Tech Brew Ride Home - Mon. 08/09 – Congressional Crypto Crunch

Episode Date: August 9, 2021

Crypto flexes its lobby muscle in an attempt to craft that infrastructure bill. Apple tries to beat back the controversy around its photo scanning plans. The Cybertruck is delayed. And what if the whole democratization of investing thing moves beyond options and even NFTs into angel and venture investing. Sponsors: Kiwico.com/ride Voices.com Links: Senators Near Deal On Crypto Oversight, But May Be Too Late (Bloomberg) Apple CSAM FAQ addresses misconceptions and concerns about photo scanning (9to5Mac) Apple’s New ‘Child Safety’ Initiatives, and the Slippery Slope (Daring Fireball) An Unsurprising But Sad Update for Tesla Cybertruck Fans: Production Has Been Pushed to 2022 (Gizmodo) Google is planning a new Silicon Valley campus with hardware hub, plans show (CNBC) Uber, Lyft Prices at Records Even as Drivers Return (WSJ) Even Your Allergist Is Now Investing in Start-Ups (NYTimes) 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 Monday, August 9th, 2021. I'm Brian McCullough today. Crypto flexes its lobbying muscle in an attempt to craft that infrastructure bill. Apple tries to beat back the controversy around its photo scanning plans. The cyber truck is delayed. And what if the whole democratization of investing thing

moves beyond options or even NFTs into angel and venture investing? Here's what you miss today in the world of tech. The big stories over the weekend were kind of the same ones we left you with on Friday. First of all, all of crypto was applying public pressure on social media and traditional media to try to get wording in that infrastructure bill ironed out. Two groups of senators say they are nearing a last-minute deal on the crypto oversight provisions in the bill, but an agreement may come too late to get added into the final wording. Quoting Bloomberg. Wyden, along with Republican senators Pat Toomey and Cynthia Loomis, had offered one approach that had the support of the cryptocurrency industry. A competing amendment sponsored by

Republican Senator Rob Portman and Democrats Mark Werner and Kristen Sinema was the White House's preferred option. We're still talking, Wyden said, declining to discuss what issues still are unsettled. The last-minute frenzy to reach a deal may prove to be fruitless if the senators are unable to get the amendment called up for a vote. The Senate has been deadlocked for days over addressing more changes to the bill because of disputes between lawmakers about which amendments to consider and how long to continue debating. Any single senator can block an amendment from getting a vote. If a compromise can't be reached or an amendment doesn't get a vote, the original language in the legislation would remain. The provision has been criticized by cryptocurrency investors and Twitter chief executive

officer Jack Dorsey for being overly broad and requiring some crypto-related businesses like miners or software developers to report to tax collectors data that they don't have access to. However, the legislation still has to clear the House, which can make changes in whatever ultimately passes the Senate this week, that would give lawmakers another chance to modify the provision, end quote. I've heard from friends in politics this week that Washington has been surprised by what a lobbying force crypto has become almost overnight. Crypto as a new industry constituency with money and leverage to spend in Washington, interesting times. And if you were on Hacker News or the R-slash-Apple section of Reddit over the weekend, you might

like me have been surprised at how vehement the backlash to that whole Apple scanning your photos to look for CSAM content controversy has become. I bet Apple has been surprised too. Apple published an FAQ this morning to address what it calls misconceptions and concerns about the photosc scanning practice, but leaves potential government pressure and slippery slope arguments basically unaddressed, which is basically where the pushback has been all week. end. Quoting 9 to 5 Mac. The biggest concern raised by the EFF and others remains. While the system today only flags CSAM images, a repressive government could supply Apple with a database that contains other materials such as the famous Tankman photo in Tiananmen Square, which is censored in China, for example. Apple has responded to this by saying, it would not allow this. Could governments force Apple to add non-CSAM images to the hash list? Apple will refuse any such demands. Apple's CSAM detection capability is built solely to detect known CSAM images stored in iCloud photos that have been identified by experts at NCMEC and other child safety groups. We have faced demands to build and deploy government

mandated changes that degrade the privacy of users before and have steadfastly refuse those demands. We will continue to refuse them in the future. Let us be clear. This technology is limited to detecting CSAM stored in iCloud and we will not exceed to any government's request to expand it, end quote. That statement is, however, predicated on Apple having the legal freedom to refuse. In China, for example, Apple has been legally required to remove VPN, news, and other apps, and to store the I-cloud data of Chinese citizens on a server owned by a government-controlled company. There is no realistic way for Apple to promise that it will not comply with future requirements to process government-supply databases of CSAM images. That also include matches for materials used by critics and protesters.

as the company has often said when defending its actions in countries like China, Apple complies with the law in each of the countries in which it operates, end quote. This is one of those controversies that I 100% do not have an opinion on yet, since I can see all sides of this debate, and I'm not going to quote from it because it's pretty long, and the point of the piece was in a step-by-step way to offer an explainer. But the best technical walkthrough of what Apple is attempting to do here comes, I think, from John Gruber at Daring Fireball. Link to that piece in the show notes. Yes, some people might accuse Gruber of being on Apple's side in this, as in almost everything.

