Tidbits #58 – AI Machine Guns, Collapsing Supply Chains, TikTok + More

Hello, hello! 👋🏻👋🏻

Welcome back to another edition of Tidbits covering all the recent things worth talking about in business, media, and technology.

How Comedians May Rule the World

Generally, I consider myself to be a fairly (long-term) optimistic person (but near-term realist). I’m generally more optimistic than almost anyone I meet or know.

Even with that starting disposition, the more I think about the sudden shocks from COVID-19, supply chain stress, and dramatic global geopolitical changes unseen in decades, the more I feel the need to tone down my medium-term optimism.

One of my favorite book trilogies is Liu Cixin’s The Three-Body Problem / Remembrance of Earth’s Past. The trilogy is truly breathtaking in terms of the deeply insightful concepts it introduces (along with a very unique and compelling storyline). One of the more minor concepts that I’ve taken to heart is the cycle between stable eras and chaotic eras. There’s a lot of reasons to suspect that our world is currently undergoing such a shift as well – from a (decades long) stable era blessed by years of plenty, to now the coming chaotic era cursed by scarcity.

And in this coming chaotic era, escaping it will require coordination and governance. But this chaotic era will also coincide with the emergence of technologies that will make it increasingly difficult to govern.

For example, below I’ve included an article about AI-assisted machine guns (which adds to the discussions in prior editions of Tidbits around drone warfare, etc). As much as governments (especially the US / western governments) would like to keep this tech to themselves, the odds are high that this type of tech will spread and proliferate. Somewhere in the future, small militias or perhaps even individual actors may have the power to assassinate people of means and power and change history on their own.

Of course, it’s already possible today, but it’s not that easy yet…and the protective walls around the castle are crumbling – evermore – a little faster.

This will mean governing people will become increasingly hard. No government has ever had the full support of all its people, but governments survive as long as a critical mass of support exists. But increasingly, the people…no, a single unhappy person alone…could have the power to change a government (both physically and psychologically and culturally / socially). That’s dangerous.

And it’s dangerous because the nature of this world guarantees that no single set of policies can ever satisfy the wants of everyone.

It will take years for our world to find its new equilibrium, but my guess is that governments will eventually be commanded by comedians. Every government will one day need to enact policies that make certain portions of the population unhappy…the way you avoid a single unhappy person from changing the course of government is, of course, to be able to deliver the bad news in a palatable manner. Comedians are very good at this! Every famous comedian ever is able to take a painful observation of LIFE and make us laugh about it. The funny part often isn’t how fake the scenarios are…the funny part is often how true the scenarios are. Moments of pain, yet moments we can laugh about.

Every government is likely going to be increasingly delivering bad news in the coming years. And it’s never been more important to be funny and likable because – as Simon Murray once wrote – nobody will shoot you if you make them laugh.

🗺 Geopolitics

#1 A Hospital Hit by Hackers, a Baby in Distress: The Case of the First Alleged Ransomware Death

When Teiranni Kidd walked into Springhill Medical Center on July 16, 2019, to have her baby, she had no idea the Alabama hospital was deep in the midst of a ransomware attack.
For nearly eight days, computers had been disabled on every floor. A real-time wireless tracker that could locate medical staff around the hospital was down. Years of patient health records were inaccessible. And at the nurses’ desk in the labor and delivery unit, medical staff were cut off from the equipment that monitors fetal heartbeats in the 12 delivery rooms.
Doctors and nurses in the unit texted each other with updates. “We have no computer charting for I don’t know how long,” one manager informed a nurse in a message later filed in court. “They are printing out the labs in the laboratory and sending them by paper,” another worker wrote. One overwhelmed nurse texted, “I want to run away.”
Ms. Kidd’s daughter, Nicko Silar, was born with the umbilical cord wrapped around her neck. The condition triggers warning signs on the heart monitor when the squeezed cord cuts off the supply of blood and oxygen to the fetus. Nicko was diagnosed with severe brain damage. She died nine months later.
Amid the hack, fewer eyes were on the heart monitors—normally tracked on a large screen at the nurses’ station, in addition to inside the delivery room. Attending obstetrician Katelyn Parnell texted the nurse manager that she would have delivered the baby by caesarean section had she seen the monitor readout. “I need u to help me understand why I was not notified.” In another text, Dr. Parnell wrote: “This was preventable.”
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Hospitals have increasingly become targets, with hackers betting that executives will pay quickly to restore lifesaving technology—adding even more pressure to healthcare providers already strained by the pandemic. In May, the Federal Bureau of Investigation warned that ongoing ransomware attacks on medical providers and first responders were putting the public in danger and risked delays in medical care.
Source: WSJ

The importance of cybersecurity continues to rise. People used to brush off cyberthreats as just a nuisance.

In recent years, cyberthreats have been elevated to economic and possibly strategic problems.

But increasingly people should view cybersecurity as THE most central aspect of national security going forward. The world is already at war, but warfare of the digital age is a slow burn and is fought in code. And there is no Navy on the internet. People are already dying. In the past, even invading armies understood that hospitals and civilian targets are generally off limits, but in our digital age, in this age of cyber warfare, malicious code knows no boundaries.

