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Preview: Silicon Valley Watcher - at the intersection of technology and media

Silicon Valley Watcher — at the collision of technology and media



Former Financial Times journalist Tom Foremski provides insight into the business and culture of Silicon Valley.



Modified: 2017-03-09T01:49:49Z

Copyright: Copyright (c) 2017, foremski
 



The Limits Of Persuasive Realities: Hacking The Brain Stem With VR Marketing Technologies

2017-03-09T01:49:49Z

Successful technologies start life by being good enough to be useful. Could some technologies become unbelievably good at what they do—and become too good to be used? Todays marketing technologies have improved greatly thanks to all that personal data we constantly give away. And they are about to rocket to a new level. With the addition of Virtual Reality environments bolstered by artificial intelligence and personalization — it will be possible to create the Dream Marketing Machine. Prime the Dream Machine with any Brand and it will reliably churn out passionate and emotionally committed customers. You’ll get Fanboys and Fangirls by the stadium-load and for pennies on the dollar that Apple pays in marketing costs. We could be very close to this Dream Marketing Machine.  Successful technologies start life by being good enough to be useful. Could some technologies become unbelievably good at what they do—and become too good to be used? Todays marketing technologies have improved greatly thanks to all that personal data we constantly give away. And they are about to rocket to a new level. With the addition of Virtual Reality environments bolstered by artificial intelligence and personalization — it will be possible to create the Dream Marketing Machine. Prime the Dream Machine with any Brand and it will reliably churn out passionate and emotionally committed customers. You’ll get Fanboys and Fangirls by the stadium-load and for pennies on the dollar that Apple pays in marketing costs. We could be very close to this Dream Marketing Machine.  At a recent event hosted by SpiritualVR  (photo above) panelist Anastasiya Sharkova said she was deeply moved by her first experience with virtual reality (VR) a title called theBlu:Encounter in which you go eye to eye with a blue whale. She said the experience was so overwhelming it bypassed all reason and logic. She knew it was all computer generated yet when she looked into eye of the giant she felt a deep emphatic connection with the artificial whale that lasted for days. And she used a lot less water for the next two weeks. This scares me. What if the Blue Whale represents a brand such as AT&T and I’m suddenly emotionally bonding with a commercial organization and I can’t control it? We know VR can affect behavior because it is already used in therapeutic applications treating post traumatic stress disorders. Persuasive Realities… Yuval Boger, CEO of open-source VR tech design company Sensics says there is already strong interest in marketing applications. "There are some excellent opportunities to create powerful branded VR experiences." - But would you willingly agree to a VR experience that you knew was designed to persuade you and manipulate your emotions for commercial gain? And then continue to influence your behavior long after the event? - Would you allow the Disney whale to try to emotionally bond with your child? - What if your new job required a swim with the company culture whale as part of HR's on-boarding? - What if your government insists you swim with its patriotic whale? Don't get hung up on these balaenopteran examples. The creature will be chosen and shaped just for you -- for maximum empathy. Hacking the brainstem… Mass media critic Marshall McLuhan in the 1960s was alarmed by the effects on people from images on the surface of spherical cathode ray screens watched from afar. VR immerses you inside a sphere of reality where its creator controls every aspect of your visual and auditory world. Marketing has never ever had so much control. Marketing can use VR to step over your talent for reason and logic and try to tap right into your emotions much as in Neal Stephenson’s 1992 novel Snow Crash — hacking the brain stem — the oldest part of the brain.  But who has the right to access our emotions? The government? Hollywood? Or anyone at any time and in any way? If these technologies of persuasion become so incredibly good at what they do— and they will eventually reach that point — then they become too good to be used. S[...]



