Thursday, April 21. 2016
This shouldn't surprise readers of this blog, but there is a nice analysis of the problems Unicorns have with the funding rounds with guaranteed payouts to certain funders (ratchet, prefs etc) on "abovethecrowd" blog - "dirty deals" made by "shark investors"
One is that they “unpack” or “explode” at some point in the future. You can no longer simply look at the cap table and estimate your return. Once you have accepted a dirty offering, the payout at each potential future valuation requires a complex analysis, where the return for the Shark is calculated first, and then the remains are shared by everyone else. The second reason they are a massive problem is that their complexity will render future financings all but impossible.
As the blog points out, later-stage investors may be tempted to become Sharks themselves and start including "dirty deal" into their own term sheets. They will need to embrace a Shark culture, and be comfortable knowing that they are adverse to and in conflict with the founders, employees, and other investors on the capitalization chart. This is filed under "No Shit, Shylock" in Broadstuff Towers...
Troubled waters lie ahead for many of the Unicorns.....clearly these deals have inflated the Unibubble, but it looks like they will also be a major reason it bursts.
(Update - this article by Sarah Lacy notes the author of the above is an early stage VC, and thus one of those being scraped by the "dirty deals" I assume. Now while one feels a tad sorry for him, he must have known (i) the VC game, (ii) the potential burn rates of these businesses trying to colonise industries with neglibible costs of entry and (iii) that they have been in the Bubbletime for c 3 years - heck, we did, this is not hard!
Thursday, March 24. 2016
Now who would have predicted this - Sarah Perez at TC:
The clue is Sarah's line "Given that this is the Internet" - it was an 800lb Gorilla "Given"
Cue a million human internet trolls thinking today "hey, with one of those I am unstoppable 24 x 7"
The problem AI has is that it potentially promises everything and the Hypesters run with that as fact, but in truth today's early AI systems are more like intelligences with Savants syndrome - there's one thing they are taught to do very well, but are completely clueless at anything else. Deep Mind can beat Lee Se Dol at Go, but it can't do any of the other things Lee can do (and it burns 50,000 times more energy in not doing it....). Tay can "learn" (aka parrot) what people tell it but cannot distinguish between deep truths and inflammatory statements.
Oh - one last thing - Tay is modelled on a teenage girl. Sheeesh.
To be fair this is not Tay's fault per se, that you have to lay at the hands of its "parents" - how did they not see this one coming (and, when it started, who was watching its first faltering steps on its first day out playing in the traffic?). Anyone who has been around the internet for more than a few months (or even days - Boaty McBoatface anyone) would have seen that this was a not improbable risk.
PS There is a deeper story here, about the reliance on machine intelligences before they are ready, and the damage they can do without anyone knowing. The thing about complex systems is it's often very hard to find out when they are not working properly, malfunction is often not obvious - so it is necessary to watch them very closely, not let them off to roam on the Interwebz like Tay.
Monday, March 21. 2016
Over 10 years it's essentially moved from people laughing at it, through enormous hype, to people incraesingly attacking it. If Gandhi is correct, next step is it wins.
We have long opined its a system of extremely high potential, but suffers from an "interesting" management culture, with all the turmoil making it hard to focus on execution and any long term plays, so it is consistently under-achieving. One of teh pities in our view is that its seen as a "social network". It's not - its a lightweight universal comms system.
There's an interview with co founder and current CEO Jack Dorsey on Bloomberg, these snippets are interesting re "where the value is":
As to Twitter vs. Facebook, I think the best differentiation I've heard was from Caroline Criado-Perez on BBC Newsnight tonight, it was something like this - Facebook is your safe home village where you're preaching to the converted and no one argues with you too much. Twitter is where you meet people who disagree with you, that can be scary, but its also where you reach out and communicate with many, many people and that is invaluable.
