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fuelcut · 4 years

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A thought experiment on Silicon Valley’s third era

[ read the tweetstorm if you’re in a rush]

June 19th marks the end of American slavery, July 4th American Independence and July 14th the storming of the Bastille. It’s also my 40th birthday, and I’m exploring what we can learn from the past to help navigate today’s struggles for racial justice and economic freedom.

1940-1980: “Atoms” and the military-industrial-labor complex

My dad arrived in the Bay Area in 1970-1971 to get his PhD at Berkeley - just as the area was being rebranded as Silicon Valley.

Free from the stifling hierarchy of the East, the Bay was America’s center for social, technical and institutional change. Black Panthers policed the police in Oakland, shiny BART trains crossed the Bay to SF where the Gay Rights movement was flourishing. My family tree waited a millennia for India to recognize intercaste marriage. My parents would see radical social change in America across every axis in a single generation. Bold leadership in the 60s expanded civil rights and embraced immigration. They (and I) benefited greatly from an economic and social foundation that had been laid over many decades.

Caterpillar Tractor - founded in the Bay Area - embodied the spirit of this era. It went from liberating France in WW2 to building a massive middle class, unionized labor force. Cat later moved its headquarters to Peoria, Illinois - because in this era, cities across the country - not just the coasts - had the ability to compete. Since WW2, America pursued an intentional strategy of geographically broad-based economic development - via highways, airline regulation and distributed national labs.

Caterpillar didn’t just give Peoria a chance, it also gave my dad a chance to put down roots in America by sponsoring his green card. There was no H1B limbo. The nexus of military, industry and labor unions brought immigrants, Women and Blacks into the workforce - with paid apprenticeships (not exorbitant higher education) and technically-focused community colleges paving the way for millions. My mom learned COBOL while her toddlers played in the back of class. Even Hunter’s Point in SF was vibrant during much of this period. (Of course, it was far from a halcyon era - the war machine had massive human cost globally and civil rights were far from evenly enforced in America.)

And while atoms reigned supreme during this era, the military and government patiently invested risk capital in advanced manufacturing, semiconductors and software/networking to prepare America for its future.

1980-2020: “Bits” and global capital, jackrocks and polarization

In 1980, Reagan was elected President - and I was born. This would also be the peak of private sector labor employment in the US and the beginning of global capital (and the multinational companies they backed) as the leading force in forging the social contract.

They promised us that countries with McDonald’s would never go to war with each other. Indeed the Berlin Wall fell, Asian laborers got jobs and Americans could buy cheap stuff at WalMart. Global capital (bits) put atoms inside shipping containers and sent them around the world - abstracting consumers from the manufacturing base.

The writing was on the wall for unions.

As a middle schooler, I saw Cat management and labor (UAW) locked into a multi-year strike over the future. The front line was not in a boardroom or on the picket line. It was neighborhoods, schools and community groups. I remember when a classmate whose dad was in the union talked about how folks in the factory were peeing on effigies of management - including my dad.

Naturally I knew which side I was on. Cat needed wage concessions and freedom to operate to be globally competitive. I’d read Akio Morita, TPS and Lee Iacocca. I worried about Japan Inc. eating our lunch (yes as a 12 year old!) UAW workers and families were much more grounded. They needed a livelihood and wanted certainty for their future.

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War continued to wage into high school. We came home one day to find “jackrocks” outside of our driveway - a tool used in feudal Japan to thwart the advancing armies - horses, chariots - etc. of those in power. In <60 years, Caterpillar had gone from transforming America’s agrarian society to becoming the enemy of American workers. We had the GOP’s Contract with America (stored in my Trapper Keeper) and Clinton signing NAFTA within a couple years. Both parties supported global capital and global capital supported both parties. Maybe jackrocks worked better than voting?

Corporate America soon figured out that if your workers were in China, Mexico or the South, it’s harder for them to stick jack rocks in your driveway. If your kids go to private school or you live in a quasi-private suburb, they’ll be insulated from the wrath of the have-nots in heavily policed, declining urban centers. No peeing on your effigy or having your kid hear about it!

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After college, I became an analyst at Bain & Company. Once an auto parts company hired us to do a “portfolio review”. I meticulously compared the costs of building mirrors in Eastern Michigan or Malaysia - creating a zero defect Excel model. Guess which location won? The auto parts company - like Cat - had the freedom to choose where to put jobs.

But what freedom did the workers have? Marie Antoinette once said “let them eat cake”. The elites of our era now say “let them move”. Social capital is critical for folks navigating change. The educated elite take the portability of social capital (embedded in college degrees and iMessage threads) as a given.

But place and social capital are deeply intertwined especially if you’re poor or a minority. While the deep introspection elites once had during 2016 has now been paved over by new crises, we should never forget that there’s a cost to society of losing its manufacturing base and jobs. How do you model the costs of broken families, drug addiction and a polarized electorate in Excel?

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I grew disillusioned with management by spreadsheet. But I saw a bright spot on the horizon: tech. I remember opening my first iPod, getting 1000 songs in my pocket and believing that America had a shot at leading a new generation of consumer electronics when everyone a decade earlier had written us off in favor of the Japanese. Perhaps tech could bring jobs and prosperity back to the country? I wanted to be part of it.

So I moved to the Valley in 2004 and joined a VC fund. I saw how the VC funding model that Silicon Valley was built on incentivizes high-risk, high-leverage and massive-scale. It encourages companies to cherry-pick top-end talent (immigrants, marquee college grads) to build the differentiated bits. Pick the highest leverage point in the stack, outsource everything else - by building in China and/or pushing the last-mile to an ecosystem that you can control at arms length.

Tech companies could more than pay back the largely fixed costs of software / semiconductor design from the large and homogenous American market. This dynamic attracted massive amounts of private risk capital and enabled aggressive expansion abroad. This model didn’t work for everything (I got burned with cleantech) - but it worked amazingly well for broad swaths of enterprise software, consumer services and marketplaces. I saw how tech could be an incredible lever for wealth creation. But every visit back home to the Rust Belt made me wonder - wealth creation for whom?

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2020+ - A thought experiment on institutional innovation and putting people first

July 14, 2020 - Q2 Earnings - CEO, MEGA TECH CORP - Hi everyone. These aren’t normal times. We’re not going to talk about our 10Q on this call. We’re here to talk about the next 10 years. So if you’re here for DAUs, ARR or CPC, you can drop off now. 

We’ve been doing a lot of thinking about the race, health and economic crises our country faces. Over the last few weeks, I’ve asked our exec team to leave their homes, their Zoom calls, their DoorDash deliveries - to join protests and explore our community through new eyes.

Race & Place: On Juneteenth, we biked from Sheraton Place to Hunters Point to Tanforan. We saw the real life impact of redlining, mass incarceration of Blacks and the lack of jobs from decades ago - and how our headquarters sustain - rather than disrupt - the region’s policies of de facto segregation. We also remembered how political demagogues once imprisoned our neighbors of Japanese descent. We see today how their rhetoric affects our Black neighbors and colleagues. What might it do tomorrow to folks without legal status in ag/service industries that California depends or the H1Bs we depend on? What does diversity & inclusion mean in this context?

Jobs: The next Friday we biked from SRI to PARC to Sunnyvale and Moffett Field. Our industry once dreamed of a bicycle for the mind and embraced technical education and apprenticeship as a path in the door for Women and Blacks. Meanwhile we’ve pushed vast swaths of work to contractors or platform-mediated transactions - making it harder to use up-skilling as a talent lever like manufacturing employers did in the last era. What’s the impact on income mobility? At what point will 40 million unemployed Americans affect our share prices and the stability of society?