Silicon Valley Innovators Warned About Hyperscale Tech Companies

2017-02-17T21:07:13Z

We are in an era of “Hyperscale companies” such as Amazon, Facebook, Google, Microsoft and Apple that limit opportunities for startups warns Sam Altman, head of Y Combinator,  Silicon Valley’s influential investment group, accelerator and educator.  The warning was part of a long 2017 YC Annual Letter: Altman wrote: “We’re now in the era of hyperscale technology companies…Companies like Amazon, Facebook, Google, Apple, and Microsoft have powerful advantages.” “I expect that they will continue to do a lot of things well, have significant data and computation advantages, be able to attract a large percentage of the most talented engineers, and aggressively buy companies that get off to promising starts." This situation “is unlikely to reverse without antitrust action.”  We are in an era of “Hyperscale companies” such as Amazon, Facebook, Google, Microsoft and Apple that limit opportunities for startups warns Sam Altman, head of Y Combinator,  Silicon Valley’s influential investment group, accelerator and educator.  The warning was part of a long 2017 YC Annual Letter: Altman wrote: “We’re now in the era of hyperscale technology companies…Companies like Amazon, Facebook, Google, Apple, and Microsoft have powerful advantages.” “I expect that they will continue to do a lot of things well, have significant data and computation advantages, be able to attract a large percentage of the most talented engineers, and aggressively buy companies that get off to promising starts." This situation “is unlikely to reverse without antitrust action.”  His warning is carefully worded because Altman knows that advocating for government intervention is unpopular in Silicon Valley. He points to opportunities for startups where these hyperscale companies “are naturally weaker.” The majority of startup founders and investors he says,  do not fully understand hyperscale’s “powerful advantage.” Foremski’s Take: [I’m a big fan of Sam Altman, the 31-year old head of Y Combinator group after moderating his presentation at the excellent Startup Voodoo conference in St Louis.] It’s good to see someone as influential as Sam Altman raising this issue because it is a topic I’ve been writing about for nearly three years:  Scale versus innovation: The peril to Silicon Valley’s future | ZDNet. We see massive late stage VC deals where the race to scale fastest and become the largest is the primary goal over any consideration of other values.   It’s because in digital economies the first company to scale has the potential to push nearly everyone else into the margins very quickly. In traditional markets a company would expand by establishing offices or stores in new regions and countries — a slow multi-year process that gives competitors time to respond. But in digital markets a well-funded competitor can quickly scale to a dominant global position in weeks.  Hyperscale AI wins… Scale matters in the very hot world of AI and machine learning. Hyperscale companies have access to massive amounts of computation and massive data sets to educate their AI.  David Galbraith, a systems architect notes the disparity in a recent piece: AI tl;dr – Medium Given the hardware, employee and data costs, the forefront of AI is in large corporations rather than startups and universities. He expects opportunities for startups in the form of agile partnerships between large corporations but the timeframe is narrow. Galbraith notes that the large Internet platforms “have been earlier to open up software tools and labs, largely in order to acquire scarce talent and insights into use cases that could indicate where to build or acquire data assets." Innovation derailed or delayed? Fewer AI startups will mean less innovation in a very important area that Y Combinator has identified as revolutionary.  Altman said Y Combinator’s OpenAI project will reveal significant progress in 2017 “for the benefit of humanity.”   Scale is not a very interesting story but i[...]



The Crunchies: An Aspirational Fantasy Of Startup Diversity; Plus Chelsea Peretti's App Ideas

