Tech Brew Ride Home - Tue. 07/12 – What If (And Hear Me Out) We Actually Owned The Things We Buy?

Episode Date: July 12, 2022

Liquidators say they can't find the Three Arrows Capital founders. The FTC will crack down on data-anonymization claims. Another smart home company decides to brick some of the hardware that people paid good money for. Hopin is the latest highflyer to fall to earth with layoffs. And what it’s like to work at Twitter right now. Sponsors: Storyblok.com/ridehome Links: Three Arrows Founders’ Whereabouts Unknown, Liquidators Say (Bloomberg) FTC to Crack Down on Sites That Claim Your Data Is 'Anonymized' When It's Not (PCMag) Hive’s abandoned smart home devices will cease operation starting in 2023 (The Verge) Live events startup Hopin, valued at $7.8 billion, is laying off 29% of staff in its second wave of job cuts in 2022 (Insider) Twitter Lawyers Call Musk’s Deal Termination ‘Wrongful’ (Bloomberg) As Elon Musk Walks, Twitter Workers Say No One’s in Charge (Wired) 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 Tuesday, July 12th, 2022. I'm Brian McCullough today. Liquidators say they can't find the Three Arrow's Capital founders. The FTC will crack down on data anonymization claims. Another smart home company decides to brick some of the hardware that people paid good money for. Hoppin is the latest high flyer to fall to Earth with Laos and what it's like to work at Twitter right now. Here's what you miss today in the world of tech. or as they say in Minecraft. Liquidators say they can't find three arrows capital founders Kyle Davies and

Zhu Su and they are seeking to subpoena them to prevent the dissipation of the fund's remaining assets, quoting Bloomberg. Representatives tapped to liquidate three arrows by a British Virgin Islands judge had quote not yet received any meaningful cooperation, end quote, from Kyle Davies and Ju Su. Lawyers said in the U.S. Bankruptcy Court filings, advisory firm Tenio is attempting to round up and preserve the assets of the hedge fund. Lawyers for Zhu and Davies told three arrows liquidators that the two intend to cooperate. A meeting between the liquidators and attorneys is scheduled for Monday, while a court hearing is set for Tuesday. The liquidators, meanwhile, are trying to

prevent the potential dissipation of the fund's assets, Russell Crumpler of Tenello said in a sworn declaration. Quote, here that risk is heightened because a subsisting portion of the debtor's assets are comprised of cash and digital assets, such as cryptocurrencies and non-fungible tokens that are readily transferable, lawyers for the liquidator said in court papers. Three arrows which Zhu and Davies founded after trading at Credit Suisse Group succumbed to the widespread crypto sell-off last month. Insolvency proceedings kicked off in the BVI, and were followed by a so-called Chapter 15 bankruptcy filing in the U.S. The fund's downfall has rippled through the digital asset industry, helping to drive at least one crypto platform that

counted Three Arrows as a counterparty into bankruptcy already. The hedge funds liquidators traveled to three arrows' office address in Singapore in late June. In an attempt to track down the founders, according to court papers, it appeared dormant. The door was locked. Computers were inactive and mail was stuffed under the door. People working in the surrounding offices said they hadn't seen anyone enter or exit the office recently. The Liquidator spoke with lawyers for Davies and Zhu via video conference last week, according to court papers, but did not speak to the founders directly. Quote, while persons identifying themselves as Suju and Kyle were present on the Zoom call. Their video was turned off, and they were on mute at all times,

with neither of them speaking despite questions being posed to them directly, Tenneux Crempler said in his court declaration, end quote. The Federal Trade Commission says it will crack down on tech companies' illegal use and sharing of highly sensitive data and false claims about data anonymization. Quoting PCMag. Lots of websites and apps like to claim your data is anonymized in an effort to protect your privacy, but according to the FTC, many of these claims are often misleading. The FTC today warned the tech industry against using data anonymization claims when it's not true, something that could be

considered a deceptive trade practice. Companies that make false claims about anonymization can expect to hear from the FTC, says Kristen Cohen, the acting associate director for the commission's privacy division. The FTC issued the warning after President Biden signed an executive order that urges the commission to protect consumers' privacy when seeking out reproductive health services. The president did so in response to the Supreme Court overturning Roe v. Wade, which has sparked concerns state prosecutors will resort to subpoenaing people's personal data from tech companies to prosecute abortion seekers. In a blog post, the FTC says it's committed to protecting consumers' privacy, including their reproductive health information. We will vigorously enforce the

law if we uncover illegal conduct that exploits Americans' location, health, or other sensitive of data, Cohen writes. As part of that effort, the FTC takes aim at how companies market their products. According to Cohen, the tech industry will often use the data anonymization claims to lure users into believing their personal data is safe. The so-called anonymization usually involves stripping out personal identifying details from the data, such as name, phone number, and address. Companies then sometimes hand the data off to marketing firms as a way to monetize the same information. The problem is that the same anonymized or aggregated process can often still expose your personal activities, especially if the data is combined with

