Category: technology | 技術 | 기술 | テクノロジー

It’s hard to explain to someone who didn’t live through it how transformation technology has been. When I was a child a computer was something mysterious. My Dad has managed to work his way up from the shop floor of the shipyard where he worked and into the planning office.

One evening he broad home some computer paper. I was fascinated by the the way the paper hinged on perforations and had tear off side edges that allowed it to be pulled through the printer with plastic sprockets connecting through holes in the paper.

My Dad used to compile and print off work orders using an ICL mainframe computer that was timeshared by all the shipyards that were part of British Shipbuilders.

I used the paper for years for notes and my childhood drawings. It didn’t make me a computer whiz. I never had a computer when I was at school. My school didn’t have a computer lab. I got to use Windows machines a few times in a regional computer labs. I still use what I learned in Excel spreadsheets now.

My experience with computers started with work and eventually bought my own secondhand Mac. Cut and paste completely changed the way I wrote. I got to use internal email working for Corning and internet connectivity when I went to university. One of my friends had a CompuServe account and I was there when he first met his Mexican wife on an online chatroom, years before Tinder.

Leaving college I set up a Yahoo! email address. I only needed to check my email address once a week, which was fortunate as internet access was expensive. I used to go to Liverpool’s cyber cafe with a friend every Saturday and showed him how to use the internet. I would bring any messages that I needed to send pre-written on a floppy disk that also held my CV.

That is a world away from the technology we enjoy now, where we are enveloped by smartphones and constant connectivity. In some ways the rate of change feels as if it has slowed down compared to the last few decades.

NCNRs + more stuff

NCNRs

Industry Structure: Fabs are in Favor – LTAs are the Tell – Fabricated Knowledge had this interesting article on the role of NCNRs – which means non cancelable, non refundable orders. Chip foundries have to spend an enormous amount of money to be at the cutting edge of manufacturing. They also need to retain staff who understand the best way to use this capital and the machines that it buys. So they spread the risk, which is where NCNRs come in. NCNRs provide the chip foundry with guaranteed revenue and remove the foundries dependence on all the other aspects of the customers supply chain. Don’t long term agreements do the same thing? Long term agreements do guarantee revenue over a set number of years, but it might not be delivered in an even manner, for instance Apple might half orders in one quarter and push back up again in the next. But if you combine NCNRs within an LTA you end up with an entirely predictable revenue stream. NCNRs mean that you capital expenditure becomes more predictable and your operating expenses have money to meet them. The foundry has worked to derisk this business by moving it on to the customer.

NCNRs works for the largest cutting edge foundries and their clients. But it could be also used to keep legacy foundries alive for the likes of car manufacturers.

Economics

Economists must get more in touch with our feelings | Financial Times – Jon Clifton, the head of Gallup, which has been tracking wellbeing around the world for many years, notes a polarisation in people’s life-evaluations. Compared with 15 years ago (before the financial crisis, smartphones and Covid-19) twice as many people now say they have the best possible life they could imagine (10 out of 10); however, four times as many people now say they are living the worst life they can conceive (0 out of 10). About 7.5 per cent of people are now in psychological heaven, and about the same proportion are in psychological hell.

Xi’s Great Leap Backward | Foreign Policy – Amid China’s worsening economic crisis, nearly one-fifth of those between the ages of 16 and 24 are now unemployed, with millions more underemployed. One survey found that of the 11 million Chinese students who graduated from college this summer, fewer than 15 percent had secured job offers by mid-April. Even as many U.S. and European workers are seeing their salaries surge, this year’s Chinese graduates can expect to earn 12 percent less than the class of 2021. Many will make less than truck drivers—if they are lucky enough to find a job at all – so much in this to unpack

UK’s debt and welfare payments bill set to soar by more than £50bn | Financial Times

Energy

Germany Sees Tidal Shift in Sentiment Toward Atomic Energy – DER SPIEGEL

Ethics

Why banning Huawei is proving easier said than done | Business | The Sunday Times – Huawei remains in the UK, with 1,000 or so staff working at offices including an HQ in Reading and a research and development centre in Cambridge, where it is investing £1 billion. It provides funding to universities and has a small stake in Oxford Sciences Innovation, which commercialises research from Oxford University. The BBC still shows Huawei adverts on its websites outside the UK, even though the company is alleged to have provided Chinese authorities with surveillance technology to target the Uighur population.