#2 The Scientist and the A.I.-Assisted, Remote-Control Killing Machine

In 2009, a hit team was waiting for Mr. Fakhrizadeh at the site of a planned assassination in Tehran, but the operation was called off at the last moment. The plot had been compromised, the Mossad suspected, and Iran had laid an ambush.
This time they were going to try something new.
Iranian agents working for the Mossad had parked a blue Nissan Zamyad pickup truck on the side of the road connecting Absard to the main highway. The spot was on a slight elevation with a view of approaching vehicles. Hidden beneath tarpaulins and decoy construction material in the truck bed was a 7.62-mm sniper machine gun.
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The assassin, a skilled sniper, took up his position, calibrated the gun sights, cocked the weapon and lightly touched the trigger.
He was nowhere near Absard, however. He was peering into a computer screen at an undisclosed location more than 1,000 miles away. The entire hit squad had already left Iran.
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The souped-up, remote-controlled machine gun now joins the combat drone in the arsenal of high-tech weapons for remote targeted killing. But unlike a drone, the robotic machine gun draws no attention in the sky, where a drone could be shot down, and can be situated anywhere, qualities likely to reshape the worlds of security and espionage.
Source: NYT

In a way, God is always conceptualized as an almighty being with the ability to project power from afar. Humanity is getting pretty close to having that power, too. But have we learned how to live with it?

🤑 Economics + Markets

#3 China’s Power Shortfalls Begin to Ripple Around the World

China is struggling with widespread power shortfalls, dealing a blow to the recovery of the second-largest economy and risking disruption to global supply chains and heightened inflationary pressure around the world.
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“There’ll be a cascading effect,” said Mike Beckham, Oklahoma-based co-founder and CEO of Simple Modern, which makes products such as insulated water bottles and backpacks, “As we started to comprehend the ramifications of what’s happening, we realized that this is potentially bigger than anything we’ve seen in our business careers.”
Last week, one of Mr. Beckham’s main suppliers, based in Quzhou city in eastern China, was told by the local government that it could only operate four days a week, instead of the usual six. In addition, it must adhere to a power-usage cap, which cuts the capacity of the factory by about one-third as a result.
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The China power crunch also risks heaping further pressure on global supply chains by pushing up prices for raw materials and essential components.
“Global markets will feel the pinch of a shortage of supply from textiles, toys to machine parts,” wrote Ting Lu, chief China economist at Nomura Holdings, in a note to clients on Monday. He added that the resulting supply shock will likely further push up global inflation, especially in developed markets such as the U.S. The power curbs have hit parts of China’s manufacturing bases, including those that produce semiconductor-related goods. A global shortage of semiconductors this year has already hit car makers and other industries.
Source: WSJ

This is going to be a tough Winter for everyone, not just the Chinese.

#4 Cargo Piles Up as California Ports Jostle Over How to Resolve Delays

Nike Inc. doesn’t have enough sneakers to sell for the holidays. Costco WholesaleCorp. is reimposing limits on paper towel purchases. Prices for artificial Christmas trees have jumped 25% this season.
Despite mounting shipping delays and cargo backlogs, the busiest U.S. port complex shuts its gates for hours on most days and remains closed on Sundays. Meanwhile, major ports in Asia and Europe have operated round-the-clock for years.
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Participants in each link in the U.S. chain—shipping lines, port workers, truckers, warehouse operators, railways and retailers—blame others for the imbalances and disagree on whether 24/7 operations will help them catch up. All of them are struggling with a shortage of workers.
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“It has been nearly impossible to get everyone on the same page towards 24/7 operations,” Mr. Seroka said.
Truck drivers often don’t show up at scheduled appointments to pick up boxes at the inundated container yards to make space for the next load to come in, say shipping and port executives. Truckers blame terminal congestion, saying delays at one appointment can cause them to miss the next, and that shipping lines aren’t doing enough to clear out the towers of empty containers taking up space at the docks.
Source: WSJ

And, global supply chains were already under stress.

#5 Global supply chains at risk of collapse, warn business leaders

Global supply chains are at risk of collapse unless governments worldwide restore freedom of movement to transport workers and give them priority over vaccines, a coalition of international business leaders has warned.
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The “mistreatment” of workers was piling pressure on the already “crumbling” global supply chain, they said, adding that any failure to act was likely to exacerbate shortages of essential goods including electronics, food, fuel and medical supplies ahead of Christmas.
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At the peak of the crisis 400,000 seafarers were unable to leave their ships, with some working for as long as 18 months over their initial contracts, the letter said. Flights have been restricted and aviation workers have faced the inconsistency of border, travel and vaccine restrictions/requirements, it added.
Additional and systemic stopping at road borders has also meant truck drivers have been forced to wait, sometimes weeks, before being able to complete their journeys and return home.
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“All transport sectors are also seeing a shortage of workers, and expect more to leave as a result of the poor treatment millions have faced during the pandemic, putting the supply chain under greater threat,” the letter said.
Source: FT

I think people are assuming it might just be a short term issue, but I think increasingly it makes sense to start questioning if that’s true.

Even robust systems in life eventually break when enough stress is applied. Like a rubber band. You can apply a decent amount of stress to it and it will still snap back, but after a certain point, it will never snap back. Once things break, they never recover.

