Andy, Author at Assert Digital Ventures

An Algorithm That Grants Freedom, or Takes It Away

February 9, 2020February 9, 2020
by Andy

This NYT article on how algorithms are being used for various predictions in the justice system is insightful but hardly surprising.

In Philadelphia, an algorithm created by a professor at the University of Pennsylvania has helped dictate the experience of probationers for at least five years. The algorithm is one of many making decisions about people’s lives in the United States and Europe. Local authorities use so-called predictive algorithms to set police patrols, prison sentences and probation rules. In the Netherlands, an algorithm flagged welfare fraud risks. A British city rates which teenagers are most likely to become criminals.
https://www.nytimes.com/2020/02/06/technology/predictive-algorithms-crime.html

The problem here isn’t that algorithms are being used in these ways. In fact, its likely better to remove the frailties and individual biases at play often in these life changing decisions. However, there are two interelated issues here:

Lack of transparency breeds conspiracy. Its easy to claim that a heartless algorithm is wrong in making these major decisions but the bigger issue is that we don’t know how, by whom and with what training data they were developed.
Biases will be built in. We like to think algorithms don’t have biases but they were trained on human data. Humans have biases. There are systematic ways to work those out of machine learning algorithms but that’s a non-trivial effort. Per #1, unless we have transparency, we cannot make these better.

Governments should open these up (with proper privacy protections) to researchers who can discover and fix the biases. Only then will we trust them.

Entrepreneur fetishization has broken venture

February 4, 2020February 9, 2020
by Andy

VC is broken. I’m not the first to say that but just more evidence from some recent articles:

“Sometimes investors are a little too serious about monetizing something immediately,” Ms. Singareddy said. “With MSCHF, there’s faith that it’ll pay off. There’s an inherent virality and absurdness to all the projects that they’ve created, and it’s something people want to share and ask questions about.”
https://www.nytimes.com/2020/01/30/style/millennial-entrepreneur-startups.html

That’s her quote about MSCHF, an “agency” of sorts in Brooklyn where they attempt to come up with viral products like “Jesus Shoes” which have water from the River Jordan in Air Jordans. Sure, that sounds like another prank viral hit by an innovative marketer building a reputation. However, that’s apparently not the goal of MSCHF. They’re a product company who doesn’t produce scalable products nor care about profits. A non-profit art gallery?

Investors defending the lack of monetization too early has shown how warped this has become. VC used to be about funding fundamental science and technology that had a huge potential impact, a long runway and a lot of risk. Unfortunately, the successes were fetishized far too much and the 99.9999% of failures are now lauded in Silicon Valley simply as learning.

With almost 40% of VC dollars now going toward digital marketing, we’ve crossed a precipice where business fundamentals like profitability and margins no longer matter. VC cash is revenue. Fail this one and start up your next supposedly wiser.

Certainly, the supply-demand imbalance with capital seeking alpha greater than market returns has fueled some of this. However, investing is psychological and emotional with a herd mentality. This just drives fund sizes and startup valuations up. Funds can only have returns with out-sized “unicorn” exits. Thus, VC kills a lot of nice small to mid-sized businesses by putting them on the rocket to stardom where almost all fail. All businesses have natural ceilings but not in VC land. Forget fundamentals, we want growth. A VC doesn’t make a $500m fund on a $25m exit. They need billion dollar companies and will starve all, including viable businesses, who do not fit that. Its broken…but there is another way and new opportunities that have arisen from this.

Decision Making

New mathematical model shows how diversity speeds consensus

January 29, 2020
by Andy

I’m glad there is now a mathematical model to demonstrate this. Here’s the qualitative side that I’ve observed (and sought) in my collaborators over the years: diversity of thought and experience breeds confidence in decision making.

