I bylined Tidbits #26 with “Did not expect that” in reference to the year 2020.
Well, the start of 2021 is certainly no less surprising.
Did not expect that…
We are in a weird cauldron of convergence across everything – geopolitics, politics, tech, media…the old way of doing things is out the door. The physical, digital, and psychological maps of the 21st Century are be rewritten. What will we end up with?
🗺 Geopolitics
The biggest news of the week (maybe even of the whole Trump Presidency…) is undoubtedly the storming of the U.S. Capitol by Trump supporters a few days ago.
The gulf between what these supporters believe (Biden won through cheating) and what most Americans including many Republicans believe (even if they did not want Biden to win) is potentially impossible to bridge…
It has never been clear to me that the average person ever changes their mind about much, especially when the belief is deeply held.
Pandora’s box has opened. What will come of this? There is no doubt that the world now sees American democracy as quite weak and exploitable. Is there any doubt that, say, Russia would be interested in further exploiting this mess?
#1 Trump Supporters Storm U.S. Capitol
Hundreds of President Donald Trump’s supporters stormed the U.S. Capitol on Wednesday in a stunning bid to overturn his election defeat, battling police in the hallways and delaying the certification of Democratic President-elect Joe Biden’s victory for hours.
In the gravest assault on the symbol of American democracy in more than 200 years, rioters forced their way past metal security barricades, broke windows and scaled walls to fight their way into the Capitol.
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Hours later, both houses of Congress resumed their work on certifying Biden’s Electoral College win, with debate stretching into the early hours of Thursday. It quickly became clear that objections from pro-Trump Republican lawmakers to Biden’s victory in battleground states would be rejected overwhelmingly, including by most Republicans.
“To those who wreaked havoc in our Capitol today – you did not win,” Vice President Mike Pence, who presided over the session, said as it resumed. “Let’s get back to work,” he said, drawing applause.
Source: Reuters
The Pence statement is also interesting to consider in light of the fact that a number of Trump supporters were talking about killing Pence. I’m sure Pence can’t be too happy about that.
#2 Permanent suspension of @realDonaldTrump
After close review of recent Tweets from the @realDonaldTrump account and the context around them — specifically how they are being received and interpreted on and off Twitter — we have permanently suspended the account due to the risk of further incitement of violence.
Source: Twitter
One of the first consequences is that private (Internet) companies now have clear authority to exercise more power even in areas that directly impact politics. Twitter is not alone. Facebook, Apple, Google, and Amazon have all acted to block far-right people from utilizing their platforms.
Regardless of whether you believe it was necessary for the current circumstances or not, power is usually not something that anyone willingly gives up. These are powers that are likely to remain in the toolkits of the platforms going forward. What will be the consequences, good or bad?
🤑 Economics
While our world is generally evolving (in some areas, convulsively…revolutionarily), one potentially good outcome is the trend towards more economic flexibility.
Our economy has been ossifying for a while because the normal forces of creative destruction have been put on hold. As industries struggle, many have utilized capital markets and cheap money to gain scale rather than evolve over the last few decades. Scale of economies is good usually, unless all you are doing is making a bigger colossus out of something that likely shouldn’t exist anymore.
For example, many commodity industries may be in this situation. Coal companies and oil companies have used capital markets to gain scale and put off destruction just a little longer…but maybe that’s not the right thing to do for the long-term to begin with.
What has been lacking is flexibility in the economy.
That brings us to what I think is potentially a good sign for our economy – a return to flexibility.
For example, Shopify has made it very easy for new businesses to emerge and for anyone to try their hand at a new business.
And Shopify rightfully celebrates this. Shopify recognizes that their true value is making it easy to become an entrepreneur, rather than focusing exclusively on driving rampant consumerism as every other e-commerce platform does.
#3 Shopify – 2020 The Year of the Entrepreneurs
The economy isn’t the only thing that is changing. The capital markets are starting to change, too.
There is currently a huge boom in SPACs…in 2020 more capital was raised through SPACs than IPOs…
Not sure how this will end, but this following Bloomberg Opinion piece is well worth reading.
I thoroughly enjoyed it and think you will, too.
