Magic Leap, AirPods & Digital Layers

What our augmented future might look like

Ranjan here. Today I’m writing about trying the Magic Leap and the future of augmented reality.

I've been spending more time at one of my clients, The RLab, a space at the Brooklyn Navy Yard focused on XR/VR/AR (I normally won't promote clients in the Margins, but they're great people). They’re stacked with cool, inaccessibly expensive gadgets and the other day I got to try the Magic Leap.

I'm writing this post to try to get a handle on how incredible it was.

Regular readers know my aversion to over-hyped unicorns with unclear business models or non-commercialized products. When I put on the headset, I certainly had this bias towards Magic Leap. But call me a convert.

I've tried a lot of VR experiences, and love games like Superhot and Beat Saber, but they always felt like a vacation. You’re transported to an intense, magical, entertaining, sometimes stressful environment that was completely separated from your normal reality. That's the point, right?

Grant, a Manager at the RLab, opened the Magic Leap box and handed me the device. The device itself is fairly lightweight (especially when compared to clunky VR headsets) with just a little Discman-looking “computer” you can clip to your belt.

I had to mark up a public Instagram pic, because I certainly did not ask Grant to take my picture trying the device, because I imagine that would be RLab gauche. 

The Magic Begins

The onboarding, holy shit. You do this weird scan of the entire room and it populates an augmented grid, covering everything around you. It manages to “capture” and differentiate objects ranging from an exposed pipe (the RLab is quite industrial-ish) to a coffee cup sitting on a table. The grid slowly engulfs the entire space surrounding you. 

Then it was time to play Angry Birds.

I set up the stack of wooden planks and pigs on a table near me, and got to work. The controller felt like a VR controller, where the act of pulling a slingshot translates oddly well, and I got to work slinging birds. I've tried every notable iOS AR experience, and none of them was ever quite fun. This was a lot of fun.

Then came the real magic. This is the part that I'm fairly convinced I won't be able to do justice, but will give it a Margins try. The Magic Leap Creator app.

For anyone who has used Tilt Brush in VR, painting in 3D is pretty revolutionary. But here, I was walking around, swirling reds and greens and purples, feeling like a futuristic Rhythmic Gymnast, painting directly into the “real-life” space I was already in.

This best captures how I felt, and is . also one of the greatest comedic performances of all time

Everything Changes

I was busy dropping little cartoonish objects around the room when my Apple Watch buzzed and I saw an urgent email come in. This is weirdly when "everything changed.”

I walked over to my laptop, and without removing the headset, sat down and started responding. I could see my computer screen and my god-awful-I-want-to-smash Macbook Air keyboard perfectly, even with the headset on. I replied, hit send, and looked up and the paint was still everywhere around me. The room was still covered in three-dimensional colored streams and weird little penguin characters.

That ability to interact with this immersive digital layer, simultaneously with the physical world, is going to change everything. There is going to be an entire augmented layer painted over our surroundings, and hopefully, if the right people and incentives are in place (a note on this at the very end), it will be incredible.

If those Apple glasses are for real, it might be closer than we realize (though, every time I try to use Apple's AR ruler, it tells me the lighting isn't right).

AirPods & Transhumanism

When I first got Apple's AirPods, I had a difficult time conveying what made them revolutionary. A common reaction to my excitement was "aren't they just bluetooth earphones?" 

The seamless pairing via the W1 chip was a big part of it. Suddenly, you could pop in your earphones, and even more impressively, switch between (Apple) devices without the dreaded spinning bluetooth icon. It just worked. But even more surprising was how the lightness of the design made them feel so natural. Yes, we all worried about losing them, but it was that light weight that made you barely recognize they were there.

That almost “natural” feeling is what make them the perfect first step towards an "always-on" augmented layer.

The idea of AirPods as a window into an audio-based augmented reality future might sound a bit futurism-y, but if you've ever taken a bike ride with them in (is that unsafe?) and have Maps active, the voice telling you to turn left without requiring an interruptive glance towards your phone, seamlessly integrated into your current action… you've already gotten the experience. Now imagine if there were audio experiences like this laid over more parts of the world.

This is even less far-fetched when I think about one of my favorite tourism experiences of all time, the audio walking tour. There used to be a company called Soundwalk (I wrote about them in 2009, and now cringe at my writing) that created these incredible guided walks.

At first they just gave you an mp3 with a map image to follow, but it evolved to leverage your GPS. "Turn around, do you see that statue? This is its history..." They even were very thoughtful about how the musical interludes integrated in your surroundings. Walking around the Lower East Side would trigger rap and salsa, walking around Paris would trigger a French crooner. Simple, purposeful things like this created wonderful experiences.

Side corporate history note: Soundwalk was bought by Andrew Mason (of Groupon fame) who mercy-killed it to Bose while pivoting the technology to a podcasting transcription service. Bose is using Soundwalk for their new Bose Frames - which also are a big proponent of this augmented audio thing.

If you want to dive deeper into augmented audio, here are two posts I strongly recommend:

One of the first posts that helped me think about this, from Jordan Cooper - Airpods As The Next Platform (And The Native Applications Therein)

Nick Pappageorge wrote on the topic a few months ago, and just gave a much-buzzed-about presentation, Audio & AirPods: the first taste of transhumanism. (I had to request the PDF from him, so maybe we can consider access to this report a special Margins-first release!)