Let me further that. When you are encountering a complex, type 1 decision with partial or imperfect information you seek perspective. Getting additional perspectives from people with backgrounds similar to yours might give you confidence in your own experience and its relevance but not that you have closer to perfect information on the decision. By seeking and synthesizing diverse views you gain (or lose) confidence in your position which is critical in these situations. And by diverse, I don’t just mean different or contrarian. It’s actually as, if not more, important to consider the diversity of the person than their view. Some decision making processes specifically advise contra-examples or “pre-mortems” which is fine but it can overly influence your perspective given its contrasting nature. What I seek are people with experience and backgrounds dissimilar to mine. Sometimes they are contra to my position and that’s informative. Sometimes they’re close and that helps bring confidence to my perspective.

Scientific literature abounds with examples of ways in which member diversity can benefit a group — whether spider colonies’ ability to forage or an industrial company’s financial performance. Now, a newly published mathematical framework substantiates the seemingly counterintuitive observations made by prior scholars: Interaction among dissimilar individuals can speed consensus.
https://engineering.nyu.edu/news/new-mathematical-model-shows-how-diversity-speeds-consensus

Organization

How should Product Managers ask for a raise or…

January 28, 2020February 13, 2020
by Andy

I get asked about compensation for product managers given their experience quite often by my students and, obviously, by those working for me. Here’s the best advice I can provide based on many conversations on the topic (including my own situations past). Note that much of this is generic to any knowledge worker position so I’ve added a few specific product manager salary tips as well.

Let’s separate the discussion between asking for a raise vs. a promotion. They are linked but not the same thing and the manager will have different considerations and elements under their control based on your ask.

Why are you asking for a raise?

Its always important for you to understand why you want a raise and be honest with yourself as to whether its the right driver:

You feel underpaid relative to your peers/market. (can be a good reason)
You are not able to pay your bills. (good reason)
You just got offered a similar job at a higher wage. (can be a good reason)
You saw some job listings that sound like you can get which are higher. (not a good reason)
Your peers get paid more. (good reason but have to tread carefully)
Your friends get paid more. (not a good reason)
You like money. (not a good reason…if its just about the paycheck certainly there are higher paying, less rewarding jobs)
You just killed it at work and are producing strong outcomes (not output) and are indispensable for your manager. (the best reason)

Asking for a raise not only takes gumption — so be convinced — but cannot be done often. Anyone who is constantly asking for more money likely will be labeled as one who’s just out for money (remember, its about the company mission, right?) or a complainer. Those are both career limiting.

How do I ask for a raise as a knowledge worker?

First, asking for a raise has a few factors a manager will consider:

How long have you been with the company/team? And have you passed the “job hopping” threshold (currently around 18-24 months of tenure)?
When (if ever) did you receive your last comp increase?
How in-line (or out of) is your comp with your peers?
How in-line (or out of) is your comp with the market (including if the company is current recruiting for similar hires)?
What are the your concrete accomplishments? Were those notably above and beyond the expectations for your job / performance by your peers?
How likely are you to leave and what is the implication of that (more on that below)?
Will this comp change improve your happiness/morale/likelihood of staying (assuming we want that) vs. how much it actually costs me?

One thing most people misunderstand — and I know why because its probably the most common reason to deny someone a raise — is that budget is the biggest consideration. That’s rarely the case unless you’re asking for something enormous. Think about it this way: if you make $125k/year and ask for a 10% raise (which is a pretty big jump in any year) that’s just over $1k/mth for the company. Even most small businesses can easily absorb that.

What am I worth?

Ah, the big question. Most established companies have bands of salary ranges for different levels and job types in the organization. Hopefully, most keep to that. Knowledge workers, especially in tech product development, should have wide bands. If your company is not tech heavy, it might not. You should talk with your HR rep to get more information on this first so you don’t go banging up against a wall you cannot surmount.

If you determine there is room, there are a few factors to consider:

What do you make now and do you have internal (be careful of using “John told me he makes $X as that will likely get John in hot water) or external facts to support that you’re underpaid?
How much of an increase are you asking for? Cost of living is typically around 3% (and hopefully your company is already accounting for that). 10%+ is a big ask unless you have concrete evidence you are underpaid.
Tying your comp to a piece of the rev/profits you’re driving is not a good road to go down unless you are solely driving that revenue (e.g salesperson).

