Tech Brew Ride Home - Fri. 04/12 - Uber's IPO and Disney+ Deets

Episode Date: April 12, 2019

Uber’s IPO filing is officially upon us and there was much rejoicing… or, at least, plenty of takes; Disney outlined its streaming video plans and in doing so it both put Apple to shame and fired a warning shot at Netflix, and, of course, the weekend longreads suggestions. Sponsors: Tiny.website wix.com/podcast Links: Uber unveils IPO with warning it may never make a profit (Reuters) Alphabet Is Uber IPO’s Surprise Winner With Potential $5 Billion Stake (Forbes) Uber’s Venture Investors Set for a Windfall (WSJ) Disney+ app and worldwide rollout plans revealed (Engadget) Disney+ streaming service will be available starting Nov. 12 for $6.99 a month (CNBC) Weekend Longreads Suggestions: The basics of modern AI—how does it work and will it destroy society this year? (ArsTechnica) FOXCONN IS CONFUSING THE HELL OUT OF WISCONSIN (The Verge) The man behind Huawei (The Los Angeles Times) The Improbable Rise of Huawei (Foreign Policy) Inside the Biotech Startup That Wants to Extend Your Life (OneZero) VIDEO OF APPLE’S W.A.L.T. IN ACTION – THE 1993-EDITION IPHONE (Sonny Dickson) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. everybody, Brian here. Just wanted to quickly tell you that we soft launched a whole new podcast today. It's called the Primary Ride Home. I'm going to tell you all about it at the end of the show today. So listen for that, but also search your podcast app for the Primary Ride Home and subscribe.

Thanks. Welcome to the TechMeme Ride Home for Friday, April 12th, 2019. I'm Brian McCullough. Today, Uber's IPO filing is officially upon us and there was much rejoicing, or at least plenty of takes. Disney outlined its streaming video plans, and in doing so, it put both Apple to shame and fired a warning shot at Netflix. And of course, the weekend long-reads suggestions. Here's what you miss today in the world of tech. Well, it finally happened. Uber has officially filed for its IPO, perhaps the most eagerly anticipated IPO in the tech space since Facebook. And filing means filing an S-1, which means we finally get an official look under the hood at Uber's actual business.

Headline numbers. Uber said it had $11.27 billion in revenue in 2018, which was up 42% year over year. And it also had an EBITA loss of $1.85 billion. One of the reasons for that loss, perhaps, the S-1 also showed that Uber spent $457 million last year on research and development, R&D on everything from autonomous vehicles to flying cars and other, quote, technical programs. More on that in a second. Uber also revealed it had 91 million average monthly active users when you factor in users of Uber Eats as well as the traditional ride hailing service, and that number was up 33.8% year over year. But, and here's the first real note of caution, quoting Reuters, Uber said it's market share.

share fell in most regions last year, although the rate of decline has slowed. The company claims more than 65% market share in the United States and Canada versus lifts stated 39% in the United States, end quote. In fact, it's also worth noting that the rate of overall revenue growth and user growth are both slowing as well. Revenue growth last year was 42%, but that is down from 106% revenue growth the previous year. Monthly active users being up 33% does not compare favorably to the 51% user growth a year earlier. And now back to that R&D number, $457 million spent on the, quote, technology programs SkunkWorks projects last year, and actually in 2018, Uber spent $1.5 billion in R&D overall.

And that has always been one of the most interesting narratives about Uber. it's unclear if it will ever be able to make ride-hailing, traditional ride-hailing a profitable concern. But they're not alone on that front. No one is actually making money in ride-hailing yet. Everyone is still subsidizing so far. Uber's strategy from day one was to land grab and hope it could muscle out all competition and create a de facto monopoly that would give it pricing power someday. But at that same time, it decided early on that self-driving vehicles were the future. And so it could eliminate a major operating cost someday if it developed self-driving technology. But it would have to spend a ton of money to get to that someday, and maybe that someday wouldn't ever come for technical reasons, or maybe it wouldn't come in time to save the legacy

