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A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig of Lightspeed.

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A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig. I am a partner at Lightspeed in Silicon Valley.

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Drinking from the Firehose #153

Happy 2020 + an experiment

After a few weeks off, I have quite a few links to share. This Firehose will be a bit longer than usual.

I am also trying an experiment and publishing each newsletter on Substack simultaneously. I like the fact that Substack makes them discoverable to new subscribers in a way that Mailchimp does not. If you enjoy this post, do me a favor and share the Substack link on social media.

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The beginning of a new decade is a tempting time to make predictions. I've read my fair share over the last week. I'm sure you have too.

Predictions over long periods of time are, in some ways, easier to make than those for coming year. The development momentum of technologies like deep learning and gene sequencing, for example, makes it easy to imagine a future when "some day" we will have fully autonomous vehicles and personalized cures for cancer. We can point to early applications that demonstrate the future today, in constrained or special use cases. In China, for instance, facial recognition is powering a huge number of consumer, enterprise, and municipal applications due to official mandates and standards driven by the government. The constraints make the problem easier to solve, but increasingly the technology will see broader applicability if we wait long enough.

"Environmental" predictions are much harder. Purveyors attempt to read tea leaves and see into the hearts and minds of others. Mostly, they are reiterating their own intuitive worldviews. Will animal meat be outlawed in developed countries? Will religion see a resurgence in the West? Will consumers embrace, or reject, the notion of privacy? Will democracy continue to be viewed globally as the preferred form of government?

Any answer to questions like these isn't really a prediction per se. Predictions must have analytical underpinnings. Otherwise, they're just opinions about the future.

My favorite predictions are the ones that feel inevitable, usually because of demographic and/or economic trends. One of the most inevitable changes we will see in American culture over the next decade is the way we think about careers.

It is now well documented that wage growth accounting for inflation has stagnated over the last 40 years. 88% of growth in annual earnings over that period of time accrued to the top quintile of earners. The vast majority of Americans have not participated in the productivity boom of the technology era. Moreover, those who have grown their earnings the most have done so by working more hours, not by earning more per hour. At the household level, earnings have grown because more women have entered the workforce, but again that's to compensate for a lack of growth in hourly wages. As a result, labor participation has declined for both genders since 2007. Hours worked also topped out in 2000. The marginal hour worked seems to have little value relative to time spent taking care of loved ones, enjoying leisure activities, or even sleeping.

The secular decline in employment runs counter the massive boom in productivity enabled by technology. Tools like Slack, Zoom, Trello, and others make remote work possible, if not preferable, in many situations. A person with the right skills can work across geographic boundaries, opening up numerous new career opportunities. Remote work is a relatively early trend, but has the potential to help Americans build their careers back by opening doors that were previously closed.

The gig economy also promised significant job growth, but a commoditized job like driving an Uber is not a substitute for a career. Because hours worked has been relatively fixed, gig economy job hours are likely stealing share from career hours. One of the biggest opportunities in the next decade is to use the technology tools at our disposal to help Americans rethink labor participation and focus on building back their careers in novel ways.

My Lightspeed partner Mercedes Bent wrote a piece recently on changing career expectations, and I found her conclusions to line up neatly with these trends. Her core insight is that careers are moving from linear to circular structures. With a circular career, workers gain a lot more support in their professional development. We're excited to spend more time meeting companies building out this career stack and aiming to solve one of the most pressing problems of the next decade.

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The Future of Work(ers)

In this circular career journey, vertical career progression may be stymied while soft skills such as professionalism and problem-solving are highly transferable. This trend toward circular career journeys is not brand new — it has been shaping over the last few generations. What is new today is the extent to which automation has affected industries and eliminated roles. This makes it timely to reframe how we think about career journeys.

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#commerce

The tyranny of perfect information.

I enjoyed this short piece in Vice about the quest for the perfect pair of lined gloves. The internet provides us with nearly perfect information on any product we want to purchase. How do we make decisions, when we ultimately know that there's more to discover?

The best e-commerce sites will not only simplify overly dense catalogues through SKU consolidation, but will also make their users feel well informed enough to hit the "buy" button.

The impossible dream.

What's the most contrarian investment you could possibly imagine in 2020? How about a $5 billion, 3 million square foot mall just off the New Jersey Turnpike?

Enter American Dream -- the 21st century super mall. And it sounds awesome!

"Every American Dream attraction is the most extreme possible version of that thing. Big Snow is the largest indoor ski hill in the Western Hemisphere; Nickelodeon Universe has the roller coaster with the steepest drop in the world; the DreamWorks water park, when it opens, will host the world’s biggest wave pool."

#media

Vids for the kids.

