @finkd, @jaypeters, @gruber, @daringfireball, @aiishamalik1, @marlizevr, @adhutchinson
Contents
Editorial: Unicorns and Face Masks
Killing Eve’s creator brings his antiheroine back to life in a Substack serialization
Apple’s App Store policies now let US developers link to outside payments
Apple previews new entertainment experiences launching with Apple Vision Pro
Apple Vision Pro to launch with 150 3D movies, immersive films and series, Disney+, Max and more
Aileen Lee and her team at Cowboy Ventures published an update on the topic of Unicorns this week. It coins new labels: ‘ZIRPicorns’ and ‘Papercorns’. Here is a good summary of how their team sees the landscape:
It’s a bloated herd that will thin in coming years (likely to about 350) because…
• A whopping 93% are ‘Papercorns’ - privately valued companies.
• 60% are ‘ZIRPicorns’ - their last valuation is from ‘20-22, when interest rates were near zero.
• Many are running out of runway. Many are on the cusp: 21% are valued just at $1B (sorry?!)
• ~40% are trading below $1B in secondary markets.4
• BUT. There is lots of substance in this herd.
• And we see evidence of a Software Unicorn Power Law - the US will be home to more than 1,000 unicorns by 2033.
The biggest change since the original article is the ratio of exits. IPOs and Acquired companies. In 2013, 66% of the 39 Unicorns had exited. Today, it is only 7%, hence the term ‘Papercorns’.
And the 2020-2022 investing frenzy means many, perhaps most, are worth far less than the most recent investors paid for them.
Despite that, the Cowboy team guesses that due to a correlation between Moore’s Law and Unicorn growth, there will be over 1000 new US Unicorns by 2030. I’m willing to bet they are right, and the rise of AI will be a large catalyst for that.
This is in a week when Apple (today) opens up pre-orders for the Vision Pro. That is accompanied by news of what you can do with it. The most interesting for me is that Apple has recorded some intimate music sessions with major artists that can be viewed as if you are in the room with them, using spatial audio and video. That indicates a future of new and novel media experiences.
The Killing Eve creator turned to Substack this week to publish new episodes in writing. Creative use of new platforms is not slowing down.
My favorite Essays of the Week are from Jeff Becker and Packy McCormick. Jeff writes about venture capital and asks: Indexing works for the S&P, why not for VC?
In answering his own question, he posits that the venture business has to change and that the incumbents will have an innovator dilemma so that the change will come from outsiders:
The problem is, even if you wanted to, there is no infrastructure to simply buy the asset class. At least not without becoming an LP in dozens of funds and/or funds of funds with additional layers of fees.Or at least there hasn’t been one yet.
That’s because there are fundamental challenges to doing it effectively:
How do you create infrastructure to evaluate 500,000+ founders annually and decide on which 5,000 to back?
Who has both enough capital & a long enough time horizon to deploy $50B over 10 years?
How do you support 50,000 companies?
How do you rebalance the fund toward the most valuable companies to produce outsized returns, like the S&P index?
And with companies like Apple, Microsoft, NVIDIA, etc earning 99% of their value after their IPO’s, how do you extend your time horizon to 20, 30, or even 50 years?
All of this is possible, it’s just going to take some time.
And so:
LP’s … need to change. Traditional high net worth individuals are not the right customer for reinventing venture capital. Sovereign funds, public money, and economic development groups are.
This is not the hope & pray for a 10X fund game. The early-stage game is about transforming the world through technology, while creating economic opportunity and global prosperity. It’s about creating new businesses, new jobs, and bringing a reasonable quality of life to every corner of the globe. Sovereign funds, public money, and economic development groups possess the capital, long-term time horizon, and economic goals that align to the reinvention of VC.
My 2c. Indexing Venture needs a data infrastructure to select which private companies go into an index. That can enable differentiation between poor performers and the best. It also needs capital and access to those differentiated companies. It needs to find a public interface enabling retail investors to allocate to it later once the sovereign and others have initiated it. That is the journey SignalRank is on. - to select, access, and then open up later-stage venture-backed companies to index investors.
Packy McCormick has the headline of the week - You need to f*** around to find out. This references the negative pushback that the Rabbit AI Agent (see the video of the week) received from naysayers. I will leave the last word to Packy - it’s great.
