SITALWeek #267

Welcome to Stuff I Thought About Last Week, a collection of topics on tech, innovation, science, the digital economic transition, the finance industry, entertainment islands, and whatever else made me think last week. Please grab me on Twitter with any thoughts or feedback.

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In today’s post: The shift to zero-trust security; big platforms are taking a stand on content that's likely to cement their monopolies even further; Apple charging into the future; what sells on TikTok; WFH productivity problems; boiling the ocean; Entertainment Island is happening (though more like an archipelago); NZS Capital Q3 Update Letter; and lots more below...

Stuff about Innovation and Technology
Song stuck in your head? There’s a Google App for That
Now you can hum a tune to Google Search and the engine’s neural net will convert it to a string of numbers and then match the melody. The tech builds on the low-power, on-device AI that Google developed for song recognition.

Among Us Super Spreading
Mobile game sensation Among Us (see top of SITALWeek #265) drove 4B+ video views on YouTube in September. For context, Minecraft had 100B related video views in 2019; so, if they maintain their growth rate, Among Us could potentially annualize at nearly half the Minecraft number from essentially zero this past summer. (In case you're not yet tired of me saying it, this is another example of non-Hollywood content taking share of people's streaming time.)

Section 230 Back in Spotlight
The Section 230 law, as it’s currently interpreted, protects online social media giants like Facebook and YouTube from being responsible for content posted to their platforms by users. However, if platforms start expressing views as to what can or cannot be posted, then they become publishers instead and must assume responsibility for what is posted – a liability they do not want. That’s why the social media giants have been hiding behind the excuse of “it’s too hard for us to moderate all this content” (see SITALWeek #247 for more of my views on Section 230). But, they are beginning to step away from their passive neutrality. For example, Facebook will no longer allow posts that deny the holocaust and, along with YouTube, will start removing content related to conspiracy theories that could be used to justify violence. Twitter continues to take a more neutral approach by labeling content as problematic, but not taking it down (their banning of a NY Post article last week seems to have been due to policy violation owing to inclusion of hacked personal information; Twitter has since revised their policy, and future violations will be flagged – but sharable – unless the content is posted by the hackers/agents themselves). 

If the social media platforms are classified as publishers, the likely outcome will be the same as what we would see with proposed big-tech platform regulation: regulatory capture. It costs tens of billions of dollars a year in CapEx and OpEx to monitor all the user-generated content being uploaded, and it’s growing every year. So, by putting restrictions on big platforms, the government significantly raises the costs and barriers for newer entrants, therefore cementing the monopoly status of incumbents (see also: How I Learned to Stop Worrying and Love the Monopoly). Thus, from a competitive standpoint, it’s actually in big tech’s best interests to assume responsibility for what's posted and, in the process, express a view about what is ok and not ok to post. As I have said in the past, I think big tech platforms have two options: 1) remain completely neutral unless content contains a specific call to action for real-world violence (this still seems to be Twitter’s approach); or, 2) declare what is/isn’t acceptable and act like a publisher by editing content being posted; users can then decide whether or not they agree with the specified ideology and either use the platform or go elsewhere. The worst-case scenario is the direction Facebook is going toward private, encrypted, small group sharing, which drives all the crazy and hate underground. I favor Twitter’s stance for now because I want everything posted. I want to know who is crazy – and how crazy they are – so I can run the other direction!

Apple Charging into the Future
The noted charger and adapter company, Apple, continues to bring its risk-averse innovation to a new set of chargers, adapters, and magnetic accessories announced last week. The company also announced an innovative, smaller box for the new iPhone 12 (because it doesn't come with a charger), which will save Apple on freight costs when they palletize phones coming over from China. Apple is making some truly remarkable breakthroughs, which experts agree may mark a technological acceleration from snail to turtle pace.

Amazon Has Self to Blame for Dearth of Truckers
After years of taking business away from large trucking companies in the US, Amazon is finding itself in a big capacity crunch and hard pressed to find truck drivers. Amazon has around 13,000 truckers contracted to move packages between distribution centers and inject them into last-mile delivery networks. For comparison, Walmart has around 9,000. Trucking supply has shifted away from Amazon during the current ecommerce boom because the company was paying truckers about 18% less than competing brokers. 