Climate: On Independence Day, we biked on the Bay Trail past landfills, superfund sites and the 101 - alongside poor and minority neighborhoods with terrible health outcomes. We talked about the Bay Area weather forecast for 2060 “fire with a chance of flooding”. We passed abandoned railways and dreams of regional transport - the result of which is folks commuting hours each way from the central valley to work service jobs in our campuses. We wondered about the long run political consequences of isolating our employee base inside the WiFi confines of a private bus network. Where is the voting base to drive institutional change? How many axles or tires will our commuter buses need to keep them safe from jackrocks on the 101?

Health: Last week, we rode from the old Permanente cement quarry to 101 (built by the same cement workers.) We talked about how Kaiser - a private employer of low-skilled workers - internalized their healthcare needs, pursued disruptive innovation and faced fierce clashes with the medical establishment. We thought about how COVID is exposing the brittleness of our employee’s isolation inside a private insurance bubble. No one can be healthy in a pandemic without competent public health infrastructure. Meanwhile, the growing cost of private healthcare makes it harder for tech - let alone the rest of the country - to employ American workers across the wage spectrum - exacerbating job loss and instability.

And as we spoke with others, we saw how the issues that Silicon Valley faces are not unique to one metropolitan area or one industry. It just happens to be the ultimate archetype of Global Capitalism and de facto segregated American metros.

What we now see - more clearly than ever - is that our entire company, our entire industry, our entire Valley - is built on a flawed foundation.

It’s like we decided to build the world’s notification service on Ruby on Rails - or building an iPhone competitor on Windows CE. Fail Whale everywhere. Unfortunately, America’s democratic institutions are in poor condition. They are struggling to deal with inequality let alone looming environmental disaster. A polarized electorate - particularly at the national level - leads to populism and makes it hard for these institutions to execute meaningful, long-term plans.

We talk a lot about speech, misinformation, fairness of targeted ads etc. But it’s becoming clear that UX, linear algebra/training data and monetization in our products is just the tip of the spear to address polarization. We believe polarization is a product of the underlying conditions of civil rights, education, health and climate debt that affect Americans differentially based on race, wealth, neighborhood and region. e.g. If we care about justice, how far does focusing on the fairness of employment ads get us in a world when many people lack the skills and negotiating power to secure a living wage?

So will today’s peaceful protests for racial justice expand into tomorrow’s revolution(s) for economic freedom? If you don’t think things are bad now, think about what happens when the stimulus checks run out. Take a look at the amount of debt in the public sector, use any imagination about COVID, work out what happens to their tax base / pension returns and consider the impact on public services, public servants and their votes. MMT better be a real thing. Maybe we didn’t start these fires, but that refrain won’t save us when the flames come our way.

We’re done debating why we need to act. It’s clear America needs our help. Let’s talk about how we’re going to rise to the occasion. Our mantra will be “internalize, innovate, institutionalize”.

First, we’re going to internalize our problems. I’m here to tell you that issues of racial and economic justice are not just moral issues but they’re financial issues. Racial debt, education debt, health debt, climate debt will hit us harder and harder each year. (By the way, revolution probably won’t be great for your DCF models.) So we’re going to recognize these off-balance sheet liabilities - which amount to a few hundred billion in the US alone over the next 10 years for a company at our scale.

Second, we’re going to innovate against these systemic problems - but our only shot at making progress is if we realign the entire company’s mission to address them. This is not about optics. This is not about philanthropy. This is not another bet. We’re putting all our chips behind one bet - America. It's the country that backed us in the first place, it's where most of our people are and most of our profits. The job for our existing products, platforms and cash flows will be to advance four areas: place / race, skilling / manufacturing, health / food and climate / mobility - starting in America. The board will measure me based on job creation and diversity. It should go without saying that we’re pausing dividends and buybacks for the foreseeable future. Every dollar will serve our mission. Every senior leader will need to sign up for our new mission - and those who choose to stay will receive a new, back-end loaded, 10 year vesting schedule. We want them focused on the long-term health of society - not the whims of Robinhood day traders or strengthening the moats of existing products. We will need to invent entirely new ways to operate and ship products. As Joel Spolsky said, “when you need to hire a programmer to do mostly VB programming, it’s not good enough to hire a VB programmer, because they will get completely stuck in tar every time the VB abstraction leaks”. We need engineers, designers and product managers that will look deep into the stack, confront the racial, job access, health and climate debts that our products, our companies and our communities are built on top of. This is not about CYA process to protect cash cows or throwing things over the fence to policy. We will need to innovate across technical, cultural and organizational lines. This requires deep understanding and curiosity. This will bring more scrutiny to our company - not less. Not everyone’s going to be on board - so for the next 12 months, we’re giving folks a one-time buyout if they want to leave.

Third, we can’t do any of this by ourselves. The problems are too big. Our role will be to provide enlightened risk capital (from our balance sheet or by re-vectoring operating spend) alongside R&D, product, platform leverage to help leaders and innovators pursue solutions in these areas. Of course we will work with our peers and the public sector wherever possible - buying/R&D consortia, public-private partnerships, trusts, etc. But the new era and landscape demands that we explore institutional models beyond global capital/startups, labor unions, NGOs or government. We need models that can more flexibly align people and purpose, that innovate on individualized vs. socialized risk/reward - and that ultimately help build and sustain local, social capital. It’s difficult to say what these will look like - but increasingly figuring this out will be existential for our core business too. Right now, it doesn’t matter if you’re designing the best cameras in Cupertino or the best way to see their snaps in Santa Monica - we’re all just building layers of an attention stack for global capital. Our Beijing competitors have figured this out. ByteDance is already eating our lunch. They’re using the same tech inputs as us - UX, ML and large-scale systems - which are now a commodity - but with vastly lower consequences for the content they show - creating a superior operating / scaling model. They’re not internalizing social or political cost.   What we need in this era is the accumulation stack - where each interaction builds social capital. This is not about global likes. This is about local respect. We’ll create competitive advantage when we build products that reach across race / economic lines to harness America’s amazing melting pot and do so in ways that build livelihoods / property rights for creators and stakeholders.

With this operating model in place, we’re committing to fundamental change in four areas:

Place & Race - We’re done with de facto segregation. Over the next 10 years, 100% of our jobs will be in diverse communities that embrace inclusive schooling, policing, housing and transit policies. (Starting tomorrow, we’re putting red lines on our maps around towns with exclusionary zoning.) This is not about privatizing cities or an HQ2-style play to extract concessions. This is about investing our risk capital and our reputation to innovate alongside government. How do we bring world-class education to neighborhoods with concentrated poverty? What is the future of digital/hybrid charter schooling? Unbundled, community-driven public safety? We’ll embrace “remote-first” as a means to this end. The Bay will become one physical node alongside others (e.g. Atlanta, DC, LA) creating an Interstate Knowledge System that develops diverse talent across the country. We’re going to coordinate our investment with leading peers - since after all, this isn’t about cost savings or cherry-picking. It’s about broadening our country’s economic base.

Skilling & Manufacturing - We will 10x the tech talent pool in 10 years - by inventing new apprenticeship models that bring women, minorities and the poor into the workforce. We’ll start with our existing contractor base, convert them to new employment models with expanded benefits and paths for upward mobility. Next, we will invent new productivity tools for all types of workers - from the front office to mobile work to call center - that brings the power of AI and programming to everyone. These will be deeply tied into new platforms for work designed from the bottom-up to build social and financial capital for individual workers and teams. Last, we’re going to manufacture most of our hardware products - from silicon all the way to systems - entirely in the US within 10 years. This will require massive investment, collaboration and innovation. It may require a revolution in robotics - but we will pursue this in a way that makes the American worker competitive - not a commodity to be automated away. If we’re successful, the dividends of our investment here will have massive spillover benefits to every other sector of manufacturing in the US - autos, etc. - including ones we have yet to dream up.