Responding to the video:
The longer answer, which we’ll explore today, is that the beauty of the system lies in millions of people trying new things, most of which will fail outright, some of which will succeed spectacularly, and many of which will survive only in pieces, contributing a new mechanism, concept, or feature to the pile of Lego bricks that the next group of tinkerers can play with.
This is true for products, research, and ideas, even the ones you disagree with. Especially the ones you disagree with.
The point isn’t to play it safe and get it right the first time; if any one person or group of people had The Answers, we might as well give real communism a try.
The point is to experiment with wild, clever, creative, novel things, get feedback from the market, and iterate until, maybe, something emerges that improves society in a fundamental way.
Halleluja.
Aileen Lee, Allegra Simon. (@CowboyVC, @aileenlee, @allegra_v2).
With a Slide Deck - https://www.cowboy.vc/cowboy-ventures-unicorn-analysis-companion-deck
Cowboy Ventures had just gotten started. To inform our investment strategy, we assembled and studied a dataset of US-based, VC-backed startups that had grown to be worth $1B+ within ten years, using ‘unicorn’ as a shortener to capture their magic.1
Our original analysis found just 39 unicorns out of thousands of startups funded. Some highlights:
The majority (62%) had “exited” - gone public or been acquired.
Most were consumer-oriented: ~80% of the value, ~60% of companies.
Enterprise-oriented companies had great capital efficiency (26x), 2.4x better than consumer companies.2
One company in a decade became a “superunicorn” (worth >$100B): Facebook.
Contrary to the prevailing stereotype, average age at founding was 34; 38 for enterprise software companies.
Co-founding teams of 3 with common work, school and tech experience were the majority.
The Bay Area was unicorn HQ (70%). NY, home to 3, was the second largest hub.
There was very little diversity - no female CEOs, just 5% had a female co-founder.
Historical returns, growing markets (social, mobile, cloud, commerce, security, crypto, AI…), COVID-era effects and low interest rates attracted 3x more capital ($580B more!) to VC funds between 2013-2021 (btw, that’s also $11B+ more in VC fee income).
This enabled established VC firms to raise record-breaking funds; public “crossover” funds joined the party too. Over a thousand newer firms also raised funds. The industry gained thousands of new investors with fresh ‘checkbooks’ and limited mentorship or oversight, given the pace.
2021 was a perfect storm of near zero interest rates while much of the world spent their days behind screens (zooming, shopping, streaming, trading, therapizing…), immersed in tech. Due diligence processes were rushed, round sizes and valuations broke records, and a huge herd of unicorns was crowned.
In March 2022, the Fed raised rates, triggering a multi-year downward effect on public multiples and enterprise budgets. Although big VCs continued to raise big money (64% of 2022 VC raised went to >$1B funds), investors mostly froze (~40% of VCs stopped dealmaking in 2023). Companies refocused on margins and profitability, cutting costs in several waves. Unicorns started to fall via down rounds, public delistings and shut downs.
Sadly, we’re far from done. It’s a dynamic time to snapshot and learn from unicorns.
To note: last-round valuations are an imperfect gauge, and likely inflate current herd size and value (Cerebral, Clubhouse and OpenSea may be examples). And, point-in-time methodology misses some companies. For example, Stripe was founded in 2010, Zoom in 2011, Snowflake and Coinbase in 2012. None was a unicorn in 2013, and are now more than 10 years old, so excluded from this dataset.
Unicorns ballooned 14x in the past decade, from 39 to 532! They now serve a wider array of sectors (we’re tracking 19) from climate and crypto to vertical SaaS.
The pendulum swung hard to enterprise (78%), the inverse of 2013.
It’s a bloated herd that will thin in coming years (likely to about 350) because…
• A whopping 93% are ‘Papercorns’ - privately valued companies.
• 60% are ‘ZIRPicorns’ - their last valuation is from ‘20-22, when interest rates were near zero.
• Many are running out of runway. Many are on the cusp: 21% are valued just at $1B (sorry?!)
• ~40% are trading below $1B in secondary markets.4
• BUT. There is lots of substance in this herd.
• And we see evidence of a Software Unicorn Power Law - the US will be home to more than 1,000 unicorns by 2033.
There’ve been very few exits - only 7% (35 companies) vs. 66% a decade ago.
Capital efficiency declined significantly.
Read on dear reader, for deeper insights, explanations and predictions.
JEFF BECKER, JAN 15, 2024
a year ago · 3 likes · 1 comment · Jeff Becker
TLDR: Proposed principles for building a competitor to the S&P 500. And as byproducts, a global community for the most ambitious people in the world and a mechanism to fund nearly every meaningful technology company on the planet.
