Tech Brew Ride Home - Wed. 01/20 – A16Z To Get Into The Media Business?

Starting point is 00:00:00 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 Techmeme right home for Wednesday, January 20th, 2021. I'm Brian McCullough. Today is Andreason Horowitz about to spin up its own media platform. Anthony Lewandowski gets a pardon and Jack Ma resurfaces. Netflix is about to start printing money and they're about to give you a shuffle play button and why Ben Thompson thinks Intel is even more in trouble than everybody thinks. Here's what you miss today in the world of tech. Is Andreson Horowitz a about to get into the media business. And by that, I don't mean invest in a company that does media, but actually become a media entity of its own. That might be too glib a way to characterize

Starting point is 00:01:18 this news, but the information is reporting that A16Z is planning to launch an opinion section on its website that will publish articles related to technology and business from outside contributors. Quote, the firm currently has two editorial roles open to helm the new efforts, It is in search of an executive editor and an opinions editor. A recent job listing by the firm for the executive editor position said the firm wants to, quote, dramatically scale our editorial operation across coverage areas and across mediums, especially video, to grow and lead a talented team of creatives, producers, talent, and marketers, end quote. Andresen Horowitz's editorial position is, quote,

Starting point is 00:01:57 unapologetically pro-tech, pro-future, pro-change, according to one job listing on the firm's site, quote, but we are also informed optimists, not freewheeling futurists making predictions without any skin in the game, end quote. Andresen Horowitz is moving in the direction of owned media, not earned media, said a person close to the firm, meaning that it wants to produce content rather than work with existing press outlets. The firm wants a, quote, more formalized vehicle to get narratives and stories out there without having to go through the press, the person said. Sonal Chokshi, a former editor at Tech Magazine Wired, who joined Andresen in 2014 as its editor-in-chief, will oversee the media expansion, which comes amid growing tensions between prominent venture capitalists and the news media.

Starting point is 00:02:43 Chokshi works for Margaret Venomachers in Andresen Horowitz's operating partner and co-founder of prominent tech public relations agency outcast, who has long overseen the depiction of both Andresen Horowitz and its portfolio companies in the media, end quote. So this is one of those times where I need to do one of those disclosures for you. The disclosure is I'm friendly with both Sonal and Market and have had many conversations with them about podcasting over the years. Plus, when my book came out, you might remember Chris Dixon interviewed me for the A16Z podcast. And of course, Andresen Horowitz has made several of their folks available for this podcast over the years. most recently, Connie Chan a few weeks ago. Let me quote from Eric Newcomer's Substack, which originally broke the news because I think it sort of sums up the angle for Andresen Horowitz here,

Starting point is 00:03:37 quote, today roughly 10% of the 200-person firm works on its marketing team. The company is expanding its editorial operation. Talk to anyone around the firm, and Chokshi's in-house media strategy is the future of the firm. One communications person remarked to me, quote, become a media company, basically, end quote. Companies and venture firms have long tried their hands at content marketing. That's what all those medium posts are for. The thing that's unique about Venomockers and Chokeshys operation is simply that they do it well and at a greater scale. Their podcasts are actually interesting. And since the media has adopted an extremely negative posture toward the tech industry, there's a big appetite for coverage with a more upbeat slant.

Starting point is 00:04:21 Andresen Horowitz can fill that market demand, end quote. well, I suppose you could debate to what degree the media truly is negative about tech, I suppose, but I also think that this tweet from TechMeme's own founder Gabe Rivera is maybe the right way to think about all this. My guess is rather than countering anti-tech reporting, this could succeed in simply promoting ideas the tech press isn't interested in or capable of conveying, which sounds potentially good to me, end quote. Once again, there is a tech angle to the political news of the day because President Trump has pardoned ex-Waimo and Uber engineer Anthony Lewandowski, quoting Engadgett. A press release from the White House noted tech billionaires Peter Thiel and Palmer Lucky were among those supporting a pardon for Lewandowski, and it makes the claim that this engineer, quote, paid a significant price for his actions and plans to devote his talents to advance the public good, end quote. It also noted that his plea covered only a single charge, omitting mention of the 33 charges he'd been indicted on.