OnlyFans Accused of Paying Bribes to Put Enemies on Terrorist Watchlist

Finance

Economic misconceptions of the crypto world – by Noah Smith

India’s Fintech Success: UPI – by Jon Y

Catalyst Nodes Monitor – how many people are using Decentraland

FMCG

Exports of Korean Instant Noodles Hit Another Record – The Chosun Ilbo (English Edition)

Health

The Digitally-Savvy HCP | Indegene

Doctors are under more work pressure than during height of covid-19 pandemic in 2020 | The BMJ

Hong Kong

Chinese secret police warned exiled Hong Kong businessman over parliament plan — Radio Free Asia – China’s state security police threatened an overseas Hong Kong businessman who recently announced plans to set up a parliament-in-exile with repercussions for his family members who remain in the city, RFA has learned. Hong Kong’s national security police said last week they are investigating former pro-democracy lawmaker-elect Baggio Leung, overseas businessman Elmer Yuen and journalist Victor Ho for “subversion of state power” under a draconian national security law after they announced plans to set up the overseas parliament. “They warned me in advance [not to go ahead with the plan], but I ignored them,” Yuen told RFA in a recent interview, saying he had been contacted by state security police in Beijing, not the national security unit of Hong Kong’s police force. “They gave me a number of warnings, [including] saying I still have family members in Hong Kong,” he said, adding that there “no point” in worrying about it. Yuen’s comments came as his daughter-in-law Eunice Yeung, a New People’s Party member of the current Legislative Council (LegCo) whose members were all pre-approved by Beijing ahead of the last election, took out an advertisement in Hong Kong’s Oriental Daily News, publicly severing ties with her father-in-law – a couple of things. 1/ This will drive awareness and consideration of the parliament. 2/ It is very similar to the cutting ties done by Myanmar families of opposition members

Hong Kong’s shortened covid quarantine won’t revive its economy — Quartz – the Hong Kong government this week finally shortened mandatory hotel quarantines for inbound travellers from three days to seven. But the city remains as cut-off from the world as ever. Tourists and business travellers are deterred by Hong Kong’s stringent, costly, and often unpredictable quarantine measures. As a result, Hong Kong’s economy has taken a hit, sliding into a recession last month following two consecutive quarters of negative GDP growth. The outlook is clouded with uncertainty, as zero-covid policies locally and on mainland China continue to weigh on consumer demand and trade.

Innovation

Interesting view on DARPA’s Gambit project. It builds on scram jet technology to build a more efficient energy.

Neuromorphic Chip Gets $1 Million in Pre-Orders – EETimes

Media

MoFi sold high end vinyl pressings and claimed that they had a high-end analogue only chain from master tape to vinyl pressings. The reality is rather different. That doesn’t mean that the records are not great quality recordings, but they aren’t what they claim to be.

TikTok employees complain of ‘kill list’ aimed at forcing out London staff | Financial Times – pretty standard wolf culture practice and then this at Google: Google issues threats to its employees – behave or get fired | Gizchina

Online

Millennial Internet Tics Have Gone From Cool to Cringey – The Atlantic – I’m still guilty of the “Millennial pause.” After hitting “Record,” I wait a split second before I start speaking, just to make sure that TikTok is actually recording. Last year, @nisipisa, a 28-year-old YouTuber and TikToker who lives in Boston, coined the term in a TikTok about how even Taylor Swift can’t avoid the cringey pause in her videos. “God! Will she ever stop being relatable,” @nisipisa, herself a Millennial, says. Gen Zers make up a larger portion of TikTok’s base, and have grown up filming themselves enough to trust that they’re recording correctly. Which is why, as short-form video comes to Instagram (Reels), YouTube (Shorts), and Snapchat (Spotlight), the Millennial pause is becoming easier to spot

Reverse Image Search – Find Similar Images | Duplichecker.com – a metasearch engine like Dogpile, but for reverse image searching

China regulator says Alibaba, Tencent have submitted app algorithm details | Reuters

Retailing

Back to the trend line? — Benedict Evans – the post-COVID impact on e-tailing

Japan’s online shoppers call time on spending spree | Financial Times

Security

China National Intelligence Law – article seven makes for particularly grim reading if you are engaged in the Chinese market, have Chinese employees or use Chinese products

Interesting dig into the US aid being sent to the Ukraine and what it implies about strategy.