I wrote, in part, about how venture funding for founders and for fund managers had pulled back significantly, and how big of an opportunity that is for both to gain market share in a down economy.
For example, 2,725 VC funds disappeared last year at the same time that Antler was growing itself methodically to becoming one of the most active funds in the world, according to Pitchbook.
I also mentioned why the early-stage game shouldn’t be lumped in with the rest of PE & VC.
While total early-stage deal volume is expected to be 16,000-20,000 per year, there are really only about 5,000 companies started each year around the world that are venture-backed and worth competing for as an early-stage investor. The 4X delta in that number is primarily bad checks and the massive volume of angel investments.
But if you only focused on the top 5,000, and you gave each of them one million dollars, you could own a significant stake of nearly every meaningful tech company in the entire vintage for $5B.
Said differently, for $5B per year, you could seed the vast majority of meaningful tech companies for 8 years with the amount of money Elon Musk spent on Twitter.
All of that to say, it’s not a lot of money in the context of private equities.
And, as an asset class, early-stage venture has produced 19.7% IRR’s historically.
The problem is, even if you wanted to, there is no infrastructure to simply buy the asset class. At least not without becoming an LP in dozens of funds and/or funds of funds with additional layers of fees.
Or at least there hasn’t been one yet.
That’s because there are fundamental challenges to doing it effectively:
How do you create infrastructure to evaluate 500,000+ founders annually and decide on which 5,000 to back?
Who has both enough capital & a long enough time horizon to deploy $50B over 10 years?
How do you support 50,000 companies?
How do you rebalance the fund toward the most valuable companies to produce outsized returns, like the S&P index?
And with companies like Apple, Microsoft, NVIDIA, etc earning 99% of their value after their IPO’s, how do you extend your time horizon to 20, 30, or even 50 years?
All of this is possible, it’s just going to take some time.
To start, we have to build the infrastructure to evaluate and back founders as early as possible. And I’m not talking about accelerating companies that already exist as that’s a pretty well-defined business model.
I’m talking about making entrepreneurship accessible to every single ambitious person on the planet. Specifically, I think access to entrepreneurship should be as ubiquitous as education. The backlog of code that needs to be written and the number of companies that need to be built is endless with respect to our human potential, and yet there are still more coal miners in the US than there are founders.
Inevitably, that is backwards.
And the reason is basically because it’s too risky to be a founder.
You make no money. You’re putting your family and your livelihood at risk.
You have no team. Everything, the entire burden, is on your shoulders.
You have no clear path to success. It’s not linear or straightforward, but rather an endless journey of unknowns.
So the world needs a destination for these people. A destination for future founders. A place for people who have the ambition but lack the capital, community, and coaching.
Historically, the industry just doesn’t know how to support that.
Instead, we send these people to Harvard Business School for $150,000, to a studio where they give up 30-90% of their business on day one, or to an accelerator where they don’t receive enough money to last the company a year.
The fact is, 99% of the talented people in this world do not have the kind of resources or risk appetites that those paths require, but VC funding has been set up to invest in those who do. It’s been set up to fund the founders who went to the good schools, or paid for the MBA. The ones who have great networks developed by virtuous cycles of good fortune and family ties.
And you can’t exactly blame the VC’s either, they’re putting many millions of dollars into each company, so there needs to be some method of underwriting and risk reduction. And truthfully, that model worked quite well until now.
But unfortunately, models built for the 1% don’t work for the 99%.
That’s why, the infrastructure, this destination so-to-peak, needs to be built to provide the time, space, and resources for founders to demonstrate their potential rather than continue to be a dog and pony show of pedigree-sourced and pedigree-based investing.
First, residencies need to replace accelerators.
A residency gives founders the community & resources required to de-risk the endeavor of becoming a founder in the first place. Lowering these barriers to entry for the smartest people in the world will increase both the volume and quality of new companies generated. Greater volume of better deals would allow an expansion of VC into more specialization with the ability to pay lower valuations due to supply, and simultaneously produce meaningful returns with smaller exits.
Second, capital deployed by residencies needs to be commensurate with both the runway required and the risk being taken.
