Tech Brew Ride Home - Thursday, May 3, 2018 - Xiaomi files for a monster IPO

Episode Date: May 3, 2018

Xiaomi files for a monster IPO, Cambridge Analytica might not be dead after all, a whole bunch of news in the digital assistant space, NPR buys a podcast app, and how Stories have eaten social networking. Stories from: @oneunderscore__ , @JoshConstine Tweets: @rycrist Links:How Xiaomi Went From Has-Been to World's Biggest IPO in Years (Bloomberg)Stories are about to surpass feed sharing. Now what? (TechCrunch) Credits: Produced by @brianmcc and the @techmeme editors Music by @jpschwinghamer 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 Thursday, May 3, 2018. Today, Xiaomi files for a monster IPO. Cambridge Analytica might not be dead after all.

A whole bunch of news in the digital assistant space. National Public Radio buys a podcast app and how stories have eaten social networking. This is what you miss today in the world of tech. Chinese smartphone maker, Zhaomi, has filed for an IPO in Hong Kong. The Beijing-based company is reportedly seeking to raise $10 billion at a $100 billion valuation. Xiaomi is the world's fourth largest smartphone maker by volume, and if it attains that $100 billion valuation, it would become the third largest Chinese technology company by value, after Tencent and Alibaba, and its IPO would become the 15th biggest of all time.

If you're not familiar with Xiaomi, Bloomberg has a timely profile up about the company. It's a bit of a comeback story, actually. After bursting onto the scene in 2011, Zhaummi struggled for a time, finding strategic direction, before turning things around by releasing a whole range of products, opening Apple-like retail stores, and focusing heavily on the Indian market. Xiaomi now sells more than 500 different products and services

and has 190 million customers in 70 countries. The company booked $18 billion in sales last year and recorded $1.9 billion in profits. Bloomberg paints Zhaume's CEO Lejeune as a sort of Steve Jobsian visionary crossed with a penchant for micromanaging, quote, at a level Jeff Bezos might envy. Lay obsesses over pixel sizes on his phone's screens

and the rainbow colors of Zhaomi's double-a-e batteries. He hates seeing empty water bottles, cluttering office desks, and his co-founders are used to him tweaking font sizes on their PowerPoint presentations. Eight of us might be called co-founders, but the structure is really one plus seven,

says design chief Liu Di. With Liu, Lee also contributed to the planning for Jaumi's new headquarters, down to choosing the urinals in the men's bathrooms, end quote. Of course, this is an interesting moment, moment for Chinese tech companies. Yawai was blocked from partnering with AT&T recently.

The feds banned U.S. companies from doing business with ZTE, and we spoke just yesterday about the Pentagon banning sales of Chinese phones generally. Quote, I'm confident no country will reject Xiaomi's products, Lee told Bloomberg. Lee said he wanted to turn a Chinese company into the biggest in the world. If I can do better than Apple, then Xiaomi should be worth $1 trillion in Mark. capitalization, Lee said. So as we discussed yesterday, Cambridge Analytica announced it was ceasing operations, and later we learned the company was going to file for bankruptcy. But there's slightly more to the story. The New York Times is reporting that some executives at Cambridge

Analytica and SCL group, with which it's affiliated, have filed to launch a new firm called AmerData, based in Britain. The wealthy Mercer family, which had financial investments in Cambridge Analytica are apparently on board, as is a longtime business partner of Blackwater's Eric Prince. This suggests that perhaps what is really going on here is a rebranding, sort of along the lines of how Blackwater renamed itself Z services after a controversy. Over at NBC, Ben Collins is reporting that Rebecca Mercer and her sister Jennifer are on the new company's board of directors. Cambridge Analytica CEO Alexander Nix was also on the board before he was terminated last month. When Rebecca Mercer filed paperwork with the British government related to

AmerData's organization, she used Cambridge Analytica's New York address to do so. So maybe Cambridge Analytica isn't quite so dead after all. Again, the price of Amazon Prime is going to go up soon, but the utility belt of things Prime will offer you keeps expanding as well. Yesterday, Amazon announced Wag, its own brand of pet products, that, you guessed it, will only be available to prime subscribers. The Wag brand is starting out with dry dog food, but there will reportedly be a whole range of pet products to come. You might already be familiar with Wag. I know I've seen their ads on the subway for years. That's because the brand used to be owned by Quidsey, which also owned diapers.com and soap.com before Amazon bought them for $545 million in 2011.