Health & Food - We’re not going to tolerate a two-class system for healthcare anymore. As we convert our contract workforce to new employment models, we’re going to have to innovate on the fundamental quality/cost paradigm across our benefit stack. This may feel like a step down but it will put us (and the rest of society if we’re successful) on a fundamentally better long-term trajectory. Food is part of Health, and we’re going to innovate there too. Free food for employees is not going to come back post-COVID. Instead, we’ll use our food infrastructure to bootstrap cooperatively-owned cloud kitchens. We’ll provide capital to former contractors - mostly Black and Hispanic - to invest and own these. We’ll build platforms to help them sell food to employees (partly subsidized), participate in new “food for health” programs and eventually disrupt the extractive labor practices we see across food, grocery and delivery.

Climate & Mobility - Lastly, we’ll be imposing a carbon tax on all aspects of our own operations - which we’ll use to “fund” innovation in this space - with a primary focus on job creation. This is an area where we’re going to be looking far beyond our four walls from the beginning. As a first step, we’re teaming up with Elon and Gavin Newsom to buy PG&E out of bankruptcy and restructure it as a 21st century “decentralized” utility. It will accelerate the electrification of mobility - financing networked batteries for buses, cars and bikes along with charging infrastructure - and leading a massive job creation program focused on energy efficiency. Speaking of mobility, private buses aren’t coming back after COVID. Instead, we’re teaming up with all of our peers to create a Bay-wide network of electric buses (with bundled e-bikes) that will service folks of all walks of life - including our own employee base. Oh and one more thing - we’re bringing together the world’s most advanced privacy/identity architecture and computational video/audio to bake public health infrastructure directly into the buses. For COVID and beyond. None of this is a substitute for competent, democratically accountable regional authorities. This is us investing risk capital on behalf of society - with the goal of empowering these authorities. Yes the New York Times will have a field day with this. Maybe in time they’ll leave their bubble, enter the real world, see the sorry state of their institutions - the behavioral health and infrastructure crises on their crumbling streets - and get on board. Until then, our job is to be patient longer than they can be inflammatory.

Open technology for global progress - While we have to prioritize America given the scale of problems, the intent is not to abandon the rest of the world or hold back it’s progress. We feel the opposite - that over the coming decades each country’s technology sectors will thrive. To get there, we will continue to invest patiently - hiring, training, partnering, investing and innovating - but with a clear north star to help each country develop local leaders in new areas. Long-term, we’ll continue to contribute open technology that others can build upon.

America should be the proverbial city on a hill for everyone - not a metaverse for the rich with the poor dying in the streets. We don’t have much time so we’re getting to work now. See you next quarter.

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This call may be imaginary but none of this is sci-fi or requires MMT. What it requires is us to care. To act. Join me on bike rides to explore our past and discuss what tangible actions Silicon Valley’s leading companies can take in the coming quarters and years. Logistics here for rides on June 19, June 26, July 2 and July 10!

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fuelcut · 4 years

Text

Silicon Valley’s imaginary Q2 2020 earnings call

[switch to long version]

CEO, MEGA TECH CORP - Hello everyone. These aren’t normal times. We’re not going to talk about our 10Q on this call. We’re here to talk about the next 10 years. So if you’re here for DAUs, ARR or CPC, you can drop off now.

We’ve been doing a lot of thinking about the race, health and economic crises our country faces. Over the last few weeks, I’ve asked our exec team to leave their homes, their [Zoom alternative] calls and their DoorDash deliveries to join protests and explore our community through new eyes.

What we now see - more clearly than ever - is that our entire company, industry, and Valley - are built on flawed foundations. A flawed social contract.

We can no longer just focus on the magical software bits and hope someone else figures out racial equity, employment, climate and health. This is Joel Spolsky’s Law of Leaky Abstractions on the ultimate scale. The abstractions are failing - and we’re seeing bugs and unintended consequences all around us. And the more we invest to deal with one-off bugs, the more likely we are to calcify change and imprison ourselves inside a failing stack. It’s like we decided to build the world’s notification service on Ruby on Rails - or building an iPhone competitor on Windows CE. Fail Whale everywhere. Unfortunately, America’s democratic institutions are in poor condition. They are struggling to deal with inequality let alone looming environmental disaster. A polarized electorate - particularly at the national level - leads to populism and makes it hard for these institutions to execute meaningful, long-term plans.

Second, we’re going to innovate against these systemic problems - but our only shot at making progress is if we realign the entire company’s mission to address them. This is not about optics. This is not about philanthropy. This is not another bet. We have no choice but to put all our chips behind one bet - America - at least to start. It's the country that backed us in the first place, it's where most of our people are and most of our profits. The job for our existing products, platforms and cash flows will be to advance four areas: place / race, skilling / manufacturing, health / food and climate / mobility - starting in America. The board will measure me based on job creation and diversity. It should go without saying that we’re pausing dividends and buybacks for the foreseeable future. Every dollar will serve our mission. Every senior leader will need to sign up for our new mission - and those who choose to stay will receive a new, back-end loaded, 10 year vesting schedule. We want them focused on the long-term health of society - not the whims of Robinhood day traders or strengthening the moats of existing products. We will need to invent entirely new ways to operate and ship products. As Joel Spolsky said, “when you need to hire a programmer to do mostly VB programming, it’s not good enough to hire a VB programmer, because they will get completely stuck in tar every time the VB abstraction leaks”. We need engineers, designers and product managers that will look deep into the stack, confront the racial, job access, health and climate debts that our products, our companies and our communities are built on top of. This is not about CYA process to protect cash cows or throwing things over the fence to policy. We will need to innovate across technical, cultural and organizational lines. This requires deep understanding and curiosity. Systems and full-stack, not just pixels. This will bring more scrutiny to our company - not less. Change must not be the burden for only our Black employees or other subsets. Everyone must be on board - so for the next 12 months, we’re giving folks a one-time buyout if they want to leave.

Third, we can’t do any of this by ourselves. The problems are too big. Our role will be to provide enlightened risk capital (from our balance sheet or by re-vectoring operating spend) alongside R&D, product, platform leverage to help leaders and innovators pursue solutions in these areas. We will work with our peers and the public sector wherever possible - buying/R&D consortia, public-private partnerships, trusts, etc. Collaboration is the default, not the exception. But the new era and landscape demands that we explore institutional models beyond global capital/startups, labor unions, NGOs or government. We need models that can more flexibly align people and purpose, that innovate on individualized vs. socialized risk/reward - and that ultimately help build and sustain local, social capital. It’s difficult to say what these will look like - but increasingly figuring this out will be existential for our core business. Right now, it doesn’t matter if you’re designing the best cameras in Cupertino or the best ways to see their snaps in Santa Monica - we’re all just building layers of an attention stack for global capital. Our Beijing competitors have figured this out. ByteDance is already eating our lunch. They’re using the same tech inputs as us - UX, ML and large-scale systems - which are now a commodity - but with vastly lower consequences for the content they show - creating a superior operating / scaling model. They’re not internalizing social or political cost. What we need in this era is the accumulation stack - where each interaction builds social capital. This is not about global likes. This is about local respect. We’ll create competitive advantage when we build products that reach across race / economic lines to harness America’s amazing melting pot and do so in ways that build livelihoods / property rights for creators and stakeholders.