driver-based business model. Or maybe someone else would beat them to that someday future of autonomy. And then this was all a busted flush and a lot of money thrown down the drain. In other words, as many people have pointed out, Uber was always a company that tried to run before it could prove that it could walk. If Uber stopped all the R&D tomorrow, it still wouldn't be profitable necessarily, but it's committed to playing out this bet and burning all of this money, while back over here, it's still burning all this other money on its original proposition of getting a human to drive you in a car on demand. Will investors be okay with that? We're going to find out, right? A couple other quick notes. Google, who has not exactly been friendly or on good terms with Uber over the years,

is actually a big winner here. The S-1 revealed that Uber paid Google $58 million for mapping services between 2016 and 2018. Over those same two years, Uber also paid Alphabet $631 million for marketing and advertising services and $70 million for infrastructure and enterprise services. Read their Google Cloud Services, which Uber uses in addition to AWS. But also, Alphabet is one of Uber's top shareholders with a 5.2% stake in the company that could be worth upwards of $5 billion if Uber hits its expected valuation of $100 billion after the IPO. And that gets us to Silicon Valley's favorite parlor game. Again, this is the highest profile tech IPO in a decade. So who's going to make

bank soon? Well, Uber's biggest shareholder is SoftBank, but only because they got their stake a little over a year ago when they invested $7.7 billion as a part of that whole make Travis Kalanick part ways happily solution. But SoftBank has done well, their stake could be worth $12 billion. after a IPO that reaches a $100 billion valuation. So that's a nice return for parking your money for a year. And Mr. Kalanick will be fine. He sold about $1.4 billion of his Uber holdings already, largely as a part of that soft bank deal.

His remaining stake could be worth another $6 billion. His co-founder, Garrett Camp, still has stock worth about $4.5 billion. First round capital put in about $1.6 million. in two rounds in 2010 and 2011, which could now be worth nearly $4 billion. Jeff Bezos was an early investor. Jason Calicanus was an early investor. Ashton Coutcher was an early investor. Napster co-founder Sean Fanning was an early investor.

Not Sean Parker, Sean Fanning. Nice to see the other Sean finally getting his real payday. But quoting the Wall Street Journal, The Most Extraordinary Winfall will go to benchmark. which is sitting on an investment worth $8.25 billion after selling $900 million of its stake to SoftBank. The firm bought much of its shares in a series A round in 2011 when it invested roughly $9 million at 0.073 a share. So, seven cents a share roughly, adjusting for stock splits, according to documents revealed by the Wall Street Journal. That would be a roughly 750 times return on those early shares at the expected $55 a share price.

The Woodside California-based venture firm's investment could go down as one of Silicon Valley's best ever. Perhaps the record payday from a U.S. startup, according to venture capital experts, went to venture firm Asell Partners, which invested $12.7 million in Facebook in 2005 for shares that were worth more than $7 billion in the IPO. It also sold some shares before the offering, end quote. Hey, who needs a fancy event with Oprah and Spielberg on stage in the Steve Jobs Theater? Disney just simply ran a presentation late yesterday for investors, a glorified slideshow, a deck. And as M.G. Siegler said on Twitter, doing so, they quickly told us more about their upcoming Disney Plus streaming service than Apple did about their streaming. service in their entire two-hour presentation. You know, Disney gave us relevant details like

the Disney Plus service will be available beginning November 12th. It will cost $6.99 a month, or $69 a year. It will support 4K and HDR video. It will be available on Roku, the PS4, and likely, we think, Apple TV, and all content available on the service will be available to be downloaded for easy offline viewing. More details. Disney says it forecast having between 60 and 90 million subscribers by the year 2024, which that was the eye popper for me. It shows they're really swinging for the fences here.

Also, Disney expects to spend about $1 billion next year to create original content for the service and about $2 billion a year for original content by 2024. Disney does not expect to turn a profit on the service for at least $5.5.5. years. Disney Plus will debut in the U.S., but Disney says it, quote, plans to be in nearly all major regions of the world within the next two years, end quote. And yes, there are hints that Disney might eventually bundle the service with ESPN Plus and Hulu someday. We also saw a preview of the service interface and UI. We got details on actual content, all sorts of actual Marvel and Star Wars series like the Mandalorian.