Taiwan

2022 TSMC Update – by Jon Y – The Asianometry Newsletter – really interesting update on TSMC

China fears losing international support for its claims on Taiwan: analysts — Radio Free Asia

Telecoms

Google tries shaming Apple into adopting RCS with #getthemessage campaign – The Verge – of course they won’t talk about how Google abandoned RSS and XMPP

August 16, 2022
The Line
The Line or Neom

The Line or Neom is a building project in Saudi Arabia. It is a 110 mile or 170 kilometre long building. It will be 200 metres wide and 500 metres or 1,600 feet tall. Inside the structure will be a city to house 9 million people, amenities like school and leisure, their work and public transportation.

NEOM advert in the FT

The Line will be run on renewable energy and involve some sort of smart grid to optimise the living experience. They’ve apparently already started the earth works on construction and expect to have it completed by 2030.

Dystopian

The Line has been criticised in western media as dystopian. The mind immediately turns to science fiction visions like Judge Dredd’s Mega City One or William Gibson‘s cityscapes in his sprawl trilogy books: Neuromancer, Count Zero and Mona Lisa Overdrive. They would likely consider ‘ideal’ to look more like the Bosco Verticale in Milan, or the STH BNK in Melbourne, Australia, both of which look very nice. However, isn’t necessarily a panacea as one forestry expert noted.

″I think it’s very important that trees are given space,” Cecil Konijnendijk, from the University of British Columbia’s Faculty of Forestry, told CNBC.

“We know that soil — what we call soil volume — is really important, so the trees have to have space underground, maybe even more so than over ground,” he added.

“And then of course trees will have to have time to develop, so you won’t have instant trees. You’ll have to take the time to make sure they grow up and then they provide the benefits that we want to get from them.”
Cecil Konijnendijk, from the University of British Columbia’s Faculty of Forestry on CNBC

And it wasn’t just the media who were critical, there were people who spoke out on social media or wrote to the FT like Mark Hudson of Blandford Forum, Dorset.

While the developers claim that it has green credentials and is a harbinger of a low carbon future, there are concerns about its effect on local fauna, flora and migrating birds.

Retrofuturism

Moonwalk 1 Artist: Andy Warhol, 1987 Media: Silkscreen on paper Description: The famous image of astronaut Buzz Aldrin standing on the Moon has become an icon of popular culture. It became material for Warhol’s silkscreen series of nationally known images printed on vibrant, retro, poster colors. Image Credit: Andy Warhol for the NASA Art Program

When I saw the adverts for The Line, I was reminded of two things. NASA’s Art Program and the visual futurism of Syd Mead.

A poster apparently designed by Syd Mead for the 1983 World Sports Fair in Japan

Syd Mead created designs and conceptual art for clients including Ford Motor Company and Philips Electronics.

In the 1970s and 1980s, Mead and his company provided architectural renderings, both interior and exterior, for clients including Intercontinental Hotels, 3D International, Harwood Taylor & Associates, Don Ghia, Gresham & Smith and Philip Koether Architects.

As the 1980s came around Mead developed working relationships a number of Japanese corporations including Sony, Minolta, Dentsu, Dyflex, Tiger Corporation, Seibu, Mitsukoshi, Bandai, NHK and Honda.

Mead cemented his place on popular culture with his work on
Mead’s world, was the world that my generation were promised but was never delivered. Instead we got social media. (If you want to see more of Mead’s work I suggest Sentury and Sentury II.)

NEOM advert in the FT

NASA has an art program that is still running, all be it in a diminished form today. During the 1970s NASA Art Program artists and researchers at the NASA Ames Research Center explored what a future space colony might look like.

