Hi, Can here, the other half of Margins. My co-host Ranjan’s last piece on Pizza Arbitrage made quite a splash on the interwebs (it was on the front page of BBC!) and we now have several times more readers than the last time we sent an email. So, a brief introduction is in order.
Margins is a labor of love of two friends: Ranjan, and yours truly, Can. We take turns writing the newsletter and every week you’ll get two emails: one links roundup, like this one, and one long-form piece (like the pizza arbitrage one). There are a few underlying themes to some of our writing (ZIRP for Ranjan, Data-as-a-Liability for me) but there’s no unifying thread other than the things we talked about in Margins’ Slack that week. Ranjan’s background is in finance and media, while mine has been in engineering and product, so we hopefully can bring you a combination of perspectives on “the business of technology and the technology of business” (the tagline we once came up with).
The main goal has simply been to get each other to write more and this newsletter is entirely free. There are as few trackers in it as Substack, our publishing platform, allows. We make no money from it, and don’t plan to. But, if you’d like to help us celebrate us hitting some of our personal subscriber goals, please join us in donating a few dollars to your local Frontline Foods. If you donate and then email us about it (honor code!), we’ll be happy to mention you (or your company) in our next issue with a link.
And now, the links!
Links from Can
We talk a lot about the monopolist tendencies of the big tech giants here. This long, very long, seriously long piece is a good (did I mention long?) overview of how we got here over the years. It is easy to ascribe the techlash to a few media organizations crying foul over having lost their regional monopolies, but the body of evidence and consensus in DC has been building for a long time now. Add this to your Reading List, and read it over the weekend.
Bork preached that the sole legitimate purpose of the antitrust laws was to advance “consumer welfare.” In practice, that standard has come to focus narrowly on the question of whether suspect practices can be proven to raise prices for consumers. Cases hinge on abstruse, inconclusive, swearing contests between equally credentialed economists. The government’s burden is hard to meet.
So long as a company’s prices were low, Bork preached, its “bigness” and market dominance were likely just signs of efficiency and innovativeness. These were qualities to be lauded, not hobbled.
Both Ranjan and I spent a few months in Singapore during our respective times at INSEAD. And just like half the Silicon Valley, I do have a weird fascination with the little red dot. The sleek skyscrapers, the gorgeous airport and the hyper-efficient bureaucracy however can sometimes hide many of the dark realities of Singapore. Up until a few weeks ago, it seemed like Singapore was able to curb the pandemic, but the sharp increase of cases stemming from the migrant workers’ dorms should wake you up to who actually is doing the building and at what cost:
But despite all the threats, through collective complacency or failure of imagination, the government was blindsided by a vulnerability it might have easily anticipated. In April, a dramatic surge of infections among poorly paid foreign workers crushed Singapore’s sense of invulnerability. The city is built and maintained by an army of laborers who come from other Asian countries — Bangladesh, India, China. They can be lodged as many as 20 men to a single room; one toilet is legally considered enough for 15 people. Last year, some of the dormitories suffered a measles outbreak. Migrant-worker housing has been connected with illness ever since the British colonial rulers called tuberculosis “a disease of the town-dwelling Chinese” because it raged among the “lowly paid migrants living en masse in congested and insanitary dwellings in the municipal area,” Loh and Hsu write. In other words, the notion that packed worker lodgings could weaken public health was neither new nor surprising.
And also, this happened?
Rights experts described the decision to hold the case remotely as callous. “The absolute finality of the sentence, and the reality that wrongful convictions do occur around the world in death sentence cases, raise serious concerns about why Singapore is rushing to conclude this case via Zoom,” said Phil Robertson, the deputy director of Human Rights Watch’s Asia division.
I swear we try not to make this newsletter some SoftBank agitprop, but my man Masa makes it hard not to. Sure, no one could have predicted that the virus and the resulting economic massacre, and, sure, some companies like WeWork and Uber are poised to take worse hits than most given their businesses. Still, this is just too much! Masa has lost billions of dollars before, and made it to the top so maybe he’s really into second comings? Is this why he’s comparing himself to Jesus. I don’t know. I’m out of jokes here.
He added that because the performance of the first Vision Fund is “not that great,” SoftBank would continue to use its own money for a second Vision Fund. “We decided not to do the marketing for Vision Fund 2 for the partners for awhile [ . . .] If the performance is not very good, then, of course, the money for Vision Fund 2 cannot be asked [from] other people.”
Strong quotation mark game, FT. Also, this is a real SoftBank investment slide??