#6 Merck Releases Positive Phase 3 Data on Oral Antiviral COVID-19 Medication

[Molnupiravir] (MK-4482, EIDD-2801), an investigational oral antiviral medicine, significantly reduced the risk of hospitalization or death at a planned interim analysis of the Phase 3 MOVe-OUT trial in at risk, non-hospitalized adult patients with mild-to-moderate COVID-19. At the interim analysis, molnupiravir reduced the risk of hospitalization or death by approximately 50%; 7.3% of patients who received molnupiravir were either hospitalized or died through Day 29 following randomization (28/385), compared with 14.1% of placebo-treated patients (53/377); p=0.0012. Through Day 29, no deaths were reported in patients who received molnupiravir, as compared to 8 deaths in patients who received placebo.
Source: Merck

BUT, technology continues to keep me somewhat optimistic. Despite the miracle of mRNA vaccines, there are enough people that don’t want to get it that the world could truly just break. But Merck has followed with its own miraculous tech of its own – a medication that promises to reduce hospitalizations and death by half for those that catch severe cases of COVID-19 (almost all exclusively are unvaccinated people at this point).

Although this is a fantastic development, it would still be best for people to get vaccinated because 7% of the people that got this medication were still hospitalized with severe symptoms (but no deaths) vs 14% of the control group either getting hospitalized or died.

#7 China Wields New Legal Weapon to Fight Claims of Intellectual Property Theft

Chinese technology giants have seized on a new legal tactic to fight claims of intellectual property theft, raising concerns in the U.S. that Beijing’s promises to strictly enforce patent and copyright laws will be undermined by Chinese courts.
In four major cases since 2020, Chinese courts granted so-called anti-suit injunctions blocking foreign companies from taking legal action anywhere in the world to protect their trade secrets.
Three of the rulings were in favor of Chinese telecom companies—Huawei Technologies Co., Xiaomi Inc. and BBK Electronics. The fourth supported South Korea’s Samsung Electronics Corp. in a dispute with Swedish telecom giant Ericsson AB.
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In the U.S. and U.K., anti-suit injunctions are typically issued by courts to prevent identical cases from playing out in multiple legal venues simultaneously. In one well-known case, a federal-district court in Washington state issued an anti-suit injunction blocking Motorola Inc. from bringing a parallel lawsuit against Microsoft Corp. in Germany.
The Chinese injunctions take that a step further by barring legal action globally, according to lawyers and others who track the Chinese courts. The Chinese courts also asserted jurisdiction over patent licensing fees globally, in what attorneys say is a break from standard practice in the West.
Source: WSJ

This is something worth monitoring in terms of long-term impact on the global economy. China is effectively using its courts in a protectionist way and trying to force global disputes into its own courts where its own companies could be favored. This is tricky for foreign companies because China is either the largest or second largest market for almost all companies. And there is no way to escape this policy shift without negative impact on access to Chinese markets.

#8 Individuals Embrace Options Trading, Turbocharging Stock Markets

“I had no idea what options were last year,” Mr. Patel said. “You can make quick 100%, 200%, 300% [gains] within minutes if things go your way.”
Of course, “you can lose just as quick,” he added.
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At times, options trading has dwarfed activity in stocks, creating leverage that traders and analysts say stands to accentuate both up and down moves in the market.
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“I’m hooked on the options,” said Britt Keeler, a 40-year-old individual investor based in Winter Park, Fla. “You could lose it all really quick but you could hustle and kinda hit the jackpot.”
Mr. Keeler said that wrong-way options bets on AMC Entertainment Holdings Inc.AMC 1.05% this year cost him almost all of his roughly $12,000 trading account, which he is slowly building back up. Still, he hasn’t been deterred.
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By one measure, options activity is on track to surpass activity in the stock market for the first time ever. In 2021, the daily average notional value of traded single-stock options has exceeded $432 billion, compared with $404 billion of stocks, according to calculations by Cboe’s Henry Schwartz. This would be the first year on record that the value of options changing hands surpassed that of stocks, according to Cboe data going back to 2008.
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And just as bullish call options have helped fuel rallies in stocks like GameStop and AMC, traders banding together to buy bearish put options could similarly help drive big declines in individual companies, said Rishabh Bhandari, a portfolio manager at Capstone Investment Advisors. The higher derivatives activity alongside lower liquidity, or ease of trading, in some corners of the market can mean higher volatility.
Source: WSJ

Back in January when the GameStop mania was playing out, I explained how capital markets were likely on the verge of a permanent shift.

Articles like this continue to strengthen my conviction.

The capital markets used to be primarily a stock market. Now the capital market is primarily an options market.

And retail investors are just as willing to speculate with call options as they are with put options.

This tells me there is a secular growth trend in volatility. Long vol.

#9 MercadoLibre SPAC Has 30 Latin America Tech Firms In Its Sights

E-commerce giant MercadoLibre Inc.’s blank-check company with venture capital firm Kaszek is just getting off the ground. Already, the e-commerce giant’s executives are mulling more partnerships in the region.
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“The vision we have is to turn this into a platform, where we construct these SPACs as a way to build stronger relationships with partner companies and generate alternative access to public markets for great digital companies,” said Pedro Arnt, the co-chief executive officer of the SPAC and MercadoLibre’s chief financial officer. “We hope this is the first of many SPACs.”
Source: Bloomberg

Here’s an interesting development. This is nominally “tech” news, but it’s really capital market news! In the past, if you are a company and you want to control something, you buy it. You can buy it with cash or issue stock.

