102: Youtube's Subs/Bell Inflation, Trade Desk on IDFA, Connected TV, Twitter, Amazon Grocery, Alibaba, John Hempton,$69m NFT, Adobe, and the Darth Vader of Planes
"Maybe someday datacenters will look like giant aquariums"
When will we realize that the fact that we can become accustomed to anything, however disgusting at first, makes it necessary to examine carefully everything we have become accustomed to?
—George Bernard Shaw
🛀 Every tech company has talked about 2020's digital acceleration — Satya Nadella famously said that he saw “2 years of digital transformation in 2 months” — but I wonder, will it change pacing even after pandemic is over? Clearly the water level in the bathtub jumped up, but is the flow into it going back to what it was before, or is the faucet now turned to a higher level permanently?
Is it like the 4-minute mile… Once it has been shown to be possible, the floodgates open..?
"gosh, I just did something in 2 weeks that we had originally planned to go spend the next year on. It's like, okay, maybe I can actually move faster. Maybe we shouldn't be taking that long."
🛀 If you don't look back at what you thought five years ago and think, "what a dumbass", you may not be growing enough.
If you look at what you're doing now and think "what a dumbass", you may be too hard on yourself.
📺 Youtube subscriber/bell inflation:
So at first there was Youtube, and it was good.
You subscribed to the channels you liked, and could get a reverse-chronological feed of the videos they released.
But then everybody subscribed to lots and lots of things and the feed became unwieldy, so Youtube made a frontpage that was generated by an algorithm that kind of mixed stuff you subscribed to with random stuff that was popular at the time or that Youtube thought would increase your “engagement” based on what you had been watching.
For Youtube creators, this wasn’t very good, because they went from having actual subscribers that saw their stuff to a mostly meaningless number of subs that didn’t really meant much (Facebook pulled the same bait & switch on publishers).
Basically, they didn’t own the relationship with their fans, and Youtube decided to pull a Vader on them and alter the deal.
But now there was a “bell” icon (🔔) next to the subscribe button, which basically meant “I really-really want to subscribe, pretty please”, so creators had to kind of rebuild their subscriber list by constantly asking everyone to “hit the bell” so the subscription actually meant something and their videos didn’t organically reach just a low-single-digits of their subs.
But it looks like we’re now at the point where that’s being changed too, because I recently noticed that now when I hit the bell, it asks me again if I’m super-super-serious about getting notified, or if I just want a “personalized” notification, which I interpret to mean “throw that stuff in the algo with a somewhat higher weight than just a vanilla subscription”.
I’m just guessing here, but I bet all the existing bells have been converted to “personalized” bells, so now creators will be asking to “hit that bell and select the ‘all’ option” or something like that…
It’s like collecting credit card points or airline miles for years, at great effort, only to have the company say, “Ok, 1 point/mile used to be worth X, but now it’s worth 1/10th of X. Tough luck!”.
I can’t imagine how many hoops we’ll have to jump through in 10 years to actually subscribe to a channel ¯\_(ツ)_/¯
🔊 Speaking of Youtube, I’m surprised they don’t have an audio-compression button yet.
They can call it something else that sounds less technical, but basically, there should be a way to listen to various videos that have very different audio levels/volumes, and have it all adjusted to similar levels.
I just watched something where I had to turn the volume on my computer way up, and the next thing I had to bring it way down. It also sucks when you switch back and forth between things, like a Youtube video with very quiet sound, and playing music.
It’s 2021, there should be an automated way to deal with this. Come on Google, don’t tell me you don’t have the tech or talent to build this…
Investing & Business
The Trade Desk on IDFA
I like how Jeff Green explains how they look at IDFA (Identifier for Advertisers, a unique identifier for mobile devices) and the impact of Apple making it opt-in rather than opt-out will have on TTD:
about 10% of our spend uses IDFA. That's meaningfully different than most other digital companies who are spending a lot of time talking about this. We also are a demand-side platform. We are not a publisher. We are not a destination, if you will, where you're logging on to our app or our website. [...]
what we do is we look at about 12 million ad opportunities every single second. And so if 1 million of those, ish, have an identifier missing, so in other words you take away IDFA, we still have 11 million to choose from. So we just choose from those that are left, the 11 million that are left [...]
it's already something that we sort of steer away from, which is why it's not that much of our business; which is why I can say definitively, I don't believe this will have any material impact on our business the way that it affects others [...]
Unlike a platform or a destination like a Pinterest or a Snapchat where you have to monetize every ad on your site -- when a visitor comes there, you have to monetize it. If that's attached to an IDFA phone, for instance, or an Apple phone, then you still have to find a way to monetize it and you're going to monetize it at a discount. Those are the very same ads that we, on the demand side, are passing over.
So because of the fact that we are on the demand side, that's why we're not impacted the way that those others are. It's not a difference of opinion. It's a difference of location in the supply chain.
This is from the Q4 transcript.