In Closing

The past few years have instilled a sense of caution when it comes to revolutionary technology. That’s a good thing. But putting on the Magic Leap really slammed me with that sense of wonder that made my brain feel like it had become a VC on Twitter. I didn't just play augmented Angry Birds. I experienced the future of an always-on, augmented layer of information and experience, overlaid upon our existing physical world.

But, I think that will happen. And I'm kinda excited to see where it goes.

Closing Thought #1

My co-host Can mentioned that this could be my most “woah” Margins piece, as in gushing about technology without consideration of its impact.

I agree.

There are a ton of very serious questions and cautions that need to be considered if and when we head down this path. As I mentioned above, it’s all about having thoughtful people with the right incentives building this. Maybe that’s why Magic Leap, Apple and Microsoft all leading the way with hardware-selling, non-advertising business models makes me a bit more optimistic. And maybe I just wrote this to make myself hopeful in light of Zuck’s speech.  

Here, via Can, is a great look at what a dystopian AR future might look like:

Closing Thought #2

There are a lot of really intriguing subplots to this augmented world, whether visual or audio, or both.

In October 2017, SnapChat did a partnership with artist Jeff Koons to have a big AR dog in Central Park. Another artist, using an AR app other than SnapChat, “defacedKoons' dog. Was this illegal? My brain starts to hurt like it did while writing that Virtual Influencers and Fashion piece.

Image 2019-10-17 at 9.06.19 PM

Closing Thought #3

The single coolest VR experience I’ve had was at a place called HubNeo in New York's Lower East Side. It feels like some Bladerunner-y, underground spot, and the experience is meticulously built to make you feel like you're in a race car (to the point that your arms end up exhausted after a few races).

The Magic Rectangles on the Old Web

I miss the old web sometimes.

Hi. This is Can. It is now my turn to reminisce after Ranjan’s post on tape trading.

The famous 2advanced homepage. This was incredible in 2001.

Do you remember the rectangles? Those things that were embedded in the early web pages. They were sort of part of the page; but not really. You could tell, I think, that some parts behaved differently than the others even if you had no idea how it all worked. You didn’t know your HTML from your CSS, but you knew, again, maybe, some parts just didn’t belong. They wanted out. Be careful what you wish for.

We got internet at home back in Turkey, when you also had to get on the computer to be on the computer. The guys (obviously) who came to set it up at home told us we were probably one of the first households in the city to get it. I am not sure if they were just angling for a hefty tip from my parents, but I was impressed. It’s not that we really planned to Get It anyway, but dad’s work was getting all wired up. We were a distributor, and the HQ wanted better inventory management. Somehow, it, The Internet, also trickled down home.

I was always fascinated, if not obsessed with computers. My mom figured early on that the computer wasn’t very useful without the keyboard, so she’d hide it occasionally. It was a primitive and much more effective version of Screen Time. Little did she know, with whatever pocket money I found, I bought another keyboard. Then it became more of a game of hide-and-hide, as I had to make sure I also hid my own keyboard so that she didn’t know I was using the computer when she was out of the house.

Internet, though, man, that was something else. It took me in like no other, and it never let go. I knew enough Computer to figure out what The Internet was, and how it sort of worked together. Not knowing enough English was a significant hurdle at times, but I had several (physical) dictionaries handy to help me out. Hyperlinks, Send and Receive on Outlook Express, mIRC, DCC connections, the weird sounds our modem made, CuteFTP, Warez, SubZero, ICQ, Mirabilis. There was a lot to learn, but I took all in stride.

And then there was HTML, and those rectangles.

I don’t know how I decided to build a website. My guess is, at some point, I realized Netscape Composer actually made things that you could feed into Netscape Navigator. It’s easy to understand what was going now, but to me, a Turkish kid with barely any English, it was all a word salad. The words Composer and Navigator didn’t mean more to me than names of car models. So I literally had to take those programs (not apps!) for a spin to understand what was going on.

Anyway. I basically clicked around in Netscape Composer until I came up with something that looked exactly like the website of an artist I liked. I spent hours and hours tinkering until I managed to embed a RealTime G2 (!) player. I think that was my first time figuring out something was different about some of these rectangles. They behaved differently.

One of the first Flash videos I remember watching. NSFW, for Turkish readers.

A few years had passed, and slowly more people started getting internet at their homes in Turkey. There were relatively popular gaming magazines who dedicated a page or two to The Internet, and through those, you could find others on it. The #zurna channel on the DALNet IRC server was the unofficial gathering spot of the Turkish people. It’s from there, I think, where you found other websites. It’s all a blur.

While I was busy duplicating cheesy pop singers’ sites, more creative people were busy, if you can call it that, giving birth to the Turkish internet’s first popular touchstones: funny videos in rectangles. That’s how I learned of Flash. The rectangles started making sense, all of a sudden.

I am a bit hazy on the details; both because these things happened more than 15 years ago, but also I was just very young, and all this stuff was new to me in a language I largely understood through several layers of indirection including but not limited to my parents, dictionaries and magazines which mostly printed reviews of new hard drives.