A live-action version of Lady and the Tramp is coming, a new high school musical series, and of course, they highlighted their deep, deep back catalog of content. Quote, in year one, Disney is promising all of the Pixar Library, everything Star Wars, a lot of the MCU, and much more. The service will launch with 7,500 episodes, 25 original series, 400 library movie titles, and 100 recent theatrical film releases. By year five, Disney expects 50-plus original serieses, 10,000-plus past episodes, and 500-plus movies in the library, end quote. And yes, yes, they ended by saying the entire back catalog of the Simpsons will be on there from day one. So a couple of quick observations. No sooner did I make that quip yesterday about Netflix's rivals not coming after them on price,

then Disney goes and does a thing like this. $7 a month. Very aggressive. Apparently, there were gasps in the room when the price was announced. As Eric Jackson tweeted, shot across the Netflix bow, and has Ben Badgerin tweeted,

quote, going to be hard for Apple to charge much more than this for Apple TV Plus now, end quote. And also, the guys on the watch podcast have taken to referring to this as Disney pluse in the French manner. And if Plus is the new Cool Kid naming convention for these sorts of projects, I don't know. Can we make pluce be a thing? Disney pluce? Apple pluce? I think I'm getting on this bandwagon and going to keep referring to them as pluses, at least until you guys tell me to stop being so

annoying. Time for the weekend long read suggestions. No podcast suggestion this week, as I've been busy on something which you'll hear about in a second, which actually will be the weekend podcast suggestion. Again, the primary ride home, but I'll tell you about that at the end. No, for the long reads now, let's begin with what is essentially a primer on what AI is. Like we talk about it all the time, but AI, machine learning, deep learning, what's the difference? This typically detailed piece from Ars Technica will catch you up in a very noob-friendly way. Right now, all AI is weak AI, and most researchers in the field agree that the techniques we've come up with to make really great weak AIs probably won't get us to strong AI.

So AI currently represents more of a marketing term than a technical one. The reason companies are touting their AIs as opposed to automation is because they want to invoke the image of the Hollywood AIs in the public's mind. But that's not completely wrong, end quote. Next, this is a story that I always feel like I should cover more, except it's just sort of a groundhogs day sort of thing. But if you've heard about the whole Foxcon building a huge factory in Wisconsin, except wait a minute, no, nope, not going to build an actual factory, but in But thank you for the billions in tax subsidies anyway. If you're familiar with that story, check out Josh Dezza's piece at the Verge. Josh went to Wisconsin to try to find out what, if

anything, Foxcon is even up to. And he maybe came away with more questions than answers. Quote, it's the Midwest Fire Festival, straight up, said State Representative Jonathan Bostroff when I met him at dinner in Milwaukee. Quote, all sizzle, no stake, end quote. Next, we also talk about Huawei all the time, the huge Chinese telecom that the U.S. government is kind of at war with. So two pieces that look at what Huawei is and how it got to be, essentially the giant of the coming 5G era. The Los Angeles Times has a piece called The Man Behind Huawei, looking at Huawei's founder Ren Zhengfe, who, as the Times titles it, quote, turned a company with no intellectual property into the world's largest telecom and made China a global

leader in 5G technology. Washington says he had help from Beijing, end quote. And foreign policy comes at it from a slightly different angle. Quote, for perhaps the first time in China's modern history, Huawei's growing market share and technological prowess are putting a champion of the Chinese government in a position to dominate a next generation technology. 5G will offer hugely faster data speeds than today's mobile technology, which is important for consumers. But 5G will also be the technology that ensures artificial intelligence functions seamlessly, that driverless cars don't crash, that machines in automated factories can communicate flawlessly in real time around the world, and that nearly every device on Earth will be wired together. 5G will be simply put, the central nervous

system of the 21st century economy, and if Huawei continues its rise, then Beijing, not Washington, could be best placed to dominate it, end quote. 1-0 has a look at David Sinclair, who I first heard about on the Joe Rogan podcast. Sinclair is a scientist who is working on turning back the ravages of aging, if the regulators allow him to try. Sinclair is the founder of Life Biosciences, a startup that has been in stealth mode for the past couple years. What is the company's goal?