What are salary bands based on experience for product managers?

Here’s a rough guide based on my sense of the current market. This is based on being in a tech center with cost of living notably above the mean (e.g. NYC, Boston; note that I’m excluding the fairy-tail land of SV unicorns and some of the big tech as that comp is wildly out of line with the rest of the market) (last updated Jan ’20):

Associate Product Manager (entry level / no experience, if those exist): $75-100k (can go higher if coming from a strong background in a related field like eng)
Line product manager (only one product), 3-5 years exp: $100-150k
Line or Senior product manager, 5-7 years exp: $150-175k
Group product manager (multiple products / teams): $175-225k
VP, Product: $225k+
SVP, Product: $300k (+/- 20%)
CPO: * (varies wildly given its C-level but on par with CTO/CIO)

Tenure at the company also can influence this and that is not factored in here. In addition, this does not account for bonus or equity as that’s too variable by company based on their comp philosophy. Use as a rough guide only as many other factors can influence this. Evidence shows that PMs now make more than engineers on average at big tech firms.

How do I ask for a promotion in a flat organization?

Before asking for a promotion, know why you feel like you deserve a promotion:

Do you feel bored and unchallenged in your job and want to take on more? Positive spin: have you mastered your job? (good reason)
Is there an opening on the team? (might be a good reason)
Did someone else on the team you feel is similar or below your abilities/contribution just get promoted? (bad reason)
Did you get offered another job which is more senior? (can be a good reason but that means you’re open to staying)
Did you lay out a specific career path and you aren’t on it (or your friends are getting promoted and you’re not)? (not a good reason)
Your teammates love you? (not a good reason)
Are you good “friends” with your manager? (not for long and not a good reason)

Let’s first understand the two general types of promotions (note that “battlefield promotions” aren’t considered here):

Merit promotion: You get an enhanced title, a bit more money and responsibility in recognition of the outcomes you have achieved. Generally, this is something a mid-level manager can decide as it has only minor implications on the org and budget. An example of this is going from “Product Manager” to “Senior Product Manager”. You get the recognition but generally have the same relationship with your peers. Your arguments here should focus on your achievements and they should be concrete, irrefutable and above the call of duty.
Responsibility promotion: You get significantly more responsibility and authority including changing the relationship with your peers (e.g. becoming a/their manager). These typically happen when a position — backfill or new in the org — opens. This is a larger consideration that might be outside your manager’s sole purview as it likely has broader implications in the organization. There are two considerations here: does the person deserve it (basically an enhanced merit promotion conversation) and can they handle it. The latter is the most nebulous but important aspect. Are you the right person to manage if you haven’t before? You’re so good in your role now, should we disturb that? Will you be happy and effective in your new role? Have you hit your natural maxima in this role/org and you’re not seen as able to take on the next level of responsibility? These considerations tend to influence the decision the most and will be the most difficult for you to get an honest assessment of.

One other thing a responsibility promotion entails is ensuring that the organization has / can create the opening for you. This reasonably might be outside your manager’s control and have broader political implications they’re not willing to go to bat for you on.

Does threatening to quit work?

Almost never and I would not go there. Even if you have another job offer in hand, why would you go back to your employer asking for a promotion or money after going through all the trouble of getting a new job? This isn’t a good strategy to get something from your current employer. They will see through this and might be happier knowing you’re somewhere else.

How indispensable is this person?