With this operating model in place, we’re committing to fundamental change in four areas:

Place & Race - Over the next 10 years, 100% of our jobs will be in diverse communities that embrace inclusive schooling, policing, housing and transit policies. (Starting tomorrow, we’re putting red lines on our maps around towns with exclusionary zoning.) This is not about privatizing cities or an HQ2-style play to extract concessions. This is about investing our risk capital and our reputation to innovate alongside government. How do we bring world-class education to neighborhoods with concentrated poverty? What is the future of digital/hybrid charter schooling? Unbundled public safety? We’re done with de facto segregation. We’ll embrace “remote-first” with physical centers of gravity as a means to this end. The Bay will become one physical node alongside several others (e.g. Atlanta, DC, LA) creating a strategic network to develop diverse talent across the country. We’re going to coordinate our investment with leading peers - since after all, this isn’t about cost or cherry-picking. It’s about broadening our country’s economic base.

Skilling & Manufacturing - We’re going to 10x the tech talent pool in 10 years - by inventing new apprenticeship models that bring women, minorities and the poor into the workforce. We’ll start with our existing contractor base, convert them to new employment models with expanded benefits and paths for upward mobility. Next, we will invent new productivity tools for all types of workers - from the front office to mobile work to call center - that brings the power of AI and programming to everyone. These will be deeply tied into new platforms for work designed from the bottom-up to build social and financial capital for individual workers and teams. Last, we’re setting a goal to manufacture most of our hardware products - from silicon all the way to systems - entirely in the US in 10 years. This will require massive investment, collaboration and innovation. It may require a revolution in robotics - but we will pursue this in a way that makes the American worker competitive - not a commodity to be automated away. If we’re successful, the dividends of our investment here will have massive spillover benefits to every other sector of manufacturing in the US - autos, etc. - including ones we have yet to dream up.

Health & Food - We’re not going to tolerate a two-class system for healthcare. As we convert our contract workforce to new employment models, we’ll innovate on the fundamental quality/cost paradigm. This may feel like a step down but it will put us (and the rest of society if we’re successful) on a fundamentally better long-term trajectory. Can we use AI to help scale the reach of community health workers? Can we help them create co-operatively owned care delivery orgs that offer new ways to share risk and support behavior change? Local, social capital is critical. Food is part of Health, and we’re going to innovate there too. Free food for employees is not going to come back post-COVID. Instead, we’ll use our food infrastructure to bootstrap cooperatively-owned cloud kitchens. We’ll provide capital to former contractors - mostly Black and Hispanic - to invest and own these. We’ll build platforms to help them sell food to employees (partly subsidized), participate in new “food for health” programs and eventually disrupt the extractive labor practices we see across food, grocery and delivery.

Climate & Mobility - Lastly, we’ll be imposing a carbon tax on all aspects of our own operations - which we’ll use to “fund” innovation in this space - with a primary focus on job creation. This is an area where we’re going to be looking far beyond our four walls from the beginning. As a first step, we’re teaming up with Elon and Gavin Newsom to buy PG&E out of bankruptcy and restructure it as a 21st century “decentralized” network of community utilities. It will accelerate the electrification of mobility - financing networked batteries for buses, cars and bikes along with charging infrastructure - and lead a massive job creation program focused on energy efficiency. It will use its rights of way to provide Gigabit ethernet + 5G to everyone - which will help people and help fund some of this. Speaking of mobility, private buses aren’t coming back after COVID. Instead, we’re teaming up with all of our peers to create a Bay-wide network of electric buses (with bundled e-bikes) that will service folks of all walks of life - including our own employee base. Oh and one more thing - we’re bringing together the world’s most advanced privacy/identity architecture and computational video/audio to bake public health infrastructure directly into the buses. For COVID and beyond. None of this is a substitute for competent, democratically accountable regional authorities. This is us investing risk capital on behalf of society - with the goal of empowering these authorities.

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fuelcut · 4 years

Text

Reflections on this moment - as sirens blare and helicopters fly

This is a note I sent to my team on June 1st. -- Obviously these are not normal times. In the US alone, we had 40 million people unemployed. 100k dead from COVID (minorities, poor disproportionately affected.) Now we’re witnessing yet another wave of police violence. George Floyd. Many others. And nationwide protests. Most peaceful. Some violent. And violence is being used to justify escalation: national guard, military helicopters flying overhead US cities, future retraction of civil liberties... All of this is feeding an information war designed for social media.

This is an extremely hard and scary time. Especially for our black colleagues. I don’t believe there’s any single way to process what’s happening. But I do encourage everyone to pause, reflect and explore what can move you (and all of us) forward.

I spent today reflecting on my own connection to the issues of social justice, race and privilege. Over my life, I’ve experienced brief moments of what it was like to be the “other” - the other that society excludes from protection or opportunity. This itself has been a remarkable privilege: to turn on and off parts of my identity depending on the context, to not be continuously marked wherever I go or targeted by cops. In high school, I remember the time when a basketball team from a rich, mostly white Chicago suburb called Winnetka came down to Peoria in the finals - only to be defeated by Peoria Manual high school - nearly all black HS in our district that had about 1/3 of the funding per kid as Winnetka. The Winnetka kids chanted “you still live here” from the stands as their team exited in a loss. The message was clear: ”You may win at sports but we’ll win at life.” The sad thing is there was truth to what they say. The town I grew up in lost thousands of good paying union jobs - the types of jobs that used to give black / white folks a path to the middle class even if they didn't have $100k+ for college. Half of the kids at my high school were on free lunch plans. When I go back now, parts of my hometown are completely burnt out.. I think a lot about the opportunity gap between kids that went to Manual vs. Winnetka. How much of their life story was already written by the time they turned 18 years old? 8 years old? 8 months? But I could leave. I could change my context. In college, I visited Spain in the early 2000s and distinctly remember a cop pinning me to the side of a Zara, accusing me of shoplifting and getting even angrier when I couldn’t speak the language. Why was I singled out? I wasn’t. Turns out this was pretty common behavior for cops and private security in Barcelona at the time if you were a darker skinned immigrant perhaps from northern Africa or the Middle East. But I could leave. I could change my context. After college, I got a job in Chicago. I picked out a spot to live where I could bike to work and save on rent. It was also part of the redevelopment of a notorious housing project - Cabrini Green. In the summer, kids of elementary school age would occasionally throw concrete bricks at me when I or others - clearly outsiders - biked by. Why? What could have driven this behavior? I wondered. It wasn’t a coincidence that Cabrini-Green was poorly served by public transit (hey why does the subway skip a mile when it stops everywhere else every half mile?) And it wasn’t a coincidence that when gentrification came, the community got kicked out - with no participation in real estate wealth creation. Chicago and many American cities are built on a system of explicit and implicit segregation - affecting every public service. Health. Education. And yes Police/Courts. But hey I could leave before I had kids or whatever. I could change my context. My second year in Chicago a friend and I went to a nearby bar for a drink. While waiting to get in, we met an angry (drunk?) bouncer who not only told my friend he couldn’t get in but decided to shove him into the street where he was nearly run over by a taxi. I decided to call the police to report what I saw clearly as abuse.

Chicago PD showed up, talked to the bouncer and came back and threatened to arrest me (!!) - stating that the bouncer accused me of assault. Their word against mine. Or more specifically a nexus of cooperation between bouncers and cops to support each others’ stories in exchange for who knows what.