and Wag represents yet another in-house Amazon brand along the lines of what the company has been rolling out in recent years, including its own furniture brands, rivet and stone and beam, and the mama bear line of diapers. It's an old saw in startup circles that the pet market is like a siren song to entrepreneurs. Remember Pets.com and the three or four other dot-com era pet startups. Well, let me give you the old litany about why this is such an appealing market. Americans will spend $72.1 billion on their furry friends this year,

with about $30 billion of that spent on pet food, according to the American Pet Products Association. Petfood is a notoriously difficult product to sell profitably online, as it's so heavy and bulky, thus the demise of Pets.com. But if anyone has solved that problem by now, you'd imagine it would be Amazon. And in a related story, Amazon might finally be ready to tackle another long, problem in e-commerce. How can people be convinced to buy clothes online without first being able to try them on? The Wall Street Journal is reporting on a survey that Amazon has been circulating,

inviting people to an office in New York, where they will have their bodies measured over the course of 20 weeks in order to determine subtle changes in our body shapes and sizes over time. Participants will get a $250 Amazon gift card for their troubles. This, along with job postings the journal has uncovered, indicate that Amazon might be working on, quote, creating statistical 3D models of human bodies, which it will then match to images and videos of people via deep learning algorithms and other tactics, end quote. In other words, maybe someday soon we'll see Echo Show Alexa devices that will be able to take a picture of us and send us perfectly fitting clothes in return. As the journal piece notes, Amazon is expected to overtake Walmart this year as the

largest apparel retailer in the United States. And hey, speaking of Alexa, Amazon today announced that there are now 40,000 Alexa skills, up from 25,000 in December and 10,000 in February of last year. But as CNET's Rye Christ snarked on Twitter, and actually I'd be curious to know this myself, quote, would love to see the number of skills used more than once. We're going to stick on the home assistant tip for just another. couple minutes. Google says that Google Assistant now works with 5,000 smart home devices up from 1500 in January. The best estimate is that Alexa works on roughly 11,000 smart home devices,

but Google Assistant is making up ground clearly. Among the new devices to come online with Google Assistant are Dishes the Hopper, Set Top Television Box, and a slew of Logitech Harmony Television remotes. But Google doesn't want to stop there. The company today announced that it is starting an investment program for early stage startups who are working on Google Assistant hardware and features. Nick Fox, VP of Search and Google Assistant, and Sanjay Kapoor, VP of corporate development at Google, said in a statement, quote, we're opening a new investment program for early stage startups that share our passion for the digital assistant ecosystem, helping to push new ideas forward and advance the possibilities of what digital assistants can do, end quote. among the first companies to receive investments under this new program,

a concierge service for hotel staff, an AI-powered English tutor, and a couple of developer apps. Amazon has a similar $200 million Alexa fund, of course, to fuel startups on its platform. And one more. You might think that Google and Amazon, and I guess also Apple with Siri, are running away with the Digital Assistant Marketplace. but there's one more player who just got a big infusion of capital all its own.

SoundHound is a 10-year-old company that has a voice recognition tool that competes with Alexa and Google Assistant called Houndify. To help build out Houndify, SoundHound today announced a $100 million investment round. Houndify CEO Kaven Mojaser told TechCrunch, quote, We launched Houndify before Google and Amazon. Obviously good ideas get copied, and Google and Amazon. have copied us. Amazon has the Alexa fund to invest in smaller companies and bribe them to adopt the Alexa platform. Our reaction to that was, we can't give away $100 million, so we came up with a strategy which was the reverse. Instead of us investing in smaller companies,

let's go after big successful companies that will invest in us to accelerate Houndify. And it's those big successful companies that have invested in this $100 million round that are the story here. The round comes entirely from Soundhound strategic partners, including Tencent, Daimler AG, and Hyundai. So clearly, Soundhound and its strategic partners think that there is room for a sort of neutral voice AI platform independent of the major tech companies. Soundhound wants to be in the business of building voice interaction into all sorts of things like maybe cars. We think every company is going to need to have a strategy in voice AI. just like 10 years ago, everyone needed a mobile strategy, while Haider said.

Everyone should think about it. Most big banks have only been experimenting with things like Bitcoin, but it seems that Goldman Sachs is willing to jump right into the deep end of the pool. The New York Times is reporting that Goldman is going to open a Bitcoin trading desk and will use its own money to trade Bitcoin futures contracts on behalf of its clients. The trading is slated to begin in a matter of week. weeks. This is probably the first Bitcoin trading operation at a Wall Street bank. What's more, if it can get regulatory approval to do so, Goldman reportedly wants to get into trading actual

bitcoins themselves, not just futures. To say that Wall Street generally has been skeptical of Bitcoin would be putting it mildly. Remember when Jamie Diamond called Bitcoin a fraud. But Rana Yared, one of the Goldman executives overseeing the new Bitcoin operations, says the bank is just responding to client demand. Quote, it resonates with us when a client says, I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value, end quote. Ms. Yared told the New York Times

