🍳 Brunch Briefing | Misra's Mischief
A papal decree, underwater Bitcoin mining, and a tough week for pornstars
In this week’s BB, you’ll learn about…
🧙♀️ Mischief (mis)managed at Softbank
🤘 A new type of tycoon comes to Texas
⛪ Why Pope Francis will not save us from AI
🧠 Autism as a competitive advantage
🚀 CoS at a rocketship, summer at a16z, and building the next GOT
📬 WeWork reneging, revisiting Patrick Henry, Gmail’s presidential endorsement
🧀 Cannabis companies, rideshare platforms, and podcasts all get some cheddar
💈 Sharp riddlers take control of the clippers
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In an effort to bring the most interesting thinking from the venture world to this newsletter, I’ll be featuring a deep dive from other investors 1/month. Next week, you’ll have an opportunity to hear from Adrian Alfieri, Director of Assembled Brands and founder of excellent newsletter, The Proof. He’ll be sharing his thesis on “Shared Neuroses.” Color me intrigued…
🐰 Overheard
(Quotes from clever people)
“Our shared passion for our work should not be misread as tension. We will continue to collaborate — as we do everyday — on executing and realizing SoftBank’s bold mission for the future.”
Marcelo Claure, COO of Softbank Group, made that comment almost exactly one year ago. The person who he was referring to was Rajeev Misra with whom he was alleged to have clashed. While Claure and Misra were quick to brush off a potential riff in early 2019, this week brought revelations that placed the friction with Misra in troubling context: the head of Softbank’s venture arm is alleged to have waged a concerted campaign against several colleagues in his rise to the top.
After joining Softbank in 2014, Misra set out to undermine two key rivals that he believed stood in his way: Nikesh Arora and Alok Sama. Over the course of several years, Misra is supposed to have paid an Italian businessman millions of dollars in order to orchestrate a takedown of both men. Strategies ranged from feeding negative information to the press, organizing shareholders to push for their resignation, and an attempted honey-trap in a Tokyo hotel in the hope compromising photos could be obtained. That attempt, directed at Arora, failed.
The last 12 months have seen a precipitous fall for Softbank. The firm has failed as investor, overcapitalizing its companies and pushing them to grow unsustainably. The result is > 7.3K layoffs across their portfolio, dire returns, and a slew of broken promises. With the news of Misra’s scheming, it seems they may be yet to hit bottom. Still, Masayoshi Son is raising capital for the firm’s second fund, though at least he has the modesty to say that this time the fundraising target is “a little bit smaller.” It seems unlikely to happen. Investing in Vision Fund II would take an extraordinary act of amnesia; doing so with Mr. Misra at the helm would require a lobotomy.
🖼️ 1000 words
(Something to look at)
Texas: the Home of Bitcoin Barons. Residents of our union’s most bombastic state often think of their homeland as a country unto itself. When it comes to electricity generation, it is, offering comparatively low cost power at unparalleled scale. The consequence of free-flowing natural gas from fracking, abundant wind energy thanks in part to subsidies, and a deregulated environment, the state has become a favorite of Bitcoin mining companies.
Specifically, power is a key cost for mining, while deregulation allows companies to strike “power purchase agreements” with electricity producers directly, rather than going through a utility. Both allow rigs to operate more profitably, especially important given the volatility in the asset class. Those factors have led to something of an energy boom: companies like Bitmain and Northern Data have built out large facilities, while Layer1 — which raised $50MM from Shasta Ventures and Peter Thiel — just kicked off operations in the West of the state. While all of these companies take steps to mitigate the warmth of Texan sun, important to avoid machinery overeating, Layer1’s approach is particularly intriguing: their machines sit in an “oil-based coolant” that keeps temperatures low.
If you disagree with Warren Buffet and believe cryptocurrencies are indeed worth something, it might be worth taking a journey south. As Layer1’s CEO, Alex Liegl noted “the cheapest electricity in the world, at scale, is in west Texas.”
😱 Signs of the apocalypse
(Look on my Works, ye Mighty, and despair!)
Burning batteries. Every month, a recycling plant burns down in America. The culprit? Lithium-ion batteries, an increasingly common scourge. The rechargeable units, ubiquitous in items like phones and smartwatches, represent a rapidly growing market: in 2017, the lithium battery market was worth $30B; it is expected to reach $100B by 2025. Unlike other batteries, lithiums heat up when damaged, eventually having a “thermal runway event” which often results in them catching on fire. The key is to dispose of them at designated drop-off centers, something many do not know to do.
An unholy decree. The content of the Catholic Church’s guidelines for ethical AI are rather mundane. The Church calls for transparency, inclusion, responsibility, impartiality, reliability, and privacy, inoffensive demands that have convinced IBM and Microsoft to sign the “Rome Call for AI Ethics.” But while the content is drab, the notion of a religious group — particularly one as manifestly corrupt and immoral as the Catholic Church — defining these guidelines represents a disturbing precedent. Let us hope that protections in this space are modeled by non-partisan institutions in conjunction with technical experts.
📡 Signal
(One exploding Google Trend)
Thinking different. When recruiting at some companies, having autism is a competitive advantage. As corporations battle for AI talent, firms like E&Y, Microsoft, and Dell are increasingly turning to those on the spectrum. In many respects, these individuals are particularly well-suited to such jobs, capable of exceptional focus, creativity, with the propensity for highly structured, analytical thought. For testing AI models, reviewing code, or labelling images for a neural network, those characteristics are particularly useful.
Companies like UltraTesting have made autistic workers the heart of their business to great success. The quality assurance consultancy is growing revenue 50% YoY, winning contracts over giants like IBM and Capgemini. They’re doing so with a workforce that is 75% autistic.