Before I could react, I was handcuffed, tossed into the back of a cop car, booked into Cabrini-Green jail to sleep the night on a concrete floor. Turns out this was a common tactic. Book folks at a time where aspects of intake were closed. Couldn’t get bail, couldn’t make a call. I guess they taught me a lesson. While the anger that was so strong for me then has slowly faded away, what remains is fear. Of the institution that is supposed to serve and to protect. It could have been far worse. I WAS NOT BEATEN. I DID NOT DIE. I was sophisticated enough to get the charge dismissed and expunged. But I was lucky. Also, I could leave. I could change my context. I recognize the privilege I’ve had that our black colleagues do not have. Looking ahead, I’m taking another look at my personal choices. Does it reflect my value system to live in an area that practices exclusionary zoning? How can I help the movement for police reform? (h/t to @km on campaign zero.) As a leader in this industry, I worry the NASDAQ is no longer a mark of progress - but a mark of inequality. I worry we’ve gotten really good at computers processing information but we haven’t done enough to empower people to make sense of it. How can we fundamentally change these dynamics? What can we do to drive educational opportunity? Job creation? I don’t know yet. I do know this will be a long road and the right answer for me is no longer to leave. It is time to stay, to fight and to help everyone - particularly those held back by institutional racism and inequality - change their context.

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fuelcut · 4 years

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Civil liberties and human life

This morning I was biking across El Camino with a green light and two massive enterprise rental trucks and an F-150 flew through a red light right in front of mine. Anyone that’s spent time as a pedestrian will agree - cars are dangerous! Especially when they are breaking the law.

If we valued human life, by now we would have automated speed/red light enforcement - not to mention road diets and other infra changes etc. These could come with second order benefits - for example, less discretionary power granted to traffic police that is difficult in practice to monitor / judge if used fairly or effectively. The broader truth here is that policing in America often is asked implicitly to take on tasks of “containment” or nuisance management (both arguably outside the realm of true public safety) - which when combined with institutional racism, extreme emotions and deadly force - can result in tragedy - e.g. the murder of George Floyd.

So why don’t we?

The cost of tech to do this kind of enforcement is declining - so we no longer need crazy vendor-financed schemed tied to usurious ticketing / rev share. And of course there are many issues with the tech - fairness being a key one.

But we’re far from broad public acceptance. A big reason is the threat that such capabilities create for people’s civil liberties. If your government has perfect understanding of every person / vehicle’s trajectory at all times - what risks does that create? You might like and trust your DOT commissioner.. but what about the foreign states that will attack (their likely brittle) technical infrastructure? What about the future president or governor who decides to change the laws - during a time of duress?

We have to go beyond framing the debate as being about human life vs. civil liberties. We need both - but we must have fundamentally different approaches to resolve the tension.

This requires us to consider institutional / technical architecture holistically. Who owns the end points? Who controls the software running on those endpoints? Who enforces that software is doing what it claims to be doing? What data is retained? Who or what institutions can change the rules? How are they held accountable?

Also, we shouldn’t assume the hundreds of DOT, police departments etc. who may be great at putting asphalt or cops on the streets - are the right entities to define, procure and manage highly sensitive digital infrastructure that becomes essential to preserving human life and civil liberties. We also shouldn’t assume the answer is is to cede this to unaccountable private companies.

We need to build new institutions with the right culture, incentives and accountability to people.

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fuelcut · 5 years

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eBikes: saving our health, planet and society with an hour a day

We called the first car a “horseless” carriage - yet it heralded much more than a new type of propulsion. It is the key to modern life: interstate highways, suburban housing and Walmarts. So it is with eScooters, eBikes, etc. They ride like bikes on the same paths and charge like phones on the same grid.

But the test of whether something heralds a new paradigm is not based on how familiar it is - but rather what new superpowers it gives people.

Everyone enjoyed riding a bike as a kid - but life intervenes. We get into a rush - with places to go, people to see and Costco runs to make. So we buy a big ass SUV. While it might be a wise decision for each of us, it is a disaster for all of us - creating crises of obesity, diabetes, heart disease, global warming and leading to sprawl/inequity.

Enter the eBike. It transforms the bike we loved as a kid from a toy into something that COMPETES with cars. Yes. Really.

The average American commutes 16 miles a day - taking ~30 minutes to get to work. (Turns out the dream of 80mph freeways has been crushed by the reality of congested arterials and byzantine parking garages.

An experienced eBike rider can make the same trip in ~55 minutes - assuming a 17 mph average on a Class 3 bike - so just an extra 25 minutes each way or 50 minutes each day! The eBike gives everyone the power to go where they want to go and carry what they want - exerting as much (or as little) energy as they want. All with health benefits and at a fraction (~1/30th) of the cost of owning a car.

Yes there are still huge problems to be solved - especially with infrastructure. But just as we couldn’t imagine the comfort and reliability of a Mercedes on a highway when the Model T was invented, we can’t imagine what the eBike experience will be in 2030 - as capitalism and democracy work together. And yes there will be unintended side effects; pedestrian life might become harder until we build infrastructure for a new class of vehicles.

But what can we achieve together if we each embraced an eBike commute? 100 million pre-diabetic Americans could live longer with a higher quality of life (while sparing the nation trillions in debt.) We could halt climate change by shrinking the 30% of GHG used in transport (eBikes consuming 1/30th the power of EVs or 1/80th that of cars.) Along the way, perhaps the slower pace can restore our sense of community and create the political will to reverse America’s economic segregation - building millions of units of affordable, accessible housing in the space freed up by cars.

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fuelcut · 6 years

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Notes on venture studios

The conventional logic in tech has been that new market cap is most effectively generated by the venture ecosystem or big tech companies pursuing adjacencies to a “sticky” core business. While this has largely been true, I’ve felt it hard to accept without questioning — particularly when considering 75%+ of VC funds fail to return capital beyond their hurdle rate or that incremental R&D productivity at big tech cos (except Amazon?) tends to be poorly measured.

So I (and many others) have attempted other models. Occasionally VCs including where I worked bring on EIRs and support them in thesis development. Corporates have tried various models to avoid disruption and/or expand into new markets. At Microsoft, I helped incubate products that had the potential to be transformative but also cannibalistic (e.g. Azure) — and thus we intentionally walled efforts off (separate mgmt/funding process) until later stages of development.

More recently, I co-founded Sidewalk Labs — funded by Alphabet/Google — to apply technology to the building and operation of cities. Because of vast differences with Google’s core business, Sidewalk operates as an independent entity — relying primarily on Alphabet’s ability to invest flexibly across VC, infrastructure and real estate asset classes to spearhead unique development efforts. Later at Sidewalk, we also saw the potential for software-driven innovations to address key urban challenges but found few startups pursuing these opportunities due to VC fear of / lack of familiarity with public sector dependencies. So we looked at approaches to catalyze activity — creating our own venture studio (e.g. Cityblock Health, Coord, Model.)

Venture studios have re-emerged with some fanfare (WSJ paywall) after disappearing (Idealab) post dot com bust. Often structured as small funds (~$10–40M), they provide “pre-seed” capital to startups created in-house — often bringing together an external EIR and recruited talent. They typically invest $500k — $2M per company (some of which can be in-kind services) initially — reserving capital to invest their pro-rata in “winners” in future rounds. Based on experience at Sidewalk and conversations with others running studios, I’ve observed several challenges and also paths for success.

Challenges of (standalone) venture studios

Difficult to fund overhead — The work that an incubator must do — if it builds from scratch — is more similar to a founder than an investor — and yet many operate with relatively low overhead akin to a passive investor (2% mgmt fee.) This makes it difficult for the incubator to invest in meaningful “staff” resources — unless they can be directly attributable to an incubated company. The mitigation can either be to consider non-fund structures (e.g. funding a StudioCo with equity capital that receives common shares in NewCos) or simply to have studio activities be part of a broader venture investing umbrella.

Capped ownership — Despite its founder-like role, there are limits to how much of a company the incubator can own — if it seeks traditional VC backing at Series A / etc. milestones. Later investors may be reticent to invest in companies that lack balanced investor ownership with meaningful equity for founders/employees. One mitigation is to reserve sufficient capital to be able to co-invest at A / B rounds — enabling new investors to come in while maintaining significant ownership.

