Tech Brew Ride Home - Fri. 10/01 – TikTok And NFTs, Two Great Tastes That Taste Great Together

Episode Date: October 1, 2021

TikTok has joined the NFT craze, so the singularity must be nigh. USB-C tries to clear up its customer confusion problem. Zoom abandons a huge acquisition. And a crypto developer is begging users to give $90 million dollars in tokens back, after an all-time screw up. Sponsors: TinyCapital.com Links: TikTok announces NFT collection led by top creators (The Block) USB-C group hopes new logos will solve customer confusion (Apple Insider) Zoom and Five9 abandon $14.7 billion acquisition (CNBC) DeFi bug accidentally gives $90 million to users, founder begs them to return it (CNBC) Weekend Longreads Suggestions: How EA got into mobile — and figured out the future of gaming (Protocol) Toast built a $30 billion business by defying Silicon Valley and surviving a ‘suicide mission’ (CNBC) How Big Tech Runs Tech Projects and the Curious Absence of Scrum (The Pragmatic Engineer) APPLE’S FORTRESS OF SECRECY IS CRUMBLING FROM THE INSIDE (The Verge) Facebook's Latest Scandals: The Banality Of Hubris; The Messiness Of Humanity (TechDirt) 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. Welcome to the Tech meme right home for Friday, October 1st, 2021. I'm Brian McCullough today. TikTok has joined the NFT craze. So the singularity must be nigh. USBC tries to clear up its consumer confusion problem. Zoom abandons a huge acquisition. And a crypto developer is begging users to give back $90 million in tokens after an all-time screw-up. Here's what you miss today in the world of tech. TikTok has launched Top Moments in NFT collection feed. six what it calls culturally significant TikTok videos from creators including Lil Nas X, quoting

The Block. The newly announced TikTok Top Moments will feature six culturally significant TikTok videos as one of one NFTs from creators including Little Nas X, Rudy Willingham, Bella Porch, Curtis Roach, Brittany Browski, FN Mika, and Jess Marciante, and Gary Vaynerchuk. I know at least two of those names. Those creators will partner with coin artist, X-O-R-R-T-F-K, Grimes, and others to create additional limited-edition NFTs that celebrate their viral videos. According to TikTok, the proceeds from the NFT sales will, quote, largely go directly to the creators and NFT artists involved, end quote, however, proceeds from the Brittany Broskey and Grimes collaboration will go to charity. A little Naz-X will drop the first one-of-one NFT of the collection, and he'll collaborate with Rudy

willing them to launch the first limited edition NFT of the collection. They'll be made available on Ethereum and powered by Immutable X, a layer two protocol for NFTs. October 6 marks the start of the sale, but the videos will also be presented at the Museum of the Moving Image

in Queens, New York, from October 1, today through November 5th, in a collection entitled, Infinite Duets, co-creating on TikTok, end quote. The USB Implementers Forum has issued new U.S. USBC certified logos that will show you if a given cable or port supports 60 watts or 240 watts

in an effort to alleviate widespread customer confusion because sadly USBC, which was the format that was supposed to make things simpler has, like a law of nature, gotten unduly complicated of late, quoting Apple Insider. USBC is becoming ever more of a standard, but different USBC cables support different cable power. Now, the USB implementers forum, or USBIF, the nonprofit support group, wants to make it immediately clear to buyers and users what type of cable they're getting. With the new higher power capabilities enabled by USB PD3.1 specification, which unlocks up to 240 watts over a USB Type C cable and connector, says USBIF president and C. Joe Ravencraft, USBIF saw an opportunity to further strengthen and simplify its certified logo program for the end-user, end quote.