2017-02-09T01:29:23Z

Chelsea Peretti (above) a comedic actress, introduced the 10th Annual Crunchies — awards celebrating startups and VCs in Silicon Valley — and managed some decent jokes poking fun at the techie audience and coming up with some great app ideas. (The final one is a killer app — people will need full-cycle tracking of nutrients to create total body datasets. See my video here.) Diversity was once again the bold theme of the event as seen in the careful selections of the nominees for the awards. Time and again the stage was filled with winners: startup teams of mixed color and gender.  People viewing from outside Silicon Valley would be tremendously impressed that our young startups are so progressive and clearly want to build the future the right way. Chelsea Peretti (above) a comedic actress, introduced the 10th Annual Crunchies — awards celebrating startups and VCs in Silicon Valley — and managed some decent jokes poking fun at the techie audience and coming up with some great app ideas. (The final one is a killer app — people will need full-cycle tracking of nutrients to create total body datasets. See my video here.) Diversity was once again the bold theme of the event as seen in the careful selections of the nominees for the awards. Time and again the stage was filled with winners: startup teams of mixed color and gender.  People viewing from outside Silicon Valley would be tremendously impressed that our young startups are so progressive and clearly want to build the future the right way. But the staged diversity of the Crunchies is far removed from actual reality — the audience of young techies and VCs looks nothing like them. Startup teams continue to be predominately: male, white/Asian; from privileged backgrounds. The Crunchies are clearly trying to push things forward in the right direction and it takes time. The message needs to be repeated many times. Soon the startups will get a clue: if you want to be nominated to win a Crunchie you’d better show significant diversity in your teams. The TJ Miller effect... The Crunchies has changed a lot since 2015 following a stunning performance from TJ Miller, a standup comedian and one of the actors in HBO's Silicon Valley sitcom. During a long evening of superb improv with the audience he called someone a "bitch." It was scandalous. It was disruptive. It shocked an audience more comfortable with unspoken workplace misogyny. The organizers apologized and since then they bend over backwards, and they would bend even further if they could, to present an awards show that is all about diversity in capital letters and in bold typeface but without spelling it out because that would be tedious. The Crunchies show highly diverse startup teams being successful. Success at winning awards equates with likely future success in business. Monkey see monkey do. The Crunchies award consists of a black monkey holding a stick. The message will eventually get through. It was a dark and stormy night... I've been to nearly every Crunchies but these last two have attracted smaller numbers of key people. I would normally run into a lot of high level contacts, a lot of top Silicon Valley CEOs would show up -- but now they don't -- with the exception of Marissa Mayer, Yahoo CEO, who was presenting an award. Lots of no-shows: Michael Arrington, the co-founder of the Crunchies, always presents an award with sidekick GigaOM founder Om Malik, also absent. There were a hundred or so empty seats in the front rows reserved for extra important people who didn't turn up. It might have been the weather. Or it might be that the new format of the Crunchies is not compelling enough for Silicon Valley’s A-list; or maybe the Crunchies are running out of steam. Ten years ago the Crunchies held an electric energy and celebrated scrappy startups and unique thinkers. The Crunchies will have a much brighter future if it can recapture some its past. - - - And the winners of the 10th Annual Crunchies are... | TechCrunch The Crunchies' Bi[...]



Do No Evil, Google And The Year Of The Monkey...

2017-02-01T03:36:47Z

According to the Chinese zodiac Google became a public company in the year of the Monkey, in August 2004. In Western culture we are familiar with the story of the three monkeys who very wisely: see no evil, hear no evil, and speak no evil. In some Asian cultures there is a fourth monkey: Do no evil.

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According to the Chinese zodiac Google became a public company in the year of the Monkey, in August 2004.

In Western culture we are familiar with the story of the three monkeys who very wisely: see no evil, hear no evil, and speak no evil. In some Asian cultures there is a fourth monkey: Do no evil.

“Do no evil" is often misquoted as Google's famous motto, which is actually: "Don't be evil" but it's essentially the same. 

In 2015, Google had tired of its responsibilities as the fourth monkey reorganized its business operations; renamed itself Alphabet, and abandoned the problematic old motto and replaced it with the more modern: "Do the right thing."

[I predicted this in 2009: “Google quietly drops “Don’t be evil”motto”]

It’s close enough to the old one that it's unlikely to confuse the ethics of loyal staff; plus, the new motto is sufficiently vague with a phrasing that provides endless relativistic wiggle room in answer to any challenge.

An evil temptation...