But here Mercadolibre seems to be pioneering a new era. Mercadolibre is planning on launching a series of SPACs so that investors can help Mercadolibre take control of strategically interesting companies without Mercadolibre having to put much money on the line.

The story here isn’t necessarily about Mercadolibre avoiding risk.

The story here is more likely that Mercadolibre invented a way to invest as if it had far more money and more cash flows than it does. Mercadolibre invented a way to invest as if it was Google or Tencent without having the same cash flows.

👻 Cryptocurrencies + NFTs

#10 Biden Administration Seeks to Regulate Stablecoin Issuers as Banks

The Biden administration is considering ways to impose bank-like regulation on the cryptocurrency companies that issue stablecoins, according to people familiar with the matter, including prodding the firms to register as banks.
The administration is also expected to urge Congress to consider legislation to create a special-purpose charter for such firms that would be tailored to their business models, the people say.
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From the administration’s perspective, it would be preferable if Congress were to impose or authorize a bank-like regulatory framework for stablecoins, as well as a series of investor protections for cryptocurrencies. If Congress doesn’t act, and its other recommendations go unheeded, the administration wouldn’t be reluctant to use [Financial Stability Oversight Council], one of the people said.
Source: WSJ

#11 Lil Nas X, Bella Poarch, Grimes, and more are releasing TikTok NFTs

Because no peace can be found in the age of man, TikTok has decided to partner with select creators, celebrities, and online entities like Lil Nas X, Bella Poarch, and Grimes to release a collection of non-fungible tokens. These TikTok Top Moments, as the company is calling them, are inspired by six “culturally significant” TikTok videos in the form of one-of-one NFTs. TikTok plans to auction them alongside a selection of limited edition NFTs it’ll sell weekly throughout October.
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“Proceeds will largely go directly to the creators and NFT artists involved,” TikTok writes, but the company declined to break down specific percentages when asked by The Verge. TikTok says a majority of the earnings will go to the creators of the NFTs. The rest will go to Immutable X, which handles NFT trading for the set, and the Museum of the Moving Image, which will be hosting a TikTok exhibit displaying the six main pieces in the TikTok collection. TikTok will not take any proceeds from sales, and says that the weekly drops of limited edition NFTs will “be sold at accessible price points to ensure each creator’s audience can own a piece of their history.”
Source: The Verge

If TikTok is doing it, it must be becoming mainstream.

Still, many NFTs are likely to have a hard time retaining value in the future.

🎭 Society

#12 Bitcoin Miners Eye Nuclear Power as Environmental Criticism Mounts

Bitcoin miners, under fire for their sizable environmental footprint, are forging partnerships with owners of struggling nuclear-power plants with electricity to spare.
The matchups have the potential to solve key issues facing each industry, executives and analysts say: Electricity-hungry bitcoin miners want stable and carbon-free power, while nuclear plants facing competition from cheaper power sources need new customers.
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Nuclear power, meanwhile, has lost public favor in the wake of accidents such as Japan’s 2011 Fukushima disaster and has struggled to compete economically in the U.S.
Nuclear plants provide a steady source of emissions-free power, but like coal-fired power plants, many face a daunting challenge selling their output in wholesale power markets amid stiff competition from wind and solar power—and natural-gas generation, which became cheaper after the fracking boom led to huge new discoveries of the fuel.
Source: WSJ

I put this in the society section because the takeaway here should be the renewed interest in nuclear power. Nuclear power is likely the one solution that we already have that could dramatically assist in our efforts to combat climate change. Nuclear power is viewed as “dirty”, but it has no carbon footprint and is much more dependable than renewables like solar. Not every country has the right conditions for solar power, but every country can run on nuclear power.

💬 Media + Games

#13 WPP and Snap Inc. launch Augmented Reality partnership

WPP and Snap Inc., the camera company behind Snapchat, today announced a global partnership (“The AR Lab”) to help brands build and deliver immersive experiences for consumers using Augmented Reality (“AR”). With a particular focus on e-commerce, the partnership combines Snap’s leading AR technology with WPP’s integrated capabilities across creative, media, commerce and technology, allowing WPP clients to better connect with their customers on the Snapchat platform and drive meaningful business results through AR.
According to a recent study commissioned by Snap, 94% of people are expecting to use AR for shopping purposes the same as or more than 2022 versus 2021.^{^[1]} With advertisers on Snap platforms finding AR campaigns to be significant drivers of business, the partnership will give WPP and its clients access to and mastery of Snap’s AR technology end-to-end, including creative production and measurement.
As Snap’s inaugural Agency AR partner, WPP will collaborate with Snap on new products and technology, such as the recently launched Snapchat Trends tool, which allows teams to use proprietary insights and data to inform creative and campaign development.
Source: WPP / Snap

WPP is an advertising agency. WPP partnership with Snap should tell you all you need about the commercial viability of AR / Snap lenses.

