Tech Brew Ride Home - Mon. 7/30 - Self-Driving Cars Need To Talk To Us

Episode Date: July 30, 2018

The king of the bitcoin miners mulls an IPO (not an ICO), the prediction market Augur gets dark, a “Netflix for gadgets” and a “Dallas Cowboys for e-sports” both raise money, advice for Twitter and Facebook, and why autonomous cars need to talk to us. Links:Scoop: Bitcoin Mining Company Bitmain Hit $1.1 Billion in Profits in Q1 2018 (Fortune)The First Augur Assassination Markets Have Arrived (CoinDesk)Grover raises €37M Series A to offer latest tech products as a subscription (TechCrunch)Twitter is prioritizing its network ‘health’ over adding new growth features. Is that the right move? (Recode)Why unskippable Stories ads could revive Facebook (TechCrunch)Retailers set sights on Facebook, Google ad revenue (Reuters)The self-driving cars hitting the road in Texas today are unlike any we’ve seen before (The Verge) 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 ride home for Monday, July 30th, 2018. I'm Brian McCullough. Today, the king of the Bitcoin miners malls an IPO, not an ICO.

The prediction market auger gets really kind of dark. A Netflix for gadgets and a Dallas Cowboys for e-sports both raise money. Advice for Twitter and Facebook and why autonomous cars need to talk to us. Here's what you miss today in the world of tech. How does that old Maxim go? The surest way to get rich in any gold rush is not to mine for gold yourself, but instead to sell the miners, the picks, and the shovels? Well, Jehan Wu and Mikri Zahn apparently took this to heart,

and it certainly looks to be paying off for them. Wu was a financial analyst and a private equity fund manager, and Zahn had founded a streaming television startup when In 2013, the pair founded Bitmain. Bitmain, which is headquartered in Beijing, is the biggest supplier to cryptocurrency miners in the world. Bitmain designs custom ASIC chips which are favored by crypto miners. So essentially all of those Bitcoin mining rigs, or at least a fair number of them, are designed and sold by Bitmain. And yes, I know that saying an ASIC chip is a custom chip is a bit redundant.

Please don't at me. By the way, Bitmain also runs Antpool, one of the largest Bitcoin mining pools, but it's those Bitmain design chips that are apparently the key to Bitmain's success. And apparently it has been a success. Just how much of a success was revealed this morning when Fortune got its hands on an email from a source either within Bitmain itself or at least close to the company. The email says that Bitmain is raising new money at a $14 billion valuation, Just this past June, Bitmain raised a $400 million round at a $12 billion valuation.

But these were the eye-popping numbers that stood out to me. Bitmain produced $1.2 billion in net profit last year and $1.1 billion in net profit just in the first quarter of this year. The company could conservatively earn net profits in the $2 to $3 billion range through the end of 2018. Again, that's profits, not revenue. Bitmain apparently has around 50% net margins. The email also says that Bitmain plans to file for an IPO quote very soon. That's good news for early Bitmain investors, Sequoia, and IDG Capital. In the show notes, I'm going to link to an interview with co-founder Wu from earlier this year.

It's an interesting read if you've never heard of Bitmain before. Potentially, the play here is not just crypto mining. but also diversifying its chip development to get into the AI hardware game. Remember last week when I introduced you to Auger, the prediction market built on the blockchain, which recently began paying out on its earliest bets. Well, CoinDesk is reporting on the newest wave of bets and predictions that you can wager on, which are popping up on Auger right now, including things like markets trying to guess the likelihood of assassination. for public figures or the number of days until the next mass shooting occurs.