Starting point is 00:05:34 He had been sentenced to 18 months in prison, but as TechCrunch reported at the time, was not required to report until the COVID-19 pandemic eased. A court ordered Lewandowski to pay Google $179 million to resolve a contract dispute, while his plea included $75,000 in restitution and a $95,000 fine, a settlement between Uber and Google subsidiary Waymo, handed over an equity stake worth about $245 million at the time, as well as a promise not to use the technology taken from Google. In December, Uber sold its entire self-driving unit to another company, Aurora. Last year, Anthony Lewandowski pleaded guilty to one count of stealing materials from Google, where he was an engineer for its self-driving car efforts, before leaving to found a startup that he sold to Uber. The judge said during his sentencing that his theft of documents and emails constituted the, quote, biggest trade secret crime I have ever seen, end quote.

Starting point is 00:06:29 So I do wonder how folks inside Google are feeling about this this morning. And of course, I assume this pardon would have no impact on any civil liabilities, right? Or has that already been settled as well? Over the weekend, someone I can't remember who tweeted something along the lines of, remember when Jack Ma disappeared and everyone was worried about him, but then one guy on CNBC went on TV and said, don't worry, Jack's just laying low, and then we all stopped talking about it, but Ma never actually resurfaced. So what about that? Well, Ma has officially made his first public appearance by addressing teachers on an online conference, quoting Bloomberg. Ma spoke briefly on Wednesday during an annual event he hosts to recognize

Starting point is 00:07:20 rural teachers. In one video of the event circulated online, China's most famous entrepreneur can be seen touring a primary school in his hometown of Hangzhou. Ma, who had stayed out of public views since regulators suspended the initial public offering of his FinTech company Ant Group, told the teachers he'll spend more time on philanthropy. He didn't mention his run-ins with Beijing. Ant confirmed the authenticity of the video, first posted on an online blog, but declined to comment further. Shares of Alibaba, the e-commerce giant co-founded by Ma that owns about a third of Ant, jumped 8.5% in Hong Kong, and shares were up almost the same level in pre-marked. market U.S. trading, end quote. Brave has become the first major web browser to natively support

Starting point is 00:08:08 the IPFS protocol. What is that? Well, if you're in a place where you might want to access censored content on occasion, you need to get schooled about IPFS, quoting ZDNet. Released in 2015, IPFS stands for interplanetary file system. It is a classic peer-to-peer protocol similar to BitTorrent and designed to work as a decentralized storage system. IPFS allows users to host content distributed across hundreds or thousands of systems, which can be public IPFS gateways or private IPFS nodes. Users who want to access any of this content must enter a URL in the form of IPFS. Under normal circumstances, users would download this content from the nearest nodes or gateways

Starting point is 00:08:53 rather than a central server. However, this only works if users have installed an IPFS desktop app, or browser extension. Brave says that with version 1.19, users will be able to access URLs that start with IPFS colon forward slash forward slash directly from the browser with no extension needed and that Brave will natively support IPFS links going forward. Since some major websites like Wikipedia have IPFS versions, users in oppressive countries can now use Braves' new IPFS support to go around national firewalls and access content that may be blocked inside their country for political reasons and is available via IPFS. In addition, Brave also says that its users can also install their own

Starting point is 00:09:39 IPFS node with one click with version 1.19 and help contribute to hosting some of the content they download to view, end quote. So you might remember when I decided to abandon ship on Chrome last year and you all convinced me to give Brave a try. A year on, I continue to be thrilled with that decision, all the goodness of Chrome without all the badness, and now all this added goodness as well. God, it sneaks up on me every quarter, but tech earnings season is kicking off once again, as always led by Netflix, which last night reported Q4 revenue up 21 and a half percent year over year, and global streaming paid memberships that surpass 200 million for the first time. All of this sent the stock up over 12%.

Starting point is 00:10:31 Netflix first passed 100 million subscribers back in 2017, but maybe the real news was this, quoting CNBC. Netflix reported earnings for the fourth quarter of 2020 after the bell on Tuesday, announcing it is, quote, very close to being free cash flow positive and is considering stock buybacks. This year, it expects to be around break-even on cash flow. Netflix's expectation of soon becoming free cash flow positive would bring to life the bull case for the stock. Netflix said it would no longer need to raise external financing for daily operations and would even explore returning cash to shareholders. The company said it intends to pay down more of its debt as well.