information from other companies, whether they be major brands or data broker firms that specialize in harvesting user information for targeted advertising. The FTC is particularly worried about companies collecting precise location information from users and then passing it off to third parties while claiming the data is anonymized. Significant research has shown that anonymized data can often be re-identified, especially in the context of location data. Cohen adds, one set of researchers demonstrated that in some instances it was possible to uniquely identify 95% of a data set of one and a half million individuals using four location points with timestamps, end quote. I guess we've grown used to the fact that all of our data is being sold anywhere and

everywhere, but will we also get a nerd to the idea that we never really own anything anymore, even hardware products? You're just basically renting anything, even something tangible, for as long as the underlying provider deigns to continue to provide you the service you paid for. Smart Home Company Hive is going to stop selling home security devices to focus instead on its more popular thermostats and smart lighting. But here's the thing. Existing devices in those discontinued categories will stop working for users starting in 20203. Quoting the Verge.

Hive, the smart home company best known for its smart thermostats, is officially getting out of the home security market. globally. In a support page posted to its website, the company says it's no longer selling its Hive View security cameras, home shield security system, and Hive leak water detection device. And soon, existing devices will cease to function. After September 1st, 2023, Hive leak will stop functioning and by August 1st, 2025, all its cameras and security systems will have joined it. The sound detection feature of its Hub 360 will disappear at the end of 2022. Hive's customers have begun receiving emails warning them of the shutdown.

The smart home company, which is part of the same family of brands as UK gas and electric supplier, British Gas, says it's discontinuing the devices to focus on products that help make homes more energy efficient. As a smart tech brand in the middle of a climate crisis, we know our focus needs to change the page reads, so we've made the tough decision to discontinue our smart security and leak detection products and develop smart home tech that gets us closer to net zero, end quote. This isn't the first time Hive has taken the decision to scale back its business. It stopped direct sales in North America at the end of 2019, and customers reported that their devices

stopped connecting to the company's app in November last year. After the shutdown, the Hive thermostat still works as a basic thermostat without app support, and the company's Zygby-compatible smart plugs and lights can be used via other smart home networks, but other products like the Home Hub and cameras were effectively bricked. The incident is an uncomfortable reminder that ownership of any device tied to a service can be bricked whenever a company's priorities change. Needless to say, you should probably steer clear of purchasing any of the impacted devices which are still being sold by third-party resellers like Amazon, end quote. Yeah, imagine telling anyone in the 20th century that you could one day buy a piece of hardware, something tangible, something you can hold in your hands and take into your home, and then it is somehow bricked down the road by the manufacturer out of your control. Today, it's smart devices, tomorrow it's refrigerators, cars, and actually, that day is already here, isn't it?

something something Tesla over the air updates. On the everything everywhere all at once front, Klarna has confirmed its down round, officially raising $800 million at a $6.7 billion valuation down from $46 billion from just June of last year, including money from new investors Mubidala and Canada Pension Plan Investment Board. I mean, there are prices low enough that they become screaming deals, I suppose. But speaking of recent high flyers, that might be in for down rounds as well,

virtual events startup hop-in, valued at $7.75 billion just back in August of last year, has laid off 242 employees or around 29% of its staff after cutting 12% of its staff in February. I believe it was Hopin that did some of the first layoffs that raised my spidey senses about all of this stuff, quoting Insider. Founded in 2019 by 28-year-old British entrepreneur Johnny Bufarot, UK-based Hoppin offers conferencing software for virtual and hybrid events with its paid plans ranging from $99 to $799 per month or higher. The firm grew quickly during the pandemic and attracted $1 billion in venture capital funding from backers on the hunt for future winners of

hybrid work. But this February, Hopin announced that it was cutting 12% of staff around 138 people citing the need for sustainable growth. The company told Insider that those impacted will receive three months of compensation and health benefits, and their one-year cliff dropped for stock vesting. The firm employs around 834 people. Hoppin faces an additional challenge in the world returning to real-world events and a possible drop-off in demand for its services. When the startup raised a big $450 million round in August last year, the startup had approximately $100 million in annual recurring revenue and around 800 employees. It also claimed to be hosting around 15,000 events a month on its platform. But currently, there are just one.