The obvious moral problem with this is that essentially if such prediction markets got large and valuable enough, they could, in essence, be financially incentivizing murder, a sort of reverse life insurance policy, if you will. As user Tante wrote on Twitter, quote, finally a real use case for blockchain, betting on things so unethical, that all established entities would refuse the bets, end quote. Could authorities step in here and shut down these markets? Well, this is crypto, so decentralization is sort of built into the cake,

quoting from the Coinbase article. Auger's developers announced Monday night that they had given up ownership over the, quote, escape hatch function, which would allow a designated party to shut the system down. If the Forecast Foundation is compromised by a state agency, Micah Zoltu, a developer who has worked on the platform, remarked, the system can't be turned off, end quote. In other words, governments may not be able to threaten Auger's creators with prosecution in order to alter or shut the platform down. They could, of course, threaten them with prosecution anyway. The individuals facing the most immediate legal risks may be the users who created these assassination markets. assuming they set up the market using a crypto token that is traceable.

A couple of interesting raises here. The editors titled this first one as Berlin-based Grover wants to be the Netflix for gadgets. I kind of disagree with this description a little bit. Yes, what Grover does is offer pay-as-you-go subscriptions on consumer electronics and the latest gadgets. Quoting from the TechCrunch piece about this news, It offers individual tech products by monthly, three-monthly or yearly subscription or via its newly launched Grover Mix subscription, which has a fixed monthly price and lets you switch items at any time. In addition, you are afforded some upside protection should you wish to purchase the item after renting it first. You're given the option to buy products with 30% of your subscription payments to date being deducted from the recommended retail price.

For longer rental periods, Grover will all... also warn you if you are close to reaching 130% of the full purchase price and prompt you to consider just buying it for, say, one euro, end quote. So that kind of just sounds like traditional layaway to me. Grover is like Netflix if, after my kids watched Despicable Me for the hundredth time, Netflix offered me the opportunity to just download and own the stupid movie for a couple bucks since half of my subscription over the last six months has gone to watching just that one movie anyway, which by the way, Netflix isn't a half bad idea. Anyway, interesting concept. To be sure,

Grover is currently focusing on Germany right now. It was in the UK for a while and did a soft launch in the U.S., but I guess they needed to reboot a bit. And to help do that, as TechCrunch reports, they just landed a 37 million Euro Series A, which interestingly consists of 12 million euro in equity and 25 million in debt. And another story of a raise from a company you might not have heard of. The company is called Swift, and it raised a $37 million Series A, led by Bessemer Venture Partners and others, including Yahoo co-founder Jerry Yang and one, Stefan Curry.

But Swift probably isn't even the name that it is most well known for. Swift is best known as the parent company of Team Solo Mid, one of the best known e-sports squads in the world. Team Solo Mid was one of the 10 inaugural teams in the North American League of the League of Legends e-sports Enterprise. It costs $10 million just to field an esports e-team in that E-League. The company was founded by 26-year-old Andy Dinn, who started Team Solom. low mid at 17 years of age before transitioning from professional e-sports competitor to well, I guess, front office management. So given all the earnings disasters last week, a lot of people had some unsolicited advice

for Twitter and Facebook going forward. In Recode, Kurt Wagner and Ronnie Mola explicitly said Twitter needs to learn to multitask. Focusing on cleaning up the spam and croft and trolls on their network is great. and quote, Twitter's health is by far the most important thing the company can and should be focused on. Without a network of people who want to use the product and who feel safe using the product, Twitter will always just be what it is. A great way to get news, but a terrible place to talk about and debate that news. That said, is cleaning up Twitter such a demanding job that the company can't continue to make, quote,

product improvements designed to deliver growth in audience and engagement, end quote? Twitter is not a new company. It's been around for more than 12 years and has more than 3,500 employees. It seems reasonable to expect it to be able to do two things at once, end quote. And as for Facebook in TechCrunch, Josh Constine says unskippable video ads in stories could be the strong new revenue driver that the company needs. If the stories social media slideshow format is the future of mobile TV, it's going to end up. up with commercials. Users won't love them, and done wrong, they could pester people away from spending so much time watching what friends do day to day. But there's no way Facebook and its

