Tech Brew Ride Home - Fri. 04/26 - Prime Delivery Changes

Starting point is 00:00:00 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. Welcome to the TechMeme ride home for Friday, April 26th, 2019. I'm Brian McCullough today. Amazon wants all prime deliveries to be one-day shipping.

Starting point is 00:00:45 Slack files for its IPO and Uber sets its IPO price range. Someone with a personal vendetta to fix Gmail. And of course, the weekend long read suggestions. Here's what you miss today in the world of tech. Today is just going to be another cavalcade of earnings and then Unicorn IPO. news. So let's start with the earnings. Amazon reported Q1 revenue of $59.7 billion up 17% year over year, operating income of $4.4 billion up from $1.9 billion year over year and net income of $3.6 billion up from $1.6 billion a year ago. So Amazon's just continuing to kill it, right?

Starting point is 00:01:30 Except there are some slight quibbles to note. Amazon's online story. revenue. You know, it's meat and potatoes business of selling you stuff online rose only 10% to $29.5 billion. That's down from the 13% growth rate seen just last quarter. And that also represents the lowest growth rate for the retail business in Amazon's history. And in fact, quoting CNBC, quote, Amazon's revenue came to a slowdown across the board. Its total revenue grew 16.9% compared to the year ago period, representing the slowest expansion since the first quarter of 2015. Its North American revenue saw a 17% increase compared with last year's 46% growth, while international growth dropped to just 9% down from the previous year's 34% growth rate,

Starting point is 00:02:23 end quote. Now, note that this is a slowdown in growth, slowing growth, not, you know, shrinkage. And BT-dubs, Amazon might be like, who cares about the retail side? Because the AWS unit reported revenue of $7.7 billion, up 41% year-over-year, and AWS now represents 13% of Amazon's total sales overall and 50% of its total operating income, contributing $2.2 billion of the $4.4 billion in operating income. As CNBC's Steve Kovac tweeted, quote, Amazon is a great cloud company with an e-commerce business on the side, end quote. Also, remember how we've been speculating about Amazon making a big push into advertising. And of course, everyone wants to tell you about their subscription revenues these days. Well, Amazon's quote other revenue category, which is mostly

Starting point is 00:03:21 that ad business, reported $2.8 billion in revenue, up 34% year over year, and subscription revenues came in at $4.3 billion up 40% year over year. But the news that got all the headlines and frankly depressed the stock price at a lot of Amazon competitors was that Amazon says it is working to offer free one-day shipping as the default delivery time for prime customers. However, it will take, quote, a significant amount of time to achieve that and also a significant amount of money, as Amazon also said it is setting aside $800 million in Q2 of this year just to roll this out. I do have to say I order stuff from Amazon basically every other day, and earlier this week, stuff just started magically coming in only a day. I ordered a present for my daughter's birthday

Starting point is 00:04:14 just yesterday morning, and it's sitting under my desk as I record this. I know getting things just a day quicker doesn't sound like much, but it kind of feels magical. And I guess Amazon had to do this because two-day shipping seems table stakes now. Amazon had to differentiate to stay ahead of the competitive pack, but still, ordering something in the morning and having it less than 24 hours later just feels magical. This morning Slack filed paperwork for its direct listing IPO, and in the documents it had to share, Slack revealed $400 million in revenue for fiscal year 2019, which, confusingly, ended on January 31st, and a loss of $138 million in that same fiscal year. That compares to $220 million in revenue for fiscal year 2018 and a $140 million net loss.

Starting point is 00:05:17 Slack also reported daily active users of over $10,000, $80,000,000. $58,000 paid accounts up 49% and paid customers paying over $100,000 based on annual recurring revenue of 575, which was up 93% year over year. Quick Silicon Valley Parlor game. Who wins in a Slack IPO, quoting from CNBC. A sell is the company's largest shareholder at 24% followed by Andresen Horowitz with a 13.3% stake and social capital with a 10.2% stake. stake. Slack CEO Stuart Butterfield owns an 8.6% stake and SoftBank holds 7.3%. End quote. Given the recent prices pre-IPO shares of Slack have been trading at on the secondary markets, Slack might achieve a market cap of $15 or $16 billion. Uber has set its IPO terms,

Starting point is 00:06:18 and it looks like Uber's not going to hit that magic $100 billion market cap mark that it was hoping for. By setting a price range of $44 to $50 per share, Uber would raise $10.35 billion at the top end of that range, which would represent a valuation of around $84 billion. Now, this would still be one of the biggest IPOs of all time, the eighth largest U.S. IPO, in fact, and it would instantly make Uber the 30th most valuable company listed on a U.S. stock exchange. But again, Uber was hoping for more. There were times in recent months when a $120 billion market cap was being touted. And the last private valuation during the most recent round of funding for Uber was $76 billion. So at the low end of that range, Uber would risk IPOing as an undercorn. One wonders if Lyft's recent, underwhelming stock performance since its own IPO has had an impact.

