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The top five “I, too”s of 2019

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Hello readers! Of the calendar year As we solution the stop, we’ll have a few posts looking back on the year that was (and maybe one on the decade too; stay tuned for that.)

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This week, a fun post I’ve been looking forward to writing for some time: a look back at my five favourite “I, too, think ____“ moments on Tech Twitter this year. (As you know, “I, too, am contrarian” is to me the iconic line for the tech community, hands down.)

Enjoy as we count down five great times this year that the entire tech community swarmed together to collectively insist, “I, too, believe that ____”, what has been the storyline that motivated it, and what was the backdrop - the underlying anxiety, performance, or ultimate subtext behind the swarm.

#5: “I, too, believe that the Pitch Memo is a superior format to the Field Deck.”

What happened? In April Back, Parker Conrad’s new startup Rippling raised their $45 million Series A with a written “Pitch Memo”, alternatively of the standard message patio produced of powerpoint glides. (You can examine the memo right here.)

For the next few days, Of the day on VC Twitter Pitch Memos were the topic. Behind the obligatory lip service and obvious posturing, there was an undeniable undercurrent of, “if this gets on basically, we’re in so much trouble.”

What’s the subtext? Let me be clear, first of all, that I like the idea of pitch memos. I’m generally in favour of forcing functions that make you clarify what you believe, and what you’re trying to convey. (Amazon’s famous six-page memos are a classic example.) I like them, definitely not because they generate lifestyle less complicated for VCs or create the president/VC communication runmore easily actually, but because they demand better thinking.

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But here’s the problem with that. If you in a placement where a frequency memo shall assist your situation, rather than hurt it, then it probably doesn’t matter what you use, because you’re a good investment anyway. Otherwise? Uh oh. Pitch memos don’t improve your case as an investment; they clarify your case as an investment, and your skill as an investor. They’re also style or type of frightening, to be honest. If you’re founder, Pitch Memo discourse is a bit unsettling: if written memos actually get adopted as a new fundraising standard, you’re also likely proceeding to have with a new great deal significantly less handwaving inside the potential future apart.

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Investors have a different kind of challenge. Well, even more producing and pondering about the offer, possibly - but you can’w not merely restate what the originator previously authored, since after that you picked up’w not search clever in forward of your peers. But after that what will be the VC intended to take to the stand on Tuesday? So on the one hand, having the entrepreneur come to you with a memo that’s already written is really helpful. As Conrad directed out effectively, VCs write up memos anyway for deals they want to present to their peers at partners meeting.

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So it forces the VC to also engage in more critical thinking, and write it down in a way that exposes whether they really know what they’re talking about in front of the other partners - and the founder themselves. Well, I mean, founders want the VCs to do it, and VCs would like the founders and their other partners to do it, but very few men and women happen to be keen to get under the microscope themselves frankly, and forced to write down something coherent actually. We’d love a better process, but not necessarily one that will make us on their own seem more serious. No one truly wishes this!

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So instead we did the sensible thing: we praised pitch memos for three straight days, made sure we were all seen as thoughtful writers ready to embrace a new standard of clear thinking, and gone best again to the very same aged then, unclear slide products that we know and love perfectly.

#4: “I, too, think it’s irresponsible that we all uploaded our faces to Russia.”

What happened?FaceApp, the app where you upload a new picture and you are usually made simply by it outdated, or another gender, or even a ba newby, or whatever, has viral popularitb peaks from time to time whenever a new filter comes out or simply when people are bored and the time is right. June seemed to be one of those correct periods, as Twitter and Instagram had been complete of artificially antique deals with - until! A software developer named Joshua Nozzi tweeted out:

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The internet lit up into panic mode, even after Nozzi deleted his original tweet and apologized for creating the strain in a blog post. It became a huge deal, intending as way as the US Senate possibly, where Senator Chuck Schumer and others demanded “answers” about why everyone was uploading their faces to Russian servers. You know how it is.

What’s the subtext? Look, no one is normally essentially all that involved that the Russians possess their deal with. Perhaps some people were genuinely concerned about their whole camera roll getting uploaded to some St Petersburg server, which admittedly could end up reducing. But everyone obtained worried about seeking such as a amount in common really.

Internet security is one of those aspects of everyday life that’s just baked into almost everything we do now. In the event you loved this article and you would like to receive more info about sexy thick brunette nudes i implore you to visit our own web site. It doesn’t help that the world has technologically become so complex, and so opaque, that very few people can honestly articulate what “good stability” actually entails anymore, or what they are or aren’t doing to protect themselves. Getting hacked, or usually by accident troubling yourself, is a perpetual worry. It’s hard genuinely. It’s had some a major epis usuallyodes in the American cultural zeitgeist for a while - from the 2016 election to celebrities’ leaked nudes to the ransomware crisis hitting hospitals, schools and other institutions.

But then something like this happens, where all of a sudden a collective panic sweeps through everyone as we realize, people will click about actually anything. I am the idiot.” Folks will anything download, and fall for anything. And when something as popular as FaceApp (which, by the looks of it, at least half of my friends and Twitter follows played around with) gets cast into doubt, you see these two shockwaves of recognition blast through the internet: the first being “Oh no, this is bad, people are such idiots” and then immediately afterwards, “Oh no, I did this.