But here’s what I remember had happened: I found a way to email the author of those videos, asking him (obviously) how on earth he made those characters move, speak, animate so freely. Clearly, those weren’t just marquee tags or scripts you embedded to make the googly eyes. Those rectangles were something else. Could he, please, share the magic?

One of the later websites I made in 1999 using Microsoft Frontpage

Again, a few steps in between here are missing in my head. He must have told me about Flash, and I must have found a way to acquire it. I remember a trip to a sketchy computer store in my hometown, asking them if they could give me a copy of Flash. But somehow, probably through one of those CDs that computer magazines gave out, I acquired a copy. Or maybe it was a Warez website? Or some friend in #zurna? Who knows?

Regardless of how I got “it,” for the next year or so, my life was Flash. I was never the creative type, but Flash clicked for me in a way that nothing else did. It took me a few days to understand what tweening was. Putting a bee on a hand-drawn path, and animating across the screen kept me entertained for weeks. In a few weeks, I got it. I knew Flash.

It’s not that I was arrogant. Lacking any and all artistic skills, I knew that I’d never make animated videos like those, but I knew if I learned how to draw, I could. I probably wouldn’t be able to create Homestar Runner, but those rectangles no longer held any secrets.

I became so good, as we used to call it back then at least in Turkey, at Flash, that I became a small-time celebrity in the Turkish Flash forums. (Maybe I was arrogant). Things like 2advanced were, yes, too advanced, but I could generally play with it enough to understand how to rebuild all that if I had the time, which I did, or the motivation, which I didn’t.

Sometimes I wonder what has happened since then. How did we lose Flash? Or rather, how is it that we still don’t have anything that comes close to it where you can author something fully interactive, wrap it in a single file, and expect it to work everywhere.

The technical part of me understands it now: Those rectangles, be it Flash or Java or ActiveX or RealPlayer (G2!!), were runtimes. Virtually computers that lived in your browser. The web was hacks over hacks on top of a system to share scientific papers. Those rectangles, however, were actual computers that could access The Computer and not be limited to the browser they were running in. In a sense, they were windows (!) to the innards of your machine. That level of access to the computer of the computer, as opposed to being stuck inside a browser, meant you could do things the web couldn’t, both good and bad.

Moreover, running a computer inside your computer wasn’t cheap. For a while, it seemed like computers would get fast enough every year or so to compensate for the added hurdle, but the rectangle computer got heavier and heavier. When the smartphones came, and we had to take a step back in terms of performance for a few years, the rectangle computer was just too heavy and too tied to the old desktop paradigms. The documents worked fine on a small screen, but those rectangles which assumed they were on a real, desktop-sized screen didn’t scale.

Rebuilding Apple’s Interface Builder on the Web in 2008

Yet, while I am intellectually satisfied with that explanation, I am still in distressed awe that we are still far from being able to create web experiences that easily like it was in Flash. We are, for everyone’s sake, past the point where there’s a new JavaScript framework that web developers get paid to migrate to every week.

Yet, for example, when I watch the 280 North’s Atlas demo from 2008, in our lord’s year of 2019, I wonder if we really took any steps forward, or just still treading water 11 years later. I know it’s not really the same thing as Flash is, but if you launched that demo today, instead of 2008, it’d still be almost as impressive as it was then. Steve Wittens’ homepage, Acko, is amazing. But what has come close to it since then, and more importantly, are we more close to creating something like that than he was in 2013? Is that not a problem? Even today, on a high-end MacBook Pro, that website stutters for me on Firefox, with aliased (pixelated) graphics and doesn’t even work fully on Safari.

And this isn’t to say some things didn’t get better. If you want to create a web presence (ugh), you don’t need to sit and browse through actual GeoCities directories to find a short URL, like I had to till I got You don’t need to download CuteFTP from a malware-ridden and crack your installation of Microsoft Frontpage. From Squarespace to WebFlow to whatever WYSIWYG tools are called these days (NoCode? LowCode? SomeCode?), some things are undeniably better and easier.

Yet, I still look back and yearn for those weird rectangles, those small computers inside the computers. Maybe I’m just too old now.

What I’m Reading

America’s Risky Approach to Artificial Intelligence: Tim Wu, the influential law professor (author of many books which formed my thinking) argues that America shouldn’t rely on gadget makers and advertisers to compete with China. Especially in the light of current trade tensions and capitulations from American companies to Chinese demands, this definitely #makesyouthink.

The plan seems to be for the American tech industry, which makes most of its money in advertising and selling personal gadgets, to serve as champions of the West. Those businesses, it is hoped, will research, develop and disseminate the most important basic technologies of the future. Companies like Google, Apple and Microsoft are formidable entities, with great talent and resources that approximate those of small countries. But they don’t have the resources of large countries, nor do they have incentives that fully align with the public interest.

Universal Laws of the World: Morgan Housel at Collaborative Fund puts together a fun list of “Laws” that govern the world. It’s more amusing than informative, but I enjoyed reading through it and learning the origins of those common adages. I often think of Parkinson’s law, that the work expands to fill the time allocated to it, when managing projects. My new favorite is one of Wiio’s Laws

“If a message can be understood in different ways, it will be understood in just that way which does the most harm.”

