Tech Brew Ride Home - Tuesday, June 26, 2016 - London's Uber-ing

Episode Date: June 26, 2018

Uber gets legal in London, a16z raises a crypto fund, Apple opts for human editors, Fortnite makes bank, and a check-in on the space race. Links:Uber wins the right to keep operating in London (TheVerge)Wi-Fi security is starting to get its biggest upgrade in over a decade (TheVerge)Fortnite is generating more revenue than any other free game ever (ReCode)Intel and the Danger of Integration (Ben Thompson/Stratechery)Steven Sinofsky Tweet Thread on the Above 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 Tuesday, June 26, 2018. I'm Brian McCullough. Today, Uber gets legal in London.

Andresen Horowitz raises a crypto fund, Apple Ops for Human Editors, Fortnite makes bank, and a check-in on the space race. Here's what you miss today in the world of tech. Good news for Uber. Late today, a UK judge granted Uber a license to operate in the city of London. a judge for the Westminster Magistrates Court, said that the company would be given a probationary license that would need to be renewed every 15 months.

Transport for London, the city's transportation authority had declined to renew Uber's license to operate in September of 2017, but Uber had continued to operate in the city in the interim while it appealed. During the new provisional period, Uber will have to continue to work to satisfy conditions that Transport for London cited in its approach. original refusal to grant a license. If Uber dots all its eyes and crosses all its teas, Transport for London said it will consider granting a regular five-year license. London reportedly has 3.5 million Uber users and is home to around 40,000 of the 50,000 Uber drivers operating

in Great Britain. So big bullet dodged for Uber. This is probably the closest they've come to being legally barred from such a major market. And as the The verge notes, in a bit of a change, Uber seemed to be stepping over backwards to make nice. Quote, yesterday in court, both sides took conciliatory steps. Transport for London said its stance had, quote, moved to one of effective neutrality, while Uber accepted that the agency's decision last September was, quote, fully justified. Uber lawyer Thomas de Lamar told the court, the onus is on us. We accept that TFL's decision.

was the right decision at the time, end quote. So the Dara Koswashahi remaking of Uber's previously aggressive posturing continues apace. We spoke extensively yesterday about benchmark and the changing environment for venture capital, which, as ever, involves a change in strategy. Well, more of that late yesterday when Andreessen Horowitz announced its first ever crypto-focused fund. The $300 million dollar fund will invest, quote, aggressively across the entire crypto space and will be a completely separate fund from A16Z's core fund, just like its biotech fund is a separate entity. And this new fund will be led by Katie Juan, making her Andriesen Horowitz's first female general partner.

Juan is a former U.S. Department of Justice federal prosecutor who launched the government's first ever task force on cryptocurrencies and also worked. on the government's Silk Road prosecution. She's also on the board of directors of that 800-pound gorilla of crypto exchanges, Coinbase, which, of course, was Andresen Horowitz's first ever investment in the crypto space. In a blog post announcing Juan's joining the firm, Ben Horowitz, wrote, quote, We first met Katie Juan when she joined the board of Coinbase, but her reputation preceded her. She had famously taken down the corrupt agents on the Silk Road Task Force as part of prosecuting

the first famous cryptocurrency-related mega-crime. I remember thinking at the time, wow, she took down federal task force agents for lining their pockets. She is definitely the real deal, end quote. Juan will be running the crypto fund with another Andreessen Horowitz partner who has long been known as a crypto enthusiast, Chris Dixon,

who also told CNBC that the recent drops across the board and the value of cryptocurrencies will not affect the new fund's investment philosophy. Quote, we've experienced ups and downs in the cryptocurrency market and expect there will be many more. There's potential in the technology and some of the downturns can be the best investments. There are wild fluctuations in the price and we see that as an opportunity. We've been unfazed and investing consistently over time, end quote. The new fund will reportedly be stage and geographically agnostic.

And Dixon said it will have an all-weather philosophy, so they'll be invest. investing whether Bitcoin crashes 70% or goes up 7X overnight. Some interesting tweet analysis from fellow VC Hunter Walk, quote, Andresen Horowitz's core, bio, and crypto as separate funds not only acknowledges different portfolio models, regulatory needs, and limited partner segmentation, but also give fund general partners an entrepreneurial feel with potential benefits of shared back office brand, etc., end quote. And of course, given the space this new fund will be operating in, you'd think Juan's regulatory background would be quite useful in terms of helping startups navigate this uncharted territory.

