Stealing Signs: Issue 10
FB Messenger, Women in MLB, Superhuman, Knowledge Accessibility, & SpongeBob
Worth Reading
FB Messenger Ecosystem
Mark Zuckerberg, Facebook
“…if we only support the same kinds of advertiser value propositions we do in News Feed, this will never be as big of a business for us as we hope. Instead, I think we will need to do the hard work to make payments and offers work frictionlessly inline. This can create much higher value impressions (more similar to search) that take advantage of the intimate and interruptive nature of the environment. For example, a business will be able to message people with specific offers when people are nearby and people will be able to redeem them inline, include paying right there.”
An incredibly impressive and prescient memo from Zuck on the dynamics of FB Messenger. It’s a treasure trove. I think the monetization approach was spot on and he clearly understood the importance of payments — it’s an issue Instagram still grapples with today as they try to implement e-commerce features.
I especially enjoyed Zuck’s note on geo-targeting, or location-based ads. We’ve seen a few companies in the past 2 weeks in this space at Founder Equity and I’m very interested in it. After a bit of research, it’s surprising to me that location-based ads are still relatively rare. I’m bullish on the space, especially as UI/UX problems are solved and technology advances to enable more accurate targeting — seems like a logical approach to advertisement. I’d imagine they’d have the highest conversion of any ad unit.
Related to this topic, Ben Thompson evaluates candidates for the next big paradigm shift after “mobile” in this stage of tech on the latest episode of Exponent (his podcast) and the last week’s worth of Stratechery articles. He suggests “mobile” may be the last big shift (RIP the AR/VR future). I’d agree and think many in tech/VC would agree, too — it’s part of why I find it curious that location-based ads are relatively rare. It’s clear that mobile is the best platform for them imo — where are they?
2020 Startup Themes
Daniel Gross, Founder of Pioneer.app & Angel Investor
“‘Enterprise search’” is shaping up to be in 2020 what RPA was in 2019… They’re all attempting to build the same thing: a search/feed/discovery product that helps you find things amongst Slack, Gmail and Salesforce clouds.
I’ve yet to see anyone properly tackle the more rudimentary, “boring” and lucrative approach: an on-prem search appliance, similar to GSE, that indexes internal intranet, wikis as well as email.”
Daniel nails it in this piece with 11 themes I agree will be central to the 2020 startup world and why. I particularly like #3: The New Meme: Enterprise Search. Many enterprises struggle simply to index internal information across their suite of proprietary and 3rd party tools, much less dynamically search for it. I think this problem will continue to grow for a couple of reasons: 1. emergence of startup, niche collaboration tools increase the number of systems housing enterprise information, 2. remote work dynamics exacerbate this system fragmentation problem. It’s also important to consider whether this problem is “worth solving.” In other words, is current state so inefficient that an enterprise search tool can be adopted? I think so. We experience this problem at Digital Intent and Founder Equity, and we have well-organized Google Drive structure and only ~50 employees. Our client experience also suggests is a major pain point. Still not sure if the market is ready for an enterprise search tool, though.
Also intrigued by Daniel’s take on privacy at #5: The Privacy Headfake. I hadn't thought of personal data privacy as “a bug rather than a feature” before. Need to think on this a bit more, but I like it. Lastly, #9: Developer Tools is a theme I’ve been keen on for the past 6 months. We’re seeing some cool products in this space.
As We May Think
Vannevar Bush, Director of the Office of Scientific R&D under FDR
“Presumably man's spirit should be elevated if he can better review his shady past and analyze more completely and objectively his present problems. He has built a civilization so complex that he needs to mechanize his records more fully if he is to push his experiment to its logical conclusion and not merely become bogged down part way there by overtaxing his limited memory. His excursions may be more enjoyable if he can reacquire the privilege of forgetting the manifold things he does not need to have immediately at hand, with some assurance that he can find them again if they prove important.”
A legendary piece from Vannevar Bush in which he proposes technology, solutions, and strategies to make knowledge more accessible. He accurately predicted many technologies that would be developed in the future, largely centered around knowledge storage, management, and sharing. I think my favorite part of the piece is how clearly he articulates his vision — it’s unbelievably crisp. He manages to describe technologies not yet invented as if he was analyzing a system that’s been around for one hundred years.
His concept of a collective memory machine, a ‘memex’, ties in well with one of the 2020 Startup Themes from Daniel Gross above — enterprise search. It’s interesting that information indexing, search, and connection remains unsolved for the enterprise — arguably the domain that would make the best use of these functions. It’s not quite solved for the individual, but were much closer to a solution here than in the enterprise, with tools like Pocket, Google Drive, Notion, and Google Scholar. It’s also interesting that Vannevar’s first example of a ‘memex’ is an individual use case. Despite the minimal technology leveraged throughout enterprises at this time, imo an enterprise ‘memex’ is a very logical use case. He eventually describes what this might look like, but he first outlines what it would look like for an individual, which I think is important to call out.