Twitter says it wants to solve the “journalists’ careers end because someone digs up an old tweet” problem: Permanence is a feature of the internet, but it’s not some natural law. It’s just what we decided should be the norm. I think we should rethink that. And more specifically, I think you should also delete your tweets, unless you want them weaponized against you as you evolve and change, like any other sane person should. Anyway, Twitter is pondering about the same thing now, which is nice. Let’s see if this gets build before we are all living in The Matrix anyway.

Remembering and Forgetting Music

Tape trading, iTunes and whether we listen or hear

Ranjan here, and this week I’m writing about Grateful Dead tape trading and the impact of technology on listening to music.

A lot of great music came out in The Deleted Years. That we've forgotten much of it doesn't mean it was more disposable, it's just that the rapid changes in technology meant we disposed of it. And now it’s gone. - The Forgotten Years

I started playing guitar in 4th grade. My first band, in 6th grade, was called Kamikaze. Our first song started, "Kamikaze rocks as hard as we feel. We don't care if you don't like us." We were eleven years old. Grunge and metal ruled the day.

Then a couple of things happened in 1994. I entered my freshman year of high school. The World Wide Web was becoming much more of a thing. And I started getting into the Grateful Dead.

It all started with a tape. Boston Music Hall, April 7th, 1971. It was a bootleg recording of a Grateful Dead show and I listened to it endlessly on my Aiwa mini stereo. Thanks to the magic of the Mosaic Web Browser, I had a much easier, graphical way to navigate the existing communities interested in this. So I dove into Tape Trading.

Image result for maxell xlii grateful dead

It was wild. People spoke in terms like "Cornell 5/8/77" (venue and date of show). People posted their collections, and if you were a newbie to the scene, you could send blank tapes with prepaid shipping, and someone would spend the time to duplicate the shows and send them back to you.  

Once you had your collection going, it became more of a trading thing. You would coordinate with someone, and just on trust, buy some high-quality cassette tapes (Maxell XL2's were the US Dollar reserve currency equivalent), duplicate your show, and send the tapes. I never got burned and there was no blockchain needed. Being Deadheads, you'd often get some stickers, trinkets, or even thoughtful, handwritten letters included in the packages. I was a 14 year old kid, sitting in my bedroom and taking part in this musical community that combined trust, technology and a shared love. It was beautiful.

I remember getting to college and the days of MP3s, and Winamp taking over, and soon you could find every show within seconds. At first, it felt magical. The shows that I would spend days coordinating, and weeks waiting for a package in the mail, could all now be accessed in downloads that took minutes. But I slowly lost interest.


Our fellow Substacker, Why is this interesting, pointed me in the direction of this excellent Esquire essay about "The Forgotten Years" of music:

..if you ask me to name my favorite songs from 2007, I might need to use a lifeline. The music of the mid-aughts to early-teens is largely gone, lost down a new-millennium memory hole. There is a moment that whizzed right past us with no cassettes, discs, or Shazam queries through which to remember it. These are the Deleted Years, and we need to start honoring this period, right now, before we forget it forever.

The Deleted Years, by my count, ran from 2003 to 2012—give or take a year or two on either side—from the time the Apple Music Store opened to right around when we really started to use Spotify. In the early years of the new millennium, the music industry was crashing from its decadent late ‘90s peak, and record stores were beginning to drop like the early victims in Contagion

This really hit home. Maybe it was just that I became a strait-laced finance guy starting in 2002, but after an upbringing of being very purposeful about listening to music, my memory of music starting in the mid-2000s really starts to blur together.

After reading the Esquire piece, I realized that my musical memory for much of this time really does feel like a Girl Talk song (for reference: here's what I mean).

It's a weird feeling for someone who has been obsessed with music for as long as I can remember. My Dad was one of those 1960s immigrants who moved here enchanted by the American Dream and was really into country music. I can still remember every word to songs by George Strait, Dwight Yoakam and Merle Haggard that I haven't listened to in years. Like in any proper Indian father-son relationship, I never tell him this (and instead write this in a newsletter to strangers), but those songs still mean a lot. I remember every single word.

But the mid-to-late-2000s is a black hole. Nothing really stands out.

RIP iTunes

It's strange to me that this happened with the introduction of digital music, and not with the advent of streaming. iTunes should've been a direct digital corollary to the days of compact discs, and to be kind of VC Twitter-y, my mental music-processing workflows should've been the same.

But something changed. Even during my college days of collecting ill-begotten mp3s, everything still made sense. Maybe that's because, the music industry as a whole hadn't yet devolved into chaos. The Billboard Charts, radio stations, concerts, album releases, and even music journalism were not yet forced to change, as the blast radius only extended to college kids who had just gotten access to high-speed connections. The entire music machine could continue working as it always had, and things still felt normal.

But the industry fell into complete disarray thanks to the iPod and 99 cent downloads. Artists released albums in the traditional way, but everything just felt like it was running around like a headless chicken. The industry tried to operate like it always had, and it just didn’t quite work.