Management attention — Every incubator struggles between “thin” (most talent is tied to a specific incubation — making it difficult to appropriately invest in vetting ideas internally) and “fat” / “shared” models (most talent is shared across incubations at least until the point of external funding — making it difficult to isolate concerns and thereby risking “orphan” entities particularly in the likely case where one entity is particularly successful.) This is arguably the most difficult challenge to mitigate.

Paths for success

There are not yet enough data points to generalize whether the studio model is more vs. less effective than the “traditional” venture ecosystem at creating successful companies. But the most intriguing venture studios have embedded in them a critique of the VC ecosystem that in turn suggests an arbitrage opportunity:

Geography — Entrepreneurs in 2nd or 3rd tier metros are less likely to be able to find the necessary complements (co-founders, investors) on their own for a successful venture. Therefore, incubators/studios (e.g. High Alpha in Midwest, EF in London for hard tech founders, Pioneer Square Labs in Seattle) may have an advantage vs. VCs.

Domain — Entrepreneurs and VCs in the valley have favored less regulated industries where success requires execution along one (often product/design- or engineering-) vector. Studios may be able to develop the necessary expertise (e.g. Sidewalk in urban tech, Accretive with healthcare payer relationships) to de-risk ventures that take on additional sources of risk — e.g. policy change, multi-party sales cycles etc.

Network/Technology Leverage — Entrepreneurs in certain markets may face challenges building and scaling wherein shared services provided by an incubator provide an advantage. There examples of this both in traditional VC contexts (e.g. data-driven talent sourcing at Village Global) and in studios (e.g. Playground’s expertise in offshore consumer HW manufacturing and on-device ML/CV.)

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fuelcut · 8 years

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Revolutionaries wanted: it's time to create the world's biggest neighborhood

Reposting a personal note I drafted in early 2016. (This does not reflect any official POV of my employer then or now.)

We recently moved into a new apartment on the UWS. My wife called me on move-in day to let me now she’d bumped into our friend from Palo Alto.. who we had also known from Seattle and who'd recently moved to NYC. Turns out we were neighbors! Out of millions of people, what are the chances? Perhaps higher than one would think...

We increasingly have two classes of Americans. Call them digital makers and digital takers who live in increasingly separate worlds - separated by location/land use, access to education, health and jobs.

Digital makers work in tech/media/professional services/finance, live in a handful of neighborhoods across the country (Mission, Capitol Hill, Park Slope, Santa Monica, Stamford, etc.) all connected by JetBlue and the same Facebook filter. They compete for prized childcare, prized school districts, prized ivy league schools, prized spouses and prized investment banks / consultancies (thanks for the chart below!) / de-risked tech companies - pecking each other out like aggressive chickens.

And then there’s everyone else. Digital takers. Waiting in line for EBT cards, watching Detroit ruin porn on Androids made in Shenzhen.. wondering when the free trade magic is going to trickle down. They’ve been left out of the digital economy. They're struggling to get by except for those perhaps with union jobs in govt or a regulated sector. And once they have that job, they resist any change further calcifying government and the economy.

Makers complains how slow Gogo Wi-Fi is on the plane, Takers drink lead-poisoned water from a utility they can barely afford.

Makers complains about the ETA for their Uber driver who’s stuck in traffic, Takers lives in fear of getting a 3 star rating from their Uber passenger that threatens their sharecropper status.

What’s driving this? Our pursuit of happiness over the last 50 years has led to cities that are less diverse (“protect us from apartment dwellers that might ruin our precious neighborhood”), less vibrant (“keep shop traffic far, far away..”) and reliant on the car for the vast majority of needs.

The result is a nation divided.

One where both camps (digital makers and digital takers) are increasingly frustrated and concerned about creating a better life.

America is ready for a revolution, but it won’t start in DC. And it won't be about redistribution or protectionism.

It will start in cities - the engines of opportunity. While zip codes may divide people into haves and have nots, in cities there's still hope that a critical mass of people can come together to make change.

From containing chaos to streaming it

The purpose of this urban revolution will be to take the digital technology that currently divides society and instead uses it to reimagine the policy and physical infrastructure of the city in ways that create new shared prosperity for all.

To do this, cities must not seek to contain urban chaos and human activity - for example segregating living by income level, segregating space by use..Instead, we need flexible cities that use technology to unleash human potential:

giving every single child or adult - regardless of income level - a safe place to live with the time and resources to learn and be healthy

enabling communities and businesses to easily form and take root

creating dynamic forms of governance that don’t constrain urban chaos, but rather take full advantage of it, orchestrating it into a delightful and constantly changing stream of life, work and play

What's It Feel Like? The World’s Biggest Neighborhood

"Think of the main streets of a thriving city. Commercial networks overlap with transport networks, political networks, family networks, friendship networks, environmental networks, etc. All these networks not only coexist, but actually enhance each other, constantly presenting unrelated people, ideas, and resources in unexpected juxtapositions." - @vgr

This new place will bring together the best of the neighborhood - safety, familiarity, community - and the best of the big city - opportunities, diversity, possibilities.

The result is the World's Biggest Neighborhood. BIG opportunities to learn and make a living, BIG fun, BIG diversity. It was once said of Busy, Busy, Town.. "Has there ever been a greater orchestrator of chaos than Richard Scarry?"

Yes - [this] City will use technology to beat Richard at his own game. We won't have car crashes or fires.. but we will have other forms of delightful chaos on our Main Street: the 3rd grade teacher feels safe holding class in the town square, pop-up restaurants come and go every week and autonomous fruit stands cruise down the road so people can pick just the right kiwi. Look a layer deeper and this [city’s] ability to manage chaos creates opportunity for everyone.

A safety and real estate infrastructure empowers educational entrepreneurs to easily create a micro-school. Parents get a variety of schools to choose from - each with built-in child-safe transportation. Restauranteurs can startup with minimal risk in a location with foot traffic and nearly free delivery to 100k people. Urban innovators in a local startup center can pilot all kinds of new mobile businesses and interfaces enabled by AVs. Seattle's coffee reputation started with unregulated espresso stands. Who knows what this neighborhood's cultural contributions will be?

What's our job?

[This developer’s] job is not to be a top-down master planner. In a dynamic and diverse world, "failures don’t happen despite planning and prediction, they happen because of them." We must distill our plan and platform to its core essence.

credit: Richard Scarry

Our job is to inspire and create urban revolutionaries - that will co-create and grow the city with us. We will arm them a platform and tools that enables urban innovation [... ] And jobs. The financial model for this city will be on Github, not in Excel. We will give them free software to visualize the city. We will provide seed capital, but tools like Kickstarter mean that residents can invest too.

We'll fund one City to start, but there are 100s of Cities waiting to be built - each one reflecting the hopes and dreams of their communities.

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fuelcut · 9 years

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BMW i3: corporate strategy dream that ends in a nightmare?

As a former “corporate strategist”, I can’t help but read about BMW’s moves (e.g. 2014 annual report) into electric cars and sharing with admiration:

“We’ll make driving so cheap only the rich will buy cars”

“i3 shuns the industry’s piece-cost approach, taking instead a life-of-the-car-and-beyond view”

In a couple of years, I imagine BMW bragging not about car units or even [g CO2 / km], but occupancy * vehicle miles traveled. The job to be done is mobility! Let’s worship at the altar of Christensen and disrupt ourselves!! And depending on how you cut the stats, BMW is on its way.

20-40% of its fleet is sold with financing (increasingly leased.) Your residual value is now BMW’s problem

They have 2.4M insurance contracts. Your safety now affects BMW’s pocket book.