Thursday, March 17. 2016
We've been following the path of Boston Dynamics over the last decade or so, and here is the next step in the saga - Google, having bought in haste, has divested it fairly quickly. How come? Bloomberg thinks its about time to market:
Hmmm...further down the article is something I've seen a lot of over the years - senior exec with a view does deal, rest of top management wasn't really bought in, senior exec leaves, acquired company strangled or sold:
Walking robots are a scary narrative when you're trying to persuade the world you're good guys with cute electronic cars, perhaps?
Friday, March 11. 2016
This is astounding - Wirecutter
That's between a 50% and 67% saving in battery life from using an Adblocker. In technology terms that's a 2 year Moore's Law improvement in battery life (better in fact, as betteries are inproving at a slower rate than chipsets). Or to put it another way, Ads remove much of the advances in battery life over the last few years (and bandwidth too, but that's not for today)
As a comparison Wirecutter also measured the drain of (i) continuous bright screen and (ii) watching a movie continuously...:
Running on bright screen vs minimum brightness
....using the Geekbench utility’s battery-intensive routines for an hour, an iPhone 6s used 54 percent less battery—12 percent of a full charge versus 26 percent—with the screen brightness at minimum compared with maximum brightness. A Moto X Pure Edition Android phone used 30 percent less (21 percent of a full charge versus 30 percent
Watching a movie
So per hour, they found the extra drain was, for the iPhone and Moto X respectively:
No Adblocker for an hour of browsing - 4.5% and 14%
Bright screen on all the time vs low - 14% and 9%
Movie watching over Wifi at 50% brightness - 5% and 11% respectively
So on the iPhone for example, the difference Adblocking makes per hour is roughly the energy required to watch a movie, or using the phone set for using at minimum brightness vs medium brightness.
More pressure on the Mobile Ad industry - the presure from bandwidth and load time frustration is already increasing Adblocker adoption, this is yet another turn in the sorry tale.
Wednesday, February 10. 2016
Fascinating article in The Grauniad last night, about the emerging inbuilt ability of consumer electronics to snoop on you.
Firstly, do y'all remember how last year it was revealed that Samsung had announced a television that would listen to everything said in the room it’s in, and in the fine print literally warned people not to talk about sensitive information in front of it?
(Disclosure - didn't blog it as was on holiday. My bad...but reminded me of an old joke I first read in the 1970's: "Russian TV is different to US TV - IT watches You". Not so funny now...)
Anyway, turns out that despite the hullabaloo at the time, a whole host of new devices that spy on you are coming on stream, as the Gruaniad notes:
a wide array of devices now act as all-seeing or all-listening devices, including other television models, Xbox Kinect, Amazon Echo and GM’s OnStar program that tracks car owners’ driving patterns. Even a new Barbie has the ability to spy on you – it listens to Barbie owners to respond but also sends what it hears back to the mothership at Mattel.
Even Barbie! (And some Teddy bears too, I understand)
Now - never mind the insecurity of these devices to common or garden hackers, it also appears that governments are getting in on the act - from testimony yesterday by the director of national intelligence, James Clapper. As the Guardian reported
Clapper made clear that the internet of things – the many devices like thermostats, cameras and other appliances that are increasingly connected to the internet – are providing ample opportunity for intelligence agencies to spy on targets, and possibly the masses. And it’s a danger that many consumers who buy these products may be wholly unaware of.
There you have it. Or, to quote Evgeny Morozov:
In case you are wondering what "smart" - as in "smart city" or "smart home" - means:
Or, to quote ourselves in our 10 Tech predictions for 2016:
8. The Internet of Things Fridge use case will still be the most oft repeated one in public. In private, surveillance and monitoring will be.
Didn't occur to us it was the Fridge that would be doing the spying though.....do you remember all those years ago when You! (aka Us!) were Time Persons of the Year and going to be the citizen-content providers of the future? Little did we know this was how it was going to be done....