Connected TV Sales
According to Strategy Analytics’ TV Streaming Platforms service, sales in Q4 2020 reached 109.1 million units. Of these 13.2 million were Amazon-branded devices, achieving a market share of 12.1%, with Samsung moving into second place and Sony’s new PS5 games console keeping it in third.
Overall sales of connected TV devices, including smart TVs, streamers, games consoles, reached 305.3 million units, an annual increase of 7.6%. [...]
2020 sales of both smart TVs (186 million) and media streamers (81 million) reached new records […] In streamers, Amazon and Roku extended their lead over both Google and Apple and together now account for more than 60% of the streamer market. (Source)
Twitter ‘Tip Jar’ Feature for Spaces
If this screenshot that Jane Manchun Wong has is real, it looks like Twitter will add a way to link external payment methods to Spaces profiles so that people can be tipped.
The list of options is all third party stuff like Venmo, Cash App, Paypal, Patreon, and such. I’m not sure if this is a way to get around platform requirements for a 30% cut (ie. if 100% of the money goes to the creators and Twitter doesn’t take a cut, and isn’t even processing the payments itself)…
I think we can expect the same thing for Twitter accounts outside of Spaces, either just with Super-Follows or maybe even for all accounts.
Seems like a good idea generally. If creators can monetize more inside of Twitter’s platform, they’ll tend to create more there rather than just use Twitter as a top-of-funnel to create leads that they then move off-platform.
And with more rewards and incentives for high-quality content that people find good enough to spend a few bucks on, it can’t hurt the average quality of discourse, especially if this is creating a culture of voluntary tipping that doesn’t require paywalls (these can work too, but it’d be too bad if the balance of free vs paid got too out-of-whack).
Amazon’s Grocery List
As many businesses struggled to survive the pandemic, Amazon was quietly building a national grocery chain.
The first Amazon Fresh store opened to the public in Los Angeles in September. Store No. 11 opened Thursday, and Amazon is working on at least 28 more, from Philadelphia to the Sacramento suburbs.
The company is also testing the “Just Walk Out” cashierless shopping technology created for its Go convenience stores at an Amazon Fresh location in Illinois. [...]
Amazon last year struck a deal with a large grocery distributor called SpartanNash Co. that included the right to acquire a stake in the company. [...]
The prices, at least so far, are low. A basket of 30 commonly purchased grocery items in one of Amazon’s Chicago-area stores last month undercut Jewel-Osco, an Albertsons Cos. Inc.-owned mainline grocer, by as much as 20% when including items on sale, and is competitive with Aldi and Walmart. (Source)
Speaking of Amazon, Fat Tail Capital has some numbers to keep things in perspective:
In the US, Amazon added 49M square feet of warehouses in 2020 and will add another 104M sq ft over the next 18-24 months. Thus, from 2020-22, it will build 153M in the US, more than Walmart’s entire existing US logistics network of 145M sq ft built over the last 49 years.
Globally, Amazon operates 389M square feet (36M square meters) of logistics space, building 108M square feet in 2020, or a rate of 2.1M sq ft per week.
Amazon spent 10x more on non-AWS capex in 2020 than Shopify or DoorDash have in revenues so let’s maybe not go crazy with the last-mile logistics disruption stories.
Alibaba Under Pressure
China’s government really has turned on Alibaba in recent times, flexing and showing them who’s boss (Jack Ma especially, who may or may not still be "embracing supervision" in an undisclosed location).
Since late last year, Alibaba has been in Beijing’s crosshairs, along with its financial affiliate Ant Group [...]
regulators are weighing whether to require Alibaba to divest some assets unrelated to its main online-retailing business. Once final, measures against Alibaba will need to be approved by China’s top leadership.
Alibaba now faces a two-pronged challenge: correcting the anticompetitive behavior alleged by regulators and adhering to the government’s political agenda. The pressure reflects Chinese leadership’s assertion of statist prerogatives over the economy, which could risk dulling the innovation and competitive spirit that powered China’s growth in recent decades. [...]
While painful, none of the measures under consideration would come close to crippling the company, whose businesses include online retail, entertainment, media and cloud computing. Unlike Ant, which regulators viewed as a disrupter and a threat to the stability of the financial system Alibaba is considered the pride of China, a showcase for technology innovation that also is vital to the nation’s economy. (Source)
China’s Ant Group Chief Executive Officer Simon Hu has stepped down from his role, the company said on Friday. (Source)
Interview: John Hempton
Good interview with the always very thoughtful and measured John Hempton:
I don’t short, I don’t generally invest like John does, and I would never own Herbalife, but I always try to seek out the perspective of smart people.
h/t Trevor Scott
This Digital Artwork NFT Sold at Christie’s for $69,346,250
Here’s the actual auction page with the collage piece (basically a crapload of digital artwork he did every day since 2007, all stitched together).