All-in-all, here’s the simple way I always look at people on my team at review time or when they ask for raises/promotions (and I know that most senior leaders look at it this way whether they admit it or not):

When managers make comp & promotion decisions they know they are delivering a message. They tend to fall into one of three categories:

“You’re indispensable“: If you leave, how easily can I replace you (i.e. are we screwed)? If so, I’ll make accommodations for you. Even if I’m not immediately able to pay/promote you, I’ll make some informal promises to keep you happy.
“You’re solid but not indispensable“: It will hurt but I can replace you internally or with a relatively painless external hire. I might accede a bit on comp but not likely on promotion if I feel you’re in the right position now (natural maxima).
“You need to go“: I’m not bold enough or want the hassle/morale hit of actually firing you but hope you self-select out. If you’re getting this message, its probably not a good fit and use it as a time to exit gracefully and on your terms (they might pay you to hunt for a job).

This is why, when it comes to review and bonus season, managers — who inevitably have less to give out than they want — have to look at their staff this way. The #1s need to be over indexed on and the #3s need to be starved (so that hopefully they’ll quietly self-select out…and soon). The #2s end up bearing a bit of the brunt if the #1 group needs to pull from their pool. Whichever category you’re in significantly influences your ability to negotiate. First, try to get an honest understanding of that (for another post).

How will this person’s happiness (and remaining with the team) affect morale?

The other factor a manager considers is the potential affect of you not being happy / leaving on the rest of the team. Are you well liked and easy to work with? Do you pick up the slack and cover for others? Do you drive people nuts? Are you not carrying your weight? You not being there could actually improve morale. This is a challenging calculation that good managers have their finger on the pulse of.

How aggressive should I be in asking for a raise and/or promotion?

The simplest advice I can give is that if you’ve been at your job for over 18 months and know you’ve been performing well — and well means above expectations…you don’t get promotions for showing up every day — you should start the conversation. The first response will likely be to put it on the radar and have it formally considered at the next review time or another milestone (unless you’ve already achieved #1 status above). Be patient but hold your manager to this commitment and ask for what you need to do to get this.

How do I interpret my manager’s response?

You need to read between the lines a bit and possibly ask some follow-up questions:

No with reasonable justification: “company policy is that we only consider comp changes in Q1” (confirm this is true), “I cannot do anything now but let’s reconvene on this in 1-2 quarters” (make sure this happens), “Deliver that product successfully hitting your KPIs and then we’ll discuss” (get it done and then take it up), “You’re above most/all of your peers so increasing you more would just create a bigger disparity” (could be true; ask for more data and provide market comps as the company might be out of line; doesn’t mean you can’t get more in the future), “You’re not ready, but can be” (get the terms and what you need to do)
No with non-answer: “I don’t have any budget” (see above), “You’re at the top of our range for your level/experience” (ask what the ranges of more recently hired peers are; come back with market data if you can)
Yes with counter-offer: “I can’t do $10k but how about $5k” (ask for the reasoning)
Yes: congrats but use it as an opportunity to understand their expectations of you as they might have reset

Again, I never advise threatening or asking over and over unless you get an a “non-answer” as outlined above. Getting an answer you aren’t happy with is not a non-answer. Just ask for what you need to do to be inline for something.

Don’t put your manager’s back to the wall. That will only strain your relationship. If you already have a strained relationship you don’t think you can repair, you should already be looking for another role/job.

Innovation

Clayton Christensen has died

January 24, 2020January 24, 2020
by Andy

Sad to report that Clay Christensen is dead. When I saw him at HBS a year or so back he was ailing. His influence will live on for some time. RIP

E-commerce

The merging of payments with “shopping”: Paypal + Honey…

January 19, 2020January 23, 2020
by Andy

An couple of interesting salvos were recently sent in the online payments and shopping space. First, Paypal bought Honey for $4b to move up the consideration funnel to see user shopping interests not just at payment time. Honey has moved from a rebates browser plug-in to become a kind of pan-site shopping cart facilitating not only coupons but comparison shopping, identity and an interest graph. Paypal sees this as a way to immediately move up the ecommerce funnel not only to leverage their identity but also to engage the customer earlier in the consideration cycle. A potentially lucrative and deeper lock-in that has not often been the purview of payments providers.