Specifically, founders need two years of runway or more, and investors need reasonable valuations to maintain the health of their business model. These two things cannot be at odds with one another or the entire system breaks down. At Antler in the US, we commit $250K to companies so they can burn 15-20K during the exploration phase for 12-24 months, and then we commit another $250K in capital that is matched 50 cents on the dollar to new money in which both makes it easier for founders to raise, as well as easier for us to rebalance toward the fastest growing companies. For our LP’s, it is also a mechanism by which the founder can prove the value of the business with the inclusion of additional investors, and without us over-committing capital up front.
…Much More if you click the link
JAN 16, 2024
Last week, Rabbit dropped its $199 AI device, the r1.
It sold out 40,000 devices across four pre-order batches, good for $8 million in booked revenue, tout de suite. It also launched a thousand tweets arguing that “it should have been an app,” that it would never work at $199, that it didn’t have a real use case, and that it was a solution in search of a problem.
Look, I don’t know the Rabbit founders, they don’t need me to defend them, and they’re laughing all the way to the bank as we speak. But some of the reactions to the product are the latest in a long line of commentary I’ve noticed that amounts to:
“Why didn’t they simply do the perfect thing on the first attempt?”
The short answer is: that’s not how this works. Things are not linear or clean. We can only asymptote towards perfection through trial and error.
Even Steve Jobs, the Steve Jobs, launched the ROKR E1 in partnership with Motorola before the iPhone, as Michael Mofina pointed out to me. I had memory holed it. It was a total bust.
You don’t have to watch that whole video, but if you want a little hit of cringe, start at 10:50, where Steve lets the COO of Cingular Wireless come onstage to do a corporate standup comedy routine. No one gets this stuff right every time, not even ~*Steve*~.
The longer answer, which we’ll explore today, is that the beauty of the system lies in millions of people trying new things, most of which will fail outright, some of which will succeed spectacularly, and many of which will survive only in pieces, contributing a new mechanism, concept, or feature to the pile of Lego bricks that the next group of tinkerers can play with.
This is true for products, research, and ideas, even the ones you disagree with. Especially the ones you disagree with.
The point isn’t to play it safe and get it right the first time; if any one person or group of people had The Answers, we might as well give real communism a try.
The point is to experiment with wild, clever, creative, novel things, get feedback from the market, and iterate until, maybe, something emerges that improves society in a fundamental way.
Let’s turn to the Pace Layers.
I like to think of the top layer of Stewart Brand’s Pace Layers, the fashion layer, as the Experimentation Layer.
This is my favorite layer, the fuel that keeps the engine of progress humming, the raw material from which society is sculpted. It’s where new things and ideas come to play, airlocked from hurting the deeper levels, free to compete for the right to change them for the better. As Brand writes (modified with our new name):
The job of experimentation is to be froth—quick, irrelevant, engaging, self-preoccupied, and cruel. Try this! No, no, try this! It is culture cut free to experiment as creatively and irresponsibly as the society can bear. From all that variety comes driving energy for commerce (the annual model change in automobiles) and the occasional good idea or practice that sifts down to improve deeper levels.
Jan 18, 2024 at 4:51 a.m. PST
Updated Jan 18, 2024 at 5:07 a.m. PST
May 29-31, 2024 - Austin, Texas
BlackRock’s (BLK) spot bitcoin (BTC) exchange-traded fund (ETF) hit the $1 billion assets under management mark on Wednesday, becoming the first of the recent cohort of bitcoin ETF providers to hit the milestone.
The asset manager's iShares Bitcoin Trust (IBIT) started trading on Jan.12.
“We are excited to see IBIT reach this milestone in its first week, reflecting strong investor demand,” Robert Mitchnick, Head of Digital Assets at BlackRock said via an email. “This is just the beginning. We have a long-term commitment focused on providing investors access to an iShares quality ETF.”
IBIT’s holdings consist of 99% bitcoin, and nearly $60,000 in fiat, data shows. The fund held 25,067 token per an updated on Thursday.IBIT closed Wednesday trading at $24.41 and trades at a slight premium of 0.42% relative to spot bitcoin. The fund has recorded an average daily trading volume of 14 million shares so far, the data shows.
By Jessica E. Lessin Jan 18, 2024, 5:00pm PST
When a year or so ago tech companies including Amazon, Meta Platforms and Google announced broad layoffs—in some cases for the first time in their history—tech workers were on edge.
But as 2023 wore on, there was a little sense of relief. It started to feel like the post-pandemic themes of “rightsizing” and “removing layers of management” that defined the “year of efficiency” had passed.