#4 SPAC Magic Isn’t Free
Maybe the biggest capital markets story of 2020 was the boom in special purpose acquisition companies. A SPAC raises money from investors in a “blank check” initial public offering, puts the money in a pot, and goes out and looks for a private company to merge with. 1 In the merger, the target private company gets the money in the pot and the SPAC shareholders get shares in the new combined company; the result is that the target company has raised cash and gone public through the merger. It is an alternative to an IPO that can offer more speed and certainty and perhaps even a better price.
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Still there is a basic tension here: Part of the beauty of the SPAC is in its clever free-money structure, which gives big investors a good reason to give money to an entirely uncertain endeavor like taking public an unknown company. But all that free money is expensive.
Source: Bloomberg
💬 Media
#5 TikTok debuts first augmented reality filter that uses iPhone 12 Pro’s LIDAR camera
TikTok has released its first augmented reality filter that can utilize the iPhone 12 Pro’s LIDAR sensor for an enhanced confetti effect that realistically settles on people or objects in your room.
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TikTok isn’t the only major company with eyes on Apple’s LIDAR tech. Snapchat, one of the other major players when it comes to augmented reality filters, already added support for Apple’s LIDAR sensor back in October, allowing creators to build their own enhanced AR filters for the app.
Source: The Verge
Interest in AR from both consumers and platforms is growing.
TikTok is a very capable company, and this will bring them ever closer in competition with Snap.
Also interesting to consider the growing advantages that Apple’s platform has when it comes to hardware that can enable high quality AR experiences such as the LIDAR sensors that are making its way into many iOS devices. This will create lock-in over time because apps that are enabled and built on top of that hardware stack will find it harder to enable similar experiences on other platforms that do not have the same hardware stack.
Thirdly…Apple is generally very good at finding cross-platform uses for their technology. LIDAR is generally believed to be critical for an autonomous car. I would not be surprised if Apple is currently honing their LIDAR tech in a low-risk situation (AR) before maturing the tech for autonomous car usage.
Speaking of AR…
#6 Facebook Smart Glasses Coming ‘Sooner Than Later’ Without AR
“These are certainly connected glasses, they are certainly providing a lot of functionality, [but] we’re being quite coy about which functionality precisely we are providing,” Bosworth said. “We’re excited about it but we don’t want to over-hype it. We’re not even calling it augmented reality, we’re just calling it ‘smart glasses,’” he added.
Source: Bloomberg
What could this mean?
But what’s clear is that the industry competitive landscape that people have in their minds are going to change drastically in the next 5 years.
Apple’s main competitor was Microsoft in the 90s.
In the 2000s and 2010s, Apple’s main competitor is often assumed to be Google.
Apple’s main competitor in the 2020s and 2030s is very likely Facebook and the coterie of companies that have ambition and designs on being the “metaverse” including Epic, Snapchat, TikTok, etc.
The battlefield will be AR and VR. Because AR and VR will become the new operating system for your life. Apple currently controls the most valuable OS and needs to ensure they control the next OS. Facebook controls the most valuable network and the network of the future is the metaverse. And all of the social media players as well as some game platforms like Epic and Roblox see the metaverse as an extension of their game and entertainment ecosystem. In other words, OS, networks, media, and games are all converging. And hence all of these unlikely competitors will find themselves in crowded turf.
Speaking of turf changes…Amazon is going straight for Google.
Amazon is increasingly leveraging the power they have over your purchasing data to take control of the advertising industry.
At the end of the day, advertisers want to sell you something, and that data naturally sits with the e-commerce platform.
#7 Introducing Amazon Marketing Cloud (beta)
Advertisers are looking for more transparency and flexibility in understanding how their marketing performs across media channels such as search, display, video and audio. To help them address this challenge, Amazon Advertising is introducing Amazon Marketing Cloud (AMC)—a new, holistic measurement and analytics solution currently in beta for eligible advertisers. AMC is built on Amazon Web Services (AWS), which for 14 years has been the world’s most comprehensive and broadly adopted cloud platform.