I would've thought the real comprehension problems would come from the infinite choice of streaming, like it has with news. That we’d be completely overwhelmed by an unmanageable supply of music and our heads would explode. But with music, by the time Spotify made streaming work, it feels like the music industry and listening populace had, collectively, started to figure things out. Albums were no longer necessary complete things, but that was fine. The radio and MTV had been fully phased out in driving discovery, but we were ready for it. Maybe there are one-minute songs built for Instagram, but whatever.

If anything, it gives me hope for our media consumption in the coming years. Maybe, the past few years have just been a tear in the fabric of the universe and we will once again start to figure out how to process online information.

A few years ago when trialing Apple Music was the first time I had opened iTunes in forever, and I looked at something that felt like a time capsule. The music that I bought from 2002-2007 was just sitting there, and, possibly contributing to the confusing sense of the time, I wasn't even sure what my "ownership" of it was. I certainly can't transfer it to Spotify, but I don't even think I need to.

Technology and how we remember

Possibly the most famous Dead bootleg was "Cornell 5-8-77". Its rendition of Scarlet Begonias ⇒ Fire on the Mountain was considered, at least on the message boards, the zenith of the genre.

This Bob Weir quote (guitarist from the Dead) about that specific show is possibly the most perfect way to end a piece on how technology changes how we remember and forget music:

For me it was just another tour. I remember feeling like we were hot back when were doing it. But, for instance, that Cornell show that that people talk about, I can’t remember that specifically. It didn’t stand out for me on that tour. The whole tour was like that for me. I think that show became notable because there was a particularly good audience tape made of it. And that got around. I think it was the quality of the recording was good and the guy’s location was excellent. And whoever it was that made that recording made every attempt to get it out there so that people could hear it.

As we’re getting 1990s nostalgic, here’s a White Men Can’t Jump (could you imagine if this movie came out today!) clip about listening to vs. hearing music.


It’s like a Taboola module, but just us referring to our old posts!

1) Writing this post made me go back and re-read Andrew’s guest post on The Climate Change of the Abandoned Internet. I kind of love that this nostalgic, old-man-on-the-lawn piece was written by someone in middle school in the 2000s.

2) Back in May, we wrote about TikTok and how it could one day find itself in the midst of the US-China trade conflict, and specifically have the Bytedance - acquisition put under CFIUS review. Well:

Pick your side because the NBA picked theirs

I know nothing about sports.

Hi. Can here. Today, we are talking about taking sides when things matter.

Values of your Shareholders

I know it feels like a few decades past now, but just a few weeks ago, we were discussing shareholder value. Well, not us, but a bunch of CEOs were. They got together, supposedly around a round table, and decided that we should steer away from optimizing for shareholder value to something more encompassing. You could say more of a 360 review, even. Businesses should take into account their impact on all the stakeholders, they said. Communities matter! Employees matter! Customers matter! Even the suppliers matter! Everyone gets a car!

I joke, but I don’t hate it. There is a Warren-esque feel to this enterprise. It feels warm, fuzzy, if not a bit wonky. But at the same time, like the hosts of Capitalisn’t and many others, I wondered if it’d actually change anything in the long run. The obvious criticism is “when everything matters, nothing does”. But, I am trying to be optimistic. The fact that such language is adopted (and hopefully not just co-opted) by the fat cats is good news, in my book.

Yet there are issues. For starters, accountability is a big problem. How do you measure performance along the goals you’ve set in a system like this? More importantly, who can kick you out? It’s somewhat dark, but it’s clarifying way to look at it. Accountability is not just bean counting, it’s really about pink slips.

Yet, it can feel a bit fatalist. I like more philosophical musings at times. A different and better way to think about this is allegiances. What is on top of your mind, when you make an ad-hoc decision? When there’s not enough data, and you need to listen to gut, what do you feel like is the right call? Whose side are you on? I don’t want to go full “us versus the terrorists” here, but some decisions are clear cut!

Something something Facebook

For example, Zuckerberg last week made an interesting point in a leaked (I want to believe it wasn’t, but it probably was) Q&A session that he considers the rule of law somehow above anti-trust regulation. If that sounds mechanically wrong and utterly confused, yes, it is because so.

My co-author Ranjan had a take last week about this, how Zuckerberg tries to other those who are upset by his firm’s actions. The weird undertone that bothered him (and me) was that Zuckerberg was co-opting “rule of law” as a weapon against Warren’s agenda. I know we are now used to “law” being disconnected from any presidential exercise, but my guess is if Warren becomes POTUS, she’ll enforce her policies via the rule of law, not by, say, twitter or late night press releases.

Meanwhile, it turns out America is not the only country that matters anymore. I, the token foreigner on this newsletter, should know this. Tech companies have been long aware of these issues (and I wrote about them), but the NBA now got a good reckoning too. Daryl Morey, GM for Houston Rockets, one of the most popular NBA teams in China (a weird thing to say, really) wrote a tweet supporting the protests in Hong Kong.

Unsurprisingly, lots of Chinese fans got upset, and the NBA’s main broadcasters and streamers in China cut their ties with the team. The team briefly meandered about firing Morey, and the league, which generally behooves itself the most woke (wokest?) of all professional sports leagues, had to put out a press release kowtowing to the Chinese market’s demands. Obviously, it’s pretty hard to tell where the market ends, and the state begins in China. You could paraphrase this as “Houston Rockets, and the NBA succumbed to Chinese pressure” and you’d be more right than wrong.