Now there is this. The year is but a few weeks young, and the layoff announcements are mounting. A few cuts at Instagram. Some trims at YouTube and quite a few at Amazon. Further large cuts from smaller companies, like Unity and Discord.
Jon reported Wednesday night that Google CEO Sundar Pichai warned the company—which already announced it is laying off around 1,000 workers this year—to expect more cuts throughout 2024.
The waves of new cuts have created a big sense of unease. People who thought these companies had already corrected for any pandemic-era overhiring don’t understand why they are necessary. Are the businesses weaker than expected? Are companies replacing workers with automated tools?
I think it is a mix of both, but probably more of the latter.
Let’s not forget the world’s largest tech companies are tech companies through and through. Of course they are going to turn to technology to take costs out of their business so they can move faster. That just seems inevitable.
A representative from Google recently said that whether a human or AI wrote an article doesn’t affect its ranking in Google News. That’s an interesting statement, even setting aside what that will do to the quality of journalism people read.
Does Google care whether a product is built by a human coder or a computer?
I think not. It’s another reason I think tech investors should be happy. Tech workers, on the other hand, should be worried.
We’re working to prevent abuse, provide transparency on AI-generated content, and improve access to accurate voting information.
January 15, 2024
Protecting the integrity of elections requires collaboration from every corner of the democratic process, and we want to make sure our technology is not used in a way that could undermine this process.
Our tools empower people to improve their daily lives and solve complex problems—from using AI to enhance state services to simplifying medical forms for patients.
We want to make sure that our AI systems are built, deployed, and used safely. Like any new technology, these tools come with benefits and challenges. They are also unprecedented, and we will keep evolving our approach as we learn more about how our tools are used.
As we prepare for elections in 2024 across the world’s largest democracies, our approach is to continue our platform safety work by elevating accurate voting information, enforcing measured policies, and improving transparency. We have a cross-functional effort dedicated to election work, bringing together expertise from our safety systems, threat intelligence, legal, engineering, and policy teams to quickly investigate and address potential abuse.
The following are key initiatives our teams are investing in to prepare for elections this year:
We expect and aim for people to use our tools safely and responsibly, and elections are no different. We work to anticipate and prevent relevant abuse—such as misleading “deepfakes”, scaled influence operations, or chatbots impersonating candidates. Prior to releasing new systems, we red team them, engage users and external partners for feedback, and build safety mitigations to reduce the potential for harm. For years, we’ve been iterating on tools to improve factual accuracy, reduce bias, and decline certain requests. These tools provide a strong foundation for our work around election integrity. For instance, DALL·E has guardrails to decline requests that ask for image generation of real people, including candidates.
We regularly refine our Usage Policies for ChatGPT and the API as we learn more about how people use or attempt to abuse our technology. A few to highlight for elections:
We’re still working to understand how effective our tools might be for personalized persuasion. Until we know more, we don’t allow people to build applications for political campaigning and lobbying.
People want to know and trust that they are interacting with a real person, business, or government. For that reason, we don’t allow builders to create chatbots that pretend to be real people (e.g., candidates) or institutions (e.g., local government).
We don’t allow applications that deter people from participation in democratic processes—for example, misrepresenting voting processes and qualifications (e.g., when, where, or who is eligible to vote) or that discourage voting (e.g., claiming a vote is meaningless).
With our new GPTs, users can report potential violations to us.
Published Jan. 18, 2024
By Andrew Hutchinson Content and Social Media Manager
While it still remains focused on its longer term metaverse initiative, AI has become a much bigger focus for Meta, with Zuck and Co. looking to latch onto the latest tech trend, which it believes will have a transformative impact on how we interact, in almost every way.
With that in mind, Meta will this year look to boost its AI projects, via increased investment in its back-end technology, which could result in some significant new AI elements across its various platforms.
Mark Zuckerberg provided a basic overview of its AI plans in a post on Threads today, in which he gave some vague hints at the next steps.
Zuckerberg sees generative AI merging into all areas of our daily lives, with the introduction of an AI assistant in its Ray Ban Stories glasses being just the start of this systematic melding.
In line with this, Meta will be increasing its investment in hardware, which will include building a massive tech stack, arguably larger than any other individual company.
The focus on the horizon is the development of automated general intelligence, or AGI, which is the holy grail of AI development. AGI systems will essentially be able to think for themselves, so they won’t be just responding to human prompts, but they’d also suggest entirely new options and use cases, in order to further enhance the user experience.