Spotify’s Moats, Management, and Unit Economics
Travis Wiedower, Wiedower Capital
“Spotify should benefit from numerous network effects. There is more of a social element to Spotify than many other music services. My girlfriend and I are able to easily share music with each other and collaborate on playlists. While not as strong as the network effects that Facebook or eBay have benefited from, this does create a direct flywheel among users wanting their friends to be on Spotify.”
Great breakdown of Spotify’s business dynamics — I think Travis nails it. That said, I would have gone deeper into the social elements of the product. As Travis calls out at the end, retention is the single biggest business lever (vs. avg. revenue/user). Podcast creation and discovery certainly will help Spotify retain more users over time, but I think personal and social network effects can be even more powerful — just ask Facebook, LinkedIn, TikTok. I think Spotify recognizes this and, over time, they’ll focus more on social features than podcasting. For example, there was recent news of a social feature in development called Tastebuds (discovered by Jane Manchung Wong) , which will let users discover and listen to their friends’ favorite music. Currently, user interaction is restricted to playlists — it requires users to take action (I have a hard time even starting playlists for myself) and gives only a mild feeling of collaboration with others. Tastebuds would significantly alter the way users interact with each other and discover music, and it appears to be the first step in building a digital community/social graph within Spotify (see: Fortnite, Roblox). I’m excited.
We got a glimpse of Tastebuds (whether intentional or not) when Spotify enabled SSO with Facebook and users could see what song their FB friends were listening to in real-time, but that was a single song — no incentive (or ability) to interact. I love the idea of a Spotify social graph — features like social discovery, a public history of my recent listens, maybe even info about concert’s I’m attending. After all, premium users spent ~80 minutes in the product per day in 2018 (myself included). Social interaction is very likely to increase that number and users’ perceived value of product, all which drive retention.
Superhuman & the Productivity Meta-Layer
Julian Lehr, Stripe
“Snoozing emails and Inbox Zero are now standard features in most email apps. I’ve always wondered why no one ever developed the idea further: Why stop at snoozing emails? Why not add other actions to your email inbox?”
Julian concisely makes the case for email as a task manager. Absolutely brilliant — I would love to see email progress down this path. The first thing that came to mind for me was other people’s response if I were to go from email directly to calendar invite without responding. It’s much simpler, but emails as tasks likely require a shift of social norms.
Julian notes that the problem with the UI/UX features that have been tried previously are challenging to work with because the user is limited to a handful of actions (swipe right/left, long/short swipe). I actually think this is an interesting constraint and that I'd be fine with 5 actions: 1. accept meeting and add to calendar, 2. decline meeting and propose a different time, 3. delete email 4. add article/video/media to pocket, and 5. add document/media to Google Drive.
<stuff> Weekly!
LOL Weekly - The SpongeBob Nascar Shirt
lololol. Larry Walker got elected in the Baseball Hall of Fame on Tuesday in his final year on the ballot and what was he wearing? A SpongeBob Nascar-style shirt. Should put that thing in the HOF along with him. Unbelievably awesome.
Funding Weekly - Leap Energy
“a cloud-based platform that collects reams of pricing data from California grid operator CAISO and analyzes it to discover the value of reducing electricity consumption for demand response or price-arbitrage opportunities… It sets up “bidding curves” that will automatically trigger these devices to turn off and on in response, tracks the load reductions that result, and measures and verifies them for participation in CAISO programs.”
I’m fairly certain the way energy is distributed and the way we consume it will change significantly over the next 10-20 years. From advancements in battery technology, micro-grids, and the emergence of household and device-level energy management, I think we’re in for a change. The recent California fires and PG&E electric grid mismanagement allegations mainstreamed the pain points in the energy industry and highlighted the gap in the current market, which I think solutions like Leap will begin to fill rapidly.
Baseball Weekly - First Woman on MLB Coaching Staff
Alex Pavlovic, NBC Sports
“The [San Francisco Giants] announced that Mark Hallberg and Alyssa Nakken are joining Kapler's staff as Major League Assistant Coaches, giving the Giants 13 coaches in all, including Nakken, who is the first woman to hold a coaching position on a big-league staff.”
This is awesome and long, long overdue. The article notes that Nakken will be responsible in part for “[building] a winning culture in the clubhouse.” This is fascinating imo — the first woman on an MLB staff and is responsible for helping the (male) players build chemistry. I absolutely love it and think it makes a ton of sense, but it’s literally the last thing I’d guess an MLB team would task the first woman on their staff with. I’m very excited to see how this plays out — more her influence on team chemistry than the actual hire itself. I’m sure she’ll do well, more interested in her impact on team chemistry and if this is enough momentum for other teams to follow suit and hire women.
Art Weekly - Inconvergent
Anders Hoff
“Inconvergent is a generative art project by Anders Hoff. The project explores the interesting—and complex—behaviour you can get from systems consisting of simple rules. The project also explores how to use algorithms to create aesthetic compositions, structures and textures.”