Toroidal Colony – Cutaway view, exposing the interior. Art work: Rick Guidice. NASA Ames Research Center

Torus Interior. Interior view. Art work: Don Davis. NASA Ames Research Center

That feeling of retrofuturism might not be accidental. An architect writing in the FT commented on the similarity between The Line and a concept proposed (as more a provocation or thought experiment) by a group of Italian artists called Superstudio who proposed a white gridded wall across the Arizona desert in the late 1960s called Il Monumento Continuo or Continuous Monument in English.

The case for a city like The Line

Firstly, Saudi Arabia has to do something, doing nothing isn’t an option.

At the moment, the population is growing at about 1.65% a year and the average age of the population is just below 30 years old. By comparison the population in the UK is 43. Energy consumption tripled from 1981 to 2010 and if things carry on like this the country will soon move from being the worlds largest energy exporter, to a net importer.

The Saudis only have so much time to do something before the favourable petro-economy conditions turn against them.

The demand for oil won’t dry up completely, but the economics change when oil becomes about supplying legacy transport in the developing world, which will likely go on for a long while, together with a small amount of vintage vehicles run by enthusiasts.

To give you an idea of how long this can be. Leaded petrol started its phase out in cars back in 1975, in the US, and only stopped being sold in 2021. Leaded fuel is still used for some aviation power plants.

Then there will also be a continued need for chemical feedstocks for the likes of the pharmaceuticals sector and manufacturing. At the moment Saudi Arabia’s GDP is just under 600 billion pounds a year, but that doesn’t mean that it will stay at this level for long, or by how much it will decline.

Then there is the challenge of making Arabian peninsula liveable during climate change. They’ve seen the Arab spring in Egypt and Tunisia, or the Syrian civil war and they don’t want it to happen in Saudi Arabia.

Concentrated populations in cities are better for the environment than having them spread out homesteading or living in suburbia. Less environmental impact delivering services. All of which Stewart Brand puts the case for; far more elegantly than I could in his Whole Earth Discipline: An Ecopragmatist Manifesto.

Where does my own opinion lie on The Line?

I can understand why the Saudis have gone there. They have sound pragmatic reasons for doing something.

I also feel nostalgic about the childhood future I dreamed of seeing when I looked at Syd Mead and the NASA space colony art work in children’s science books and a sense of a bright future lost.

But I don’t know how much of it will actually work.
- Will the Saudis be able to find design fixes for migrating birds or animals in the same way that roads have developed overpasses or underpasses in the west?
- Will the smart city systems work?
- What about the renewable energy capacity?
- Will there be an economy inside The Line? What will it look like?
- What kind of society will be constructed inside The Line?
- Will The Line be able to cope with an extreme weather event like a sandstorm, or the flash floods from rare rainstorms that occasionally happen even in the desert?
- How will the infrastructure be repaired or upgraded once its all built?
- Will the Saudis be able to afford completing The Line, or will they run out of money? The 2008 financial crisis crushed development in Dubai the following year and the aftershocks are still being felt through stretching out debt deadlines. Dubai property developers like Limitless went through successive rounds of financial restructuring. The Line is a project on a far grander scale.
August 15, 2022
Gentler place to work + more stuff
Gentler place to work

Saying out loud the quiet bit about work-life balance; tectonic plates of streaming move again – I’ve found myself thinking about one panel in particular – the participants in the session on advice for aspiring leaders went beyond the usual platitudes, and shared a couple of uncomfortable truths about an industry which is trying to rebrand itself as a gentler place to work. – I think that we’ll see more of this move away from a gentler place to work as companies look to cut staff. I entered the workforce in the middle of recession before I went to college, this was the time of micro serfs and mcjobs. The idea of a gentler place to work seemed to be a transient one to me – one that would come and go with economic growth. Zero hour contracts really grew during and after the 2008 financial crisis, which is as far away from a gentler place to work as you can get.