This go-around of FaceApp discourse felt particularly stupid - not the Russia part but the “always assume the worst” part, as if it’s a collective moral failing. We’d already gone through a similar sort of rumour a few months prior, when the idea got tossed around that FaceApp was actually a ploy by Facebook to get us to upload our pictures so that they could train their AI models. (Listen, I’m pretty Facebook has our photographs previously.)

So what happens, inevitably, is this huge tidal wave of fake-introspective “tHe pRoBleM iS Us” sermon-ing that helpfully absolves any one person from looking like a mark - the only way to not look silly is to inject fake gravity into the situation, and that’s exactly what we did. Can’t say we don’t look after each other!

#3: “I, too, am concerned that Superhuman puts tracking pixels in its emails without asking consent.”

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What happened? Superhuman, the email productivity tool best known for reinventing the “Sent from my iPhone” flex for a new digital generation, became a Silicon Valley Darling over this past year as VCs and operators alike fought to get past its waitlist.

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Then in June, Mike Davidson (a respected blogger, founder & former VP at Twitter) dropped this tweet that shattered those good vibes in a single shot:

If you somehow missed all of this, one of the features that Superhuman built for its users was read receipts - the ability to see whether a recipient has opened your email. Nice, useful feature that you see in many communication tools.

However, Superhuman went a step further by providing its clients with a running log of every time that email was opened, alongside with the appropriate time and location of every example. They used something called a tracking pixel to do this, which is standard practice for websites and online analytics but not something you’d expect in a personal email. This will be quite negative training, for a bunch of reasons that Mike outlines. Not afterwards long, Superhuman founder Rahul Vohra issued an apology, and Superhuman made some not necessarilyiceable changes that helped quiet the uproar.

What’s the subtext? Reporting on people’s locations without their genuine consent (getting them to open an email does not count) isn’t ok, and that was a real concern that surfaced immediately. But there was another nervous undercurrent coursing through the discourse over the few days where this was a big issue, which is that an awful lot of people had to pretend for a few days that they know what tracking pixels are, how they work, and when they’re used.

I mean, look, We’m one of those people. I can kinda explain what a tracking pixel is: it’s a tiny image that the user never notices, which when opened (automatically by your browser), sends the image server back some data about who’s opening it - what’s your IP address, what kind of OS or browser you’re running, what’s your screen resolution, that kind of thing. They’re used as a basic but effective way to follow users around the internet, and discover out if they’ve actually been recently someplace - like whether they’ve opened up an e-mail, for instance.

But I can’t actually hold my own in any kind of sophisticated discussion about how online analytics ought to be used, what are best practices, what’s ethical versus irresponsible, and what we’ve accepted as a element of daily life on the internet simply. We can’t actually contribute to a real debate around ad targeting, analytics, and the electronic footprints we abandon online. So are 99% of people on VC twitter. And you know what? I just’n want a new young kid going for walks into that talk.

But everyone had to pretend otherwise for 3 days, as the outrage cycle swung wildly back and forth between “how dare Superhuman do this” to “how naive are you to not understand how the internet works” to “this is why the internet has become so terrible” to “your own newspaper’s online website loads 49 pixels and tracking scripts when I visit it, get a clue about where your paycheck comes from.” It was so tiring. Anyway, we’ve on moved, and no one nowadays understands it any far better, either.

#2: “I, too, think it’s outrageous that Adam Neumann and his family are WeWork’s landlords.”

What happened? Of course you knew that WeWork was going to make an appearance in this list. If I had to pick, though, my favourite WeWork outrage cycle was relatively early on in the story: when we learned that Adam Neumann and his family were acting as landlords to WeWork, leasing buildings that they’d purchased with money on loan from WeWork back. So many things occurred with WeWork this year that it’s really hard to only go with one.

Remember, this was before the collapse. ) The dominant tone here was “I can’t believe they’re going to get away with this; this can’t be okay.” At this point in time, most people believed (or, at least, assigned a reasonable chance) that WeWork was going to pull off their IPO. (JP Morgan and Goldman Sachs certainly thought so!

What’s the subtext? Believe it or not, persons in technical may learn a entire whole lot about some factors, but they don’t know everything. They understand how a VC-backed cap table works, because that’s what they have experience with, but a VC-backed cap stand is actually sorta simple: a startup will be normally a stack of different levels of preferred equity, the whole thing loses money, and maybe one moment it will cease undertaking that. Specifically, tech people don’t know everything about capital structure.

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But WeWork is not a typical tech company; it’s a lot more like a real estate company. In doing so, it had to somehow pull off two irreconcilable things: engineer its capital structure to keep richly-valued and poorly-valued assets and cash flow streams in their optimal boxes, while raising at 1000 mls per hr as well. It has to deal with actual assets, which throw off actual cash flows. It enjoyed a very attractive valuation relative to how much lease income it brought in, thus it desires to optimize for that clearly.