Tuesday, January 12. 2016
Over the weekend, the Daily Telegraph installed sensors under their staff's desks to sense when they were at them. When discovered on Monday, the shit hit the fan - Buzzfeed:
One journalist at the paper said Telegraph union representatives had raised concerns about the issue and “HR are frantically rowing back on it”.
As is the norm these days, once discovered, the devices were retracted today after the standard "best of green intentions, learn our lessons" bollocks:
However, OccupEye’s [device manufacturer's] own website makes few references to environmental issues and instead focuses on how companies can make cost savings by downsizing their offices and fitting more staff into smaller spaces.
As is also the norm these days, it's a given that the devices will soon be back - just a lot smaller and unnoticeable, probably embedded in a cornucopia of sensors in new "smart desks", sold as a set of personalised benefits to the desk occupier. The future is here, and will be evenly distributed unless you can catch 'em at it.
As for the shit hitting the fan nex time, the fan is going to be "smart" too.....
Monday, January 11. 2016
Thursday, December 24. 2015
Above - Get Back!
Good Morning, Good Morning
At midnight last night the Beatles tracks became available on Spotify (and most other media) and I'm sure many others like me lost a few hours sleep listening and adding songs. Because we can.
To be honest I'm not a great Beatles fan, they have about a 10% hit rate with me - but they have so much stuff, that still means a lot of songs I want to add to the playlist (By the way, an analysis og Great Bands I read a few years back showed that sheer amount of compositions was a good predictor of greatness)
Anyway, it gave me pause for thought about music consumption, and the long and winding road travelled to where we are now.
In my life (time) it was tape decks and Other People''s Records, you built up a music collection with a little help from your friends. Then came Napster and we plunged helter skelter into sucking as much music down before the inevitable closedown, then LastFM where social scrobbling turned out to be a magical mystery tour of music your friends liked, then Pandora, which was hello, goodbye as they shut up shop to the UK. It all seems like yesterday, but that Revolution started 10 - 15 years back.
Anyway, put most of the songs I like on Spotify last night, so I'll let it be for now. Bit tired of course, but overall I feel fine .
Wonder how we will consume music when I'm 64....
Wednesday, December 23. 2015
Now, we of the Peanut Gallery are told over and over that There Is No Bubble in the Unicorn market, (which we disagree with by the way) but when these apparently not-overvalued companies sell or IPO and find that there is a not-reduction over previous values, it's illustrative to know who gets shafted - an illustration here from the NYT when Good Technology Ltd was sold to Blackberry - first the drop in valuation::
Ms. Wyatt [CEO] introduced BlackBerry’s chief, John S. Chen, who winkingly apologized for how his deal makers had driven Good’s final sale price down to $425 million, less than half of the company’s $1.1 billion private valuation.
The impact became clearer when the deal was described:
In an investor document about the sale that was distributed to shareholders, employees discovered their Good stock was valued at 44 cents a share, down from $4.32 a year earlier. In contrast, preferred stock owned by Good’s venture capitalists was worth almost seven times as much, more than $3 a share.
So the management and board no doubt felt they should take their lumps with the troops, given it was their error, you'd think? Did they heck:
When Good Technology was sold to BlackBerry, not all of its shareholders benefited. The start-up's employees, who own common stock, found their shares were valued far less than that of Good's investors, who owned preferred shares.
We've written before about the Preference Share and Ratchet racket going on with private funding rounds at present, and why it is driving the Unicorns' over-valuations. In essence none of the principals take any risk if (increasingly when) there is a devaluation of the company, its only the ordinary shareholders - mainly the employees - who get scraped. Lawsuits tend to come after the fact, which is too late, the money has flown the coop by then (read the article to get a good view of the futility of trying to claw money back). Thus there is little motivation to stop the practice.
So for all of you toiling away in overvalued Tech Co's (Unicorns or No), look long and hard at this example - there, but for the lack of a sale or IPO of your company yet, are you.
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