Curated Insights 2017.09.10

You are the product

What this means is that even more than it is in the advertising business, Facebook is in the surveillance business. Facebook, in fact, is the biggest surveillance-based enterprise in the history of mankind. It knows far, far more about you than the most intrusive government has ever known about its citizens. It’s amazing that people haven’t really understood this about the company. I’ve spent time thinking about Facebook, and the thing I keep coming back to is that its users don’t realise what it is the company does. What Facebook does is watch you, and then use what it knows about you and your behaviour to sell ads. I’m not sure there has ever been a more complete disconnect between what a company says it does – ‘connect’, ‘build communities’ – and the commercial reality. Note that the company’s knowledge about its users isn’t used merely to target ads but to shape the flow of news to them. Since there is so much content posted on the site, the algorithms used to filter and direct that content are the thing that determines what you see: people think their news feed is largely to do with their friends and interests, and it sort of is, with the crucial proviso that it is their friends and interests as mediated by the commercial interests of Facebook. Your eyes are directed towards the place where they are most valuable for Facebook.


WhatsApp announces free Business app, will charge big enterprises

Businesses will only be able to contact people who have provided their phone number and agreed to be contacted by the business over WhatsApp…the enterprise solution will initially be free but it does plan to charge businesses. Some functionality that will be offered by the Business app and enterprise solution includes the ability to create a verified profile with info like address, description, and hours, plus “Features for helping manage customer chats like away messages for when businesses are not able to respond at the moment.

With over 1.3 billion monthly users and 1 billion daily users, WhatsApp has reached the massive scale necessary for it to earn significant revenue even from light advertising. Its Snapchat Stories clone WhatsApp Status now has 250 million daily users, and could host vertical video ads between friends’ content the way Instagram does. It could also insert display ads into the inbox like Facebook Messenger.

Apple can thrive in connected home despite Amazon, says Barclays

Google’s strength is around Cloud, ML and getting better at NLP. The reduction in error rates from Voice search from the mid-20%’s to low single digit % of queries over the last three years speaks to this strength […] Amazon is leading device market share today, and has the greatest Voice dataset to work with, but it needs to catch up to Google in NLP and ML (machine learning) in order to secure its position as the leading player longer term. We feel comfortable that Amazon will get there given their strength in cloud with AWS and long history in machine learning at Amazon.com (recommendation engine, etc).

Apple’s Connected Home strategy is focused on the company’s ability to leverage its software ecosystem (namely iOS) while maintaining its established position within its massive loyal user-base. This is an interesting approach when compared to Amazon and Google, which seem to be putting more emphasis on AI-powered speakers as the center of their Connected Home strategies. While we believe that AI-powered speakers could be used to drive incremental sales for Amazon, and gather additional data for Google, we wonder whether these devices can really be the center of the Connected Home in their current form. For Apple, we believe the iPhone will provide a natural control panel for the Connected Home due to its user-friendly interface and constant presence with the user. We note, despite the rapid growth of the Amazon Echo, Apple’s Siri still runs on significantly more devices. For context, we estimate that Apple’s installed base of devices is now much larger than 1 billion, including more than 700 million iPhones, compared to an estimated 20M+ Echo and Echo Dot units sold by Amazon at the end of 2016.


Chip prices keep rising, could crimp demand, says JP Morgan

…is that all upstream and downstream component makers guided continued blended ASP increases across memory, rechargeable battery, MLCC, camera modules and even PCBs. Among major components, SEMCO remained the most optimistic on continued MLCC price increase in the next 6-9 months under moderate supply growth from Japanese suppliers. Contents growth at dual-cam seem to be more based on volume growth rather than specification upgrades and we confirmed progress/ interest from both corporates/investors on 3D sensing potentially used for more than facial recognition and multiple brands.

We need to stop pretending that the autonomous car is imminent

We could start to see more interest in electric vehicles as second cars that are used primarily for short errand trips around town, but then we run into pricing concerns because few people want to spend more for a second car than their primary vehicle. Plus, the costs and potential impact on the electric grid as consumers start to install in-garage charging systems — yet another expense associated with electric cars — are potential concerns.

Beyond physical safety are the cybersecurity concerns. As has been discussed by many before, enormous potential threats are opened when the connectivity necessary to build and run autonomous cars is put into place. The notion of hacking when it comes to automobiles moves from an annoyance to a life-threatening concern.

…the ability for cars to communicate with each other and other elements of the transportation infrastructure (stoplights, road signs, etc.), commonly referred to as V2V (vehicle-to-vehicle) and V2I (vehicle to infrastructure).

…concerns about regulatory standards, insurance liability and other legal issues that could dramatically slow down deployments…

A simple design flaw makes it astoundingly easy to hack Siri and Alexa

Using a technique called the DolphinAttack, a team from Zhejiang University translated typical vocal commands into ultrasonic frequencies that are too high for the human ear to hear, but perfectly decipherable by the microphones and software powering our always-on voice assistants. This relatively simple translation process lets them take control of gadgets with just a few words uttered in frequencies none of us can hear.

The first is that voice assistants actually need ultrasonics just to hear people well, compared to analyzing a voice without those high frequencies…The second is that some companies are already exploiting ultrasonics for their own UX, including phone-to-gadget communication…User-friendliness is increasingly at odds with security.


Tiny changes can have big implications

Slow changes — both improvements and deteriorations — get magnified over time. But over short periods of time, they are barely noticeable for most people. Cognition, says Charlie Munger, misled by tiny changes involving low contrast, will often miss a trend that is destiny.

One big lesson that I have learnt over the years is that I should never talk to, or rely upon, the management of a company when worrying about risks of disruption. Apart from the fact that they have too much financial and emotional investment in the game, the management of a company is just too close to data which will turn out to be noise in the long run.

More data does not always lead to more insights. Often less is better. In fact, when one is thinking about disruption (or gradual improvements in the competitive advantage of a business), investors who are somewhat detached as compared to insiders and industry analysts, and who have learnt much after reading evolutionary biology and history of not just businesses but civilisations, are likely to be in a much better position to identify important changes that are hidden in daily, weekly, quarterly, or even annual financial statements.


Sheryl Sandberg just gave some brilliant career advice. Here it is in 2 words

“I think the most important thing we’ve learned as we’ve grown is that we have to prioritize,” said Sandberg. “We talk about it as ruthless prioritization. And by that what we mean is only do the very best of the ideas. Lots of times you have very good ideas. But they’re not as good as the most important thing you could be doing. And you have to make the hard choices.”

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