Juan told CNBC, quote, we want to see crypto move beyond the speculation phase and see it eventually solve real world problems for millions or even billions of people. Yesterday, Apple announced it was launching a special section inside the Apple News app that will focus on the upcoming midterm elections in the U.S. Apple said the section would feature, quote, timely, trustworthy midterm election information along with the most important reporting and analysis from a diverse set of publishers. But it also said, and I quote, the 2018 midterm election section helps readers follow the latest on the elections with breaking news, exclusive highlights, and analysis. from reliable sources selected by Apple News's team of experienced editors, end quote. And a lot of people have been reading that last bit as a not too subtle jab at Facebook. Apple said that using actual humans as editors and actively curating the news is nothing new in its news app,

since it launched with a team of editors from day one who were tasked with, discovering and spotlining well-sourced, fact-based stories to provide readers with relevant, reliable news, information." Monday night at the Fortune CEO initiative conference in San Francisco, Apple CEO Tim Cook spoke about using actual humans to decide what's newsworthy and trustworthy, saying, quote, news was kind of going a little crazy. For Apple News, we felt top stories should be selected by humans to make sure you're not picking content that strictly has the goal of enraging people.

This may seem like a really in the weeds technical story, but it's an important one. the Wi-Fi Alliance has begun certifying products that support WPA-3, the successor to the WPA-2 security protocol. WPA-or Wi-Fi-P-P-P-P-Petected access is the security standard for connecting devices to wireless. WPA-2 is built right into your home router, for example. WPA-2 has been the security standard for Wi-Fi since 2004, so this is being called the biggest update to Wi-Fi in more than a decade. You might have heard the news recently of consumer-grade routers around the world getting breached by hackers. Well, this new standard is designed to mitigate that sort of thing. Quoting from the Verge, the new protocol provides a number of additional protections for devices connected over Wi-Fi.

One big improvement makes it harder for hackers to crack your password by guessing it over and over again, and another limits what data hackers can see even once they've uncovered the passcode. Nothing will change as far as users see it. You'll still just type in your password and connect to it. to the network, end quote. Now, this is not to say that your internet connection is somehow magically now more secure. The Wi-Fi Alliance is just now certifying new devices with WPA-3 built in, so you're going to need to upgrade to a new router that supports WPA-3, or hope that your existing device is updated to support it. And you'll need new devices that support

the protocol as well. That's what the Wi-Fi Alliance is announcing, that over the coming years, they'll be overseeing the rollout of this new technology across the whole universe of devices. Basically, anything you buy in the coming years will have WPA3 baked in, and if you're in the market for a new router, you should be looking for one with WPA3 in it. But don't worry, all the devices will be backwards compatible to WPA2, so none of your gadgets will stop working. The new ones will just be slightly more secure. A couple of quick check-ins on some corners of tech we haven't spoken about in a high second. First of all, let's check in with Fortnite.

Fortnite is generating more revenue than any other free game ever. If you may or may not remember, Fortnite is given away for free on every platform you can play it on. That was one of the genius growth hacks that allowed the game to take off last year. So how does Fortnite make money? By selling an in-game currency called V-bucks, which lets players buy cosmetic upgrades, unlock rewards, and even celebratory dance moves. If you've played the game recently or even just followed a match on Twitch, you'll notice players put a lot of effort into really tricking out and personalizing their characters. So how popular has that proven?

Fortnite has now generated $1.2 billion in revenue since its launch, and it made $318 million in the month of May alone. That puts the game ahead of other free-to-play juggernauts like Clash of Clans, and revenue for a smash hit, Pokemon Go peaked at only 203 million at the height of that craze in August of 2016. And let's check in on the space race. Jeff Bezos has been promising us for years that we'd soon be able to buy tickets to go into space on his Blue Origin rockets. Well, soon has reportedly become next year, when Blue Origin will actually begin selling tickets,

according to Senior Vice President Rob Mayerson. Between now and then, the company will reportedly begin crude tests, that's C-R-E-W-E-D, of its new Shepard rockets, which would potentially be getting a one-up on SpaceX, and frankly, NASA, which has not launched a crude mission to space since retiring the space shuttle in 2011. If you do eventually score a ticket on a Blue Origin rocket, expect it to be a thrilling, violent, and essentially brief experience. You'll only go into suborbital altitudes and get about a four-minute, admittedly unbelievable gander at the globe before making your return journey. And of course, we're all familiar with Blue Origin and SpaceX and maybe even Virgin Galactic. But just today I learned about another player that I hadn't known about before. Huntington Beach-based company Rocket Lab has a rocket called the Electron that it has been developing since 2006.