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Today, Amazon advertisers can use Amazon Attribution to measure the on-Amazon impact of their non-Amazon media. They can also measure brand preference, awareness, and brand lift of their Amazon Advertising campaigns through leading industry measurement partners. Amazon Marketing Cloud brings advertisers additional flexibility to understand the sequence of marketing touchpoints that deliver impact and build a comprehensive view of how to most effectively engage their audience.
Source: Amazon
#8 Amazon’s advertising business booms in pandemic
As more and more merchants cram on to Amazon’s vast marketplace, brands that want to stand out are spending heavily on ads.
As a result, Amazon’s “other” business unit, which is made up almost entirely of its ads business, is growing faster than its retail, cloud computing and Prime subscription divisions.
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Amazon offers advertisers data that is irresistible: a closed loop that shows them how effective every dollar they spend is, and more than two decades of insight on the actual buying habits of consumers, rather than just their web-browsing habits.
“I can understand better the value of $1 spent on Amazon because I can literally see the transaction,” said Eric Heller, who runs the Amazon Center of Excellence at WPP, the world’s largest ad agency, which advises on how best to use Amazon’s platform.
Source: FT
“…because I can literally see the transaction”.
Yes.
Google and Facebook needs to become Big Brother and track your every move in order to prove to advertisers that their ads work.
Amazon can just show them the ad works.
This is why Facebook is smart for trying to go downstream into e-commerce directly.
Visual Capitalist published a number of great charts on digital dating / Match a few months ago. I missed it at the time, but the charts and accompanying article is worth browsing.
Digital dating is a very large and growing industry as societal norms shift…and very few players are focused on it other than Match, Bumble, and a few smaller players.
And the economics are fantastic! Match has margins as high as any tech company without the need for too many expensive engineers or massive datacenter investments.
#9 An Army of Swipers: Dating in the Modern Age
Source: Visual Capitalist
💰 Fintech
#10 Bitcoin tops $40,000 — just days after passing $30,000
Source: Coindesk
Bitcoin first topped $19,000 in December 2017 before crashing spectacularly to around $3,200 a year later. But long-term buy and hold bitcoin bulls, or HODLers as they’re known in crypto circles, are having the last laugh.
That’s because the price of one bitcoin (XBT) topped more than $40,000 Thursday — double the value from a little more than three years ago. Prices later slid back to around $38,000.
Source: CNN
I missed this one. I will console myself with the fact that I’ve owned a number of companies that indirectly benefit from it, of which Square is the most relevant one.
And also PayPal:
#11 PayPal backs crypto tax startup Taxbit
PayPal Holdings Inc’s venture arm has made an investment in Salt Lake City, Utah-based tech startup Taxbit, which helps consumers and businesses calculate the taxes owed on cryptocurrency holdings, the companies said on Thursday.
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While bitcoin and other virtual currencies have been attractive to speculators, they have struggled to become widespread forms of payment in part because they are treated as property for tax purposes in the United States, making every transaction taxable.
Taxbit “can help people optimize taxes as they their use crypto throughout the year,” Woodward said.
Source: Reuters
Hard to say what cryptocurrencies will be worth years from now, but if it gains acceptance and traction, I would be surprised if the infrastructure that enables it does not become valuable as well.
Square and PayPal (along with Coinbase) are the easiest ways to transact in cryptocurrencies. PayPal continues to extend their infrastructure with investments in entities like Taxbit that make it evermore easier for a crypto future to become a reality.
When it comes to fintech / payments / crypto, infrastructure continues to be the layer that I think is far more interesting than anything.
Part of that infrastructure is solving the digital identity problem. And another part of that infrastructure is enabling that infrastructure to extend not only online but offline as well.
Apple Pay has taken a while to gain momentum, but Apple Pay’s growing usage in areas that more directly touch infrastructure rather than just payments is going to be an important advantage.
For example:
#12 All NYC Subway Stations, Buses Now Accept Apple Pay Mobile Payments
Apple Pay is now accepted at all subway stations and in buses across New York’s five boroughs; 15,000 OMNY readers at 472 stations and 5,800 buses. It’s part of the MTA’s One Metro New York (ONMY) payment system, which is on track to replace plastic MetroCards by 2023. Though some stations have been testing Apple Pay since 2019, the feature is now available at every location, AppleInsider reports.