This isn’t very new, really. Max Read says, “‘Gap Inc. respects China’s sovereignty, and territorial integrity’ runs through my head sometimes like a line from a poem” while pointing to the time companies ranging from Mercedes-Benz to Marriott succumbing to similar Chinese demands in ways. This has been going for a long time. There are so many examples that I am sure by the time you get through this list, there will be more added.

Corporate Politics is now Politics

I don’t love this, but here’s the truth. In a world where we outsource much of our political activism to corporations, what companies say and do matter as much as, if not more, than our elected leaders. As consumers, we pressure companies to do the right thing, and they try to oblige. Sometimes, as Ranjan previously pointed out, companies see this as a way to actually buy in some leniency by leading the way in activism and hope that we also tag along, bringing with us our consumer preferences.

The NBA thing obviously feels different than Marriott sacking a line manager. It’s not America’s favorite pastime, but still a big one. It literally reads “National” Basketball Association, as opposed to, say, “A private league of teams, some of which have owners that are not American”.

You can argue this two ways. The NBA is (largely) a private enterprise, and so are the teams. They are free to make money however they want around the world, and they aren’t strictly beholden to Western ideals such as liberal democracy. They are, in other words, only accountable to their shareholders (hah!), and if Americans did not want it to be making money abroad in authoritarian regimes, they should have told them so. There are tons of industries with such restrictions. Some businesses are not allowed to operate in certain countries, and certain companies (and industries) cannot have shareholders from other countries. So, maybe the NBA is off the hook?

It sounds right, academically, but doesn’t sit well emotionally. To many people, the NBA is as American as cherry-pie and guns in schools, and we should hold it to a different standard. The NBA should Do Better. It’s not that we want the Harlem Globetrotters to trot the globe and promote democracy, but we should at least expect a bunch of rich people to hold the fort when they get chided by authoritarian regimes. This, to me, is the right way to frame this.

American companies prosper outside of the US, thanks to the rule of law in America. And those rules and regulations mainly derive from the principles of liberal democracy. You can make the argument that China is now a flourishing economy without a liberal democracy. But, by any measure, it’s still a poor country whose GDP per capita is dwarfed by significant parts of the democratic world. And while we do want companies to make money, obviously, it’s not that the only thing we want.

We also want to live free —and, or die, if you are from New Hampshire—. Regardless of your feelings on Chinese values versus American, you need to realize one thing: You can’t say in China that you want freedom without facing major repercussions. If you are an American, it’s a good argument for why we should at least hold our ground when someone on our side says that they want freedom for others too. It’s literally the least we could do. Just, you know, to not concede, when someone challenges our own core beliefs.

This is going back to the accountability thing a bit. The point of freedom isn’t to be able to say or do what you want to say or do. It’s also being able to take action without fearing the consequences. There is supposed to be no chilling effect. For example, you could, in America, decide that it’s not your job to protect the southern border and refuse to do business with your government. There are exceptions to this but that’s a far and few in between. Generally, you are on your own.

This is a good thing. You can refuse to be part of a government contract. Or you can be selective too; you can sell your services to one part of the government, and decide that the workings of some elements are problematic, and choose to opt-out. It’s all part of the promise of free enterprise. You are free to do whatever you want, and not do whatever you do not want.

“Flame of the West”

Look, I bring this up because last couple weeks, there was this flurry of marketing activity as several Silicon Valley venture firms went to fund Anduril, a boutique defense contractor that builds drones, and sentry towers, and I guess, some sort of “AI” that ties the room and all these pieces together. The fact that the company was founded by Palmer Luckey, who was ousted from Facebook after details of his funding of pro-Trump troll farms came to light did not help the optics. I am assuming that Luckey is supposedly buddies with (according to this Bloomberg piece) with Holocaust deniers did also not come up? I don’t know, really.

So, here’s my personal view: If you have to argue that you must invest in a defense contractor because that’s the patriotic thing to do, you may not fully get what free enterprise means. I mean, sure, you can feel really passionate about the defense industry and think that some investment in modernization might mean savings in the long run. That sounds a bit more McKinsey than G.I Joe but it does pass some academic muster.

But again, emotionally, at least for me, doesn’t sit well. Part of is that I do not like it when we pretend that these decisions aren’t based mainly on future free cash flows, and not much else. Also, while the Anduril’s founding team is more than a single person, it’s also hard to get past the antics of Luckey,. It’d be a tough sell to anyone that he is less interested in democracy as he’s interested in keeping America’s southern border more locked up than less.

And that, to me, is the real issue. As a foreigner who has immigrated to the US, I do believe in fewer borders, not more. I believe in less military spending, not just in terms of efficiency but in terms of less militarization overall. It’s okay if we disagree on this, but I don’t think America haphazardly projecting its military might all around the world last few decades has been good for America either. The famous phrase “United States is an an insurance company with an army” comes to mind, while also pointing out the copious regional conflicts people around the world have had to suffer.

