Every year, the tech industry experiences moments that serve as guideposts for future entrepreneurs and investors looking to profit from the wisdom of the past.
In 2017, Susan Fowler published her heroic blog post criticizing Uber for its culture of sexual harassment, helping spark the #MeToo movement within the tech industry; 2018 was the year of the scooter, in which venture capitalists raced to pour buckets of cash into startups like Bird, Lime and Spin, hoping consumer adoption of micro-mobility would make the rushed deals worth it.
These last twelve months have been replete with scandals, new and interesting upstarts, fallen CEOs and big fundraises. Theranos founder Elizabeth Holmes finally got a court date, SoftBank’s Masayoshi Son admitted defeat (see: “In the case of WeWork, I made a mistake”), venture capitalist Bill Gurley advocated for direct listings and denounced big banks’ underwriting skills, sperm storage startups battled for funding and Away’s dirty laundry was aired in an investigation conducted by The Verge.
The list of top moments and over-arching trends that defined this year is long. Below, I’ve noted what I think best represent the largest conversations that occurred in Silicon Valley this year, with a particular focus on venture capital, followed by honorable mentions. As always, you can email me (email@example.com) if you have thoughts, opposing opinions, strong feelings or relevant anecdotes.
1. SoftBank admitted failure: We’ll get to WeWork in a moment, but first, let’s talk about its multi-billion-dollar backer. SoftBank announced its Vision Fund in 2016, holding its first major close a year later. Ultimately, the Japanese telecom giant raised roughly $100 billion to invest in technology startups across the globe, upending the venture capital model entirely with its ability to write $500 million checks at the flip of a switch. It was an ambitious plan and many were skeptical; as it turns out, that model doesn’t work too well. Not only has WeWork struggled despite billions in funding from SoftBank, several other of the firm’s bets have wavered under pressure. Most recently, SoftBank confirmed it was selling its stake in Wag, the dog-walking business back to the company, nearly two years after funneling a whopping $300 million in the then-three-year-old startup. Wag failed to accumulate value and was struck by scandal, leading to SoftBank’s exit. Why it matters: ditching one of its more high profile bets out of the monstrous Vision Fund wasn’t even the first time this year SoftBank admitted defeat. Once an unstoppable giant, SoftBank has been forced to return to reality after years of prolific dealmaking. No longer a leader in VC or even a threat to other top venture capitalists, SoftBank’s deal activity has become a cautionary tale. Here’s more on SoftBank’s other uncertain bets.
2. WeWork pulled its IPO. The biggest story of 2019 was WeWork. Another SoftBank portfolio, in fact the former star of its portfolio, WeWork filed to go public in 2019 and gave everyone full access to its financials in its IPO prospectus. In August, the business disclosed revenue of about $1.5 billion in the six months ending June 30 on losses of $905 million. The IPO was poised to become the second-largest offering of the year behind only Uber, but what happened instead was much different: WeWork scrapped its IPO after ousting its founding CEO Adam Neumann, whose eccentric personality, expensive habits, alleged drug use, desire to become Israel’s prime minister and other aspirations led to his well-publicized ouster. There’s a lot more to this story, click here for more coverage of the 2019 WeWork saga. Why it matters: WeWork’s unforgiving IPO prospectus painted a picture of a high-spending company with no path to profit in sight. For years, Silicon Valley (or New York, where WeWork is headquartered) has allowed high-growth companies to raise larger and larger rounds of venture capital, understanding that eventually their revenues would outgrow their expenses and they would achieve profitability. WeWork, however, and its fellow ‘unicorn,’ Uber, made it all the way to IPO without carving out a strategy of reaching profitability. These IPOs ignited a wide-reaching debate in the tech industry: does Wall Street care about profitability? Should startups prioritize profits? Many said yes. Meanwhile, the threat of a downturn had startups across industries cutting back and putting cash aside for a rainy day. For the first time in years, and as The New York Times put it, Silicon Valley began trying out a new mantra: make a profit.
3. A whole bunch of CEOs stepped down: Adam Neumann wasn’t the only high profile CEO to move on from their company this year. In a move tied to The Verge’s investigation, Away co-founder and CEO Steph Korey stepped down from the luggage company, instead becoming its executive chairman. Lime’s CEO Toby Sun stepped down, shifting to another role within the company. On the public end of the ecosystem, McDonald’s, REI, Rite Aid and many others replaced their leaders. According to CNBC, nearly 150 CEOs left their post in November alone, setting up 2019 to break records for CEO departures with nearly 1,500 recorded already. Why it matters: All of these departures were caused by varying factors. I will focus on WeWork and Away, which took center stage of the startups and venture capital universe. The recent Away debacle reinforces the role of the tech media and its ability to present well-reported facts to the public and enact significant change to business as a result. Similarly, much of Adam Neumann’s ouster came as a result of strong reporting from outlets like The Wall Street Journal, Bloomberg and more. From facilitating a toxic, cutthroat culture to paying millions in company dollars for an unnecessary private jet, Away and WeWork’s situations proved standards for startup CEOs has shifted. Whether that shift is here to stay is still up for debate.