I spent a good amount of time this holiday getting into TikTok. After a bit of a stall period earlier in the year, the app seems to be surging again, according to SensorTower.

I found this article in The Ringer had a number of key insights into why TikTok is different than other social apps that came before. First, its algorithm drives engagement right off the bat, vs. pressuring users to invite all their friends into the app to make content. This creates a more level playing field for content:

"Every video has a chance to go viral on its own, regardless of how big your platform is, based off their algorithm.”

Second, TikTok has made memetic imitation much easier by allowing users to grab audio from videos they like to include in their own. Its Gen Z users want to participate in memes right away, and TikTok supports that behavior natively.

“That’s what’s unique about the app and Gen Z,” the company’s then–director of U.S. marketing, Stefan Heinrich Henriquez, told Fast Company in June. “They’re not just passive consumers anymore. … They aren’t just watching. They’re creating in response. You’re turning them into brand ambassadors without even doing any influencer marketing.”

Third, TikTok is leaning into influencers heavily, far more so than Instagram and YouTube, who have pushed back as their platforms have become too "commercial." Its advertising platform even allows brands to search for creators to partner with.

"TikTok launched a database in September called TikTok Creator Marketplace, where brands can search for influencers with whom they can partner. Companies that want to launch a sponsored campaign on the app are able to browse major accounts and better understand user demographics and search by parameters like follower count, content creation topics, and audience analysis, according to a TikTok spokesperson."

Tune into Bitmoji.

Snap's* 2016 acquisition of Bitstrips (the makers of Bitmoji) was viewed with a healthy amount of skepticism at the time. I've long been a fan of the product, which gives Snapchat users a unique visual identity. With keyboard integration, that identity is portable across various other social touchpoints. I wouldn't be surprised if Bitmoji was a key factor in Snapchat's acquisition funnel, since the ties to Snap's core app are so strong.

That's why I'm glad to see Snap doubling down on Bitmoji by launching Bitmoji TV next month. It blurs the lines between media and social in a fun way that only Snap could accomplish.

#tech

A decade of flops.

Some big ideas don't work out. I find it instructive to look back on the last decade with a critical eye, not only to what didn't exceed expectations in technology, but more importantly why.

I was involved with a number of the VR startups on this list. It's clear now in retrospect that the market was way too early and that what you could do with the technology at the time had severe limitations. At the time though, it was hard not to fall in love with the promise of VR. Maybe this will be the decade it succeeds!

A SPOT of leverage.

I've been long Spotify* for a while now. The main driver of my bullishness is the belief that they will continue to diversify audio streams away from costly music licenses. This post walks through how a shift towards podcasting could generate significant operating leverage for the company.

#science

The black hole that should not exist.

Scientists just observed the gravitational waves from a 100 solar mass black hole. According to the "pair-instability mass gap" theory, a black hole between 50 and 130 solar masses should not exist. The discovery may point to a new formation mechanism for black holes that's not currently well understood.

The unstoppable water bear.

The tardigrade, or "water bear," is one tough cookie. 

"Water bears can withstand even the vacuum of space, as one experiment showed. A sort of microscopic Rasputin, tardigrades have be frozen, boiled, exposed to extreme doses of radiation, and remarkably still survive. How they do this has been a mystery to science, until now."

Scientists recently discovered that, when removed from an aqueous environment, the water bear preserves itself by secreting a protein that creates an amorphous glass coating all over the organism. It then goes into stasis until it comes into contact with water again, at which point the protein dissolves.

#culture

The story of "Alive."

One of the greatest songs of the 1990's ("Alive", by Pearl Jam) had the most unlikely of origin stories. Essentially, Eddie Vedder wrote the lyrics after hearing a demo tape by the other band members, before the band had formed. Eddie had never even met the other guys at this time. He sent the dubbed over demo tape in the mail back to guitarist Stone Gossard and bass player Jeff Ament, and the rest is history.

One more turn (video).

I've spent a LOT of time playing Civilization. I recall many sessions where I would sit down, look up at the clock, and 6+ hours had passed. Other players have similar experiences all the time. The game is almost perfectly designed for immersive play.

In this video, the game's creator Sid Meier discusses the history of the game and why players always need just "one more turn."

Disclaimer: * indicates a Lightspeed portfolio company, or other company in which I have economic interest. I also own stock directly in AAPL, ADBE, AMZN, CRM, FB, FTCH, GOOG/GOOGL, NFLX, SHOP, SNAP, SPOT, SQ, and TWLO.

Lightspeed Venture Partners, 2200 Sand Hill Rd, Ste 100, Menlo Park, CA 94025 USA Sent to ataussig@gmail.com — Unsubscribe