#14 Expanding Our Games Team With the Acquisition of Night School Studio

We’re in the early stages of creating a great gaming experience for our members around the world. So we’re excited to announce today Night School Studio is joining Netflix.
Founded by Sean Krankel and Adam Hines in 2014, Night School Studio is best known for their critically acclaimed debut game, OXENFREE. We’re inspired by their bold mission to set a new bar for storytelling in games. Their commitment to artistic excellence and proven track record make them invaluable partners as we build out the creative capabilities and library of Netflix games together.
Source: Netflix

Netflix acquired a game studio. Netflix is becoming Net-games.

#15 Netflix launches new mobile games in Poland, Italy and Spain as a members-only perk

Netflix is expanding its mobile gaming push with the launch of three more gaming titles which will become exclusively available to Netflix members in select European markets. The company today is introducing a trio of casual games — “Shooting Hoops,” “Teeter Up” and “Card Blast” — to Netflix members in Spain and Italy, as well as Poland, where Netflix recently began marketing its first members-only mobile games within its Android app.
Similarly, the new titles will be made available using the same model. Through a new “Games” tab inside the Netflix app, members will be directed to the games’ listings on the Google Play Store for their region. Here, they’ll download and install the game as they would any other app. But when it comes time to log in, they’ll need their Netflix credentials to begin playing.
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“We view gaming as another content category for us, similar to our expansion into original films, animation, and unscripted TV,” read Netflix’s shareholder letter, adding that its initial focus would be on free games designed for mobile devices. “…Since we are nearly a decade into our push into original programming, we think the time is right to learn more about how our members value games,” the company explained.
Source: TechCrunch

#16 Squid Game Knockoffs Are Blowing Up on Roblox

One of the biggest shows currently on Netflix is the South Korean import Squid Game. Now fan-made Squid Game experiences are popping up all over Roblox.
Squid Game was released on September 17 and has quickly become one of the most buzzed-about shows on Netflix, becoming the first South Korean television show to hit the number one spot in Netflix’s Top 10.
This popularity seems to be reaching across mediums as in recent days fan-made games based on the same deadly challenges seen in Squid Game have begun cropping up all over Roblox. There are already several Squid Game Roblox remakes on the site’s “Popular” section, which is impressive as a recent investigation by People Make Games reveals just how difficult it is to get your game featured on Roblox’s front page.
Source: IGN

The proliferation of Squid Game games on Roblox is exactly why Netflix and games are converging. Netflix isn’t a streaming company. It’s a content / IP company. And content comes in many formats. Sometimes it’s a show that you stream on Netflix. Sometimes it a toy that is based on your favorite show. Increasingly, it’s also a game on some platform.

💰 Fintech

#17 Mastercard reinvents installments to give consumers more payment choices wherever they shop

To meet growing consumer demand for flexible, digital-first payment options, Mastercard today unveiled Mastercard Installments, a unique and innovative Buy Now, Pay Later (BNPL) program that delivers greater choice at checkout, both in-store and online.
Mastercard Installments uses the power of the company’s trusted network to make BNPL available to millions of consumers and merchants worldwide. It enables banks, lenders, fintechs, and wallets to offer a variety of flexible installment options to consumers – including a zero percent interest, pay-in-four model – without onerous integration into the merchant infrastructure, allowing them to quickly offer secure and competitive BNPL experiences at scale.
Mastercard Installments enables consumers to digitally access BNPL offers, either pre-approved through their lender’s mobile banking app or through instant approval during checkout. Pre-approved installments can be used directly on a merchant’s website, and can be stored in digital wallets including Click-to-Pay, to then be used online or in-store wherever Mastercard is accepted. Instant approvals during checkout will be available through Click-to-Pay shortly after launch. Consumers will have full transparency on lender practices up-front during the approval process, and unlike most current BNPL offerings, consumers will continue to benefit from zero liability fraud protection, the ability to challenge unrecognized charges, and the peace of mind that comes with Mastercard’s acceptance footprint.
Source: Mastercard

I’ve written before about how Visa (and Mastercard) are not just credit card networks. All networks are fungible. Visa and Mastercard is a network that connects banks, merchants, and consumers. Its first use case was for credit and debit cards. But all networks are fungible. You can run anything you want on it.

Mastercard is now showing how this network can be used to do BNPL installments as well.

What’s interesting is that in this implementation, Mastercard resolves the hard work that has plagued BNPL players like Afterpay and Affirm – signing up the merchant. Mastercard’s BNPL solution will instantly be accepted at Mastercard merchants. The piece of the value chain that will lose out are the banks. Mastercard is throwing the banks under the bus here by pitting banks against each other. Some weaker banks (when it comes to card issuance) will likely sign up with Mastercard to be a lender on this product. These banks will earn less interest from consumers compared to credit cards, but that’s okay because these smaller banks weren’t big card issuers to begin with. While Mastercard has pitted the banks against each other, Mastercard gets to protect its network from BNPL disruptive threats by becoming one of the networks that offer it.