Using lightweight composite materials, 3D printing, and novel electric fuel pumps, Rocket Lab aims to launch much smaller rockets into orbit to deliver a new generation of much smaller satellites. It's scheduled to have its first launch from its facility in New Zealand, Wednesday, June 27th. So either tonight or tomorrow or right now, depending on when you're listening. And going forward, Rocket Lab hopes to be launching monthly by the end of this year, ramping that up to a launch every two weeks by 2019, and eventually maybe even as often as every 72 hours. Finally, today I really should have tried to squeeze this in yesterday,

especially because people have been sharing it so much on Twitter. But if you want expert analysis of where Intel is at as it searches for a new CEO, of course, you can turn to no one better than Ben Thompson. In his latest stratakery piece, Intel and the danger of integration, linked in the show notes, of course. Ben describes a classic case of a company that remained wedded to a business model that, while it delivered fantastic success for decades, no longer works,

and Intel has stupidly, stubbornly refused to acknowledge this reality. Specifically, Thompson is referring to Intel's so-called integration model. It's a well-known story, but it's worth having been recount it, quote, Intel doubled down on an integration of its own, the design and manufacture of X86 chips. That is, Intel would invest huge sums of money into creating new and faster designs, the 386, the 486, the Pentium, etc., and also invest huge sums of money into ever smaller and more efficient manufacturing processes that would push the limits of Moore's law. This one-two punch would ensure that despite AMD's license,

Intel's chips would be the only realistic choice for PC makers, allowing the company to capture the vast majority of the profits created by the X86's integration with DOS Windows. Then, of course, came the explosion of the fabulous chip designers in Asia, chips made to the specifications of whoever ordered them. As Thompson points out, we wouldn't have chips specifically designed for cryptocurrency mining rigs, say, or things like Google's tensor processing units, if we still lived in a world where everyone just had to accept Intel's. This is our architecture, and you'll like it, way of doing business. It's hard to blame Intel, of course. They still made the best silicon in the world, and it cost them a ton in terms of manufacturing and design

and just plain infrastructure to continue to do so. It's just that over time the technology industry didn't always need the best. They just needed the best for the task at hand. And so this caused Intel to miss major shifts and major markets, not the least of which was obviously mobile. Again, quoting from Ben's piece, Instead of simply manufacturing arm chips for the iPhone, the company presumed it could win by leveraging its manufacturing

to create a more efficient X-86 chip. It was a decision that evinced too much knowledge of Intel's margins and not nearly enough reflection on the importance of the integration between DOS, Windows, and X-86. Intel took the same mistaken approach to non-general purpose processors, particularly graphics. The company's Larrabee architecture was a graphics chip based on, you guessed it, X86. It was predicated on leveraging Intel's integration instead of actually meeting the market need.

Once the project predictably failed, Intel limped along with graphics that were barely passable for general purpose displays and worthless for all of the new use cases that were emerging, end quote. Thompson concludes that Intel, especially under the now-departed Krasanich and his predecessor, Paul Otonelli, refused simply to break out of their integration mindset. And so now you have a situation where Intel, while it's committed to its aggressive, new, discrete graphics chip rollout by 2020, like I told you earlier this week, is still by definition 18 months to three years behind AMD in the only market that matters right now, today. The piece concludes with this great line, quote, What makes disruption so devastating is the fact that absent a crisis, it is almost impossible to avoid.

Managers are paid to leverage their advantages, not destroy them, to increase margins, not obliterate them, end quote. This is all basically required reading if you're interested in innovation and disruption theory. I have a link in the show notes, of course, as I said. And as a bonus, I also have a link to a lengthy and super smart tweet thread by, Steven Sinovsky that is directly in dialogue with Thompson's piece, agreeing with some points and pushing back on others. If you were looking for a quick crash course MBA, you're welcome. Check out the links. And that's all for today. I've been your host, Brian McCullough. Follow me on Twitter at Brian MCC. And as always, I've had the able assistance of the TechMeme editors.

Follow them on Twitter at TechMeme. Thanks for listening.