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JAN 18, 2024
is no stranger to alternative forms of publishing. His Killing Eve trilogy, featuring the murderous adventures of an assassin called Villanelle, first appeared as a self-published series of novellas for Amazon Kindle.
Villanelle—and the story of her entanglement with MI5 agent Eve Polastri—grew an international fandom following the adaptation of the novels into a BBC drama by Phoebe Waller-Bridge, starring Jodie Comer and Sandra Oh. But in 2022 the televised version of the series came to a shocking end, and fans erected makeshift shrines all over the world. Villanelle’s creator, a former journalist, decided to revive her—and in a new way.
“I knew that to steer a new Villanelle adventure through the conventional publishing channels would be a long process,” Luke wrote. “With fine serendipity, I ran into a writer friend who asked me what I knew about Substack, [and] a couple of hours’ research was enough to tell me that the online publishing platform was the right home for my own book. Vitally, I could offer it for free, which I felt I owed readers in return for their loyalty.”
/Apple is still taking its 27 percent cut, even if users buy digital goods and services from a website linked from within an app.
By Jay Peters, a news editor who writes about technology, video games, and virtual worlds. He’s submitted several accepted emoji proposals to the Unicode Consortium.
Jan 16, 2024, 3:48 PM PST
Apple has updated its App Store policies to spell out how developers can link to outside payment platforms, as reported by 9to5Mac. Developers will still owe Apple a cut if they use an outside payment platform. Apple will take a 27 percent cut (as opposed to the 30 percent in many cases) or 12 percent if a developer is part of the App Store Small Business Program, according to a support page about external purchase links.
Section 3.1.1(a) of the App Store Review Guidelines lays down more of the new rules for developers who want to link to alternative payment methods, like how they have to apply for an “entitlement” to enable them. Developers also can’t exclusively receive payments from outside Apple’s walled garden; they’ll also have to offer Apple’s in-app purchase system in their apps.
Apple’s template examples for in-app links to outside payment options. Image: Apple
The updates follow the Supreme Court’s decision not to hear Apple and Epic’s appeals over the Epic Games v. Apple ruling, which required Apple to discontinue its anti-steering rules
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Tim Sweeney, on Twitter/X, yesterday at 10:30am:
As of today, developers can begin exercising their court-established right to tell US customers about better prices on the web. These awful Apple-mandated confusion screens are over and done forever.
That take didn’t last long.
Sweeney, yesterday at 7:00pm, after Apple released the details of its intended compliance with the anti-steering (anti-anti-steering?) mandate from the Epic v. Apple case:
A quick summary of glaring problems we’ve found so far:
Apple has introduced an anticompetitive new 27% tax on web purchases. Apple has never done this before, and it kills price competition. Developers can’t offer digital items more cheaply on the web after paying a third-party payment processor 3-6% and paying this new 27% Apple Tax.
[Sweeney’s points 2–4, complaining about Apple’s stringent design, presentation, and privacy demands regarding external links, omitted.]
Epic will contest Apple’s bad-faith compliance plan in District Court.
Sweeney’s description makes it sound as though Apple is demanding its commission from all web sales for apps and services that have an iOS app. They’re not. They’re only demanding the commission from web sales that occur within 7 days of a user tapping through to the web from the new External Purchase Links entitlement in an app. Any app or service that already sells over the web, without paying a cent to Apple, can continue to do so in exactly the same way.
Also, Apple has done this before: what they announced yesterday is almost exactly in line with their compliance with Netherlands regulations pertaining to dating apps in 2022.
Before yesterday:
iOS app developers could sell digital content and subscriptions over the web, without paying Apple any commission.
iOS apps outside the “reader” category could not link to, nor even tell users about, those web purchases from within their apps.
After yesterday:
Apps that wish to link to — or, I think, even inform users about — web purchasing options from within their iOS apps must (a) still offer Apple’s IAP for those items; (b) pay Apple its adjusted 27/12 percent commissions on web sales that come from inside iOS apps; (c) send Apple sales data monthly and submit to audits of their sales; and (d) follow Apple’s stringent design edicts for these in-app links to the web.
Apps that do not link out to their web stores from within their iOS apps using Apple’s new External Purchase Links entitlement can continue whatever they were doing before yesterday. For apps that do nothing new, Apple is collecting nothing new.