Queue Amazon for the reactive move. In the most Amazon predatory way, they warned their customers that Honey was a security risk and should be uninstalled:

“Honey tracks your private shopping behavior, collects data like your order history and items saved, and can read or change any of your data on any website you visit,” Amazon said. “To keep your data private and secure, uninstall this extension immediately.”
https://www.pymnts.com/amazon/2020/amazon-warns-paypal-honey-security-issue/

I can’t say what is under the hood with Honey but it hardly seems a security threat nor, given people opted in via downloading a browser plug-in, have serious privacy issues. Amazon had to know of Honey before and seemed content to co-exist with them. However, the Paypal acquisition changes the equation here.

Theoretically, Paypal has the potential to create a “meta shopping and payment layer” driven by their broad identity capabilities and (non-Amazon) merchant relationships. You can think of it as a shopping cart across all e-commerce sites (Amazon included…unless they can get Google to ban the plug-in…doubtful) where Paypal then guides the customer on where to buy and how to pay. Many non-Amazon merchants already integrate with Paypal and, post acquisition, many will integrate with Honey. This is one of the few real threats to Amazon’s e-commerce power. Imagine browsing Amazon for a new Fitbit. Honey pops up and says you can get it with a 10% coupon at BestBuy and, with one click, checks you out there.

Dan Schulman (Paypal CEO) certainly knows the value of a closed loop, vertically integrated network from his days at Amex. Paypal is now positioned to go much deeper. This will be interesting to watch play out over the coming 18 months.

The Secretive Company That Might End Privacy as We…

January 18, 2020January 23, 2020
by Andy

Expose on Clearview AI who has built a ~30bn (and growing) image database scraping public sources like social media — without your knowledge or permission. Its used currently, as far as we’re told, solely for law enforcement. However, this puts the pressure on the privacy matters that have been gaining voice as computer vision neural nets go mainstream and improve over 95% accuracy.

While this is new ground technically, its not in the sense of a new technique which can greatly help society (solve crimes) can also be misused (including by those entrusted to use them properly). Just one example from some smart NYT reporting:

While the company was dodging me, it was also monitoring me. At my request, a number of police officers had run my photo through the Clearview app. They soon received phone calls from company representatives asking if they were talking to the media — a sign that Clearview has the ability and, in this case, the appetite to monitor whom law enforcement is searching for.
https://www.nytimes.com/2020/01/18/technology/clearview-privacy-facial-recognition.html

We don’t have privacy now and its regularly being eroded by cameras, online data, proprietary behavioral databases (e.g. Equifax).

“I’ve come to the conclusion that because information constantly increases, there’s never going to be privacy,” Mr. Scalzo said. “Laws have to determine what’s legal, but you can’t ban technology. Sure, that might lead to a dystopian future or something, but you can’t ban it.”
https://www.nytimes.com/2020/01/18/technology/clearview-privacy-facial-recognition.html

Banning doesn’t work and won’t here especially how technology easily spans borders where the legal standard varies.

“It’s creepy what they’re doing, but there will be many more of these companies. There is no monopoly on math,” said Al Gidari, a privacy professor at Stanford Law School. “Absent a very strong federal privacy law, we’re all screwed.”
https://www.nytimes.com/2020/01/18/technology/clearview-privacy-facial-recognition.html

As I’ve discussed before, this will not be solved by policy or technology solely. Its those two plus real criminal penalties for the violators and simple controls everyone can use like in a decentralized social network.

Watch this space.

What's tech?

What’s Tech?

January 18, 2020
by Andy

I’m using January to work on a real need I see on both sides of a multi-sided market. At any time, there are 10s of thousands of tech product management jobs open. Product Manager now seems to be the title du jour both in traditional companies adopting a more user/product centric org design and also by re-titling positions like business analyst and project manager to PM (not a good idea but I’ll cover that one another time).

That would seem great for a PM job seeker, right? Not really. Most of these jobs require many years of PM experience. That’s because its difficult to have an entry level PM given the responsibility you have and experiences you need to draw upon. And few companies are investing in extensive training and mentorship programs now with the average job tenure for the <30 crowd at 18 months.