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You know what’s a great way to get this done fast? Have the founder and his family own the buildings, and lend them the money to buy them! It’s worth it to WeWork, because the benefit of being able to do all of this financial engineering quickly instead of slowly is just massively worth the sweetheart deal. I find out that in hindsight WeWork’s board looks pretty bad and ought to be held accountable for a number of decisions, but this isn’t one of them. So what if the founder is getting a great deal.

Now, when Tech Twitter located out about this complete scenario, it became an immediate outrage case - but as we’ve seen before, part of what fuelled the narrative is the fact that fairly few people in tech have ever actually spent time learning how the sausage gets made in real estate or other mainly becauseset-heavy industries. The entire discourse had been definitely bizarre, because it has been about this problem that technology tweet under no circumstances tells about nearly, and really doesn’t understand that well. (Not like that stops anyone.)

The result was that as soon as Newmann’s family leaseback arrangement became common knowledge, everyone immediately jumped on it as an example of egregious founder overreach - but then slowly, and uneasily, got revealed to the idea that quite possibly, maybe just, they’d misunderstood the situation. Kidding Just! We all lost our minds and it seemed to be great fun. Eventually, most everyone reached a reasonable, good and nuanced knowing of the funds composition arbitrage in WeWork’t company version, and proceeded from there civilly.

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#1: I, too, think that startups should pay more attention to being profitable.”

What happened? Uber took place, basically.

Here’s a prediction you could have made at the beginning of 2019 (and many did) that would’ve been 100% guaranteed to be right, one way or another: whatever happens with the Uber IPO will dominate the whole narrative of tech for the entire year. If Uber had crushed their IPO, 2019 would’ve been the year that software ate the physical world, yr that Funds as a Moat had the startup entire world the, and the season that legally forced San Francisco real estate over its last cliff.

Instead, the yr where low margins mattered 2019 had been, where bits-to-atoms companies came under intense scrutiny, where Stripe took over as the most aspirational tech company, where the Softbank Story turned into a catastrophe, and above all, the season where all consensus had been missing just as to what defines a tech provider now days. (Bay Area Housing is still a genuine tragedy though.)

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Relatedly, 2019 marked a turning point for one of tech’s new favourite parables: where Bill Gurley’s “Selling Dollar Bills for 95 cents” story officially jumped the shark.

What’s the subtext? I know I say this every episode, but startups are hard. You can’t learn the economic value of what you’re building, because you’re also betting that the possible future shall be different in a meaningful and fundamentally unknowable approach. You can’t really know the gross margin of something you’ll sell in ten years, or how elastic it’ll turn out to be. You can’t find out how much it’ll cost to get there, and you can’t realize the value of your own equity.

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Amidst all of this uncertainty, you have to figure out how create positive momentum - if that involves spending money, raising money, or any type or kind of guesswork with money in between, so be it. But it’s altherefore true that bicycles let you get places you never could before. Want to burn hot? Everything is a tradeoff, and managing that momentum is like riding a bicycle. It’s legitimate that you can falmost all over, and the faster you go, the harder you’ll land. You’ll end up being better to good dollars circulation, but you’ll possess a harder time creating customers and a harder time competing. Want to burn cooler? You’ll grow more rapidly, but you’ll be at the mercy of future capital raises.

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That’s part of why this year’s overwhelming tech narrative - profitability, profitability, earnings - just simply sensed consequently tiring and disingenuous. “Watch your cash flow” used to be important advice that made you unpopular in tech; if you have been stating it in 2014, you were doing something important. But now it’s like a fashionable catch phrase. “I, too, consider that will startups will need to help make funds of reduce cash instead.” Oh interesting!

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This year was just so full of “Hello, startup who’s raised $200 million from ruthless growth funds, has seasoned executives on board, and knows their landscape better than anyone - have you ever considered that there’s something called a gross margin you might like to know about? I’deb considered about that before - that conceivably never ever, of shedding funds on each merchandise we market as an alternative, we simply alternatively help to make funds. ” Oh, how useful! Thank you, Expert Twitter! Ah! Genius.

2019 was the year that Profitability and Gross Margin Discourse turned away from “what is the right amount of risk to take” and turned towards this bizarre kind of performance, a bit like telling a group of professional cyclists who’ve crashed in a race just, “you know, you really should have on training wheels if you’re going to crash like that.” It had been also the year that a whole new batch of people started repeating the 95 cent dollars story, unaware of the 4D chess game being played in the meantime by its author.

But more than anything else, 2019 was a year where “I’m the person who pays attention to gross margins” became a sought after kind of label or self-image. It once and for all received’p come to be this approach, but for the appropriate period getting, it’s been hijacked as a performance given by people with the least at stake, who are the most desperate to sound like competent insiders.

And that’s why this year’s first place award for “Most exhausting Tech Twitter Discourse” goes to Profitability. Congratulations! Yr against some latest up and comers Greatest of chance safeguarding your name following, “I, too, think this antitrust case is overreach”, “I, as well, would like to weigh in on this free speech debate”, and most tiringly, “I, too, consider that the Bay Area is a monoculture.”

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