China

Take down Pelosi’s plane’: Chinese react online to Taiwan visit | Financial Times

Displaced Syrians voice anger as bombed-out town doubles as film set | Financial Times – film being produced by Jackie Chan as demand in China for conflict porn grows alongside nationalistic fervour

Consumer behaviour

Children between the ages of 10-12 are spending the most on video games, survey reveals / Digital Information World

‘I am borrowing to live’: pawnbrokers enjoy golden era as UK hits hard times | UK cost of living crisis | The Guardian

Economics

How rising tensions across the Taiwan Strait could threaten global trade | Financial Times

Ideas

Primary care physicians need 26.7 hours in the day – Futurity

Why Is the Web So Monotonous? Google. :: Reasonably Polymorphic – The primary purpose of the web today is “engagement,” which is Silicon Valley jargon for “how many ads can we push through someone’s optical nerve?” Under the purview of engagement, it makes sense to publish webpages on every topic imaginable, regardless of whether or not you know what you’re talking about. In fact, engagement goes up if you don’t know what you’re talking about; your poor reader might mistakenly believe that they’ll find the answer they’re looking for elsewhere on your site. That’s twice the advertising revenue, baby! But the spirit of the early web isn’t gone: the bookmarks I’ve kept these long decades mostly still work, and many of them still receive new content. There’s still weird, amateur, passion-project stuff out there. It’s just hard to find. Which brings us to our main topic: search. – It is more than search, there is also motivation and consumer behaviour change in the old web versus the new one – The Founder of GeoCities on What Killed the ‘Old’ Internet | Gizmodo

Innovation

How the American semiconductor industry claimed back technological and market leadership from the Japanese

Microrobots in swarms for medical embolization — Nano Magazine

Turning fish waste into quality carbon-based nanomaterial — Nano Magazine

Ireland

Lidl Ireland removes mandatory retirement age of 65 | RTE

Legal

EU starts competition investigation into Google Play store terms – report – Telecompaper

Luxury

Telfar gets Beyoncé boost, but so does Hermès despite Birkin snub | Vogue Business – rappers don’t drive luxury sales, middle class Asians do

Media

Visa and Mastercard cut ties with ad arm of Pornhub owner MindGeek | Financial Times

Retailing

Ocado, the online supermarket – is this a legitimate content partnership with Disney? Something feels a bit off about the Ocado | Disney inspired meals. The ‘inspired by Disney’ tagline and the Lion King themed ‘green grub pasta’ feels weird.

Security

Missfresh hit by lawsuits from investors and employees | Financial Times

Starlink’s Space Speed-Up: A Battle for Internet Leadership – EETimes

Government concerns over China-owned CCTV company embedded in UK – Channel 4 News – There are more than a million of Hikvision’s cameras installed across the UK – monitoring every aspect of our lives. But Channel 4 News has learned that there are growing concerns within the government about the Chinese state-owned tech company.

Next Generation Post-Quantum Encryption May Not Be As Secure As Many Tech Experts Had Hoped / Digital Information World

China’s war games spur Taiwanese business to rally to island’s defence | Financial Times

Web of no web

Air Force Pilots to Fight AI-Based Enemies Using AR Helmets

Apple’s Next-Gen CarPlay Is Scaring the Car Industry. Here’s Why. – Robb Report UK

Some interesting business takes on the commercial decline of ‘metaverse‘ platforms:
August 6, 2022
Alibaba + more things

Alibaba lost ambition

Two interesting things have come out today on Alibaba: Alibaba moves closer to home with Hong Kong dual-primary listing | Financial Times – this is interesting because it implies that Alibaba either couldn’t remain in the US stock exchange with the new Chinese tiered data enterprise ruling: China plans three-tier data strategy to avoid US delistings | Financial Times or punishment of Jack Ma continues.

Which means the only listings are likely to be old industry listings of state owned firms that foreign investors wouldn’t want to deal with anyway. The second one was: Alibaba scales back global expansion plan to rival Amazon | Financial Times – Alibaba.com’s US operation has failed to meet its initial targets, forcing the Chinese company to readjust its growth plans, according to three people familiar with the operations. The project has also been hit by dozens of staff departures from its New York office. The troubles at its US business-to-business arm come as Alibaba steps up its international push as its domestic operations continue to get hit by Beijing’s tech crackdown, slowing economy and rising competition. However, Alibaba.com has struggled to retain US sellers since its launch, in part down to the difficulty of competing with the prices of global merchants. “US manufacturers aren’t as competitive, the cost of everything is a lot higher including labour. The team do not have enough support internally, so they can’t get enough suppliers and sellers on board,” one current employee said – you could read this as the US is uncompetitive, or Alibaba only manages to sell on cost rather than value (quality, flexibility, after sales service don’t matter).