Thus, a chicken and egg problem.

One way we’re solving this is our new Tech Product Management program at NYU Stern. But there still is a gap especially in the process of certifying skills and talents for PMs given many are soft. There’s no code test or portfolio review which is why PM interview processes are so exhaustive.

Watch this space.

Self-driving cars

Intel’s Mobileye has a plan to dominate self-driving

January 10, 2020January 12, 2020
by Andy

Mobileye can tout all it wants but its system is dangerous and notably behind Tesla Autopilot. I recently had a Nissan rental with Mobileye’s self-driving system for about a month. I was excited as I wanted to try another advanced self-driving system after using Autopilot in my Tesla Model 3 for the past year and a half. However, it became clear after just a short time of driving familiar highways that the Mobileye system not only is well short of Tesla’s, it’s outright dangerous.

First, let me say that Tesla Autopilot is not perfect but has notably improved over the past 18 months. The only issues I still occasionally face in primary/secondary/tertiary road driving are left lane exits (which has been documented as the cause of several bad Autopilot accidents) and bridge overpasses on bright, sunny days (being seen as an obstacle causing sudden braking. However, I’d estimate that Autopilot does 90% of my driving with few incidents on most trips.

For the Nissan/Mobileye system, I tried it on roads I’m familiar with that I use Autopilot on regularly. Most of this was on major Interstate highways but I also tested on secondary highways and, briefly, on local roads but that was far too dangerous. The Mobileye system could detect roadlines pretty consistently as long as there was no rain (it stopped working in any weather — something Tesla doesn’t do unless its bad). However, lane keep regularly “ping-ponged” in the lane and, on curves, swayed dangerously into the neighboring lane or shoulder. It would then over compensate not only making for a juttering ride but sway into the other lane/shoulder. The irony is that it would beep to signaling its lane warning but it was due to its own system. Need some reinforcement learning? It was actually so bad, I got to the point where I’d take over on any curve I saw coming, modest or otherwise.

There was one feature I liked with the system UX that I think Tesla could use to improve Autopilot. I got to know this well due to the curve issues mentioned above. When on self-driving, you can steer manually and it keeps the self-driving system engaged allowing you to control and then instantly taking back over once you stop. I had to do this A LOT. On the Tesla, when you do feel the need to take over, you take the car out of Autopilot. You then have to put it back in. Its mostly annoying when you’re driving in heavy but moving traffic and changing lanes where Autopilot isn’t aggressive enough. If Tesla put this UX in, it would really help.

First, I’ll note that I was likely on a prior version of the Mobileye system and it will improve. However, Mobileye claiming to be at the top of the heap on self-driving is more than a bit of a stretch. In addition, the biggest advantage Tesla has, like Apple, is the vertically integrated product where they can update. I don’t know how feasible that is for Mobileye given the OEM relationships. Thus, their systems might be mostly parked in time. Not good.

NOTE: I’ve not had the opportunity to yet try Cadillac’s SuperCruise.

In his Tuesday speech, Mobileye’s Shashua calls ADAS systems with high-definition maps, like Super Cruise, “Level 2+”—a small step above regular ADAS systems that are called “level 2” in the five-level SAE framework. A number of carmakers have developed similar systems. Shashua says Mobileye is supplying the technology for 70 percent of them, including systems from Nissan, Volkswagen, and BMW.
https://arstechnica.com/cars/2020/01/intels-mobileye-has-a-plan-to-dominate-self-driving-and-it-might-work/

The Automation of Healthcare

January 3, 2020
by Andy

Below are a couple of competing views on the coming automation of healthcare. Healthcare is ripe for it as its a non-scalable industry. Highly educated service providers are paid for their time including doing menial and repetitive tasks that could be automated. This is why your doctor charges so much (amongst other inefficiencies).