#18 Affirm to Debut Crypto, Debit Products in Push Toward Super App

Affirm Holdings Inc. is planning to debut a debit card and allow customers to buy and sell crypto directly from savings accounts they have with the company as part of a broader push to become a one-stop shop for consumers’ financial needs.
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With its latest ambitions, Affirm is joining a bevy of banks and technology giants hoping to become the world’s next “super app,” akin to China’s Alipay or WeChat, India’s Paytm or Singapore’s Grab. Those companies combine everything from financial services and payments to food delivery and shopping in one place.
Affirm’s customers are already starting to turn to the company in this way. Roughly a third of its transactions originate from Affirm’s website and app rather than a merchant partner’s website.
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“Unlike Visa and Mastercard and the traditional payment networks, we know what is being transacted — we know what items they’re buying,” Levchin said. “It allows us to say, ‘This merchant wants you to buy this thing and the maker of this thing wants you to pay no interest at all — they’ll give you a discount.’”
Source: Bloomberg

1/ Standalone BNPL needs to transform in order to survive.

2/ Payments and data are converging.

🛍 Commerce

#19 Square and TikTok Partner to Help Businesses Expand Their Reach Online

Today, Square and TikTok announced a new integration that will make it easy for sellers of all types and sizes to reach new customers and grow their sales online. Square x TikTok enables sellers to send fans directly from TikTok videos, ads, and shopping tabs on their profiles to products available in their existing Square Online store, providing a streamlined shopping experience that retains the look and feel of their personal brand.
To take advantage of these powerful new commerce features from TikTok, TikTok For Business users can now quickly and easily set up a free, fully integrated Square Online store and start selling right away.
Source: Square

TikTok continues to push ahead with e-commerce…this time with a partnership with Square (in addition to existing partnerships including Shopify).

TikTok also detailed a slew of other e-commerce related announcements at their recent TikTok World event. TechCrunch has a good rundown here.

It’s increasingly clear that TikTok is not just a rising star, but a real force to be reckoned with. TikTok recently announced they have crossed 1 billion MAUs (excluding China since the Chinese version is separately operated as Douyin). This makes TikTok one of the largest and most compelling community on the internet today.

#20 Google adds new ways to shop, like turning a website’s photos into shoppable products

Google today introduced new ways to shop through its platform, including both online and via its Google Search mobile app. In an update coming soon to the Google Search app for iPhone, the company will begin to leverage a new machine learning model using on-device processing to recognize the products found in images on a website to make them instantly “shoppable.” It will also make it easier for online shoppers to browse for clothing and accessories from the search results and check for in-stock items at local stores.
On the Google mobile app for iOS, users will soon see a new button that turns the images on a website into shoppable products through Google Lens. That means, if you’re browsing a website and something catches your eye in a photograph, you can click to see where to buy the item in question. This sort of feature is an expansion of the existing Google Lens technology, which can already identify products in images. It’s just adding it to a new context.
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In another update, when you’re browsing for clothing, shoes and accessories on mobile, Google will make it easier to shop from its Search results.
Here, it will display a visual feed of products matching your query — like “cropped jackets,” for example — in multiple colors and styles. And it will show you style guides, videos and details on where you can buy the items locally. You can also filter the results by style, department, brand and more, plus check ratings and reviews and compare prices.
Source: TechCrunch

Some pretty interesting changes. Leverages Google’s strengths in AI and web search.

Google is an advertising company. The key driver of advertising is always commerce. Google’s move into commerce was always its long-term destiny, but Google has been pretty slow to embrace it.

#21 Google, Battling Amazon, Tries an E-Commerce Makeover to Win Back Advertisers

Google, an unlikely underdog, is struggling to keep pace with Amazon. AMZN -0.05% com Inc. in the battle for billions in e-commerce ad dollars.
In its latest strategy shift, the Alphabet Inc. GOOG 2.40% unit said Wednesday that it is updating the look and format of product search pages to feature images of apparel, accessories and other items to better resemble a digital store rather than a long list of links and text.
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While Google broadly dominates in search and digital advertising, Amazon’s commanding lead in e-commerce has made it the starting point for an estimated 53% of U.S. searches for consumer goods. Chasing those clicks, advertisers have shifted their spending, lifting Amazon’s share of search ad sales to a fifth of the market and reducing Google’s share to 57% from 61% in 2019, according to market research firm eMarketer.
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Amazon’s accelerating ad business has raised alarms inside Google, prompting Chief Executive Sundar Pichai to assure Alphabet’s board that rejuvenating its flagging e-commerce efforts is a priority, according to former Google executives. He must fix a mess of Google’s own making. The company has rebooted its digital shopping strategy at least four times over two decades and has had five leaders of its e-commerce operations in 10 years, the former executives said.
Source: WSJ

This article is interesting because it suggests Google’s move into commerce is not born out of vision but out of defensiveness.

On the one hand, there is nothing like fear to wake up the senses. On the other hand, it’s hard to win long-term when you are not doing things born out of vision.

#22 Etsy Builds a Virtual Home to Showcase Handmade Products

Etsy shoppers can now see how some of the marketplace’s most popular products look in a stylish living space before making a purchase.
The handmade goods hub has debuted a true-to-scale virtual home decorated with artwork, furnishings and other items from Etsy’s listings. Viewers can navigate through the photorealistic 360-degree visuals from their phone or computer and select highlighted products as they take a closer look or add it to their cart.
The 12-room experience, called Etsy House, was created in partnership with creative visualization studio The Boundary. The Etsy team curated the products featured throughout the walkthrough to match the interior design and included several winners of its Etsy Design Awards.
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As trends in AR and virtual experiences accelerate, expect brands to get more and more creative with how they present and demonstrate their products online.
Source: Adweek

More evidence that AR / VR are really good ways of presenting products to consumers.