Business

Leicester garment factories still exploiting staff, study finds | Financial Times – not terribly surprising in Brexit Britain.

Aviation sector will be disrupted for years, Qatar Airways boss says | Financial Times – “Covid has damaged the supply chain of the industry . . . I think that it will last for a couple of years — it is not going to go away tomorrow,” Akbar Al Baker told the Financial Times in an interview. Labour shortages in Europe, delays in aircraft deliveries from manufacturers and a lack of spare parts had all affected Qatar Airways, he added. – and this is without the problems that airports have faced in baggage handling etc. If aircraft deliveries were really an issue, why did Qatar pick a fight with Airbus?

Economics

Pakistan is in big trouble – by Noah Smith – Noahpinion – what happens when China stops writing cheques?

Finance

Henan protests highlight concerns over China’s rural banking sector | Financial Times – is this China’s equivalent of the 1990s Savings and Loans scandal that bedevilled the US?

Hong Kong

HSBC’s past may not help its future | Financial Times – There is no place in the new Hong Kong for a pre-eminent bank which is not institutionally subject to the Chinese government. As China turns inwards, it makes sense for the ruling party to want its own financiers in command of a smaller standalone lender that will be well-capitalised, regionally-focused and prepared to serve national objectives, not global shareholders. The installation of a Communist party committee at HSBC’s Chinese investment banking subsidiary, reported by the FT, is a prelude of what is to come: a slow, patient strategy of small steps designed to make inevitable a break-up already determined on high in Beijing. That is why Ping An has fired the first shot in the final battle over the colonial legacy of Hong Kong — a place China has always called “a problem left over from history”. – the smart play would be to cut the PRC and Hong Kong business off from the rest of the network. While China is the growth engine, it relies on the rest of the network for this profitable wealth management business. Secondly, what will happen with Standard Chartered?

Ideas

Reviving Progress in the UK – there is an issue with the capital injection required by the plans outlined. Would anyone trust the UK government that they would be able to execute in a competent manner on the ideas? I think that the UK is suffering from a crisis of competence as much as anything else.

Japan

Majority of younger Japanese people in survey respect less than 30 percent of their old coworkers | SoraNews24 – crumbling social contract of salary men and the iron rice bowl

Legal

Sextortion: a Costly Hell for Celebs, CEOs, Sports Stars

Luxury

Cultural appropriation vs appreciation: Can luxury brands in China tell the difference? | Campaign Asia – a mix of things going on here. Poor executions of ‘Chinese-ness’ by western brands historically (I’m looking at you Burberry) and nationalism which has made consumers much more confident and intolerant – rather than cultural appropriation a la ‘African American hair’ style concerns.

Marketing

Best of the Week: Sorrell is a unicorn no longer; and Facebook pulled the rug on news again – good analysis of why S4 puzzled some of us industry veterans who had worked at Sorrell-era WPP of miserly pay rises, terrible IT equipment due to penny pinching and constantly lengthening periods between pay reviews

Media

Associated Press Aims to Drop the Term “Assault Rifle” from StylebookThe Firearm Blog – really interesting change towards more neutral language while the progressive media obsesses about the new SIG-Sauer MCX Spear which is similar in terms of lethal effect to the longer range rifles field during the first part of the cold war. These cold war era designs have been modernised and are available to gun owners across most of the US. The MCX Spear relies on a newer, harder to get ammunition. This ammunition is also harder to fill at home than existing formats like the earlier NATO 5.56mm and 7.62mmm rounds. Older weapons like the Heckler & Koch G3 are a bit heavier but offer a similar performance, yet you wouldn’t get this information from the progressive media. Regardless of your opinion on gun control, the facts matter.