I was never comfortable with Google's "Don't be evil" motto because of the company's strategic importance to the Internet and to the economies of entire countries.

As Google grew in size I grew more worried about its "Don't be evil" philosophy.

We have seen many times how the universe loves irony; and how it values thorny opportunities to pop our oversized hubris and sink blowhard ambitions -- the bigger the better.

With a motto like "Don't be evil" there was a nightmare risk that Google would somehow end up being responsible for many imaginable and unimaginable evils.

The hands of fate love such opportunities. Let us not lead them into temptation!

A less evil motto...

I once proposed a replacement motto for Google, with the aim of lowering the risks of attracting disastrous ironic consequences:

"Brush your teeth and get eight hours sleep."


If Google messes up what's the worst that can happen? It's a bit grumpy, falls asleep in meetings, and has to chew some minty gum. No harm done and it is temporary — there's always a new day.

But with “Don’t be Evil" there's no end to the potential horrors from a universe highly motivated by ironic intervention. Google did the right thing to be rid of it.




The Summer Of Love - Photos And Stories - SF Leads In Culture Not Just Tech

2017-01-27T05:43:20Z

 The California Historical Society has opened a Summer of Love photo exhibit and is collecting people’s stories about this very important cultural event. To riff on the famous call to action voiced by Timothy Leary at the Human Be-In "turn on, tune in, drop out", we invite you to "log on, tune in, and join us" in this journey. If you have something to share—your first hand experience of the Summer of Love, an event you are planning, a book or article you are writing, or your memories of the era— or if you are interested in supporting this effort, please contact us. It’s not just in technology that this small little place in the world leads the world.  Here’s more information from Anthea Hartig, Head of the California Historical Society:  The California Historical Society has opened a Summer of Love photo exhibit and is collecting people’s stories about this very important cultural event. To riff on the famous call to action voiced by Timothy Leary at the Human Be-In "turn on, tune in, drop out", we invite you to "log on, tune in, and join us" in this journey. If you have something to share—your first hand experience of the Summer of Love, an event you are planning, a book or article you are writing, or your memories of the era— or if you are interested in supporting this effort, please contact us. It’s not just in technology that this small little place in the world leads the world.  Here’s more information from Anthea Hartig, Head of the California Historical Society:  "Today, the San Francisco Arts Commission opens the exhibition Jim Marshall's 1967, showing more than 80 stunning images created by the legendary rock 'n' roll photographer Jim Marshall in 1967. The exhibition is now on view, for free, in the ground floor galleries of San Francisco City Hall. It is a must-see for anyone interested in music, the counterculture, and how San Francisco became a magnet for young dreamers across the country and around the world.” "In honor of the opening of this exhibition, the California Historical Society (CHS) is launching a new major public history project focusing on the 50th Anniversary of the Summer of Love. We have created a new public history website featuring historical essays, first-person perspectives, and listings of numerous related events that will take place this year across California. CHS is proud to work in partnership with San Francisco Travel and more than 50 cultural and community organizations in San Francisco and across the state on this effort.” "The Summer of Love was a historical moment that has had a lasting impact on music,art, and popular culture, as well as healthcare, technology, food, and politics. We invite you to join with us this year as we explore the layered and complicated history and legacy of the Summer of Love. Bookmark www.summerof.love and follow us on social media (Facebook, Twitter, and Instagram) for all of the latest news and information about this Anniversary. Our own exhibition, On the Road…” “Yours in understanding that history truly matters,” [...]