I’m only surprised that Sweeney was seemingly surprised by any of this. He genuinely seemed to think that Apple not only would, but had to allow links from within apps to the web for purchases without collecting any commission on those sales, and that developers could present those links however they chose.
I’m glad that Sweeney and Epic plan to contest this, because I’m genuinely curious whether Judge Yvonne Gonzalez Rogers sees Apple’s solution as complying with her injunction against their prior anti-steering rules. But I think it does comply.
To be clear, I think Apple should allow apps other than games to just tell users they can pay/buy/subscribe/whatever on the web, without any commission. That the rules which have applied only to “reader” apps since early 2022 should be extended to all apps other than games, perhaps alongside a requirement (which doesn’t apply to “reader” apps) that apps taking advantage of this also offer in-app purchasing.
I’d draw an exception for games — an exception that surely Sweeney would disagree with completely, given that he’s in the games business — because games are different, and hefty un-circumventable revenue commissions to platform owners are clearly standard for the video game industry. The iPhone and iPad are not PCs; they’re consoles for games and apps.
But I’m not sure at all that Apple is doing anything contrary to the law. Sweeney (and other critics of Apple’s stewardship of iOS as a tightly controlled console) believe Apple both shouldn’t and legally can’t comply with the anti-steering injunction this way. I only believe Apple shouldn’t, not that they legally can’t.
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Users can turn any space into a personal theater, enjoy more than 150 3D movies, and experience the future of entertainment with Apple Immersive Video
With Apple Vision Pro, users can turn any space into the ultimate personal theater.
CUPERTINO, CALIFORNIA Apple today announced a series of groundbreaking entertainment experiences that will be available on Apple Vision Pro beginning Friday, February 2. With more pixels than a 4K TV for each eye, combined with an advanced Spatial Audio system, Vision Pro enables users to watch new shows and films from top streaming services including Apple Originals from Apple TV+, transport themselves to stunning landscapes with Environments, and enjoy all-new spatial experiences that were never possible before, like Encounter Dinosaurs.
“Apple Vision Pro is the ultimate entertainment device,” said Greg Joswiak, Apple’s senior vice president of Worldwide Marketing. “Users can turn any place into the best seat in the house, enjoy personal concerts and adventures with Apple Immersive Video, interact with lifelike prehistoric creatures in Encounter Dinosaurs, and even land on the surface of the moon using Environments. It’s unlike anything users have ever seen before and we can’t wait for them to experience it for themselves.”
“At Disney, we’re constantly searching for new ways to entertain, inform, and inspire by combining exceptional creativity with groundbreaking technology to create truly remarkable experiences,” said Bob Iger, The Walt Disney Company’s CEO. “Apple Vision Pro is a revolutionary platform that will bring our fans closer to the characters and stories they love while immersing them more deeply in all that Disney has to offer. We’re proud to once again be partnering with Apple to bring extraordinary new Disney experiences to people around the world.”
Aisha Malik @aiishamalik1 / 7:55 AM PST•January 16, 2024
Image Credits: Apple
Apple has detailed a number of entertainment experiences that will be available at launch with its mixed-reality Apple Vision Pro, which goes on sale on February 2. At launch, the headset will feature 150 3D movies, immersive films and series, a Travel Mode feature, streaming services like Disney+ and Amazon Prime Video, and more.
The Vision Pro will allow users to download and stream content from Disney+, ESPN, MLB, PGA Tour, Max, Discovery+, Amazon Prime Video, Paramount+, Peacock, Pluto TV, Tubi, Fubo, Crunchyroll, Red Bull TV, IMAX, TikTok and MUBI. Users can also watch online and streaming video using Safari and other browsers.
Users will be able to watch “Avatar: The Way of Water,” “Dune,” “Spider-Man: Into the Spider-Verse” and “The Super Mario Bros.” and more in 3D. Users can access 3D versions of eligible movies on the Apple TV app, and users who own or purchase movies with a 3D edition will be able to access that version on Apple Vision Pro at no extra cost. Apple says several streaming apps, including Disney+, will offer 3D versions of their new and popular movies on Vision Pro. More titles, including those available exclusively to Disney+ subscribers, will be announced at a later date.
The headset will also come with Apple Immersive Video, which is a new entertainment format that features 180-degree 3D 8K recordings captured with Spatial Audio. Apple is making a curated selection of immersive films and series available on the Vision Pro at launch. The immersive films and series include “Adventure,” which follows pioneering athletes as they take on challenges and “Wild Life,” which takes viewers up close with unique creatures. The collection also includes “Prehistoric Planet Immersive” and “Alicia Keys: Rehearsal Room.”