Starting point is 00:11:13 It's raised $15 billion in debt since 2011 and currently has $8.2 billion in cash on. hand, end quote. So what we're talking about here is the financial flywheel that folks like Matthew Ball have always predicted would kick in at some point for Netflix is kicking into gear exactly as predicted and exactly when predicted too. So good news for Netflix. Come for that. Netflix is about to really begin printing money news, but stay for news you can use like this. Netflix says it's shuffle play feature, which lets Netflix's algorithm choose, what you'll watch next. We'll be rolling out globally to all users in the first half of this year. Quoting TechCrunch. Shuffle play puts a big button right on the Netflix home screen beneath your

Starting point is 00:12:01 profile icon. When clicked, Netflix randomly plays content its personalization algorithms thinks you'll like. This could include a movie you're currently watching, something you've saved to your watch list, or a title that's similar to something you've already watched, for example. A variation has also been spotted in the TV app's side. navigation. More recently, we found this sidebar option relabeled as shuffle play instead of play something as before. In addition, as you'll start scrolling down through the Netflix home screen on the TV, you'll eventually come across a screen that explains what the option is and points to the new button with a red arrow. Not sure what to watch, this page asks before explaining how shuffle play

Starting point is 00:12:42 works. The button has already appeared on some users' Netflix app for TV devices due to the ongoing tests. Netflix tells us the feature is still being tested only on TV devices, not other platforms like web or mobile. It declined to say how many users or what percentage had been opted into the test to date, end quote. And finally today, again, we've only obliquely mentioned the trouble Intel seems to be in. We haven't really had the chance to dig deeper. So in eight of that, I point you to yesterday's newsletter from none other than Ben Thompson at Stratereckery. Ben says that Intel is actually in more danger than its profits and bounce sheet suggests at the moment. He says Intel should immediately spin off its manufacturing business unless the U.S. could somehow subsidize it in the interest of having a strong national semiconductor industry.

Starting point is 00:13:39 Quote, in short, Intel is losing share in PCs even as it is threatened by AMD for X86 servers in the data center. and even as cloud companies like Amazon integrated backwards into the processor. I haven't even touched on the increase in other specialized data center operations like GPU-based applications for machine learning, which are designed by companies like Nvidia and manufactured by Samsung. What makes this situation so dangerous for Intel is the volume issue I noted above. The company already missed mobile, and while server chips provided the growth the company needed to invest in manufacturing over the last decade, the company can't afford to lose volume,

Starting point is 00:14:18 at the very moment it needs to invest more than ever. Intel needs to be split in two. Yes, integrating design and manufacturing was the foundation of Intel's moat for decades, but that integration has become a straightjacket for both sides of the business. Intel's designs are held back by the company's struggles in manufacturing while its manufacturing has an incentive problem. The only way to fix this incentive problem is to spin off Intel's manufacturing business. Yes, it will take time to build out the customer service components necessary to work with third parties, not to mention the huge library of IP building blocks that make working with a company like TSM relatively easy, but a standalone manufacturing business will have the most powerful incentive possible to make

Starting point is 00:15:03 this transformation happen, the need to survive. This also opens the door for the U.S. to start pumping money into the sector. Right now, it makes no sense for the U.S. to subsidize Intel. the company doesn't actually build what the U.S. needs, and the company clearly has culture and management issues that won't be fixed with money for nothing. That is why a federal subsidy program should operate as a purchase guarantee. The U.S. will buy A amount of U.S. produced five nanometer processors for B price, C amount of U.S. produced three nanometer processors for D price, E amount of U.S. produced two nanometer processors for F price, etc. This will not only give the new Intel manufacturing spinoff something to strive for, but also incentivize other companies to invest.

Starting point is 00:15:49 Perhaps global foundries will get back in the game, or TSM will build more fabs in the U.S. And in a world of nearly free capital, perhaps there will finally be a startup willing to take the leap, end quote. I would also point you to a tweet thread involving John Masters and others, which is the final link in the show notes today that includes this summation by at cynical security. As I've been saying over and over again, Intel suffers from PTSD, which has been piling up over several failed processors and causes. In effect, internal panic towards any decision which deviates from X86, which is the only processor which ever made them money, end quote. Nothing really for you today, so I'll just talk to you tomorrow.

Tech Brew Ride Home - Wed. 01/20 – A16Z To Get Into The Media Business?

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