“I HAVE NOTHING TO HIDE” | Campaign Monitor – Ad Contrarian on privacy and ad platforms

Retailing

Maybe We Don’t Need Groceries in 15 Minutes After All – The New York Times

Shein shed $30b in value since April, private bids show – not that surprising given how disposable has declined

Security

CNN Exclusive: FBI investigation determined Chinese-made Huawei equipment could disrupt US nuclear arsenal communications – CNNPolitics

Software

Revealed: Documents Show How Roblox Planned to Bend to Chinese Censorship

Taiwan

Taiwan’s ‘time machine’ house recreates, preserves memories of Hong Kong — Radio Free Asia – this is a really interesting project by Hong Kong expats, for Hong Kong expats based in Taiwan. The idea of collective memory and nostalgia also came through this piece here: Mementos of a vanished Hong Kong pile up at vintage second-hand store amid emigration wave – Hong Kong Free Press HKFP

Technology

Beijing detains high-flying Tsinghua semiconductor boss, report says | Financial Times – Zhao Weiguo, the former head of an expansive Chinese conglomerate with state backing and deep investments in the global technology sector, has been placed under investigation by officials in Beijing, according to local media. The 54-year-old, who led cash-strapped chipmaking giant Tsinghua Unigroup for a decade, has been out of contact after being taken from his home by authorities in mid-July, reported Caixin, a Chinese business publication.

Telecoms

Eutelsat to bid for OneWeb – eeNews Europe and interesting direct state involvement in the combined business UK and France to get board seats in planned Eutelsat and OneWeb tie-up | Financial Times

July 26, 2022
The Power Law by Sebastian Mallaby

The Power Law lays out VC history

The Power Law: Venture Capital and the Art of Disruption does for the technology venture capital industry what Accidental Empires and Where Wizards Stay Up Late did for the technologists that they financed.

About the author Sebastian Mallaby

Prior to reading The Power Law Mallaby wasn’t a familiar name to me. Looking into his background I could see why, Mallaby is a Washington Post columnist and specialises in international economics for the Council of Foreign Relations. A perfect CV for a policy wonk. His previous works have included a biography of Alan Greenspan, the World Bank and a book on hedge funds.

What the book doesn’t cover

The origins of modern venture capital in the pre-second world war era was through the family offices of people like the Wallenbergs and the Rockefellers. The Power Law only picks up the story post-war and has a distinct US bias in its storytelling.

Synopsis of The Power Law

George Doriot

Mallaby starts the story with Georges Frédéric Doriot and the American Research and Development Corporation (ARDC). What’s interesting Doriot is how he was different from today’s VCs with a focus on patriotism. Doriot is most famous for his funding of Digital Equipment Corporation (DEC), an enterprise computer company whose mini-computers facilitated the early internet and many business computer systems. At the time of DEC, the Boston area seriously rivalled the Bay Area as the technology centre.

Treacherous eight

As the book goes into the story of Arthur Rock and his relationship with the treacherous eight who left Bill Shockley’s lab, this is where many Silicon Valley histories start to coalesce with The Power Law. Mallaby adds a little more, such as the 600x return that both the eight and Rock enjoyed from their investment. At 96, Rock is still alive at the time of writing. He is more recently remembered for his involvement of firing of Steve Jobs from Apple in 1985, a good deal of this came down to his distaste for Jobs informal appearance.

Sandhill Road

Arthur Rock and former Doriot student Bill Draper benefited from being in the right place and at the right time. The US government looked to spur innovation as part of the cold war and the Bay Area was were much of this innovation would happen. Sequoia and Kleiner Perkins followed soon after, these names are now central to the Sandhill Road venture capital ecosystem, but in 1972 they were just starting off with businesses like Atari. Atari wasn’t started by experienced business professionals, but by a twenty something who thought meetings in the hot tub were a good idea. Atari marked a point in time when VCs had to become the adults in room, or as Mallaby put it ‘active investors’.

What I didn’t realise at the time was how early in Kleiner Perkin’s history was their engagement with biotech pioneer Genentech. I didn’t realise that Genentech was funded before Apple and was more a peer of Tandem Computers. Much of the early networking was based on a two-way door between established venture funded firms that were descendants of the treacherous eight and early venture capital firms that employed experienced executives as partners.