The group's new certified USB logo program presents cable logos clearly indicating support 460 or 240 watts as defined by the USB power delivery 3.1 specification, end quote. For those buyers who do look at the packaging or who do check the cable they're plugging in, the group has also issued new USB4 logos. These are intended to unify branding across the different types of cables, end quote. They're walking away. Zoom says it no longer plans to acquire cloud-based call center software maker 5-9, following the FCC's review of the $14.7 billion deal on national security grounds, quoting CNBC. Zoom said in July that it was acquiring $5.9 in an all-stock purchase for $14.7 billion,

its first billion-plus purchase, and at the time, the second biggest tech deal of the year. The company has now lost an opportunity to quickly broaden its capabilities after its stock rallied during the coronavirus pandemic. Buying 5-9, quote, presented an attractive means to bring to our customers an integrated contact center offering. Eric Yuan, Zoom's founder and CEO wrote in a blog post. That said, it was in no way foundational to the success of our platform, nor was it the only way for us to offer our customers a compelling contact center solution, end quote. A branch of the U.S. Department of Justice was reviewing the deal out of concern about potential foreign and participation, according to a letter dated August 27th, that was sent to the Federal Communications Commission. But Zoom said last week when news of the review was reported that it still expected the deal to close in the first half of 2022. While some large tech acquisitions, most notably in the

semiconductor industry, have been nixed of late by regulators, it's highly unusual for companies to willingly terminate their own deal. Proxy advisory company institutional shareholder services had recommended shareholders vote down the proposal CNBC reported September 17th. 5-9 shareholders were ultimately unsatisfied with the small premium that Zoom was set to pay. At the agreed-upon price, they were only going to receive a 13% bump in the value of their shares over where they were trading prior to the agreement. Given the momentum in cloud software and all the money investors have poured into 5-9's peers, a significantly higher premium was likely expected. Additionally, Zoom's stock has dropped 28% since the deal was announced, while 5-9 shares have fallen only 11% because it's a stock. stock swap, that means 5-9 shareholders would have been receiving even less of a premium than

at the agreed-upon price, end quote. We started this episode with crypto, and I want to end the non-long-reads segment today with another crypto story, but of a different kind. The founder of the DeFi Staking Protocol compound is begging, and frankly threatening users asking them to voluntarily return $90 million after mistakenly sending them the money. due to an oopsie in the protocol, quoting CNBC. About $90.1 million has mistakenly gone out to users of popular defy staking protocol compound after an upgrade gone epically wrong. Now the founder is making a plea and issuing a few threats

to incentivize the voluntary return of the platform's crypto tokens. If you received a large, incorrect amount of comp from the compound protocol error, please return it. Robert Leshner, founder of Compound Labs tweeted late Thursday, keep 10% as a white hat. Otherwise, it's being reported as income to the IRS and most of you are doxed, continued the tweet. D5 protocols like compound are designed to recreate traditional financial systems such as banks and exchanges using blockchains enriched with self-executing smart contracts. On Wednesday, Compound rolled out what should have been a pretty standard upgrade, but soon

after implementation, it was clear that something had gone seriously wrong. The new Comptroller contract contains a bug causing some use. users to receive far too much comp, explained Leshner in a tweet. There are no admin controls or community tools to disable the comp distribution. Any changes to the protocol require a seven-day governance process to make their way into production, he added, indicating that no fix could take effect for seven days. A core developer at decentralized crypto exchange sushi swap said in a tweet that the entire episode could be blamed on a one-letter bug in the code.

Compound made clear that no supplied or borrowed funds were at risk. but that did little to soften the blow. Protocol users en masse began reporting massive windfalls. Soon after Leshner's tweet about the bug, $29 million worth of comp tokens were claimed in one transaction. Another claim that they received 70 million comp tokens into their account or about $20.8 million at the time of their post. Newly minted comp token millionaires now have a few options. Bitcoin developer Ben Carmen points out that it isn't really possible for the platform to reclaim the money. Quote, they shouldn't be able to recall the money without rolling back the chain, explained Carmen. They'd have to purposefully 51% attack the chain to get rid of some

blocks, end quote. So it's up to a user's discretion to decide next steps, end quote. Which, what do you think? Like, seriously, on a moral level, it's like that monopoly card, bank error in your favor. I guess, yeah, you should give it back, but if it's exceptionally difficult to do so, like how much should you be expected to bend over backwards to correct someone else's error. Time for the weekend long-read suggestions. And first up, I've not covered it, but Electronic Arts, aka EA, has been making a lot of big gaming studio acquisitions of late billions of dollars worth, and they all seem to be in aid