The other factor here is that, in the US at least, you own your medical data. Few people feel like they own it but legally you do. Its just locked away with your doctors, labs and other health providers. All of the big tech companies, as well as several healthcare tech providers, are working on actually providing access and portability to this data.

Once that is available, I have a view that there’s a big opportunity for healthcare providers to offer APIs into them with that standardized data. You want a 2nd opinion, submit your data to another doctor. You want to see if a pharmaceutical or supplement helps with your condition, submit your data. Behind those APIs will need to be reasonably sophisticated AIs that can assess and respond to the patterns seen in your data. Doctors provide not only the input to the AI but the specialization needed on top for unique cases and follow-up. This makes healthcare a lot more scalable.

In his upcoming book, The Future Is Faster Than You Think, which will hit bookshelves in late January 2020, Diamandis makes the case for why he believes big tech companies are going to be running healthcare by 2030. In December, he came to Fast Company’s offices to make the case for why Big Tech is the doctor of the future.
https://www.fastcompany.com/90440921/amazon-and-apple-will-be-our-doctors-in-the-future-says-tech-guru-peter-diamandis

Hamish Fraser first encountered Babylon Health in 2017 when he and a colleague helped test the accuracy of several artificial intelligence-powered symptom checkers, meant to offer medical advice for anyone with a smartphone, for Wired U.K. Among the competitors, Babylon’s symptom checker performed worst in identifying common illnesses, including asthma and shingles. Fraser, then a health informatics expert at the University of Leeds in England, figured that the company would need to vastly improve to stick around.
https://www.fastcompany.com/90440922/should-you-get-medical-advice-from-a-bot-doctors-arent-so-sure

E-commerce

Prime Power: How Amazon Squeezes the Businesses Behind Its…

December 20, 2019December 20, 2019
by Andy

This article sadly articulates the reality of how Amazon treats sellers. I could provide anecdotes point by point but the article and its stories speak for itself. The revelation that Bezos sees the marketplace as his cash cow for expensive side projects makes sense and shows how he has lost his vision.

The only one I’ll mention is that I don’t know of anyone selling on Amazon who only has them take 27 points of margin. Try more like 38. And consumers should know there is no way Amazon is the lowest price as sellers are forced to pass these costs on. They need to be regulated as there is no avoiding them nor control any seller has which is the definition of monopoly power.

But to make it all work, Amazon runs a machine that squeezes ever more money out of the hundreds of thousands of companies, from tiny start-ups to giant brands, that put the everything into Amazon’s Everything Store.
https://www.nytimes.com/2019/12/19/technology/amazon-sellers.html

What's tech?

What’s Tech?

December 18, 2019
by Andy

I’m not one for making calendar predictions however there are a few trends heading into 2020 that bear watching:

Deep fakes will become an issue continuing the disturbing trend everything can have its factual basis challenged. Already central to the 2020 US election, this will pop-up in some way and make it so that every public figure can now deny any statement/video as “fake”. There are no easy answers here and I find it deeply troubling (not just deep fakes but the erosion of truth).
Related, fake/harmful content will continue to plague social networks and their AI-driven approaches will only have limited effect. I wrote a commentary piece on how to handle balancing reducing fake/harmful content with privacy on social networks. This is not easy to solve but there are algo+human solutions that can greatly raise the bar and the hurdles for those with ill-motives.
There will continue to be more consciousness of mild mental health disorders and people seeking solutions (traditional therapy and alternative). As the events around us induce more anxiety, people will continue to become comfortable seeking help and tech is trending here to try and help. See what a friend is doing here.
The “VC is broken” trend will continue to gain momentum. There won’t be any notable change to funding in the near term as stupid money still seeks outsize returns and the “entreprenuership/VC cheerleading” will continue unabated, but we’ll see more realization of solid business models and that old-fashioned profitability come (back) into play.
“Product Manager” will continue to grow as hip title du-jour and see a supply-demand imbalance grow especially for experienced PMs. I now firmly believe this is being driven by more and more traditional firms changing their org structure to be product-centric (a good thing) and re-titling positions like business analyst and project manager as product manager (not necessarily a good thing). I’m working on some help for this at NYU Stern and in another way. Stay tuned as this is a 2020 focus for me.
There will be little substantive movement on regulation/anti-trust of big tech any time soon. Lots of smoke, little fire as laws have to be changed and some well-heeled interests are opposed to this.