Image Credits: Apple
The Vision Pro will launch with a “Travel Mode” feature that will stabilize visuals for use on planes, along with a “Guest Users” feature that will allow users to share specific apps and experiences with others.
Marlize van Romburgh @marlizevr
Online discussion platform Reddit is moving forward with detailed plans for a March 2024 IPO, Reuters reported Thursday, citing sources familiar with the matter.
The San Francisco-based company has been considering an IPO for at least three years. It filed confidentially for a going-public offering in December 2021, but like many private technology companies, delayed those plans as the business climate turned south the following year.
Reddit’s IPO would be the first from a social media company since Pinterest’s debut in 2019, Reuters noted. It would also follow a prolonged drought for new tech offerings and could help kickstart the IPO market.
Only two major venture-backed startups — Instacart and Klaviyo — went public in 2023, and both have since floundered on the public markets. While industry insiders are hopeful IPOs will resume in 2024, many have said they don’t expect new offerings to substantially gain steam until the latter half of the year.
Other highly anticipated potential IPOs this year include digital payments platform Stripe, and Shein, the fast-fashion giant founded in China.
Reddit plans to sell about 10% of its shares in the offering, per Reuters, but has not yet set a target valuation for the IPO.
January 11, 2024
Circle Internet Financial has circled back around on its hopes to be a public company.
The company, which is behind the USDC stablecoin, said it has confidentially filed (although not all that confidentially since it issued a press release) for a U.S. initial public offering.
Circle said the number of shares it plans to sell has not been determined and no proposed price range was given for the offering. The offering is expected to take place after the SEC completes its review process.
The Boston-based firm is the issuer of USDC, which is pegged to the U.S. dollar and is the second biggest stablecoin behind only Tether. There are more $25 billion worth of USDC in circulation.
This is not Circle’s first attempt to hit the public market.
Circle’s proposed merger with blank-check firm Concord, which is backed by former Barclays boss Bob Diamond, has been its own long and winding story.
The company — an issuer of USD Coin, a type of stablecoin — announced
In July 2021, Circle said it would merge with Bob Diamond’s special-purpose acquisition company Concord Acquisition Corp. in a deal that would value the company at $4.5 billion.
However, USD Coin’s circulation quickly doubled, and in early 2022 Circle terminated its previously announced merger agreement and agreed to new terms that doubled the crypto company’s valuation to $9 billion.
That deal was expected to close in December 2022 or be extended but was instead called off.
“We are disappointed the proposed transaction timed out, however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important,” said Jeremy Allaire, co-founder and CEO of Circle, in a release at the time.
Published Jan. 16, 2024 By Andrew Hutchinson Content and Social Media Manager
It seems that Musk has convinced MrBeast to give his new creator revenue share program a shot, which X has shouted across every channel that it can, as an endorsement of its new “video first platform” strategy.
The X team is super excited this week, because MrBeast (aka Jimmy Donaldson), the most popular YouTuber of all time, has uploaded one of his videos directly to X, as a means to test X’s monetization capacity, according to Donaldson’s post.
This comes after a recent interaction with X owner Elon Musk, in which Donaldson explained to Musk that there’s little point in him uploading content directly to X, because he can’t make as much money from his videos on X as he can on YouTube.
Musk and Donaldson have also interacted at various points in the past, with Musk looking to lure Donaldson to help boost X’s new video push. But in pure revenue terms, Donaldson’s correct, there’s no way that X will be able to match the money that he makes on YouTube.
OpenAI looks to be the 1st superunicorn of the decade, and AI likely the megatrend.
The Bay Area gained in #s but lost ground as Unicorn HQ while other hubs grew.
More unicorns and geos, more co-founders with diverse backgrounds - but some things didn’t change at all.
Diversity still wanted - still lots of opportunity to improve founding team composition.
If past is prologue, expect a mixed outlook for the current herd, and many more unicorns in the future.
OpenAI looks to be the 1st superunicorn of the decade, and AI likely the megatrend.
The Bay Area gained in #s but lost ground as Unicorn HQ while other hubs grew.
More unicorns and geos, more co-founders with diverse backgrounds - but some things didn’t change at all.
Diversity still wanted - still lots of opportunity to improve founding team composition.
If past is prologue, expect a mixed outlook for the current herd, and many more unicorns in the future.
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