of finally allowing EA to become a big player in mobile gaming, quoting protocol. EA spent years becoming a household name with sports franchises FIFA and Madden and putting out major console and PC hits like The Sims and Mass Effect. Now it wants to expand its footprint. The company's strategy is in many ways emblematic of what the biggest game makers in the industry are now pursuing a full cross-platform portfolio that reaches consumers wherever they are, be it on smartphones, in the living room, on console, or playing on a pricey gaming PC. This approach is how big game publishers are discovering new audiences and keeping those audiences in their ecosystems now that almost everyone who wants a dedicated gaming device already has one.

The best-selling console of all time, Sony's PlayStation 2, sold just over 150 million units in its lifetime. Today's market leader, the PS4, has an install base of about 116 million. That pales in comparison to the roughly 1.3 billion smartphones sold in 2020 alone. The largest untapped market, it turns out, is consumers who have game consoles in their pockets, but haven't realized it yet, end quote. Next, I know I'm re-uping something that I've mentioned in the past, but I can't help myself. The survival and success story of the startup toast is by far my favorite startup story of recent times, so from CNBC, a full profile of the company's complete history.

Quote, Bennett told one of his partners he'd made a massive mistake by passing. It wasn't just Bessemer. Venture capitalists wanted nothing to do with the restaurant industry where margins are low and budgets notoriously tight. To me, it sounded like a suicide mission, said Bennett, recalling that he told the founders it would take them five years to build something viable. These legacy systems were old and painful, but they were 50,000 features into a really complex roadmap, end quote. Meanwhile, Papa would start soon flying around the country trying to help land new business

deals and recruit talent. One place he wasn't going, the Bay Area. Quote, we intentionally chose not to put reps in Silicon Valley, Papa said. As long as potential competitors didn't see the product in action, they could continue arrogantly dismissing it, he said. Instead, Papa was traveling to places like Grand Rapids, Michigan, home to a 124-year-old company called Gordon Food Service. Gordon distributed food to restaurants across the country and became a critical distribution partner for toast. We focused on the middle of the country, which was mostly overlooked, Papa said, end quote.

Next, I've seen a lot of folks discussing this newsletter post, looking at how big tech runs their projects and their project teams, and also the curious absence of Scrum, quote, when talking to engineers at Facebook, WhatsApp, Google, Netflix, and similar organizations, most of them have never used Scrum. Why? It's because of a few things. Competent, autonomous people need less structured to produce reliable high-quality output. Big Tech is able to attract, afford, and hire these people. Leveraging competent teams comes through giving them freedom to choose how to operate. This is true for most types of engineering, and there's a good reason why the Skunk Works model of autonomy with reduced bureaucracy is what many

high-performing teams with high-calibre people end up following. Scaling an engineering organization goes well beyond team-level processes, which is another reason most of big tech does not push heavyweight team processes. This is not to say these organizations don't have challenges with productivity, but most of these challenges are not ones that a heavy-weight process would solve, end quote. And the verge takes a deep look at how the worker advocacy and worker activism that we've seen in recent years at companies like Google and even Amazon has finally arrived at Apple. The tension might have stayed at a low simmer, were it not for a Slack channel.

Hashtag remote work advocacy created in September 2020 to promote a more flexible working environment. By the summer of 2021, it had reached roughly 2,800 members with conversations growing increasingly lively. After CEO Tim Cook made his announcement, employees knew they had to send a message. It was a small pushback against management that would lay the groundwork for months employee organizing and perhaps change the Apple workforce forever. Apple's remote work struggle is emblematic of a deeper shift taking place inside the company. Since 1976, the tech giant has operated in largely the same way. Executives make decisions about how the company will function, and employees either fall in line or leave. What choice do they have? Apple is currently worth