Wishing everyone a joyous and safe holiday season. After venturing into the deep cold woods of upstate NY I’m off to Fla for some sun before the deep winter grind hits. I have several notable projects teed up for Jan & Feb that I’ll write about more once I get them underway. As always, hit me up if I can be of help.

Regulation

F.T.C. Is Said to Consider an Injunction Against Facebook

December 13, 2019
by Andy

This is a big deal (albeit would be tied up in court for awhile). Getting ahead of the already planned integration of messaging across Facebook, WhatsApp and Instagram so its not a nightmare later (and it would be).

The Federal Trade Commission is considering seeking a preliminary injunction against Facebook to prevent the social network from integrating several of its messaging services, according to three people with knowledge of the matter. The agency has discussed how the Silicon Valley company is stitching together the technical infrastructure underlying WhatsApp, Instagram and Facebook Messenger, said the people, who spoke on the condition of anonymity because the talks are confidential. The F.T.C. is weighing whether such an integration would make it harder to potentially break up Facebook, they said, especially if the agency determines that the company’s acquisitions of some of those apps reduced competition in social networking. The agency has not made a final decision about what to do, the people said.
https://www.nytimes.com/2019/12/12/technology/ftc-facebook-injunction.html

Brand

Big Brands, Online Startups Find Success Rests on Store…

December 10, 2019
by Andy

This article points out a few interesting elements of what is going on with direct to consumer (D2C) online only brands: they’re needing traditional retail to scale. With VC economics behind them, they’re being forced quickly beyond their early adopter (and presumably profitable) customers into adjacencies which are expensive to acquire online and beyond the reach of their branding and viral efforts.

That reality is hitting some of the world’s biggest consumer-products companies, which collectively have invested billions of dollars in startups in recent years that sold directly to consumers. Meanwhile, upstart brands are finding they must move into stores to compete outside of niche territory—for at least two reasons, executives and analysts say. Big retailers can give brands critical visibility, and consumers generally prefer buying household staples in a single shopping trip to enrolling in many subscription services.
https://www.wsj.com/articles/big-brands-online-startups-find-success-rests-on-store-shelves-11575895927

I think there are a few things to learn from here:

1. Going it alone D2C with a new product can be expensive in building a new brand and marketing it. The world of PPC is not friendly to this especially in an established category. Even with creative use of social media and some viral help, that gets you to the early adopters but to cross the chasm to scale with profitability, that’s more difficult as most of these guys are finding out.

2. The nature of the product matters here. I agree with the sentiment that if its a “no thought, throw it into the basket” (which can include impulse buys) that works well with traditional brick & mortar merchandising. Ironically, its where B&M has an advantage over e-commerce as B&M has an inventory constraint issue but less of a display to customers “end cap” issue. It’s always been challenging to up sell in e-commerce (especially on Amazon).

3. Most of these brands (and many other similar ones we talked about) have a “no Amazon” approach. That makes sense at one level especially when you see the economics associated with Amazon and if you believe you have significant marketing prowess. They can build early adopter traction with creative marketing/branding efforts but Amazon is scale in e-commerce. And, if you haven’t planned that in your financial model, its looks (and likely is) unsustainable to try and go there and, ironically, traditional retail suddenly looks attractive.

The last point is particularly important. Amazon is its own beast. It’s a definite challenge especially if you’re a marketer seeing your brand is pushed to the side by the Amazon “halo” brand. However, D2C gets expensive when you need to scale to adjacent customer segments. Every product has an optimal reach with profitability. There might be another maxima above that with adjacent segments but seeking that is expensive and often doesn’t materialize.