It's not about curing diseases. It's about slowing or even stopping the underlying problem of aging. Quote, Sinclair and others in the longevity field argue that as we age, our bodies undergo changes at the cellular level that put us at a higher risk for disease. Rather than treating those diseases one by one, a successful longevity therapy would instead treat the underlying causes of aging itself. Doing so successfully would reduce the amount of time the body spends in the decline caused by aging, which would delay disease and as a result extend human lifespan. It's not about living forever. Yet, it's about living healthier for longer, extending what life biosciences calls health span. The company wants to develop drugs that allow people to age without actually getting old, end quote.

And finally, you know me, I can't resist this sort of stuff. Long before the iPhone, Apple was working on the Walt, the whizzy active lifestyle telephone. Quote, the Walt, which was announced at Macworld, 1983, was never released to the public, and only a very small handful of prototypes were ever constructed for the device. One of the few known samples of this was sold on eBay for $8,000 back in 2012. It was even prototyped in both classic Mac color and a somewhat more business-looking dark gray color. While there are some key details known about the device, such as that it was designed in partnership with Bell South,

and offered advanced features for its time, such as online banking access, a full touchscreen, fax and caller ID support, a built-in address book and even the ability to customize ringtones. It even featured Newton-like full handwriting support. A functioning version of the device has never, to my knowledge, been seen by, quote, virgin eyes, end quote. Well, if you click through to the last long read link,

Sonny Dickerson has a video of an actually functioning Walt in operation in all of its Mac System 6 glory. Enjoy. So, yeah, there's a new ride home podcast, everyone. That's the real weekend podcast recommendation, I guess, this week. The new show is called The Primary Ride Home. It's hosted by Chris Higgins, who, of course, you know from being the occasional guest host of this show. And it will cover the presidential primary news every day, 5 p.m. Eastern, 15 to 20 minutes long. Same format as this show, the latest news, headlines, context, and conversation from the campaign trail.

I do encourage you all to search for it, subscribe to it, and give it a try. I think some of you know that this is the TechMeme Ride Home podcast, and I'm thrilled to be partnered with TechMeme. But technically, I have always owned the show. I just licensed the name TechMeme and the brand, and I get their editorial help, of course. But one of the reasons why I wanted to test out a Ride Home podcast is, because I wanted to test a hypothesis. I wanted to see if Daily News Aggregation was something that could live in podcast form. I wanted to see if that was a useful thing, if it was valuable to people, viable in terms of workflow and production, and of course, profitable. A year into this

ride home show, I think we've proven the model, so the idea now is to test it out in other verticals. Thus, my new startup, ride home media is going to test the model even further with new rides home. The motto we've been using internally is that ride home podcasts are TLDR as a service. So why choose the politics vertical as the second experiment to run? Why not a gaming news ride home or maybe an Apple ride home or a Wall Street ride home? well look those could still be coming soon hopefully hopefully someday there will be a universe of rides home like any interest niche you can imagine any content vertical hopefully there will be a ride home for that and look i'm not very political myself to be honest i try hard in fact to keep politics out of

this show but when we thought about it we thought what is an information topic that will have a ton of news reliably every day for the foreseeable future and with a super engaged audience. Yes, the 2020 primary. I mean, there's basically 100 candidates running right now, right? And the primary right home is not going to be a heavily political show per se, at least not in the, it's a partisan show or it's an anti-Trump show sense. No, it's just a show that will attempt to do for politics what this show does for tech. In the, there's a campaign happening. What did you miss today when you were at work? Here's what happened. Here's what everyone is saying about what happened. Chris was online reading all of the things for you, so let him catch you up since. It's trying to

do what this show hopefully does well, but for this specific information vertical that we believe a ton of people are super interested in and engaged with. So again, you know Chris. We all love Chris. Check him out. Check the show out. Might make a super interesting daily companion to this show and keep an eye out. Hopefully there are other rides home coming down the pike shortly. For now, though, I'd love it if you would search your podcast app for the primary ride home and subscribe and give it a try. As for this podcast feed, there are two brand spanking new weekend episodes coming to you this weekend. Talk to you on Monday.