👨‍💻 Technology

#23 Cloudflare Extends Zero Trust Security to Businesses’ Doorsteps

Cloudflare, Inc. (NYSE: NET), the security, performance, and reliability company helping to build a better Internet, today announced it will extend its network to iconic properties like Salesforce Tower in San Francisco, Willis Tower Chicago, John Hancock Tower in Boston, and 30 Hudson Yards, 4 Times Square & 520 Madison in New York, as well as the planned further expansion into thousands of other office buildings and multi-dwelling units globally. This dramatic expansion will allow businesses to easily connect to Cloudflare’s network from offices and co-working spaces instead of relying on costly, rigid hardware solutions. Now, enterprises will have one more way to connect to the Cloudflare One suite of SASE security solutions to help secure and connect employees across all the devices, applications, and networks they may use in a hybrid work landscape.
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Businesses have maintained expensive and hardware-intensive office networks since the dawn of the modern Internet. Never have they gotten less return on that investment than through the COVID-19 pandemic—and the hybrid future of work will only exacerbate the high costs of maintaining and securing this outdated infrastructure.
What’s more, these legacy networks weren’t designed to secure employees across all their devices, networks, applications, and work locations. By directly connecting to Cloudflare’s network, businesses will save the time and cost of identifying, managing and securing their own hardware. This expansion of Cloudflare’s network will make it easy for businesses of any size to adopt its Zero Trust and SASE, or secure access service edge, solutions to connect and secure employees no matter where they work.
Source: Cloudflare

Cloudflare had a really busy week. Yesterday, I wrote a dedicated piece about how Cloudflare’s new R2 service is aiming for AWS. But R2 was only one of several announcements over the last few days.

Cloudflare also announced that they are now installing hardware in major properties. This effectively extends Cloudflare’s network physically all the way to some major customers. If the value of Cloudflare’s network is being close to users, nothing will get closer than being in the same building. This edge network footprint will be very hard for competitors to fight.

#24 Cloudflare Is Taking a Shot at Email Security

Cloudflare CEO Matthew Prince says that from its founding in 2009, the company very intentionally avoided going anywhere near the thorny problem of email. But he adds that email security issues are unrelenting, so it has become necessary. “I think what I had assumed is that hosting providers like Google and Microsoft and Yahoo were going to solve this issue, so we weren’t sure there was anything for us to do in the space,” Prince says. “But what’s become clear over the course of the last two years is that email security is still not a solved issue.”
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On Monday, the company is launching two products: Cloudflare Email Routing and Email Security DNS Wizard. The tools let customers place Cloudflare in front of their email hosting provider, essentially allowing Cloudflare to receive and process emails before sending them through to the Microsofts and Googles of the world. This is somewhat similar to Cloudflare’s long-standing role as a “content delivery network” for websites, in which the company is a proxy that can serve data or catch malicious activity as web traffic passes through.
Cloudflare Email Routing makes it possible for individuals or organizations to manage an entire custom email domain, like @coolbusiness.com, from a single consumer email account, such as a personal Gmail address. The tool even lets you consolidate many addresses—boss@coolbusiness.com, help@coolbusiness.com—so they all forward to a single inbox. This way, small businesses in particular can get the benefits of a dedicated, custom email domain without having to manage a whole separate platform.
The second tool, Security DNS Wizard, aims to make two email security features accessible for Cloudflare customers and easy to use. Sender Policy Framework (SPF) and DomainKeys Identified Mail (DKIM) are two tools that are essentially a combination of caller ID and screening schemes for email: They aim to reduce email address spoofing by setting up public records that must match an email’s sender information for the message to go through. This significantly reduces how easy it is for attackers to, say, send an email to employees that really looks like it comes from “Cool Business CEO.”
Source: Wired

Not only is Cloudflare physically extending their network to the doorsteps of their customers, Cloudflare is also increasingly doing that via software as well.

Cloudflare’s edge network derives its advantages by being close to the user and sitting between them and whatever they are trying to access. By doing that, they can provide security and better performance. But it also means they can provide an ever growing amount of services.

Cloudflare is now inserting itself the same way in the email value-chain. Cloudflare is attempting to be closest to the user and sitting between them and whatever email service they use. By doing that, they can provide security and better performance. And it also means that they will eventually be able to offer an ever growing amount of services.

#25 [Translated] ByteDance enters the automotive cloud and plans to catch up with Tencent in 2025

36Krypton learned that ByteDance recently launched an automotive cloud business and has recruited personnel from Amazon Cloud, JD Cloud and other companies to promote the project. At the same time, Byte also began to negotiate cooperation with a new car manufacturing and freight self-driving company for the “smart driving cloud” project.
According to 36Kr, Byte Automotive Cloud provides three major services: IaaS (Infrastructure as a Service), that is, the public cloud of the volcanic engine, including computing, network and storage capabilities; PaaS, that is, the volcanic engine – automatic driving Driving cloud services, including simulation platform, data annotation, image rendering, data unpacking and other capabilities; SaaS, including service management, vehicle management, after-sales data, production data and other capabilities.
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From 2023 to 2025, Byte’s goal is to gradually achieve more than half of the customer cloud business coverage, “the overall revenue catches up with Tencent”.
Source: 36 Krypton via Baidu

Ambitious.