Apple was notable for two reasons. Firstly, venture capital firms operated for the first time rather like an insurance syndicate with several funding the business rather than one large investor. Secondly, the returns on Apple seems to have solidified the model and bought niche financing to a wider awareness beyond the geographic pockets of the technology industry. Where many books like Accidental Empires would use this as a jumping off point to tell the story of the PC industry. The Power Law instead talks about computer networking, this makes sense if one thinks of Metcalfe’s Law as the power law that matters the most in the internet age. The early east coast venture capital community were more cautious than their west coast counterparts, partly because the east coast technology corridor had less of a loose network of connections compared to the west coast. I think that the different business culture of the east coast also had an effect.

Connectors

Doerr connected Cypress Semiconductor and Sun Microsystems, two companies that Kleiner Perkins funded so that they would make the SPARC RISC microprocessor. You could put this as the starting point for the golden age of UNIX servers and workstations – which we can trace forward to today’s Mac range and modern Google servers.

Doerr had attempted other alliances before and in this way we see a different way how Metcalfe’s Law was the power law of the title. VCs has access to several nodes that they could connect together to try and build a technical vision. This is different to the idea we’re usually sold of the tech visionary / company founder a la the Google founders, Mark Zuckerberg or Steve Jobs.

Meanwhile Don Valentine of Sequoia Capital usurped the founders of Cisco Systems and brought in a new team to run the business bilking the founders out of much of their money. Part of this was down to one of the original Cisco founders being a woman.

Government money

The VC industry of the early 1990s capitalised on government money. Netscape was a remake of Mosiac which was the first graphic internet browser software developed in the NCSA software design group. This was part of the government-funded National Center for Supercomputing Applications (NCSA) at the University of Illinois. UUNET was a commercial ISP based on the back of the ARPANET email delivery system. As the dotcom boom took off it was the largest ISP and the fastest growing. UUNET eventually became part of MCI WorldCom and then Verizon, where UUNET remains a key part of the Verizon business offering. Both Netscape and UUNET were viewed at VC successes but as The Power Law shows, the reality was more complicated.

Irrational behaviour

I thought that the original dot.com boom was irrational behaviour, but I learned from the account of GO Computers a decade or so earlier that irrational behaviour is very much in the blood of venture capital, which explains how we had WeWork and Uber in the 2010s which is where The Power Law finishes its tale. The funny thing about the irrational behaviour is that both the dot com era and the 2010s Softbank appear to have been an accelerant with their late stage momentum approach to venture capital deals which blew valuations on businesses up far beyond what would be reasonably expected otherwise. Softbank gave birth to ‘growth equity’ as a business model that took in many existing and new VC businesses including Russian Israeli Yuri Milner and his DST Ventures business which invested in Facebook, Stripe and GroupOn.

Paul Graham and Peter Thiel

Paul Graham was a founder of an ad tech business who then moved over to investing and had a reputation for warning startup founders about the nature of VC funding. It fitted neatly into the ‘John Gaunt’ type narrative that played well with some of his peers like Peter Thiel. The impact of these people setting an ideological agenda of sorts for Silicon Valley founders, together with a plethora of other founders providing seed capital to businesses from Google onwards greatly impacted the freedom of VCs to operate using their previous models and left the industry open for the Softbanks of the world to inflate everything.

China off-note

The Power Law offers a largely truimphantist view of the role of VCs such as Sequoia Capital in China. However, this seems to ignore the impact of Chinese VC and angel investors. It also chooses to ignore the negative impact of Xi Jingping.

Conclusion

Mallaby illuminates part of Silicon Valley history that I wasn’t familiar with, in particular VCs strategic role in steering technological change during the 1990s. Time has somewhat outpaced the book. The rise of Xi Jingping and the change in attitude towards safety and innovation amongst young Chinese is likely to make the China section look overly optimistic. The end of easy money, at least for the time being will impact the VC industry globally and growth equity looks like a folly during the present time. But if you want to understand how things were The Power Law is the ideal book for you.

July 19, 2022