The OMNY system works with contactless cards and smartphones or devices like smartwatches. Users can pay for individual rides via Apple Pay, though there is no way to purchase unlimited monthly or weekly passes just yet. MTA will add more fare options this year and next, and Metro North and LIRR are expected to receive OMNY in 2022.
Source: PC Mag
This may seem like a payments development.
But what this is signaling is that Apple Pay (and other select infrastructure partners) is going to eventually replace the offline ticketing machine. Apple Pay will become infrastructure. And as it replaces government issued cards, it will slowly subsume identity functions as well, which historically reside solely in the hands of the government.
🛍 Commerce
#13 Alibaba and Shopee clash in Vietnam as ASEAN e-commerce war rages
Free deliveries and low commissions are part of Shopee’s aggressive marketing efforts in Vietnam that have helped it become the country’s most popular e-commerce platform and grow through the COVID-19 pandemic. Shopee, owned by Singapore-based tech group Sea, drew 62 million monthly visits in Vietnam in the third quarter of 2020, up more than 80% from a year earlier.
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The effort seems to be paying off. According to data from iPrice Group, Shopee was the most visited site in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam in the third quarter of 2020. Only a year earlier, Lazada (owned since 2016 by China’s Alibaba Group Holding) was No. 1 in the Philippines, Singapore and Thailand, while Indonesia’s most visited was Tokopedia, the e-commerce group backed by Japan’s SoftBank Group.
Sea’s rise is forcing a response. Lazada has joined hands with Grab in Vietnam, while Grab and Gojek have made new investments in digital finance businesses.
Source: Nikkei
Sea / Shopee is killing it.
And everyone is now trying to build new alliances to counter Sea / Shopee.
Alibaba unfortunately has more problems to worry about in China, though. Alibaba is likely going to be very distracted for the next 6-18 months.
That means Sea is going to keep crushing it.
#14 Gojek in Talks With Tokopedia for $18 Billion Merger, Sources Say
Indonesia’s ride-hailing and payments giant Gojek is in advanced discussions about merging with local e-commerce pioneer PT Tokopedia, ahead of a planned initial public offering of the combined entity, according to people with knowledge of the matter.
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The merged entity would create an Indonesian powerhouse with a valuation of about $18 billion, with Gojek and Tokopedia pegged at around $10.5 billion and $7.5 billion respectively in the talks, according to the people involved. Their businesses range from ride-hailing and payments to online shopping and delivery — a local mashup of Uber Technologies Inc., PayPal Holdings Inc., Amazon.com Inc., and DoorDash Inc. It plans to go public in the U.S. and Indonesia.
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Gojek and Tokopedia have considered a potential merger since 2018, but discussions accelerated after deal talks between Gojek and arch-rival Grab Holdings Inc. reached an impasse, the people said. Grab Chief Executive Officer Anthony Tan continues to resist pressure from SoftBank Group Corp.’s Masayoshi Son to give up some control in a combined entity with Gojek, said the people.
Source: Bloomberg
New alliance? If two sinking boats get together, does it start to float or just sink slower?
Gojek was previously in discussions to merge with Grab. I have high confidence in Grab’s long-term strategy.
FYI, Uber also owns a nice chunk of Grab since Uber sold their Southeast Asian operations to Grab a few years ago in exchange for a stake in the company.
👨💻 Technology
#15 AMD Ryzen 9 Crushes Entire Intel Comet Lake Line-Up
According to the user, the CPU-z score puts the AMD Ryzen 9 5900H at 20% faster in single-core at 10% faster in multi-core tests versus the Intel Core i7-10875H which is very impressive.
Source: WCCFTech
Nothing short of impressive. The turnaround in AMD in the last 5 years has been nothing but unbelievable.
Lisa Su deserves all the credit she can get and more for what she has done.
But the landscape is changing. Most companies are starting to recognize that Apple’s integrated silicon strategy is an important advantage. What will this mean for merchant chip providers like AMD and Intel? Yes, AMD is crushing Intel, but will AMD still remain relevant to customers 10 years from now if their key customers want to do their own internal silicon?