$2 trillion, making it the most valuable company in the world, as well as one of the most powerful. Over the past few months, however, that culture has started to erode. As workers across the tech industry advocate for more power, Apple's top-down management seems more out of touch than ever before. Now, a growing number of employees are organizing internally for change and speaking out about working conditions on Twitter, end quote. And finally today, you'll notice I didn't mention yesterday's Facebook hearing. I didn't mention the now notorious Finsta account exchange. But I do want to quote liberally from this piece from Mike Maznick in TechDirt because it really rings true to me, quote, in the days since Facebook files came out, I've been having a few conversations

with people about the write-ups and what it all means. There is general agreement that none of this makes Facebook look good, and it shouldn't. There's really nothing in all of this that's good for Facebook. A few of the discussions, though, jumped to the argument that Facebook's executive team is, quote, evil. A lesser version of this is that they're totally incompetent. I don't think either is quite true. Thinking it through, I think Facebook's executive team is one, in deeper than they realize, and two, falsely thinks it has a better handle on things than it really does. This is an issue that is all too common, especially in the internet world where there's a kind of myth around visionary founders. And that's certainly been applied to pretty much every successful internet founder.

Indeed, recent research throws some cold water on the idea of brilliant founders leading to big breakthroughs, and suggests that successful companies are about being in the right place at the right time with minimally competent leaders to keep everything from going off the rails. This is, quite obviously, from the outside looking in, but my impression of much of Facebook's leadership is that they've bought a bit too much into the myth of their own brilliance and their own ability to work their way through challenges at the size and scale of an operation that isn't just providing a service to basically a third of the globe, but which is also seeking to get those people to interact with one another. Nearly all of human history is about our general failures to get along with one another, and many of the problems facing Facebook

are also of that very nature. There is something of an open question about which of these problems are merely revealed or exposed due to Facebook, which are exacerbated by Facebook, and which are actually decreased by Facebook. It seems likely that all three of these forces are at play, and there is no one who has a full grasp on how to deal with the problems that are a part of human nature, or how to try to minimize humanity's worst impulses across the globe. I don't think Facebook has the answers, but sometimes I fear that some of the leaders at the company think that they do, or that they can outthink the world and how they approach these problems. The issues which become clear in all of this reporting are not of a company that is nefariously run by evil geniuses

toying with people's minds, as some would have you believe, nor is it incompetent buffoons careening human society into a ditch under the billboard screaming, more engagement, more clicks. It seems pretty clear that they are decently smart and decently competent people who have ended up in an impossible situation and don't recognize that they can't solve it all alone. Over and over again, this recognition seems to explain actions that might otherwise be incomprehensible. So many of the damning reports from the Facebook files could be evidence of evilness or incompetence, or they could be evidence of a group of executives who are in way too deep, but believe that they really have a handle on things that they not only don't, but simply can't due to the nature of humanity itself.

Facebook and Instagram were never going to cure depression or keep teen girls from feeling bad about themselves. And hell, to give the company a tiny bit of credit, don't worry, I'll take it away in a moment. The very fact that they did this research in the first place and realized how shitty some people feel on the site is a step that many, many companies would never take. On the flip side, how they actually handled this is a part of the problem. As Willa Ramos points out in the Washington Post, the real issue here is in the burying of the findings, not necessarily. in the findings themselves. And again, viewed through the prism of a hubristic, we can fix this because we're brilliant mentality, you can see how that happens. There's a correct realization that this report will look bad, so it can't be talked about publicly because Facebook seems to have an inferiority

complex about ever looking bad. But the general belief seems to be that if they just keep working on it and just make the latest change to the UI or the algorithm, maybe, just maybe they can show that they've somehow improved humanity. It's a belief in themselves and their ability that simply isn't realistic. But it does explain how the company handles nearly all of these scandals. I don't think the Facebook files show a company that is evil or incompetent. It seems to show a company that is in way too deep, but still thinks it can totally get things back under control, end quote.

This weekend, the final episode of the World Cup of Entrepreneurs will be released. This is where the big names all are doing battle. There's jobs, there's Musk, Gates, Bezos, Dorsey, even Collison. Who comes out on top? As I said last time, this is maybe the most fun I've had in podcasting in a couple years. So listen to find out. I'm more proud of this episode than just about anything. Please enjoy it, and don't be shy about sharing it with others, posting it, tweeting it.

It's a lot of fun. Talk to you on Monday.