#26 SAY HELLO TO ASTRO, ALEXA ON WHEELS

The Astro, which will initially cost $999.99 and available as a Day 1 Edition product that you can request an invite for the privilege of buying, is Amazon’s most ambitious in-home product yet. Amazon sees it as bringing together many different parts of the company — robotics, AI, home monitoring, cloud services — all into one device. Best described as the love child between a Roomba and an Echo Show smart display, the Astro is meant to be the next step in what Amazons believes to be the seemingly inevitable home robot.
Amazon claims the Astro can do a wide variety of things you might want from a home robot. It can map out your floor plan and obey commands to go to a specific room. It can recognize faces and deliver items to a specific person. It can play music and show you the weather and answer questions like any Echo smart display. It can be used for video calls, always keeping you in frame by literally following your movements. It can roam around your house when you aren’t home, making sure everything is okay. It can raise its periscope camera to show you whether you’ve turned the stove off. It can use third-party accessories to record data like blood pressure.
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The Astro’s ability to recognize faces means it knows who it’s looking at and can play a greeting or turn on your favorite music when it sees you. It’s designed to learn your habits, so if you end up using it most of the time in the kitchen, it will park itself there.
Source: The Verge

It’s a cute robot, but I’m not sure it’s all that compelling, yet. It’s mostly just a walking Alexa with a camera that scans your house.

This was announced alongside a lot of updates to mostly existing hardware efforts. The Verge has a good rundown of the other announcements here.

For a bit of fun…World War III could be a showdown between Jeff Bezos and Elon Musk. Both have robots, rockets, machinery, and infrastructure.

🚘🌽 Mobility + Delivery + FoodTech

#27 Uber: Beauty’s next retail channel

Beautyondemand is the first in a series of memberonly experiences that Uber and Postmates plan to offer. Uber has also...

For Los Angeles subscribers of Postmates Unlimited, a loyalty programme that offers mostly unlimited deliveries for a monthly fee, there’s a new service on the menu this month: beauty on demand.
Postmates Unlimited, which was acquired by Uber last November for $2.65 billion, is offering a bundle of 18 beauty products, delivered straight to consumers’ doors, for an all-in price of $375. The bundle, which represents a huge discount on the in-store price (likely to top $1,000), features products from cult indie brands such as Furtuna Skin, Summer Fridays and Corpus Naturals.
Uber is broadening out from its origins as a ride-sharing app. Part of its strategy is to build customer loyalty by acting as an ultra-flexible and fast delivery service. Beauty brands could be a big part of the mix, Uber believes. In the post-lockdown landscape, service has become an overriding priority, says global head of membership Julie Kim, who joined the company in February from Postmates. Brands are investing in mechanisms and technology solutions to ensure reliability and convenience for their customers, she says. “Uber Direct is a great tool for retailers who want an operationally efficient way to reach their customers. Anybody who has an e-commerce mechanism can basically utilise our backend technology to enable same-day service.”
In May, the Estée Lauder Companies became the first beauty business to directly link with Uber in the US. Customers can order ELC-owned brands, such as Origins, through the Uber app. Other new brand partners include Dr Barbara Sturm skincare. LA-based members of Uber’s Eats Pass (offering unlimited food delivery for a monthly subscription) can also order Sturm products, delivered to them within 35 minutes. Members who make purchases over $300 receive a free anti-aging body cream and cleanser.
Source: Vogue Business

All networks are destined to eventually compete because everything is becoming everything.

Uber started as mobility network. It moved people around. But if you can move people around, you can move other things around including food. Eventually you will discover you can move just about anything around. And when that happens, you will discover (like Uber did) it’s just a logistics company. And when you discover you are a logistics company, that means you can do e-commerce. Because Amazon isn’t an e-commerce company. It’s just a logistics company, too.

💉🔬 Health + Science

#28 PacBio Partners with The European Reference Genome Atlas Initiative

Biodiversity is under threat worldwide with a high number of European species at risk of extinction¹. Genomics is a powerful tool to help understand biology and how ecosystems function. PacBio’s HiFi Sequencing technology allows scientists to take the first important step by reliably generating high-quality genetic maps of each plant and animal species. Studies have shown that reference-quality genomes provide the most complete insight into the genetic basis that forms each species².
“Together, PacBio and ERGA aim to put Europe’s biodiversity on the path to recovery by 2030,” said Neil Ward, Vice President and General Manager of EMEA at PacBio. “Each plant and animal species has a unique genome and they range in complexity. Since HiFi Sequencing reads are both large and accurate, scientists can easily assemble, phase, and analyze genomes with confidence.”
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“With accurate reference genomes, scientists can gain the most complete insight into a species’ genetic basis to understand its evolutionary history and also predict its future adaptation potential,” said Camila Mazzoni, Chair, ERGA, Research Group Leader at Leibniz Institute for Zoo and Wildlife Research. “We’re excited to welcome PacBio to the ERGA initiative and look forward to our coordinated effort to generate complete reference genomes for all European biodiversity, which will accelerate conservation initiatives and advance biodiversity genomics innovation.”
Source: Pacific Biosciences

The world is only just beginning to scratch the surface of what it can do in the biology realm. We are at the foothills of the Century of Biology.