The #FakeNews Effect On Commerce And Critical Thinking

2017-01-27T08:01:18Z

The issue of fake news is extremely serious and it requires immediate attention.  Its proliferation will undermine trust in everything. Everything will look fake. Including the truth. Without reliable and trusted information: - Consumers and commercial buyers will delay purchases. - Businesses won’t have good information for investment decisions. - Shareholders won’t have a clear view into investment risks. The rich get richer… The winners will be special self-interest interest groups — a variety of organizations with nefarious agendas. They will do very well in a fake news future and will learn to operate with impunity. Because even if outed — the truth will look fake. And anti-truth technologies will act as a red herring for a lot of censorship of valid content.  It’s very bad for the economy. Fake news is also bad for your head.  "The point of modern propaganda... is to exhaust your critical thinking" The issue of fake news is extremely serious and it requires immediate attention.  Its proliferation will undermine trust in everything. Everything will look fake. Including the truth. Without reliable and trusted information: - Consumers and commercial buyers will delay purchases. - Businesses won’t have good information for investment decisions. - Shareholders won’t have a clear view into investment risks. The rich get richer… The winners will be special self-interest interest groups — a variety of organizations with nefarious agendas. They will do very well in a fake news future and will learn to operate with impunity. Because even if outed — the truth will look fake. And anti-truth technologies will act as a red herring for a lot of censorship of valid content.  It’s very bad for the economy. Fake news is also bad for your head.  "The point of modern propaganda... is to exhaust your critical thinking" It's a haunting line from a recent Tweet by Garry Kasparov, the former world chess champion and Russian political activist.  "The point of modern propaganda isn't only to misinform or push an agenda. It is to exhaust your critical thinking, to annihilate truth." https://twitter.com/Kasparov63/status/808750564284702720 Exhausting media... The non-stop media channels everywhere you look -- now look back at you. And very soon every display near you will have a message specifically for you. The most advanced technologies of persuasion are coming to a screen near you.Personalized. 24-7. Will your thoughts and opinions truly be your own? Will they be based on truth or biased by others? What's the solution? How do we escape fake news and the exhausting never-ending intrusions of influence? There is a solution that grew out of the 1960s and 1970s when mass media was flexing its muscles and taking a massive cultural toll by trying to exhaust people's critical thinking around civil rights and the Vietnam war: People turned it off, turned away and turned on. The attention became Be. Here. Now. Original ideas and original thoughts require that you take the time to have original experiences — experiences that are unique and unmediated — un-media-ted through the experience of others. And that includes having an original experience of yourself. An uncomfortable zone for many. This is why meditation and mindfulness practices are so important to creating original ideas and thoughts. (And keeping notebooks nearby :) Critical thinking is a limited resource and we could use plenty more of it in every human endeavor. Machines can't do it for us. AI is a list of responses to a list of inputs — it is not a critical thinking machine. We have to do the critical thinking but the machines will be able to help us fight fake information with sourcing, verification and authentication — they are very good at those tasks. And they don't get exhausted. [...]