family of apps will keep letting us fast forward past stories ads just a split second after they appear on our screens, end quote. Constine says that unskippable ads are probably inevitable since Facebook could charge more for them, but he expects them to be rolled out slowly the way the company did with autoplay videos in the news feed. Finally, Ben Thompson was on vacation last week, so he missed all of the excitement. In his Monday post on Stratere this morning, he took a lengthy deep dive looking at the Facebook situation from several angles, but he concluded, in an upbeat way, at least from a Facebook perspective, quote, for all of the company's travails and controversies over the past years,

its moats are deeper than ever. It's money-making potential not only huge but growing both internally and secularly. To that end, what is perhaps most distressing of all to would-be competitors are, in fact, this quarter's results. At the end of the day, Facebook took a massive hit by choice. The company is not maximizing the short term. It is spending the money and suppressing its revenue potential in favor of becoming more impenetrable than ever. Also, do you remember when we talked about Amazon's earnings last week? I mentioned how Amazon has turned on the advertising spigot,

allowing brands to advertise their products on the Amazon website itself, among many other places. Gee, selling real estate on your website to brands. Crazy idea, right? So crazy that Reuters is reporting that retailers like Target, Walmart, and Tesco are increasingly doing similar things, selling ads and search keywords on their websites to consume. goods companies.

Quote, specifically, they are selling more ad space, pop-up banners, and search bar keywords to consumer goods companies such as Kraft Heinz Company and Procter & Gamble Company. These makers of everything from soap to shampoo are investing more to advertise on retailers' websites where people who already have an intent to buy are guided to specific products using their individual shopping habits, end quote. So they're using all of that data about our buying habits, data collected on their websites the way Amazon has done it for 20 years. Huh, they finally learned that one of the biggest advantages of online retail isn't just convenience. It's in data as well. Also, the article notes

online ad revenue offers significantly higher margins for retailers than merely selling goods in stores, because when you're just the retailer, you have to compete on price, of course, But when you're the advertiser, you're one step further up the cost chain. Being the middleman and the retailer at the same time can be a pretty good double whammy of a business. So there's another self-driving car startup out there making real-world ride-hailing test drives on the real-world roads of Frisco, Texas. It's called Drive A.I. It uses Nissan NV-200 minivans. But unlike Waymo or Cruise Automation, the car. are bright orange with a big self-driving vehicle notice painted on the sides.

They're supposed to be noticed, but that's not the only thing that's notable about how much they want to be noticed. On Drive AI vehicles, there are also four bright LED screens. On the front hood, on the back, and on each side. Why LED signs? To do something that I had actually never thought about before with autonomous vehicles. communicate the car's intention to other vehicles and even pedestrians. According to the Verge, quote, there is a list of canned messages that are displayed on the screens

depending on what the vehicle is doing or who is driving it. Waiting shows on the front and side screens and crossing shows on the rear with a moving graphic of a pedestrian walking when the car is stopped for pedestrian crossings. Going displays on the front and side screens. as the vehicle starts driving from a stationary position with a moving graphic of the van driving. Entering slash exiting shows on all screens

with a moving graphic of a person entering and exiting the vehicle. Human driver shows on all screens whenever the vehicle is in manual mode, end quote. Apparently drive AI considered adding emojis as well, but thought better of it. So the thing that I had never thought about was, yeah, if I'm behind the wheel,

I can do things like make eye contact with another car when we arrive at a stop sign at the same time. No, you go first. And I can wave at pedestrians to let them know I see them, and they can cross in front of me. And, of course, I can use other more stringent methods involving rude gestures or a solitary finger if somebody has especially displeased me. But in an autonomous vehicle world, communicating the vehicle's intentions to non-robot actors, will still be important. I mean, at some point the computer cars will be able to talk to each other, but for a long, long time,

they're still going to need to talk to humans in the real world as well. As I recorded that last segment, I suddenly had the image of some sort of modern day Charlie Chaplin, black and white silent movie short, where The Little Tramp is coming to an intersection at the same time that an autonomous car is. Charlie tries to go, tries to cross the intersection, the car tries to go, stop, start, stop, start until Charlie throws his hat in the air and his cane and frustration because he can't figure out what the car wants to do. That's all for today. I've been your host, Brian McCullough. Talk to you tomorrow.