that Goldman had concluded that Bitcoin was not a fraud, but, quote, I would not describe myself as a true believer who wakes up thinking Bitcoin will take over the world, she said. Some podcasting news that will raise a few eyebrows, Popular podcasting app PocketCasts has been acquired by a consortium made up of National Public Radio, WNYC Studios, WBEC Chicago, and This American Life. The acquisition price wasn't revealed, but apparently the app will operate as a joint venture between the new owners, and Owen Grover, a veteran of IHeart Radio and Clear Channel, will run the new venture as CEO. As of right now, the word is that NPR's NPR, NPR,

our one app will still be a going concern. Pocketcast developer Russell Ivanovick says that he had fielded acquisition offers in the past, but, quote, we turn them down because the unique thing about this opportunity is the mission-driven nature of these organizations. They want what's best for the podcasting space. They want to build open systems that everyone can use. Finally today, I wanted to flag a piece that is not really a news story or a long read or a feature or even an editorial,

but just a summation of things as they stand in tech that I hadn't really seen elucidated anywhere else before. Over at TechCrunch, Josh Konstine noticed that at Facebook's F8 conference, a lot of the announcements weren't about Facebook proper, but about Instagram and WhatsApp and Facebook Messenger, all apps that feature the convention of story creation. It increasingly feels like news feed is old hat and stories, are where it's at. In fact, stories creation and consumption is up about 842% since 2016,

and nearly a billion accounts on platforms like Snapchat and the Facebook properties we mentioned consume these slideshows now. Facebook's Chris Cox said on stage at F8 that Stories is on track to surpass feeds as the primary way that people share things with friends. So this is a huge shift. Feeds are what social media was built on. If we're moving to stories, what does that mean? Stories are growing 15 times faster than feeds, so stories seem to be the future. What does that hold for advertising? For news dissemination?

As Constine suggests, are stories the evolutionary bridge until VR takes over? So I asked Constine about his thinking here. We've seen all of these companies flock to get rid of whatever they were doing beforehand and just put stories on the top of it. It became a whole meme where everyone's like, oh, Excel is going to have stories and Skype is going to have stories. But then Skype actually did launch stories.

And I think especially with Facebook Messenger, we saw the whole app redesigned around visual communication, even though that's not necessarily what people wanted. I suggested that the web is no longer just links and posts and snippets. It's increasingly become about free-floating narratives. Exactly. I think we got used to seeing banner ads that were a single tile, content that was just a single blurb like you see in the

Facebook news feed. But Stories is really changing that to be able to link pieces of content together. So you can actually have, you know, a turn and a reveal. You can have these elements of storytelling that give people a much bigger emotional punch. And note that serendipitously, stories have arrived just at the time that Facebook and other social media companies have encountered all of these scandals, scandals that were largely enabled by news feeds and feeds in general. I think Facebook sees Instagram and WhatsApp as a hedge for its brand, kind of the life raft. If things go wrong with Facebook, whether people get tired of it or there's all these scandals,

you can always push attention and users to these other apps. But also, they're much better at this direct messaging, this much more interactive experience that research shows is much healthier for us. Mark Zuckerberg keeps talking about how passive consumption of meat, isn't necessarily good for us, but if you're actually commenting, messaging, that makes you feel good. And that's what Instagram and WhatsApp are much better at than Facebook. Josh and I spoke in the aftermath of the disastrous earnings report that Snap had. And when I asked him about the future of that progenitor of stories, Josh had an interesting anecdote to share.

People think of Snapchat as this pure innovator, but everything comes from somewhere. I just learned that CEO Evan Spiegel actually backed a Kickstarter for a project called Spectracles, which were novelty sunglasses with similar as hues and color schemes to the spectacles that Snapchat eventually launched four years later. You know, Snapchat definitely did come up with the stories format, but it's truly a standard, a format that other people are going to iterate on. The same way that Facebook didn't necessarily invent the feed, but it may have perfected it with the relevancy sorting, I think we're seeing Instagram really perfecting the Snapchat stories format with, you know, relevancy sorting for how you find them, more clean, develop creative tools. And now it's opening a much bigger developer platform with its augmented reality camera lens platform. Check out the piece. I have a link to it in the show notes.

By the way, guys, this is a late breaking story, so I'm not sure how important it is. but in a blog post just now, Twitter is urging all users to change their Twitter passwords after it says it found a bug that stored an undisclosed number of passwords in plain text on its internal logs. Twitter claims there is no indication of a breach by outside parties or data stolen, but still, maybe time to change your Twitter password. And that's all for today. I've been your host, Brian McCullough. follow me on Twitter at Brian MCC, where if you follow along with all of my faves all day, you can pretty much work out the running order of that afternoon's show,

and check TechMame.com to read the stories behind the headlines before I can even speak them into your ears. Thanks for listening.