|“Tech Twitter”, the Twitter subset comprising venture capitalists, founders, developers, growth hackers, product managers and journalists, has been consumed by an internecine conflict this past week.|
On one side are powerful Silicon Valley VCs, angel investors, and founders. And on the other is, well, largely The New York Times and its tech culture reporter, Taylor Lorenz.
At the heart of the conflict is power. The VCs and founders think tech journalists like Lorenz and newspapers like NYT have too much power. Power that is unfairly used to target them.
And at the heart of the controversy was a leaked hour-long conversation from the invite-only audio social network Clubhouse, reportedly worth $100 million in May with just 1,500 users.
|The audio chat had spiraled wildly out of control from a broader conversation earlier in the call about the state of journalism and what VCs should do to receive better coverage. [Balaji] Srinivasan, formerly a general partner at Andreessen Horowitz, claimed that “the entire tech press was complicit in covering up the threat of COVID-19,” and claimed that relying on the press is “outsourcing your information supply chain to folks who are disaligned with you,” comparable to the United States having outsourced its medical supply chain. He proposed that the approaches to truth and accountability offered by GitHub, venture capital funding, and cryptocurrency all offer better models for journalism than “the East Coast model of ‘Respect my authori-tay.'” Silicon Valley Elite Discuss Journalists Having Too Much Power in Private App, Vice|
|“Media corporations are not the free press, any more than chain restaurants are good. The New York Times is not the free press, but you, the citizen, are the free press,” Srinivasan said in the conversation.|
Tech journalist Kara Swisher, long a vociferous thorn in the sides of powerful Silicon Valley tech executives, called it out for what it was.
|Why the NYT unnerves tech power Why is the NYT the focus of so many attacks? Because it has over 6M subscribers underpinned by a powerful and resilient business model—subscriptions. That affords the NYT the financial independence to take on those in power around the world, whether it be US President Donald Trump, the Chinese government, Apple or Facebook. But instead of being punished for taking on the powerful, stock market investors have been rewarding the NYT, making it outperform tech giants.|
|One that’s doing phenomenally well is the New York Times itself. It’s well known that many big tech companies (or at least their shares) are booming amid the Covid crisis. But so far this year, the NYT is doing better than names like Apple, Facebook, Google and Microsoft. Of the tech megacaps, only Amazon is doing better. If it hasn’t been clear before, it should be obvious to everyone now that the NYT is a tech company and a tech stock. It benefits from network effects and accelerating economies of scale like any other tech company. It’s booming in the podcast space. It’s got popular apps for cooking and games. It’s even rolling out its own proprietary platform for online ad targeting next year, cutting off third-party players. Far from being the “Failing New York Times”, the company is in a rare club of companies and players whose business just keeps getting more dominant and powerful. Five Things You Need to Know to Start Your Day, Bloomberg|
|This can be unnerving to those in power. How do you economically attack an institution that simultaneously speaks truth to power, profits from it, and gets even more powerful in the process?|
One way is by trying to turn NYT’s main advantage—subscribers—into its weakness. By exhorting people to “cancel” the NYT and its journalists.
In case you’re new to the concept of “cancel culture”, I’ll quote an older NYT piece itself.
|“It’s a cultural boycott,” said Lisa Nakamura, a professor at the University of Michigan who studies the intersection of digital media and race, gender and sexuality. “It’s an agreement not to amplify, signal boost, give money to. People talk about the attention economy — when you deprive someone of your attention, you’re depriving them of a livelihood.”|
In a subscription-heavy era where everything is on-demand, and celebrities are packaged and sold as commodities, the language of cancellation is close at hand. The usage is widely understood to have come from Black Twitter, the loose networks of black users active on the site. Everyone is Cancelled, NYT
|To do this, you must not only frame the NYT as an enemy of the truth, but also present “better” alternatives that can be funded and controlled by the powerful. A “Github model”, a “VC model” or a “Crypto model” for instance. (As an aside, what could be more “decentralised” than 6M subscribers funding an organisation to produce the journalism they value?) Speaking truth to power What is common about the fall of some of the most storied tech companies from the last few years? Immensely smart founders. Check. Billions of dollars from the world’s smartest venture investors. Check. Talented and dogged reporters backed by powerful, subscriber-funded news organisations. Check. Like Theranos, John Carreyrou and The Wall Street Journal. Or Uber, Mike Isaac and The NYT. Or Wirecard, Dan McCrum and The Financial Times. In each of these cases, the reporters and their newspapers had the tenacity and financial wherewithal to keep speaking truth to tech power, even in the face of legal and personal threats. The rise of powerful tech oligarchs isn’t just restricted to the US alone either. MK Venu is the founding editor of The Wire, a subscriber-funded Indian publication.|
|If there is a “VC model of truth”, it is not the only truth the world wants. And by seeking to cancel or defund news organisations, you only help entrench those in power.|
|Indian Railways walks down a well-trodden road|
Praveen Gopal Krishnan Late last week, the Indian Railways made an announcement.
|The Railways on Wednesday formally kick started its plans to allow private entities to operate passenger trains on its network by inviting request for qualifications (RFQ) for participation on 109 pairs of routes through 151 modern trains, the national transporter said. The project would entail a private sector investment of about Rs 30,000 crore, it said. This is the first initiative for private investment for running passenger trains on the Indian Railways network. Indian Railways to allow private players to operate passenger trains, Hindustan Times|
|The immediate reactions were predictable. Some believe that this move is the first step in the dismemberment and sale of India’s crown jewel of affordable, mass and efficient forms of transport. Others believe that this is a welcome step, and will force Indian Railways to compete and push themselves to greater heights. As always, the second and third-order effects are much more nuanced and complicated. Privatisation of parts of government-run businesses is hardly new to India. It’s been done with airlines, banking and telecom—three sectors which were all exclusive monopolies of the state. All have yielded mixed results. It’s far too early to judge if this move—which is a privatisation of a small portion of the Indian Railways—is going to work out or not. But, there are a few factors worth remembering. A private Railways player will likely make losses for a long, long time.|
It’s not easy to make money in Railways. If you are a private player, you may have the demand, but you have limits of differentiation beyond which your pricing starts to get compared against airlines. That’s the ceiling. And you’ll compete against Indian Railways, which will likely undercut you. That’s the floor. A very narrow range exists in the middle. Private players will have to be sure there isn’t a conflict of interest.