The Rise Of Fake News Amidst The Fall Of News Media

2017-01-25T00:32:21Z

The Fake News epidemic is a direct result of our continued failure to create a stable business model around professional news media. We seem to have forgotten that the news media sector continues to be in turmoil. Take a look at a few of the headlines above from last year. And in just the first few days of 2017: - Medium — one of the most popular online publishing sites says it will cut 50 jobs and change to an unspecified business model. Medium was founded by Ev Williams, founder of Blogger, co-founder of Twitter. It doesn't pay for much of its content yet this digital-first social media savvy media company is struggling. All media companies are in the disruptive path - not just digital. Ev Williams wrote: The Fake News epidemic is a direct result of our continued failure to create a stable business model around professional news media. We seem to have forgotten that the news media sector continues to be in turmoil. Take a look at a few of the headlines above from last year. And in just the first few days of 2017: - Medium — one of the most popular online publishing sites says it will cut 50 jobs and change to an unspecified business model. Medium was founded by Ev Williams, founder of Blogger, co-founder of Twitter. It doesn't pay for much of its content yet this digital-first social media savvy media company is struggling. All media companies are in the disruptive path - not just digital. Ev Williams wrote: 2016 was our best year yet. Key metrics, such as readers and published posts were up approximately 300% year on year. And we witnessed important stories published on Medium — from world-famous leaders to unknown individuals — on a daily basis. New York Times also reported growth in readers but warned of further cuts. Our global audience surpassed 200 million monthly users, a multiple of our reach a few years ago…Nothing can disguise the fact that the continued shift from print to digital demands a somewhat smaller and more focused newsroom. More readers... but less revenues Medium's 300% growth is an example of one of the most painful paradoxes in the media industry: reporting large new audiences and falling revenues. Media companies have to run forward constantly just to stand-still. There is no stable business model. It is all because advertising has to compete against the ever lower cost and ever-wider reach of advertising from Google and Facebook. Some more bad news from January 2017: After Buyouts and Layoffs, Nearly Two Dozen People Will Leave the Seattle Times Newsroom - Slog - The Stranger Pandora Reducing Workforce by 7% | Variety Fusion Faces Its New Reality – WWD   Condé Nast Braces for Consolidations This Week Ahead of Annual Meetings – WWD   Foremski's Take: This is a serious failure of the Internet and its collective hive mind of visionaries, computer experts, and software engineers — the world's top gray matter. Googols of top neurons connecting over the Internet and we still haven't figured out a way to collect the true monetary value of professional news media so that it can be reinvested in producing more high quality media. Since 2005, after leaving the Financial Times, I've warned that if we can't find a way to pay for professional media then society will pay for it in many unpleasant ways such as a rise of misinformation from special interest groups. People won't pay for the news media they should be reading but special interest groups will gladly pay for the media the media they want them to read.We have important decisions to make about a large number of issues such as the economy, the environment, energy, education, elder healthcare and those are just the ones that begin with the letter "E" — there's plenty more issues . With bad information we won't be able to make good decisions. Software engineers call this GIGO - Garbage In Garbage Out. It's going to get worse. In an era of free onlin[...]



US Venture Capital Investments Plunge In Fourth Quarter 2016

2017-01-12T04:33:26Z

Two major reports on venture capital activity from PricewaterhouseCoopers/CB Insights and the National Venture Capital Association (NVCA) showed a steep drop in US venture capital investments in the last months of 2016 but a strong overall year. 

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Two major reports on venture capital activity from PricewaterhouseCoopers/CB Insights and the National Venture Capital Association (NVCA) showed a steep drop in US venture capital investments in the last months of 2016 but a strong overall year. 

The fourth quarter seed and angel deals fell 43% to their lowest level since 2012. And late stage deals dropped to the lowest level since 2009, according to data from NVCA’s Pitchbook.

A rise in exits is essential in attracting further investment capital. However, investments outpaced exits by a multiple of 11.2 – the highest ratio in more than a decade and exits equalled $47 billion – at 2011/2012 numbers.

However, a more favorable IPO market is expected in 2017 because of well managed and well performing startups lining up for their public debut. 

The MoneyTree Report from PricewaterhouseCoopers and CB Insights found that fourth quarter US deals fell 16% in number and 20% in dollars compared with the prior year. The global full year

 2016 decline was 10% and 23% respectively.

Artificial Intelligence was the hottest area with $705m funding moving into 71 deals in the fourth quarter. One of the big funding losers, surprisingly was Cybersecurity startups reported MoneyTree.

After rising into Q3’16, US Cybersecurity funding plunged 51% to $370M. Deals also dropped to 32, down from 40 in the previous quarter.

“For those who predicted 2016 would be the popping of the venture bubble, it was not. Yes, it was a tougher year in terms of deal activity and funding, but versus 2014, which we can call a more normal period, 2016 compares quite favorably,” said Anand Sanwal, co-founder and CEO of CB Insights.

Looking forward to 2017, Sanwal expects new big investors from the Middle East and Asia to offset any declines from other investors.

MoneyTree reported that Silicon Valley had a steep drop in new capital investments of 37% and 22% fewer deals compared with the third quarter. New England funding fell 41% in the same period.