I am lucky to have been born to a stable family in a relatively stable country. By some virtue and a decent amount of luck, I made my way to the US and now plan to live here, at least for a while. I am privileged enough to make my decisions based what I think is important to me so that I can defend them with integrity. This isn’t to say I don’t post-facto rationalize things here and there, but largely, I want to and do live my life on a path that follows a coherent thread. Liberal democracy, free enterprise, live and let live, they all sound about right. It would be nice if America, with all its business and thought leaders, did the same. Otherwise, what are we even doing here?

Previously, On The Margins

Taboola and Outbrain

You might have heard that Taboola, the famous purveyor of chumboxes underneath your favorite news pieces bought Outbrain, another famous purveyor of chumboxes. Ranjan previously went on a deep dive one of those boxes, seeing where each ad leads to. He’s still traumatized, but it’s a good read.

Commission-free Trading is Now Hip

Charles Schwab and E-Trade both announced they are dropping commissions on their stock trading. They never really made much money from them, but it’s interesting how Robinhood changed the game here. However, as The Margins’ resident economist guest writer Andrew Granato points out, this may not be a good thing for individual traders.

Mark Zuckerberg and Existential Threats

Let's read Zuck's entire antitrust answer together.

Ranjan here, and today I'm will try to remain calm as I write about Mark Zuckerberg and Elizabeth Warren.

Many Margins readers probably encountered the leaked Zuckerberg weekly town hall audio from earlier this week (the fact that they were leaked was, in itself, quite a story). The most striking part of the audio were his comments on antitrust and Elizabeth Warren.

The conventional wisdom seemed to be that his comments were innocuous, and even potentially beneficial for Facebook. It's worth taking a much closer look, because these few minutes lay out a number of clear themes of how Zuck thinks about antitrust.


To provide the best possible context, I'll include his entire antitrust answer, (including the question asked of him). All the Zuck quote blocks are sourced from The Verge.

I know this might feel a bit long for a newsletter, but it's very much worth looking at all of his words (emphasis added throughout is mine):

Question: With the recent FCC fine, investigation, and with the rise of politicians like Sen. Warren, I was wondering how personally worried you are about regulators coming in and breaking up Facebook?

Mark Zuckerberg: Well, I think you want to separate out a couple of things. I’m certainly more worried that someone is going to try to break up our company. Now, there’s a separate question about, at the end of the day, there is the rule of law — which, for all of the concern about the direction the country is going in, as someone running a company that operates in a lot of different countries, I have to say one of the things that I love and appreciate about our country the most is that we have a really solid rule of law, which is very different from a lot of other places around the world.

Like most trash talking, I’m both amused and annoyed by Zuck's confident retort that "someone is going to try". Significantly more worrying to me, however, is the language that follows.

He is setting up the framing of antitrust actions as a breakdown of the rule of law. To Zuckerberg, regulation is a bug, not a feature of democracy. This is central to his worldview; that civil society’s primary purpose is the allowance of unfettered capitalism. I normally would worry I’m reading way too much into the words, but Facebook’s actions over the past decade certainly lend credence to this.


So there might be a political movement where people are angry at the tech companies or are worried about concentration or worried about different issues and worried that they’re not being handled well.

This is an infuriating sentiment, and one I see regularly. That there is some "political movement where people are angry at the tech companies." It minimizes the righteous anger as an unfocused, personal one. No. People are angry about your platform's impact on our elections. About the live-streamed broadcast of racist mass murder. About the genocide and lynchings. About addiction and mental health consequences. It's not a political movement. It’s not even some coordinated, nicely branded “techlash.” It's just regular people, watching inaction and outcomes, who are fed up. 

The most important word

That doesn’t mean that, even if there’s anger and that you have someone like Elizabeth Warren who thinks that the right answer is to break up the companies ... I mean, if she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge. And does that still suck for us? Yeah. I mean, I don’t want to have a major lawsuit against our own government. I mean, that’s not the position that you want to be in when you’re, you know, I mean … it’s like, we care about our country and want to work with our government and do good things. But look, at the end of the day, if someone’s going to try to threaten something that existential, you go to the mat and you fight.

Again, the trash talking. 'Like, I don't want to have to crush my own government, but....'. I know Zuck's persona of nerdy programmer has long disappeared, but the level of NFL Wide Receiver cockiness is still jarring to hear.

Most important in this passage is that the threat is existential to Facebook.

This is the part we all need to internalize. If regulators try to break up Facebook, they are coming after his family and he will fight. I'm sure this is nice to hear from your leader, but it's a critical point. It's them against the rest of us. It's Facebook employees vs. civil society. Having a reasoned discussion about the importance of competition in a dynamic, innovative economy is a non-starter. He lays out that in this battle, there is no middle ground. The word existential is everything.

At least we’re not Twitter

And I just think the case is not particularly strong on this … It’s just that breaking up these companies, whether it’s Facebook or Google or Amazon, is not actually going to solve the issues. And, you know, it doesn’t make election interference less likely. It makes it more likely because now the companies can’t coordinate and work together. It doesn’t make any of the hate speech or issues like that less likely. It makes it more likely because now ... all the processes that we’re putting in place and investing in, now we’re more fragmented.