~20% of BMW’s pride and joy - the i3 - or ~3000 cars are sold into the DriveNow sharing program where ~390k customers have registered to use them. BMW makes money not just when it sells cars, but when people use them. [Of course, the i3′s overall volume of ~20k units pales in comparison to the 3 series at 400k+ units]

Impressive stats.. but I had to see the transformation myself. So I signed up for DriveNow and checked out an i3 for a recent work trip from Mountain View to SF. My impressions:

1) Power - i3 is amazing to drive around town. it can match or beat an M3 from 0-40mph.. and encourages you to do that often. Even more impressive than speed is that the electric drivetrain is incredibly smooth.

The auto industry has spent ~100 painstaking years taming the beast of internal combustion (w/thousands of explosions per minute and incredible complexity) and doing a damn good job of it. Now it all feels horribly outdated when contrasted with a massively simpler electric system.

2) Aluminum chassis + carbon fiber/plastic passenger compartment not only saves weight (2700lb curb weight) but also makes the car feel robust without harshness..inspiring a lot of confidence. It is an impressive engineering feat.. and one that has been a work in progress for the last 10 years.

3) Range anxiety is real. (see instrument cluster.) Making it between SF and the valley (1-way) with A/C and spirited driving can get you close to empty on the battery with a bit of “range extender” to save the day. This is no Tesla.

4) Sharing experience..

DriveNow software - app + car: garbage. The Android app feels like it’s a step above a webview with lagginess / lack of responsiveness / no real-time feedback (i.e. your receipt is emailed later in the day. hello have you tried Uber?)

Reserving (and Vehicle Distribution) - the big problem right now is there are almost none of these cars in the wild making finding a car a big event and booking one-way rentals nearly impossible. You also need to reserve a specific car 15 minutes ahead of time (do I care which color car I book? why isn’t this handled probabilistically?) This is solvable though if A. automakers take the same approach to sharing as they do to rental fleets ceding excess inventory (with very low variable cost) to create new revenue streams that don’t cannibalize the core B. comprehensive metro-level parking deals C. yield management.. that encourages the “right” supply/demand orchestration.. e.g. negative rental prices on occasion or surge.

Finding the car: The app doesn’t actually lead you to the exact location of your car in the lot!

Charging: plugging and unplugging your car is a pain. these [limited range] cars need to be intro’d alongside inductive charging to make mainstream acceptance viable. In line with the i3′s positioning, BMW’s ChargeNow network is focused on urban areas unlike Tesla’s SuperCharger network. But the density isn’t close to being sufficient yet.

Personalization / access control: You still need your DriveNow card to unlock the car, the app to book and then once inside you have to fiddle with menus to start using. Then you also need to bluetooth pair your car. No reason all of this can’t be simplified into a single tap!

Returning / Parking - The car really needs custom navigation SW that via a series of BD deals let’s you type in a destination and navigate straight to a DriveNow-ready spot.

In closing… if the car itself is a “B”, the entire sharing experience is an “F”. How long will it take BMW to master the details and competencies required to win in this new world? And if they fumble, will Uber win their future?

A parting tweet in the hopes that BMW seeks out partners and respects the new role of the smartphone as the center of urban mobility..

4/ but does Apple car need to be AV to be transformative? imagine i3 powered by Apple + $$. done well.. it’d make DriveNow 50x more popular

— Anand Babu (@fuelcut)

August 22, 2015

via @vgr

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fuelcut · 9 years

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4 ways Uber can solve congestion where government has failed

“At some point, there’s a public good here, which is a restricted capacity of the streets of Manhattan. If [Uber] can’t accept that’s what the proper role of government is here, then we have a much larger disagreement.” - Anthony Shorris, NYC Deputy Mayor

It’s now clear De Blasio administration’s attacks on Uber are motivated more by political donations than by real concern about congestion. While I’m confident Uber will defeat this particular attempt at capping its growth, Uber must look to the future and play a leadership role in solving congestion. Why? Just like internet congestion degrades YouTube/Netflix etc, road congestion degrades the Uber experience. And unlike the internet, road capacity cannot be easily scaled. More importantly...

...Uber wins in a world where congestion has a price

People using public roads don’t pay for the cost their trip imposes on others (in consuming limited real estate and creating delays.) This “social cost” leads to a tragedy of the commons, limiting traffic flow and overall throughput.

Congestion charging attempts to deal with this market failure. With such policies in place, Uber’s advantage over taxis actually increases. UberPool (while immature) enables most trips with common origins / destinations to be shared, reducing the effective cost to an individual of any congestion charge. In contrast, taxis will struggle to embrace shared rides due to entrenched social customs, conflict between street / app hail and required technical sophistication. The upside for Uber could be significant since its total trips are still <10% that of taxi trips in NYC (~485k / day.)

But can Uber truly solve congestion without collective government action?

It’s unlikely we’ll see another politician push for congestion charging. It’s hard to sell in a tweet or a bumper sticker and many citizens don’t trust government to get issues of equity, spending etc. right. It feels like just another tax.

At the same time, Uber’s success is evidence that networked technology can surpass static government regulation. Act one was to dynamically network black cars (nonrival) in order to disrupt static government allocations of medallions (rival.) Is there an act two where Uber reduces congestion without government regulation?

A challenge is that taxi + Uber trips are a small fraction of overall trips in NYC - perhaps 10-15% of total. How then can Uber take a non-excludable good (public road) and effectively make it excludable (tolling / charging)? Wouldn’t Uber require collective action to avoid the free rider problem?

When analyzing climate change (another case of managing commons goods), Elinor Ostrom detailed how a distributed approach could have impact even in the absence of collective action.

Here are 4 ways Uber can lead on congestion - without the government:

1.) Drive adoption of coordinated routing

Intelligent Transport Solutions were supposed to provide real-time, coordinated routing to increase system-level efficiency, but have gained little traction. In contrast, every Uber/Lyft driver uses Google Maps or Waze for intelligent routing. If a critical mass of drivers used apps like these, coordinated strategies become possible (i.e. sending drivers down different routes occasionally sacrificing a vehicle’s travel time to optimize the overall system.)

To achieve critical mass, Uber could strike deals to encourage non-Uber drivers to use these apps every day (e.g. $10 off an Uber ride for every 10 Waze commutes.) Over time, the city might step into offer its own incentives.

2.) Make congestion cost transparent to riders

People underestimate the value of their own time and the impact of congestion on commutes. As part of the booking flow, perhaps Uber can expose congestion cost to riders. By prompting riders to enter a destination, Uber can use real-time traffic data to estimate the total fare inclusive of delays (Uber fares being composed of per mile and per minute fees.) Riders can be alerted to the impact of congestion, and given an option to take UberPool or an alternate mode. This might result in near-term reduction in transaction volume but could increase long-term trust and repeat use.

3.) Create a surcharge as proxy for the social cost of congestion

Uber trips - unlike taxi trips - are not assessed a $0.50 / trip tax to fund MTA. If it’s only a matter of time before the tax man cometh, why doesn’t Uber redefine the rules of the game by creating its own surcharge?

Instead of a static tax, Uber can create a dynamic surcharge (call it the “affordable transit fee”) that works as follows:

Rides during peak congestion periods would have a higher surcharge - encouraging UberPool (or possibly transit use)

Rides starting or stopping at subway locations would have no surcharge at all (taking advantage of Uber’s location tracking)

Yes this will result in some share shift to taxis, but this will be minimal due to the superiority of Uber / UberPool. And until the MTA comes calling, Uber can use funds it raises to subsidize rides for the working poor in transit deserts.

This might be the first time in history that a private company voluntarily taxes itself.. but why not skate to where the puck will be? If dynamic taxation is successful in reducing congestion - even marginally, Uber can flip the tables and drive a broader tax rethink.