Starting point is 00:07:24 These stories have been sitting at the top of TechMeem all day, so let me run. run through them as fast as I can because it's kind of nothing new, but then maybe cumulatively something new all the same. First, the Irish Data Protection Commission has launched an official inquiry into Facebook after that incident where millions of Facebook light and Instagram user passwords were stored as plain text internally at Facebook. Next, the New York State Attorney General has announced an investigation into Facebook's unauthorized collection of more than 1.5 million users' email address books. And then yesterday, Canadian privacy regulators found that Facebook committed serious breaches of local privacy laws due to mishandling users' personal info.

Starting point is 00:08:08 That investigation was around the original Cambridge Analytica stuff. And sources are telling the New York Times that as it weighs constraints for Facebook and its widely expected disciplinary ruling coming sometime soon, the FTC has discussed stronger monitoring of Facebook's privacy practices and direct punt. for Mark Zuckerberg himself, quoting from the Times. At least one member of the five-person commission has called for direct punishment of Facebook's chief, Mark Zuckerberg, and believes the proposed fine would not change Facebook's behavior, the people said. In fact, the member would be willing to fight in court for stronger controls over the company, the two people said, end quote. I alluded to this yesterday, but in one of the weekend episodes coming up soon, I get into a many debate about whether Facebook actually is changing. And this is why I think they are. They're

Starting point is 00:09:02 facing like an S storm around the world from every arena facing fines, possible antitrust rulings, you name it. So it's not just that I think that this is encouraging Facebook to finally have a come-to-Jesus moment and change its behavior. I think the point that I may or may not have made clearly on the weekend episode you'll hear on Sunday is that I think that, I think that this is encouraging Facebook to move its business and business model into areas where it's less likely to catch crap for what they do. Like maybe I'm suggesting that given the choice of reforming the way it does business and moving its business to areas that will attract less scrutiny, it's choosing the latter. It would rather go hide than actually have to reform.

Starting point is 00:09:50 I'm just going to quote from the lead of this fast company piece from Mark Wilson, quote, Michael Leggett is even more annoyed with Gmail than you are. It's like Lucky Charms got spewed all over the screen, he says to me as he scrolls through his inbox. It's true. Folders, contacts, Google apps like Docs and Drive, and at least half a dozen notifications, all cluttered Gmail at any given moment. And of course, there's that massive Gmail logo that sits in the upper left-hand corner of the screen. Just in case you forgot that you typed in Gmail.com into your browser.

Starting point is 00:10:30 three seconds ago. Go look at any desktop app and tell me how many have a huge effing logo in the top left, Rance Leggett. Come on, it's pure ego, pure BS. Drop the logo. Give me a break, end quote. Well, it turns out Leggett is not just any disgruntled Gmail user. He was actually the lead designer for Gmail from 2008 to 2012 and the co-founder of the now dearly departed inbox app. Leggett is now working at Nouri, a company using blockchain to work on climate change solutions. But in his spare time, Leggett has created a Chrome extension called Simplify. It gets rid of all of the extraneous notifications, folders, functions, and makes your Gmail screen suddenly feel, and this is serious, almost calming. Almost like one of those writing apps that people use to achieve distraction-free writing.

Starting point is 00:11:27 The extension runs entirely in your browser, doesn't serve ads, collect data, and has no actual way of making money. Leggett doesn't care. He put the source code on GitHub to prove that he's doing everything above board. No money changed hands to get me to feature this story. I just tried the plugin and love it. And love that Leggett is doing this out of the goodness of his heart, or at least the frustration in his heart, simply because he hates stupid Gmail in its current incarnation. So if you share his frustration with Gmail again, it's a Chrome extension and it's called Simplify.

Starting point is 00:12:07 Time for the weekend Long Reads suggestions. And for whatever reason this week, there were so many that I loved that I just, I couldn't bring myself to cut any of them. So I'm going to try to blaze through all these to get them all in. Polygon has a look at how Fortnite's massive and overnight success led to a real work crunch at Epic Games. Quote, in a dozen interviews conducted by Polygon over a period of several. months. Current and former employees say they regularly worked in excess of 70-hour weeks, with some reporting 100-hour weeks. And Polygon has a super-long and super-detailed piece looking at Red Dead Redemption 2, six months into that game being in all of our lives.