But again, just on a base technical level, his piece was the most instructive I read this weekend, and he does address the whole slippery slope argument directly. Sad news, but hey, it does give me a chance to break out this old bit. Sorry, Tesla fans. The cyber truck is being delayed. Quoting Gizmodo. Spotted by Electrek on Saturday, the order page for the Cyber Truck on Tesla's website. Now states the following, quote,

You will be able to complete your configuration as production nears in 2022, end quote. The message appears on the order forms for all three models of the cyber truck. I'm going to stop with the voice. The single motor, rear wheel drive, dual motor, all-wheel drive, and trimotor all-wheel drive, despite earlier assertions from the company that the dual-wheel-wheel-drive, and tri-motor versions would be produced first, the outlet pointed out. Tesla first announced the cyber truck in 2019, later specifying that it would go into production in late 2021. However, there were signs that cybertruck wouldn't be delivered this year. This past January,

Musk said Tesla would have to get lucky to deliver a few cyber trucks by the end of the year, as previously announced. Even then, Musk affirmed that he expected volume production to begin in 2022. The cyber truck is not the easiest truck to make. The steel exoskeleton body for instance, will require new manufacturing processes to bring it to fruition. Tesla has also said it needs to order certain equipment and machines to begin production. The point here is to inform people with Cybertruck orders which could exceed $1 million, according to a crowdsourced reservation tracker cited by various outlets, that they should mentally prepare themselves to wait until 2022, end quote. Again, I've been hearing whispers over the last year or two that Google might

abandon its hardware efforts at any time, and given that it is Google, you know, who knows, they'll abandon anything at any time. But there also have been a plethora of signs lately that the exact opposite might be true, that Google might be leaning full bore into its hardware projects. The latest sign, according to filings, Google is planning a campus in Silicon Valley made up of five buildings dedicated to hardware development. Google has spent around $389 million on the land since 2018, quoting CNBC. The plans which are filed as an R&D facility show a center for hardware operations and a separate new tech campus that would be accessible to the public, sitting between its current headquarters in Mountain View and its recently approved mega-mixed-use

campus in San Jose, dubbed Midpoint. The future tech campus will include five office buildings connected via a pedestrian bridge over a road. It will sit adjacent to three industrial buildings that will house some operations for its hardware division, including Nest products, according to several planning documents. Google has filed plans for an R&D Center that includes hundreds of updates to three industrial buildings, including meeting rooms, lounge areas, microkitchens, equipment platforms, conveyor belts, and a shipping warehouse, according to plans and permits viewed by CNBC. The plans mention Google Hardware and Nest, which refers to the company's connected home business. These buildings will also house general supplies and store items like

furniture for local campuses, according to a company spokesperson. The new space comes as Google appears to be bringing more hardware efforts in-house under Executive Rick Osterlo, who oversees devices and services, including Nest, the Google Home Smart Speakers, its flagship pixel smartphone, and the pixel book laptops. The hardware unit has produced minimal revenue for the company compared with its core internet services like search YouTube and Google Cloud, but executives recently said it would be attempting to grab more market share this year, end quote. And this is something I've been hearing from everybody. Uber and Lyft, they're crazy expensive lately. We've spoken about this before, but it might not just be a driver shortage. Here's some solid new data.

A raccoon intelligence analysis of e-receipts for more than one million customers shows that the average Uber and Lyft fares in the U.S. were 50% higher in July 2021 compared to January 2020, according the Wall Street Journal. The sky-high prices, which the companies say are driven by the continuing labor shortage, come despite a recent influx of drivers. Uber said Wednesday that 30% more drivers signed up in July compared with the month before. Lyft said Tuesday that 50% more drivers signed up in the three-month period that ended in June compared with the preceding three months. Uber spent more on incentives than analysts had expected in the second quarter. The company said it doesn't plan to spend significantly more on them in the current quarter because it has been acquiring drivers in recent weeks,

despite pulling back on incentives. As Uber and Lyft eye long-term profits, analysts say consumers should expect to pay more per ride compared with the discounted rates before the pandemic, but analysts also don't think prices will stay at their current heights. Drivers' earnings are at an all-time high thanks to the continuing bonuses. Uber said its drivers are making more than $40 an hour in its busiest markets, but a near-term challenge is retaining them once the incentives go away, end quote. I'll let this tweet from George Iskander stand for any number of dozens of similar stories that I've heard recently here in New York.