4. The IPO market was unforgiving to unicorns: WeWork never made it to the stock markets, but Uber, another scandal-ridden unicorn, did. The company (NYSE: UBER), previously valued at $72 billion, priced its stock at $45 apiece in May for a valuation of $82.4 billion. It began trading at $42 apiece, only to close even lower at $41.57, or down 7.6% from its IPO price. Not stellar, in fact, quite bad for one of the largest venture-backed companies of all time. Uber, however, wasn’t the only one to struggle with its IPO and first few months on the stock market. Other companies like Lyft and Peloton had disappointing results this year confirming the damage inflated valuations can cause startups-turned-public companies. Though a rocky IPO doesn’t mark the end of a company, it does tell you a lot about Wall Street’s appetite for Silicon Valley’s top companies. Why it matters: 2019’s tech IPOs illustrated a disconnect between the public markets and venture capitalists, whose cash determines the value of these high-flying companies. Wall Street has realized these stocks, which NYT journalist Erin Griffith recently described as “Publicly Listed Unicorns Miserably Performing,” are far less magical than previously assumed. As a result, many companies, particularly consumer tech businesses, may delay planned offerings, waiting until the markets stabilize and become hungry again for big-dreaming tech companies.
Facebook’s latest experimental app BARS is made for amateur rappers
NPE Team, Facebook’s internal group for experimental apps, has released a new product called BARS. The social media platform is similar to TikTok, but with a niche userbase: amateur rappers. With BARS, anyone can create rap songs using tools like beats, autotune, and more, then share the content with others.
According to the app’s description, BARS will enable users to create ‘high-quality rap in a fun and easy way.’ The app doesn’t require formal experience in the genre, the NPE Team explains, instead providing the tools users need to create their content and share it with listeners.
The app includes both audio and video effects, enabling users to record themselves performing their content. Users can create their own lyrics and pair them with beats provided by BARS; the app includes a ‘rhyming dictionary’ to help users craft their perfect song.
In addition, BARS features a Challenge Mode for freestyling based on the automatically suggested word cues, adding an element of gamification while giving users a way to showcase their skills. As is the nature of these short-form video services, users are limited to videos up to one minute in length.
The videos can be saved to the user’s camera roll for distribution on other platforms. Whether such a niche product will find a solid userbase in a market packed with TikTok-like apps remains to be seen. BARS is in closed beta at this point; iPhone users can download the app now to reserve their username and get put on the waitlist for access.
Huawei Mate X2 vs Galaxy Z Fold2: Head-to-head comparison
You’d have come to realize by now that foldable smartphones come for a premium. They are a luxury not meant for everyone. That said, the market of foldable phones is fiercely poised with Huawei introducing its third-generation handset in the Mate X2 that delivers a different, sleeker form factor than its predecessor. This new device unfolds an expensive rivalry by knocking at the door of Samsung Galaxy Z Fold2 which, after a head start of five odd months, finally has a competitor.
Galaxy Z Fold2 is not ancient just yet. It is fresh and has the mettle to take on what Mate X2 has to throw at it. Arguably, Samsung’s defining handset – that ironed out every glitch of its younger brother – was one of the finest smartphones of the pandemic year, and it wouldn’t be easy for Huawei to attain that spot. With the new launch, Huawei – if the manufacturer is able to retail Mate X2 outside of the home country – has a slight advantage with its new form factor and flagship processor powering its guts.
Samsung has been the vanguard of foldable phones, and to safeguard that image, it already has plans of introducing new devices in the Fold and Flip series this year. This will again leave Huawei playing catch up. So before the Koreans take lead, how is the Mate X2 pitted against the Galaxy Z Fold2, let’s have a quick look.
Fold and display
Huawei has succumbed to the more appreciated inward folding design. After the outer display design in the previous iterations, the Chinese OEM has now introduced the Mate X2 with a book-like, inward folding mechanism that protects the screen effectively. Though the design is influenced by the Galaxy Z Fold2 you’d say, it is bigger and sleeker in comparison.
The hinge mechanism of both the phones has been meticulously worked, but initial reports suggest that Huawei has minimized the gap between the screens – better than Samsung – with its multi-dimensional hinge. The gap has been reduced in the Galaxy Z Fold2, from its predecessor, but somehow it is noticeable, which the Chinese manufacturer seems to have done better.
On the display front, Huawei Mate X2 features an inward-folding 8-inch OLED panel with 2480 x 2200 pixel resolution and 90Hz screen refresh rate, which is larger than the 7.6-inch flexible AMOLED display – with 2208 x 1768 pixels resolution and 120Hz refresh rate – of the Galaxy Z Fold2. Mate X2 gets a cover display, again similar to its competitor. This is a 6.45-inch OLED screen touting 2700 x 1160 resolution. When folded, the Samsung handset has a 6.2-inch 2260 x 816 pixels cover display.
Despite its larger screen size, Mate X2 is slimmer – weighing only 295 grams; the phone measures 4.4mm at its thinnest point, and 13.6mm when it’s folded. The Samsung device, on the other hand, is a tad lighter at 282 grams but it measures 6.9mm when unfolded, and 16.8 mm when closed.