158 events listed for the month of July and 54 for August. Hopin is backed by major investors like General Catalyst, Tiger Global, Cotou, SEL, and IVP. Its young founder and CEO Bufarat switched his residency to Switzerland weeks shortly before the last set of job cuts. A paper billionaire, thanks to Hopin's multi-billion dollar valuation, he has cemented his wealth by selling $195 million of his own shares, end quote. By the way, this was true of the dot-com era too, but one ironclad tell that you're in a bubble, call it Brian's Law of Tech Bubbles number one, is when VCs actually allow founders to take hundreds of millions of dollars off the table in early stage financing rounds. Taking a million or two or three off the table, okay, that makes sense, because you

don't necessarily want your founders to have to be worrying about paying rent for the next decade as they hopefully build you a real business. But taking nine figures off the table, always, always, always a sign of a bubble. Like, that's generational wealth, people, the sort of wealth that you should only be able to make by making a successful company. With $195 million, seriously, what's the motivation for anyone to follow through and actually make that happen? Twitter and Elon check in to close out today, according to an SEC filing. Twitter's lawyers have called Elon Musk's deal termination, quote, invalid and wrongful, and say that Twitter, quote, breached none of its obligations under the agreement, quoting Bloomberg.

Twitter chairman Brett Taylor tweeted Friday that the company would pursue legal action to force Musk to complete the merger agreement. The social media company aims to file suit early this week. People familiar with the matter said on July 10th. The fight sent Twitter shares down 11% to $32.65 at Monday's close. The worst one day decline in more than 14 months. months. The buyout agreement specifies any legal dispute over the deal must be heard in Delaware. By close of business Monday, no suit had been filed by either side over the teetering transaction, end quote. Meanwhile, back on the ranch. Remember I said early on that I feared this whole brouhaha would in the end merely serve to decimate Twitter as a company. Well, according to Wired, Twitter employees say it's a

quote, shit show internally, exasperated by weak leadership and lack of support amid targeted harassment from outside the company. Quote, Twitter is a shit show internally. I can confirm that for you right now without a doubt, says one Twitter employee, speaking on condition of anonymity because they aren't authorized to talk to the media. They are far from alone in this view. There is no strong leadership at the moment, says a second current Twitter staffer, also speaking anonymously, the entire company is running on autopilot.

A third who is set to leave the company is equally exasperated, quote, I expect it is going to be a mess, they say, I'd like to see someone hold Elon's feet to the fire because I think it sets a risky precedent to allow him to meddle so much, drive down the stock, then pull out, end quote. Twitter staff have been told not to speak publicly on their own platform about the takeover and say they are being kept in the dark. For Twitter, this fiasco is a nightmare scenario and will result in an Everest-like uphill climb for Parag, Agrawal, Twitter's CEO, and company, to navigate the myriad of challenges ahead, says Dan Ives,

managing director at Wedbush Securities, a New York analyst firm. Among the challenges Twitter faces are employee turnover and low morale, issues around advertising headwinds, a loss of credibility with investors because of the yo-yoing share price, and damaging claims about fake accounts on the platform. The court case, if it does take place, is likely to drag on and be ugly, Ives says, casting, quote, a dark cloud over Twitter's head in the near term. The company's reputation has taken successive hits and Twitter faces questions about its ability to accurately report the number of bots on the platform, its monetizable user base, and its leadership. It's a weakness Musk is all too aware of and has highlighted publicly mocking

Agrawal and successive tweets that puncture long, seemingly vetted statements about Twitter's bot capabilities. But Musk himself has caused problems with his plans for the firm, particularly around free speech, says Prateek Wagri, policy director at the Internet Freedom Foundation. I think that would have created uncertainty once the acquisition went through around Musk's position on that, along with uncertainty on many other things, he says. A number of executives have already left the company in the wake of Musk launching his takeover bid, impacting countless others further down the food chain. The feeling internally is that people have been applying for jobs, and they're going to keep applying for jobs, says the first Twitter staffer. Employees say they

felt particularly aggrieved by a lack of management support when a number of staff were caught up in stings by Project Veritas, designed to catch them publicly saying negative things about their potential new boss. I joined Twitter and wanted to stay, says the first employee. I liked my job. Nothing would keep me here now, even if they returned to exactly what they were, end quote. The brain drain is likely to continue, with current employees worried about Twitter rescinding job offers to applicants and the impact that's likely to have on who applies in the future. job applicant who was offered a position at Twitter this year, only to have it rescinded during the takeover, says they would apply again to the company, but not before asking the manager they'd

end up reporting to about internal politics and plans for the future. Others aren't as sure that the reputational risks to Twitter are as great as those inside the company fear. The real worry was he would democratize it too much and allow people to say things that would be inappropriate on it, says Gary Cooper, a business professor at Manchester Business School. However, Cooper does think the investor impact could be more significant. Quote, there is a downside, I think, because Musk would have thought about it as a commercial business acquisition, as well as a platform, he says. Cooper believes Twitter's senior leadership team will have to step up to the plate in Musk's absence and introduce a new business plan to revitalize the company, end quote. All right, tested negative

for COVID yesterday for the first time, so there's that. But my Paxlevitt also ran out last night, so waiting to see if I get some sort of bounce back symptoms, which people say I might have to look forward to. Talk to you tomorrow, I hope.