I was out with friends yesterday and we tried calling an Uber to my friend's place $55. And we almost resigned to doing it until I was like, why don't we hail a taxi? And it ended up being $15. Funny, Uber's original selling point was being cheaper than taxis, end quote. Yeah, but then that race to create monopoly conditions. and thus monopoly prices never panned out for them. We're really about to see the final test of this business model, Toot Suite, it looks like.

Finally, today, something else that I've been hearing from a lot of people recently. If you've been in tech long enough, then you've always known the angel investor types, the folks like Saka or Kalakhanis or Ohanian, who have basically made their brands and their profiles, essentially all about being angel investors, cutting that early check to Twitter or Uber or whomever. And then if you've got friends at startups that end up going public,

then you'd likely seen them start cutting small checks on the side to their friends because everybody wants to replicate the PayPal Mafia. But the thing I keep hearing about lately is the story that, at least since the pandemic, lots of folks who have never done it before are beginning to write their first angel checks. This is borne out by pitchbook data, which says that more than 3,000 angel investors are expected to make their first angel deals in 2021, up from 2,725 in 2020. Angels have invested $2.1 billion in the first half of this year versus $2.6 billion in all of 2020. This is a trend piece from the New York Times, so take it with a grain of salt because, you know,

the way the New York Times does things, two people in Williamsburg start doing something new and the Times just swoops down and declares it a trend. But as I say, I keep hearing similar stories. Quote, founded in January, Angel Squad is one of several ways that people from outside Silicon Valley's investing elite are now joining the ranks of Angel investors. The influx, which includes art curators, Dennis, influencers, and retirees, is transforming the way that startups raise money, upending the pecking order in venture capital and pushing a niche corner of the investing world towards mass adoption. It is absolutely going mainstream, said Kingsley Advani, founder of allocations, a tech platform for angel investors. It's accelerating and it's

It's getting faster and faster. He said even his mother, a retired schoolteacher in Australia, has invested in 41 startups over the last few years. Until recently, such investing was off limits to most people. Securities rules restricted it to the wealthy because of the level of risk involved since most startups fail. Even those who qualified often lacked the connections to find deals. And startups preferred to raise big slugs of cash from a handful of investors rather than deal with the costs and headaches of processing dozens of tiny checks. But over the last year, many of those roadblocks have dissipated. Last year, the Securities and Exchange Commission loosened restrictions and began allowing people to become accredited investors, those allowed

to back private startups after passing a test. New tech tools are making the process of raising funds from many small investors cheaper and faster, and startups have become eager to add potentially helpful angels to their roster of backers. Over night, the entire world just woke up and went, oh wow, we want to go invest in technology, said Avlock Coley, chief executive of Angelist Venture, a company that provides tools for startup fundraising. Many new angel investors have some connection to the tech industry, but are not the VIPs who are normally invited into deals. Some are complete outsiders. Many are broadcasting their activity on social media and turning the investing into a branding opportunity, a hobby, a networking play, or a social status, or a way

to give back. The Angel Boom has in turn created a mini boom of companies that aim to streamline the investing process. Allocations, the startup run by Mr. Advani, offers group dealmaking. Assure, another startup helps with the administrative work. Others, including party round and sign and wire, help Angels with money transfers or work with startups to raise money from large groups of investors. Angel List, which has enabled such deals for over a decade, has steadily expanded its menu of options, including rolling funds for people to subscribe to an angel's investor deals and roll-up vehicles for startups to consolidate lots of small checks. Mr. Coley said his company runs a fund factory that compresses a month of legal paperwork and wire transfers into the push of a button, end quote. So not to get even more

anecdotal on you, but after several years on the sidelines, I myself started doing angel investing again this past year, thanks to Angelist. It's not my first time writing checks, but unlike a decade ago when I was doing this more regularly or even five years ago when I was working at TED. It's not just about having a personal network anymore. Folks kept inviting me to go in on syndicates because of this podcast, and because of Angel's, it was easy to do. It was basically a no-brainer, so I did it. I've made about six investments in the last 12 months, and I guess if any of those companies ever get big enough to make news, I'll now have to disclose that I have a piece of them, as these are the first investments I've done since starting this podcast. But yeah, at least up here where my non-tech

friends would, you know, spend the last two or three years asking me about crypto and how they could get in on that, I have now had a handful of conversations this year with friends outside of the tech industry entirely asking me for the first time about getting into angel investing. So, you know, forget Robin Hood. If this is a trend, talk about democratizing investing. Hey, folks, anybody out there interested in a job, selling podcast ads, get in touch at podcast at Techmeme.com, or ping me at Brian MCC on Twitter. We're looking for someone to sell ads for this show. It's sort of a temporary, maybe three to six month gig that would be entirely variable compensation, i.e. commission-based, though we might also

pay a small signing bonus. And who knows, if someone was a superstar at selling ads for us, it might become a permanent gig. Anyway, if this is you or you're at all, Curious, again, email podcast at techmeme.com or hit me up on Twitter. Talk to you tomorrow.