His style isn’t exactly what most people would hang on their living room walls…
Science & Technology
The Future is Here, Just Not Evenly Distributed…
Ok, this is really cool. Virtual fighter jet cockpit at home, with a mix of VR and real controls… Check it out, I can’t embed the video:
Makes me wish even more that we could figure out an easy way to deal with the inner-ear/eye mismatch with VR, so we could have games where we move around a lot (FPS and fast-paced flight sims) without any nausea or weird balance issues…
Maybe someday we’ll have some kind of Star Trek tech that is part of the headset and that just temporarily disables your vestibular nerve, or even better, over-writes it with signal that matches what you see in your game, for even more immersive VR. I’m sure someone is working on this (anyone knows what Thomas Reardon is working on these days?)
Maintaining Legacy Versions vs One Version on the Cloud
Since you probably didn’t read that one unless you’re a true OG, I’m reposting it here. It’s something Eric Vishria said during a podcast with Patrick O’Shaughnessy:
Eric Vishria: In a traditional software company… A good 30% of the engineering and product development resources were backwards-looking. They were supporting old versions, fixing bugs on old versions, back-porting bug fixes, they were supporting customers on old versions. You always had to think about backward-compatibility. You had these windows in your contracts saying “we’ll support version 6 for two years after version 7 comes out.” There was this huge tax that you paid in the traditional software world of product development resources being backward-looking. What happened in the SaaS world… whether the customers know it or not, they are getting upgrades continuously… The product development resources all are forward-looking… You get 30% or so of your engineering back, that’s a huge deal!"
‘China semiconductor trade association establishes work group with U.S. counterpart’
The CSIA said in its post it would form a joint working group with Washington-based Semiconductor Industry Association (SIA), with each side being represented by 10 chip companies.
The working group will meet twice a year to discuss issues such as intellectual property, trade policy and encryption. [...]
China is the world’s largest purchaser of semiconductors, but its domestic production of chips is marginal. [...]
According to research firm ICInsights, of the $143 billion in chips sold in China in 2020, only $22.7 billion worth were produced in China, and only $8.3 billion was produced by Chinese-headquartered companies. (Source)
Adobe Ships Photoshop Compiled for Apple Silicon (M1)
Starting today, Photoshop runs natively on Macs powered by the M1 chip and takes advantage of the performance improvements built into this new architecture. Our internal tests show a wide range of features running an average of 1.5X the speed of similarly configured previous generation systems. Our tests covered a broad scope of activities, including opening and saving files, running filters, and compute-heavy operations like Content-Aware Fill and Select Subject, which all feel noticeably faster. Our early benchmarking also shows that some operations are substantially faster with the new chip.
These great performance improvements are just the beginning, and we will continue to work together with Apple to further optimize performance over time. We think our customers using these new Macs will love the difference, too. Don’t blink. You might miss the splash screen launching… (Source)
And that’s just on what Apple has launched so far, which are the low-end of its range. How will Photoshop run on a top-of-the-line M1x iMac with much more than 16gb of RAM? That’ll be interesting to see…
‘Inside Azure Datacenter Architecture with Mark Russinovich’
Keynote by the CTO and Technical Fellow of Microsoft Azure about all kinds of aspects of the hyperscaler. Lots of cook geeky stuff, including playing Tetris on the task manager of a 448-core machine that has 24 TB of RAM by modulating the usage of cores and using them as pixels (why not?).
The two-phase immersion tech to liquid-cool servers is really cool. Maybe someday datacenters will look like giant aquariums.
The Arts & History
Find me a More Badass Plane (and this one doesn’t even have the red-on-black trim)
While on topic of planes, here’s just a cool photo of the nose cone of the SR-71 Blackbird. It’s truly the Darth Vader of planes.
Here’s cool trivia for ya:
The SR-71 was built using a ‘slide rule’, and was the last major U.S. aircraft to do so.
Over 90 percent of the SR-71 was made of titanium alloy.
Friction at high altitude and high speed heats up the airframe. Many parts of the SR-71 reached from 400-500 degrees Fahrenheit, but the airframe above the engines reached over 1,000 degrees.
[Because of the heat] The SR-71 expands three to four inches in length during flight
There’s a bunch of details about it in the great book ‘Skunkworks’ by Ben Rich. I highly recommend it if you like planes and engineering.
SR-71 pilot. Flying so high, you can see basically the black of space reflected in his helmet (these things had a "service ceiling of 85,000 ft, or 26 kilometers).
Roman Horse-Butt Width → Saturn V Rocket Design
Good short video linking together the width of Roman horse-butts and the design of the Saturn V rocket. Yes, it checks out.
Interview: Rick Rubin (Music Producer Extraordinaire)
Not only is he a great music producer, but he also has a great zen-like mind that I wish I could emulate more.
I may as well use the footnote feature, even if it’s right below the actual thing. A lot of people first discovered Rick because of his iconic hip hop work, but I first knew him because he producer ‘Reign in Blood’ by Slayer — here’s a song I used to play on the electric guitar while my friend played drum — you can’t say he’s not versatile. Like me, he seems to believe that the only thing that matters about music is whether it’s good or not, not what genre it can be classified as….