Adapt or Get Hacked: Forget Firewalls, Invest in Zero Trust
Cloudflare, a platform for making the Internet run faster and more securely, announced a new set of partnerships last week with identity platforms such as Okta. Cloudflare Access is designed to match user credentials with cloud applications to decrease hacking risk, and Cloudflare One is an end-to-end platform that replaces your existing business network, and you can also run your browser remotely on Cloudflare’s cloud. Every company should be moving as quickly as they can to zero-trust security architecture – where you assume the bad guys can hack into any  system. Zero trust, which emphasizes identity, access, and encryption, was first described by Google in their BeyondCorp whitepaper in 2014. One example of creating a zero-trust security architecture would be leveraging API-enabled partnerships between access (Okta), governance (SailPoint), privileged access (CyberArk), endpoint security (CrowdStrike), email security (Proofpoint), and Cloudflare. These connected apps are in stark contrast to the outdated firewalls – or other “moats” around servers – which have turned out to be easily breached. If you are building a security architecture and think your Check Point or Palo Alto firewalls or VPNs are keeping you safe, you might want to take another look at the copious headlines of breaches and ransomware attacks this year.

Aesthetics of TikTok Merchandising
Product review site Thingtesting talks about TikTok-based merchandising designed to appeal to Gen Z. Bright colors and packaging that can serve as a prop for TikTok videos help, along with a sincere brand message. Founder of skincare company Starface explains: “We don’t categorise ourselves as skin positive, because [Starface] is about having the freedom to have the full spectrum of emotions. It’s not about putting on this front of impenetrable confidence, because everyone fluctuates. It’s about having something that’s fun, distracting, efficacious and optimistic.” This post lists eleven beauty products successfully leveraging TikTok to build direct-to-consumer brands, and there is a palpable difference between videobyte aesthetics vs. what you would see on typical store shelves.

New Hires Struggle in WFH Setting
The Information reports on internal surveys at Google showing a recent decline in productivity among engineers – particularly newer hires, who may be finding it harder to learn the ropes and get basic pointers from colleagues outside a shared office space. In related news, GitLab posted a comprehensive tutorial on how to embrace asynchronous workflows instead of live meetings and video calls.

AI-Optimized Sales Pitch
I was reading last week about Otter.ai, which uses AI to transcribe meetings (including Zoom calls) and create searchable text. Wired magazine also discusses new AI tools used to transcribe and analyze sales calls. Part of me says this type of analysis could do amazing things for eliminating cognitive (and other types of) bias that leads to mistakes and social conflict. And, another part of me sees the endless opportunities for misuse and wants to run away screaming as fast as I can.

Miscellaneous Stuff
QuaranTeens Fair Better than Expected
According to a survey in The Atlantic, teens have experienced slightly better mental health during quarantine – perhaps because they are getting more sleep (I wonder if adults are getting more sleep as well with reduced commuting?), spending more time with family and less time on social networks (offset by more video chatting and streaming), and, I might add, not physically immersed in the modern pressure cooker that is high school? One of the more sobering statistics reported: 25% of teens were worried about their families not having enough to eat. 

Deep Ocean Mercury Rising
Deep ocean temps are rising faster than previously thought. Oceans absorb about 90% of the heat on Earth, and warmer temps expand water volume, contributing to sea level rise. Although the temp increases are minute – only 0.02-0.04 ℃ – over the last decade, the rise is meaningful given the sheer volume of water that’s being heated up. I think I’ll stop using the “boil the ocean” analogy to describe impossible things.

Asteroid Diversion
DART is a satellite that will be launched with the goal of crashing into an asteroid the size of a small stadium to shift its course 1mm per second. The asteroid is orbiting a larger asteroid, which will allow scientists to measure the impact of the collision remotely without having to send a second satellite into space. It’s a small-scale test, you know, just in case. 

Entertainment Archipelago
Back in the beginning of COVID, I had fun creating a fictional tale about turning Las Vegas into a giant media and sports bubble; so, I’ve been delighted to see that several TV shows have recorded (or are just beginning to record) new seasons in Vegas casino bubbles.

Stuff about Geopolitics, Economics, and the Finance Industry
NZS Quarterly Update
NZS Capital’s Third Quarter Update Letter is available on our website.

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Disclaimers:

The content of this newsletter is my personal opinion as of the date published and is subject to change without notice and may not reflect the opinion of NZS Capital, LLC.  This newsletter is simply an informal gathering of topics I’ve recently read and thought about. It generally covers topics related to the digitization of the global economy, technology and innovation, macro and geopolitics, as well as scientific progress, especially in the fields of cosmology and the brain. I will frequently state things in the newsletter that contradict my own views in order to be provocative. Often I try to make jokes, and they aren’t very funny – sorry. 

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