It’s why Twitter can’t do as good of a job as we can. I mean, they face, qualitatively, the same types of issues. But they can’t put in the investment. Our investment on safety is bigger than the whole revenue of their company. [laughter] And yeah, we’re operating on a bigger scale, but it’s not like they face qualitatively different questions. They have all the same types of issues that we do.

AGAIN, the trash talking. And I thought my Boston-raised, longtime New Yorker self liked to talk shit. But more important is this argument that you need monopolistic scale to combat problems like election interference. This is a debate that should be front and center. This should be a Warren vs. Zuckerberg one-hour, broadcast only on free-to-air networks (side note: New Yorkers, check out Locast), debate.

Zuckerberg earlier lauded the rule of law as one of the keys to the success of the American economy. But it's clear he didn't read the chapter on competition as a fundamental requirement for an innovative, capitalist economy. It’s this very concentration that has allowed continued inaction, without decreasing users. It’s what allows for that repeated tech apology: "We know there are problems, but we're working on it and there remains much to be done. Machine Learning." Imagine if the Facebook Blue app was ever pressured from the business side to...actually improve things. 

They haven’t. Do you feel more comfortable about the role Facebook will play in the 2020 election than you did two years ago when the Russia stuff started coming out?

This problems are real

So yes, I think that the direction of the discussion is concerning. I at least believe, I think, there are real issues. I don’t think that the antitrust remedies are going to solve them. But I understand that if we don’t help address those issues and help put in place a regulatory framework where people feel like there’s real accountability, and the government can govern our sector, then yeah, people are just going to keep on getting angrier and angrier. And they’re going to demand more extreme measures, and, eventually, people just say, “Screw it, take a hammer to the whole thing.” And that’s when the rule of law comes in, and I’m very grateful that we have it.


If there aren’t any Facebook-guided regulations to placate the population, people will get angrier. Once again, that deflection. This is about how people feel rather than real problems. I have to imagine he really believes this. I have to imagine most Facebook employees believe this. 

But, this is not about a feeling (but yes, you can clearly tell that I do feel anger). When Exxon spills oil in the Gulf of Mexico, it engenders anger, but there is a very real problem in need of fixing. When tobacco companies hide the cancer-causing effects of cigarettes for decades, people get angry, but the anger is not the problem to solve, it's the lung cancer.

And when journalists write about the problems of Facebook, Inc. it’s not for clicks (a common trope from FB folks). I think those in media are the most concerned, because they are the most in tune with the responsibilities that accompany influence . They understand, better than anyone, the power dynamic that underlies exposing someone to new ideas. And they clearly recognize the gravity of Facebook’s refusal to accept any of these responsibilities.


There was a really interesting theory proposed by Jason Kint (a must-follow if you're into media/privacy/regulation):

The idea is that Facebook purposely leaked this audio, as they deemed it beneficial - and I admit, the fact that Zuckerberg happily posted The Verge story to his FB page does make it seem a bit off. Whether or not this was some four-dimensional comms chess move (livestreaming this week’s Q&A does make it seem like it could be), I'm more incredulous that Zuck very clearly seemed proud enough of the audio to "own it" and post it.

For all the reasons stated above, he appears to be proud of his words. He look at this, simply, as a general gallantly leading his troops into battle. This is what worries me the most.


He has deemed this threat existential. Is it his fiduciary duty to take out Warren? This stuff certainly does not have to be in your face. Lower the cost dial on Trump Campaign Ads. Up the dial when the words "Native American Elizabeth Warren" are in a post. It ain't us, it's the algorithm. And just imagine if he had a candidate that would happily accept, and even encourage, election interference….

Note: I almost left this out to avoid the appearance of tin-hattiness, but this @DHH tweet made me leave it in:

Zuckerberg followed up that he will try not to antagonize her, but is he really acting in good faith?

Douglas Rushkoff made a great point: "What Zuckerberg doesn't get is that Elizabeth Warren isn't simply protecting America from Facebook, but Facebook from itself."  I loved this line because I agree with Zuck that the rule of law is one of the most important components of what makes the American economy succeed. Facebook has repeatedly shown that it is putting this stability at risk. Unchecked, the company poses a threat, not just to society at large, but even to themselves.

So it's up to the rest of us, and especially our government, to help keep them in check. After all, if at the end of the day, something existentially threatens you, you go to the mat and fight.


This Judd Legum piece on Facebook's political advertising policy is quite something. Facebook has clarified they "cannot" block clearly false information in a political ad because "political ads are ineligible for fact-checking." I get the thorny First Amendment issues that arise from evaluating the speech. I get this is complicated. This is where it comes down to good faith and why Zuckerberg's words above, that were considered innocuous by the conventional wisdom it seemed, are incredibly important. He's made it clear that it's the Facebook conglomerate over the good of society.

(Apparently, this is now okay):

As an addendum to this, yesterday afternoon, a few friends were chatting about how hopeless this all feels again. "Trump is tripling down on the idea that it's okay to pressure foreign leaders to interfere into our elections. He’s doing it openly. How is this okay?!"

This is the most important point: This will happen again. Trump will shock us into oblivion, while in the darkness of personalized Facebook feeds, millions of people will see information like above. The rest of us will be aghast at how people could possibly support someone so obscene, and our disdain for "them" will grow. And the cycle will continue.

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