Starting point is 00:12:49 What worked super well? What was a failure? It's sort of a critical assessment of the achievement of this epochal title, and I really enjoyed it. Next, the Verge has a piece up looking at how AI is shaping how music is getting made. What if an AI trained exclusively on Beyonce songs can now create songs indistinguishable from what Beyonce would likely make? It turns out that artists are already facing bots that can mimic their style,

Starting point is 00:13:19 and the weird thing is, current copyright law might actually allow that. Quote, the word human does not appear at all in U.S. copyright law, and there's not much existing litigation around the word's absence. This has created a giant gray area and left AI's place and copyright unclear. It also means the law doesn't account for AI's unique abilities like its potential to work endlessly and mimic the sound of a specific artist. Depending on how legal decisions shake out, AI systems could become a valuable tool to artist's creativity, a nuisance ripping off hardworking human musicians, or both, end quote. has a piece up that I absolutely devoured, which looks at, as the title says, how the Kleiner Perkins Empire fell. When I was coming up in tech, it was once the bluest of the blue chip VC firms, the one name you wanted to back you if you wanted to get prominent quickly. So famous, it only needed one name, really, Kleiner. Today, Kleiner is kind of sort of, well, it's kind of hard to say where

Starting point is 00:14:25 they're at at the moment, and that's what this story is looking at. Some of the tale involves the secular change from early stage to growth investing. Some of it is just the eternal issue of succession planning at VC firms. And some of it, frankly, is just good old-fashioned hubris. Quickly, I want to mention this piece in Fast Company that is looking at a space I want to investigate more. The Internet of Things and the smart home have been buzzworded to death, right? And for consumers, most of the smart devices that have gotten traction in our homes have come from Amazon and Google. But as the piece notes, quote, in the face of such intimidating competition, I was curious how companies like August, Simply Safe, Wise, and Natato, Mo, planned to survive with their own connected cameras and security systems.

Starting point is 00:15:13 Here's how they plan to outsmart the tech giants, end quote. So yes, read the piece because I too wondered, is this a tech space that has already been claimed by the oligarchs at the top of the tech ecosystem, or is there still room here for someone to come up from below? below. And another piece that I'm reading to learn more about something I don't know much about, 1-0 says, quote, for open-source developers, AWS has gone from a neutral platform to a cutthroat competitor, end quote. One of the commentators that turned me on to this piece tweeted that some folks are starting to worry that Amazon is following the old Microsoft model of embrace, extend, extinguish when it comes to open source. And finally, I just love this story. Peter Askew is an old-school domain name speculator. In 2014, against his own better judgment, he purchased the domain name Vidalia onions for $2,200. Vidalia onions are apparently a very popular sweet onion with a mild flavor that some folks like to eat like an apple. Peter knew nothing about onions or farming either, but he was from Georgia where the onions are grown and somehow the idea of doing a farm-to-consumer business over the web via this domain name appeal.

Starting point is 00:16:28 to him, quote, and so I did. I'm just dumb enough to try a project of this complexity. The market size justified an online venture. Google Trends showed strong search volume for the phrase, and chefs around the world had already belted their praise over the caviar of sweet onions. So, I just started down a path with no end goal or milestone set. I just started going. No angel investor, no VC backer. I just used some modest profit from my other domain name developments to fund the endeavor, end quote. That was back in 2015. He created a partnership with a Vidalia onion farmer. When they set up the site, they expected 50 orders for the entire 2015 season. They ended up with over 600. And so yeah, now Peter sells onions on the internet. I love this story because it's a

Starting point is 00:17:18 reminder that for all the talk of IPOs and unicorns and such that we do on the show, there's an entire universe of businesses built on the web that will never IPO, never even attract, the interest of VCs, maybe because they never need to. There's maybe hundreds of thousands of web and internet businesses that do just fine, doing a million, 10 million, maybe even more in sales every year with one, two, a dozen, a hundred employees. I should know. The first company I ever founded 20 years ago this month, Resumeywriters.com, the only one of the three startups that I've done in my life that I still own, except for, I guess, the new podcasting startup, is proudly one of those companies. That's not a plug for my business. More, it's a timely reminder,

Starting point is 00:18:06 even to myself, that for as much as we seemingly end up talking about the same 30 big-name companies on this show each and every day, that's not the entire internet or even the entire tech economy or tech ecosystem. Not even close. Big nerd weekend this weekend. Avengers Endgame, of course, but also the beginning of the Game of Thrones end game. Speaking of anniversaries, I know that I started reading the Game of Thrones books 10 years ago right now, because I met my wife in June 10 years ago, and I was already on to the third book, the Storm of Swords. I remember reading that next to her on the very first July 4th weekend we ever spent together. I've mentioned many times, I'm a nerd child of the game.

Starting point is 00:19:00 the 80s. Some part of me will always be amazed that we have comic book movies at all, much less that they've become the dominant popular culture. But even more than comic books, if you had told me when I started reading those Game of Thrones books 10 years ago that Game of Thrones would be the maybe dominant cultural event of our current decade, I for sure would not have believed you. I was just like, HBO's going to do a Dungeons and Dragons, a Sword and Sorcery show. I've got to read what this is all about

Starting point is 00:19:34 because it's probably only going to last a season at best. Well, nope, everyone seems to dig dragons and stuff all of the sudden. You know that sort of double-edged Chinese curse that says, may you live in interesting times? Well, may you live long enough to see those things that you thought would always be hopelessly nerdy, become hopelessly mainstream. Talk to you on Monday.

Tech Brew Ride Home - Fri. 04/26 - Prime Delivery Changes

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.