If you were to tell the Slashdot-reading, Mandrake-using Can of early 2000s that one day Microsoft would not just become a big open-source proponent but also come out and admit they’ve made mistakes, I’d have told you to go to DLL-hell. Yet, yet, here we are. Microsoft is now the world’s biggest company by market cap, so it’s not like they are admitting defeat In some ways, this is just relishing in the success of their strategy but still quite a statement if you’ve been following the company for a long time.
Microsoft president Brad Smith now believes the company was wrong about open source. “Microsoft was on the wrong side of history when open source exploded at the beginning of the century, and I can say that about me personally,” said Smith in a recent MIT event. Smith has been at Microsoft for more than 25 years and was one of the company’s senior lawyers during its battles with open-source software.
A “friend” once told me I had been a row in a spreadsheet she kept about potential romantic partners. I convinced her to let me take a look and it was fascinating. I sort-of wrote it off as a weird personality quirk, but and it was. Call me a hopeless romantic, but I find it not just dehumanizing but ultimately self-defeating to quantify the qualities that make two people good matches for each other. It obviously does not stop others from trying:
He then scored each woman attribute by attribute, multiplied those numbers by their weights and added the results to get a final score. But there was a problem: Jacob didn’t know what counted as a high enough score to indicate that he should stop dating and settle down. So he devised his own spin on the “Secretary Problem” – an equation typically used to decide what percentage of potential candidates a person should interview for a job. (The classic solution: the greater the size of the pool, the closer the answer tends towards roughly 37%.)
This is just incredible and worth every second of the 25 minutes. It’s one thing to share his joy of solving what is at first blush an incredibly-hard puzzle, but his clarity of thought coupled with his ability to make it look oh-so-easy is such a thrill.
Links from Ranjan
A number of people sent in the Chuck E. Cheese / Grubhub news which is an equally absurdist example of food delivery platforms. This reminded me of this 2017 Fast Company piece on the history of the restaurant, and learning that it was founded by the Atari founder Nolan Bushnell using the money from selling the gaming console company to Warner:
Around 1974, Bushnell began to call his now-Atari restaurant project “Coyote Pizza.” He often tells a story of attending an amusement show at the time and ordering what he thought was a full-body coyote costume. A large gray rat showed up instead. With Atari employees often donning the costume at company events, a character began to emerge: Bushnell named him “Rick Rat.”
If you end up reading that piece, just imagine if Bushnell could’ve pitched Masa Son on this idea:
Regular readers know of my worries about how companies like Amazon treat their warehouse workers. The NY Times had a brutal piece this week on the warehouse with the most infections (that we know of). Reading this also made me wonder a bit about what ended up happening with Haven.
On April 10, Amazon announced 11 new cases. On April 13, it was four new infections, and on April 15 the company told employees that another 11 people were infected. After that, no specifics were forthcoming, just announcements that there had been additional cases.
On a whiteboard in the warehouse, several employees asked managers why the number of infections was no longer shared. They were told that it made no difference and that the company didn’t want to make employees fearful.
Ever since belatedly learning about things like hex codes, I like to sometimes pretend I have an understanding of graphic design. This is an intriguing look from WIRED at how we see color on screens specifically changes the way we process information.
Most people are trichromats, meaning they have three types of cone cell allowing them to see roughly a million colours (around 8 per cent of men and 0.5 per cent of women are colour-blind, which usually means they only have two fully functioning cones.) A very small group of women, though, have a genetic mutation that gives them an extra, fourth type of cone cell. Tetrachromats, as they are called, are theoretically able to see some 100 million colours, differentiating between segments of the rainbow the rest of us can only imagine.
There’s also a game about your color perception the article is based on worth trying out.
Casey Newton’s newsletter best captured what makes me uncomfortable about Facebook’s acquisition of GIPHY:
Meanwhile at The Verge, Jay Peters asks Giphy’s most high-profile partners what they make of the deal, and they responded in two ways: either saying that they had been hiding user data from Giphy, or declining to comment at all. Ultimately, these partners are going to vote with their products. If they come to view Giphy as a data giveaway to Facebook, they’re likely to find alternatives. But if Apple and Snap remain Giphy customers, perhaps skepticism of the deal will subside. (I wouldn’t count on it.)
If there’s anyone to help you start to make sense of the importance of the Joe Rogan / Spotify news, its Nicolas Quah at Hot Pod:
So, this is a big deal. Like, tectonically big. The actual numbers are hard to pin down, but Rogan has mentioned on the podcast that it reaches about 190 million downloads a month, and the show is, again, widely believed to be one of the biggest revenue-generators in the industry. The terms for the Spotify licensing deal were not disclosed, but I imagine a crap-ton of money was involved in this arrangement.