As the war for technical talent continues, and the nature of work changes, those with a different way of processing may become ever hotter commodities. Let us hope so at least — as it stands only 50% of those with autism work after high school.
🔟 Jobs
(The jobs you need, and no more)
VC Intern - Harlem Capital (NYC). This insurgent VC wants to “change the face of entrepreneurship” by investing in 1K diverse founders over the next 20 years.
Strategic Finance Analyst - Seated (NYC). This company seems to be on an absolute tear, earning a spot on many a friend’s homescreen, as well as flooding NYC’s subway billboards.
Operations Director - Serial Box (NYC). “Game of Thrones for your ears,” is how i09 described this short-form text and audio company.
NLP Evangelist - Hugging Face (NYC). With $20.2MM in the bank from Lux and SV Angel, HuggingFace is looking for someone to spread the NLP gospel in Gotham.
VC Intern - a16z (SF). You’ll need to call in every favor you’ve got to snag a seat at the table with messrs Andreessen and Horowitz. Or perhaps you’re just really clever.
VC Principal - Samsung NEXT (SF). A CVC with range, Samsung’s backed companies like Branch, Figure1, and Vicarious. If you’d rather be on the venture ops side, check out this opening.
Chief of Staff - Expanse (SF). With $136MM in funding, 173 employees, and backers including TPG and NEA, Expanse is rapidly approach unicorn status. They also host trivia nights.
VC Analyst - Plus Capital (LA). A good first foot on the rung for those unlikely to be starstruck: Plus’s LPs include Portia de Rossi, Zoe Saldana, Tyra Banks and 37 other “top celebrities.”
VC Analyst - Underscore (Boston). Get your application in before 3/15 if you’re interested in being considered for this two-year rotational program.
VC Growth Analyst - Open View (Boston). The “expansion stage” firm is focused on backing companies that make work better. A portfolio that includes Datadog, Expensify, and Workfront suggests they’ve done rather well in the process. If growth is your jam, you might want to check out this pre-MBA position at Runway in NYC, too.
🐒 Long tail
(Best of the rest)
WeWork changes its mind. The coworking company which I am legally required to refer to as “beleaguered” has reportedly pulled the rug out from Dan Teran, founder of Managed by Q. While WeWork had initially countenanced selling Managed by Q back to Teran for $55MM (a steep discount on the $220MM paid), they are now said to have received a better offer from competitor, Eden Technologies.
The plight of pornstars. OnlyFans, a photo and video sharing site popular among adult performers and sex workers, was hacked this week with up to 4 terabytes of content circulating online. That led to many being harassed by trolls that referred to some of the women as “degenerates.” Unlike sites like Pornhub — found to have hosted videos of underage rape victims — performers on OnlyFans have a clear way of monetizing their content, selling it directly to subscribers. But this incident has left many questioning the safety of the platform. “This is the second leak I’ve heard about this year…[it] puts us and our families at terrible risk,” said performer Osa Lovely.
President Pete. Gmail’s algorithm determines which tab your emails will end up in: “Primary”, “Social,” or “Promotions.” Though most of the time, such filtering may be useful, surfacing relevant messages more quickly, it may also exert a form of influence, determining what information you receive. During an election year, that power is even more meaningful. Over four months staff at The Markup conducted an experiment, registering for a new Gmail account, and signing up for the mailing lists of presidential candidates. They observed a stark difference in deliverability with 63% of Pete Buttigieg’s emails reaching the “Primary” tab compared to 1% of Amy Klobuchar’s.
“Give me Liberty, or give me $3.50!” Patrick Henry’s historic cri de coeur may require a refashioning for the digital era: Facebook users in the US would be happy for the social media platform to share their contact information for $3.50 a month. The study, conducted by think tank the Technology Policy Institute, found that German users would need $8.
🤑 Splashing Cash
(Intriguing raises and acquisitions)
Power Grab. The rideshare platform raised $856MM from Mitsubishi and TIS INTEC. The company is apparently considering a merger with rival, Gojek.
Eaze takes a hit. But keeps on going. The cannabis company secured a $15MM bridge round to keep the lights on. Previous investors Rose Capital and DCM provided the cash.
Toyota ponies up. The carmaker invested $400MM into Pony.ai, a provider of autonomous vehicle solutions.
Headspin’s tailwinds. The platform, which improves apps and devices performance in different environments, raised $60MM from Dell and Iconiq. Nikesh Arora, discussed in “Overheard,” joined the board.
Air is Airtable for visual work. The collaboration tool for photos and videos snagged $6MM from Lerer Hippeau, Red Sea, Advancit, and WndrCo.
Blue Wire does a {sports metaphor for scoring}. The podcast network which features shows like Laker Film Room, and Light Years raised $1.2MM from DOT Capital and 500 Startups.
The best ice cream in New York gets its due. Artisanal purveyor of cold treats, Van Leeuwen, pulled in $18.7MM from NextWorld to keep churning out the best Honeycomb and Salted Caramel flavored desserts.
🧩 Puzzler
(A question, conundrum, or riddle to mull over)
Spelled forwards I am something you do every day, spelled backwards I am something you hate. What am I?
Praise Be to Nicholas T for shouting this response over email mere minutes after last week’s message was sent: SHE DOES BECAUSE SHE IS A WOMAN!!!
Correct, my exclamatory friend. Others that were quick on the draw included Violette Z, Arnold G, and MWF who shared the riddle with his very own female barber. Excellent.
I hope that everyone had a surprising and fulfilling Leap Day yesterday. And now, for a great March. 💙