Recently Reuters published an article suggesting Apple will launch a car by 2024.
There is now a media frenzy.
There is actually limited agreement on the details…but there is too much smoke for there not to be a massive (hidden) fire somewhere. As always, Apple is a master at making competitors compete with their past.
#16 Apple’s Self-Driving Electric Car Is at Least Half a Decade Away
Apple Inc. will take at least half a decade to launch an autonomous, electric vehicle because development work is still at an early stage, according to people with knowledge of the efforts.
The Cupertino, California-based technology giant has a small team of hardware engineers developing drive systems, vehicle interior and external car body designs with the goal of eventually shipping a vehicle. That’s a more ambitious goal than in previous years when the project mostly focused on creating an underlying self-driving system. The company has also added more ex-Tesla Inc. executives to the project.
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In a sign it has now rebooted development of a vehicle, Apple in recent months shifted an executive known for his work on vehicle interiors and exteriors to its car team. In 2019, Apple hired former Tesla engineering vice president Steve MacManus, but he initially worked on projects unrelated to the car. Now MacManus leads a development group with several employees focused on car interiors, fabrics, car testing and vehicle manufacturing, people with knowledge of the matter said. He reports to Doug Field, a former top Tesla vehicle engineer who runs the Apple car project day to day.
Source: Bloomberg
The Bloomberg article claims the car is coming a lot later than the recent Reuters article.
But there are a lot of new details…all worth reading.
And there is definitely real work going on because Hyundai unexpectedly confirmed it:
#17 Hyundai Confirms and then Walks Back Confirmation of Talks Over Apple Car
Revising its statement for the second time in a matter of hours, Hyundai said it had been contacted by potential partners for the doevelopment of autonomous electric vehicles, removing any reference to Apple. Shares of Hyundai surged 19% after Korean media initially reported on talks with the U.S. company, only slightly paring their gains after the statement confirming discussions was revised.
Source: Bloomberg
When the car comes, the old gas car companies will be in trouble.
But they are already in trouble because of Tesla.
Elon Musk just became the richest person in the world.
#18 Elon Musk overtakes Jeff Bezos to become world’s richest person
A 6% rise in Tesla (TSLA) shares early Thursday lifted the value of its CEO’s stock holdings and options by $10 billion, taking his net worth to about $191 billion. A more modest rise of less than 2% lifted Bezos’ Amazon (AMZN) shares by about $3 billion, putting his net worth at $187 billion.
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Bezos’ stake in Amazon shares increased by $75 billion in 2020, to $173.3 billion, given the huge increase in sales driven by the Covid-19 pandemic.
But that was nothing compared to Musk’s holdings in Tesla. The 170 million shares of Tesla he already owns increased in value by $106 billion during 2020, as shares shot up 743% during the course of the year.
The value of his stock options he held at the start of the year increased by $14.2 billion, while the new options he received during the course of the year as part of his pay package had a value of $21.5 billion at year’s end.
Source: CNN
I missed this one, too. But good for Elon! He’s proven many skeptics wrong.
Source: Google Finance
💉 Health
#20 AlphaFold: a solution to a 50-year-old grand challenge in biology
Proteins are essential to life, supporting practically all its functions. They are large complex molecules, made up of chains of amino acids, and what a protein does largely depends on its unique 3D structure. Figuring out what shapes proteins fold into is known as the “protein folding problem”, and has stood as a grand challenge in biology for the past 50 years. In a major scientific advance, the latest version of our AI system AlphaFold has been recognised as a solution to this grand challenge by the organisers of the biennial Critical Assessment of protein Structure Prediction (CASP). This breakthrough demonstrates the impact AI can have on scientific discovery and its potential to dramatically accelerate progress in some of the most fundamental fields that explain and shape our world.
Source: Google DeepMind
Another important development that could lead to revolutionary changes in terms of our understanding and command of biology.
The 21st Century is undoubtedly the century of biology in my mind.
And I continue to believe biology is going to be one of the most important areas where AI is utilized.
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