Again, if you are a private player, running private trains, on rails and infrastructure provided by the Government of India, competing against trains run by the Government of India, and regulated by the Government of India, I’d imagine you’d want to be sure that the deck isn’t stacked against you before you enter. Because there will be conflicts. For the best deep-dive about this, I really recommend Sayantan Bera’s story in Mint, which was published a few months ago. That being said, this does seem like a sound trial balloon. Disinvestment of publicly owned utilities to bring in private players to add revenue are goals that multiple Indian governments promise… and largely fail to meet. This time, they are doing it with their crown jewel—Indian Railways. Reliance Jio has lessons for everyone. Even Indian Railways.
|Indonesia’s upper-middle-income trap Nadine Millions of Indonesians are losing their jobs and are on the cusp of falling back into poverty this year. That reality stands in contrast to a recent World Bank report which, for the first time, elevated Indonesia’s status from “lower-middle income country” to “upper-middle income country” this year. Indonesia is now in one bracket with neighbours Thailand and Malaysia and many other emerging markets, including Brazil and Mexico. Vietnam, the Philippines, Myanmar, as well as India are still lower-middle income countries. The classifications are updated each year on 1 July, based on gross national income (GNI) per capita figures. Moving up from low- to upper-middle income in the World Bank hierarchy doesn’t have a huge immediate impact for Indonesia, although a change in rank can affect the terms and types of loans countries can access. It does make for good headlines though. In the fineprint however, you’ll notice that Indonesia made it into the new bracket by the tiniest of margins. Indonesia’s reclassification is based on a mere $0.004 GNI per capita difference.|
|“Southeast Asia’s biggest economy saw its GNI per capita rise to US$4,050 in 2019.. Upper-middle income status categorizes countries with a GNI per capita of $4,046 to $12,535, while lower-middle income status categorizes countries with a GNI per capita of $1,036 to $4,045.” Indonesia now upper middle-income country, World Bank says, The Jakarta Post|
|And that’s based on 2019 data. A stalled economy and contracting incomes this year could potentially lower the next score and bump Indonesia right back into the lower-middle income bracket. That would probably lead to fewer headlines though|
|A Tipping Point? Rohin The concept of tipping points originated largely from epidemiology, where researchers tried to model the point at which a disease becomes an epidemic or a pandemic. But it was popularised by author Malcolm Gladwell in his 2000 book of the same name. In his book, Gladwell lays out 3 key factors that determine whether an idea, product or trend crosses over the tipping point. The Law Of The Few Gladwell argues that “the success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts.” This is the Law of the Few. There are three kinds of people who fit this description: mavens, connectors, and salesmen. The Stickiness Factor Another important factor that plays a role in determining whether or not a trend will tip is what Gladwell calls “the stickiness factor.” The stickiness factor is a unique quality that causes the phenomenon to “stick” in the minds of the public and influence their behaviour. The Power Of Context The third critical aspect that contributes to the tipping point of a trend or phenomenon is what Gladwell terms the “Power of Context.” The Power of Context refers to the environment or historical moment in which the trend is introduced. If the context is not right, it is not likely that the tipping point will take place. Could India—a country of 1.3 billion people; a democracy; and the world’s fifth largest economy—banning Chinese apps be a global tipping point for how Chinese tech companies and apps are treated? For countries to do unto China what China does unto them?|
|China is at the receiving end of something it’s more used to handing out: a ban on popular software. The latest Indian salvo may not wreak much immediate financial havoc, but deals a blow to the overseas ambitions of Chinese internet companies.|
After growing up at home mostly shielded from foreign competition, Chinese internet companies have been trying to venture abroad in recent years. India and Southeast Asia, due to their geographical and cultural proximity, are the clear target markets.
Replacing Chinese cell phones may be tough but apps are another matter. As anti-Chinese sentiment rises among the country’s neighbors, Chinese internet companies will find it even harder to expand abroad—something their foreign rivals, who have tried for years to penetrate the heavily protected Chinese market, are all too familiar with. Chinese Apps Get the China Treatment in India, WSJ
|Cutting all ties Olina It’s not just digital India that’s severed ties with Chinese apps and products. In Kolkata, kites have been grounded because the string, or “manja”, that holds them taut against the wind is China-made. Of course, when it comes to bans, everyone wants a piece of the action. There is another group, however, that will celebrate the ban for reasons non-Chinese. And that is PETA, which has launched numerous protests against “manja”, saying the string is often coated with adhesive and powdered, finely crushed glass, or other materials to make it sharp. And that proves deadly for pigeons, crows, owls, endangered vultures, and other birds that get entangled in the string.|
|Human foosball in Argentina Jon Professional footballers in Europe and other parts of the world have returned to the pitch—albeit without crowds—but already the beautiful game has adapted to Covid times. Amateur players in football-mad Argentina have devised ‘human foosball’—a mix between 5-a-side matches and table football. Pitches are divided into rectangular grids which players must stay within in order to avoid close contact as part of Argentina’s social distancing rules. That alters the game considerably. Dribbling past opponents, tackles and physical contact are all out in favour of a focus on passing, movement and precise shooting|