Processing and power
Huawei Mate X2 is powered by in-house Kirin 9000 SoC. Based on the 5nm manufacturing process, the octa-core chipset is clocked at 3.13GHz and is comparable to the power and performance of Qualcomm and Samsung’s flagship processors – Snapdragon 888 and Exynos 2100 – respectively.
The Mate X2 is a clear winner with its flagship processor; the Galaxy Z Fold2 is only powered by the comparatively older Snapdragon 865 Plus, which nonetheless offers smooth performance despite very occasional software glitches while multitasking.
The Kirin 9000 in Mate X2 is paired to 8 gigs of RAM and 256 or 512 gigabytes of internal storage. Galaxy Z Fold2 on the other hand has mammoth 12GB of RAM which is accompanied by internal storage options akin to Huawei’s smartphone.
You’d expect a robust battery pack to power these interesting devices. Both are powered by the same – 4,500mAh capacity battery – they differ in their quick charging capabilities. The Galaxy Z Fold2 supports 25W fast and 11W wireless charging, the Mate X2 employs SuperCharge adapter to boost its battery with 55W fast charging.
Samsung has proven its worth in the mobile camera department, Huawei has not been far behind either. The latter has versatile camera setups and the aspect is carried down to the Mate X2 as well. Continuing its Leica partnership, the Chinese smartphone maker has equipped its foldable smartphone with Ultra Vision Leica quad-camera module comprising 50MP primary shooter with OIS and an f/1.9 lens.
Other three cameras in the setup on the back include 16MP ultra-wide camera, 12MP telephoto sensor with 3x optical zoom and OIS, and an 8MP lens capable of 10x optical zoom. Galaxy Z Fold2’s cameras are not as enticing. It has only a triple camera setup on the back that includes 12MP primary camera with an f/1.8 lens, 12MP ultra-wide, and another 12MP telephoto sensor with 2x optical zoom.
The phones differ significantly in their selfie cameras. The inner folding display of Mate X2 lacks a selfie camera, which you can find in its rival in form of a 10MP selfie camera. Both have a front camera on the outside – Mate X2 features 16MP sensor, while the Z Fold2 has a 10MP camera.
Software and global approach
Huawei has the upper hand in the design, camera, and power, but in addition to the hardware, the software will help you make the final decision. Mate X2 here is a slight disappointment out of the box. It runs the EMUI 11 based on Android 10, while the Galaxy Z Fold2 is upgraded to run Android 11-based One UI 3.0.
The bigger factor still is that Huawei’s foldable smartphone cannot use the Google app ecosystem – no Play Store, YouTube etc. It has to rely on Huawei Mobile Services (HMS) for the apps and other features. Galaxy Z Fold2 offers a complete Google ecosystem experience, which would play in its favor, especially in markets outside of China. Mate X2 will allow sideloading of prominent apps but it’s not going to be a full-proof solution to lure in many.
Adding to Huawei Mate X2’s limited future in international markets is the uncertainty of whether it will actually release globally. For now, the smartphone is available in China and there is no information on international reveal. The only hopeful fact is that Huawei sold its Mate Xs (second-gen foldable) in select overseas markets, which it would want to achieve again with the Mate X2.
This is what the expensive rivalry actually comes down to. Both Samsung Galaxy Z Fold2 and Huawei Mate X2 are very expensive devices, even though there is a stark difference in how much they will set you back. Samsung has priced the Galaxy Z Fold2 at $1,999 and comes in two – Mystic Black and Mystic Bronze – to choose from.
The Mate X2 however starts at a deal-breaking $2,780 (RMB 17,999). If you have the dosh to spend, the phone is available in Crystal Blue, Crystal Pink, White, and Black color options.
Barack Obama and Springsteen team for Spotify podcast special
Bruce Springsteen and Barack Obama has teamed up to launch a podcast special called Renegades: Born in the USA for Spotify. The podcast will feature eight episodes, the first two of which were released this past Monday. The podcast will touch on a number of topics ranging from America’s future to fatherhood.
Renegades: Born in the USA is the latest project from the Obamas’ Higher Ground Productions, which also has a deal with Netflix for several video projects. The new podcast saw its first two episodes drop on February 22, one titled “Outsiders: An Unlikely Friendship” and the other titled “American Skin: Race in the United States.”
The first episode involved Obama and Bruce Springsteen talking about their ‘unlikely friendship,’ while the second episode touches on the topic of racism. Both episodes include links to transcripts of the episodes for those who prefer to read them.
The first episode makes sense — Obama and Springsteen do, indeed, seem like an odd match for a podcast. Obama talks about this during Episode 1, explaining that, “In our own ways, Bruce and I have been on parallel journeys trying to understand this country that’s given us both so much.”
This isn’t the first podcast to result from Spotify’s deal with Higher Ground, which was struck in 2019. Listeners will be able to stream the next six episodes in the series over coming weeks — it’s unclear whether there will be a second season of the podcast.
You can stream the podcast on Spotify now.
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