4.) Bootstrap a Congestion Reduction Fund

Customer feedback data gathered in #2 and #3 will give Uber a clear sense of the transaction losses its suffering due to the cost of congestion (i.e. how many people decide to take the subway because Uber-ing in traffic is too expensive / time consuming?) Are there routes / times where the cost of congestion is so high that Uber itself might bear the investment of reducing it?

Uber could capitalize its own “congestion reduction fund” - eventually drawing employers/others who bear the cost of congestion. Such a marketplace would select investments carefully to minimize free rider effects. Two examples:

Parking Rebates - Availability of parking encourages individuals to drive rather than use taxi/Uber/transit. While Uber cannot reduce the number of available spots, it may be able to influence who uses them. By partnering with carpool apps, Uber could provide significant rebates to "efficient” drivers - tied to arrivals during off-peak times or # of occupants. With parking supply relatively fixed in the near-term, such a move could paradoxically lead lot owners to raise prices.. pushing marginal drivers to transit.

Logistics “Policing” - Deliveries during peak times create massive congestion. While NYPD attempts to police double parking, it can’t be everywhere all the same time. Guess who is? Uber. By investing in dash cams w/basic computer vision for its most active drivers, Uber can rapidly detect and report double parkers - using irregular traffic data as a trigger for capture.

Of course, Uber is under no obligation to do any of this. But with great power comes great responsibility. And increasingly we need Uber to lead where government has failed.

#uberpool #uber #congestion #nyc #deblasio

0 notes

fuelcut · 9 years

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should you go to b-school? tl;dr: high upfront investment for uncertain return constrains choices during years where you’re most able to take risk. can still be the right choice for some

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fuelcut · 9 years

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3 reasons why UberPool should be a new experience, not just another slider

See also: Uber and the evolution of the on-demand economy

So far UberPool is an amazingly successful social experiment. The next step is turning it into a scalable, business (Uber's "big hairy audacious goal") that justifies Uber's valuation. UberX - even with high driver utilization - has a price floor higher than cars or transit for many scenarios. UberPool can slash cost and unlock a massive market opportunity: general transportation.

But is success for UberPool simply about adding another slider to Uber's on-demand UX..? or does success require rethinking the Uber experience?

Status quo: add a slider!

Studies like MIT's Senseable City Labs suggest 95% of Manhattan cab rides could be shared with <5 minute delay. Such data favors incremental evolution - like we've seen to date from Uber. However, Manhattan is the absolute best case - with higher population density, job density and shared transit usage than any other US city and most world cities.

Take hypothetical City B. 50% of origin - destination pairs (i.e. all trips.. not just taxis) could theoretically be served by UberPool (2+ riders) with <15m delay for each rider. I have no idea what city resembles this, but on the surface City B sounds like it could sustain UberPool.

But going from 95% -> 50% and 5m -> 15m massively impacts the experience:

Does 50% map to a certain set of hours or neighborhoods where the service can reliably be offered? Can users depend on it being available / budget around it etc.?

A random delay between 0-15 minutes is huge when you consider the average US commute is ~30 minutes. How will users cope with such uncertainty?

In the short term, subsidization solves all of Uber's experience issues. But cheap debt and equity lasts only so long.

Rethink: a new experience

To make UberPool a large, scalable business, I believe Uber must rethink the experience in 3 key ways:

1) Establish a new promise - UberX succeeded with a promise of reliable point-to-point transit with minimal latency and lower pricing than taxis.

UberPool doubles down on Uber's price promise, but backtracks on the core promise of reliable point-to-point transit - adding unpredictable "delay" element to accommodate pickups / route deviations for each passenger.

There are a very large set of customers that might find low UberPool prices appealing AND who are willing to tradeoff on trip efficiency BUT who need greater assurance of expected delay in order to plan ahead.

UberPool must create a new promise providing customers greater assurance:

"pay [n% less], delay [<10m]”

Setting clear service level expectations upfront and beating them (like Amazon has done consistently with ship times) will increase confidence and overall adoption.

2) Make people walk - Every UberPool I’ve been in would have been MUCH more efficient if folks would walk a few blocks (hello Mission Street!) e,g,

This type of guidance could initially be a series of simple heuristics reflected as part of a new promise for UberPool:

"pay [n% less], walk [<5m], delay [<5m]”

It also lays the groundwork for a a multimodal Uber.

3) Rethink Uber as an always-on app - Born in the "smartphone in pocket" era, Uber's on-demand UX encourages impatience.

Yet only some trips truly require departure at a moment's notice and arrival at the fastest possible time. Many appointments have "soft" start or end times where the user might be willing to change behavior (i.e. leave earlier or later) if the UX encouraged it.

The Watch with glanceable notifications and haptic nudging presents the perfect stage for an always-on UX that can shape behavior.

(And while initially, watch apps may be derivative of phone apps, eventually we'll see Watch apps actually influence the larger smartphone app installed based the same way we see mobile apps influencing desktop sites.)

Of course this UX rethink requires solving extremely hard machine learning / prediction and routing problems (in real-time..) However, there’s been a ton of progress in academia and industry and Uber has a tremendous opportunity to put it to good use.

#uber #uberpool #machine learning #ux

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fuelcut · 9 years

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Idea maze for AI startups: an addendum

chris dixon’s post on the idea maze for ML/AI startups addresses a topic that's near and dear.

Like x.ai.. but actually most user-facing NLP apps are domain-specific. key q: how you deal w/edu,failure mode http://t.co/cZvPpEK6Fh

— Anand Babu (@fuelcut) January 12, 2015

I agree with his overall premise - that you need to think very carefully about the domain of focus and how you acquire data.

But I think a few points are overlooked:

1) come for the rules-based cheat, stay for the AI

This is analogous to come for the tool, stay for the network. You can fake an AI experience through a complex set of rules - Siri being the prime example.

2) fault-tolerant UX is a must-have, not a choice

Even domain-specific AI gets things wrong. It's folly to think otherwise. In fact, when it comes to AI products, having an insight for better "fault-tolerant" UX is almost as critical as having an insight about a better learning algorithm.

Moreover, the foundation of a user feedback loop (which is how your models get better) is a fault-tolerant UX that presents choices when your unsure.

3) many VALUABLE data sets sit unused (so think B2B2C)

Many large enterprises and consumer internet companies have massive data sets (with some level of labeling.) Not all of them will be interested in or capable of building their own data / machine learning teams.

The opportunity initially probably looks much less like wit.ai (i.e. self-service developer API) and more like traditional consulting / enterprise SW for a host of reasons - both business and technical.

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fuelcut · 9 years

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Evolution of marketing aka ape-human coexistence

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fuelcut · 9 years

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Postmates & on-demand delivery: not just for the 1%

On-demand delivery services like Postmates get called out as symbols of Silicon Valley building for the 1%: people for whom money is more valuable than time doing errands for those whose time is more valuable than money. However they can have impact far beyond that for two reasons:

1) Everyone has a 1% value moment - In the last month, I've used Postmates 4 times... in each case saving the day:

Forgot my dress shirt upon checking into a hotel for a function -> BananaRepublic.com reserve in store -> postmates delivery to hotel

Ran out of baby formula (happened twice!) —> Postmates order from Walgreens via free-form text input—> Postmates delivery to home

Stuck at home w/sick kids and out-of-town visitors wanted Philz —> Postmates order from Philz via in-app menu —> delivery to home

I'd argue that many people (across a broad range of incomes) have high-value use cases where they would pay a significant markup (>10%.) So the addressable market is not just the 1%, but rather everyone - on occasion.

2) Rewiring the world for on-demand benefits everyone

We're still in the early days of on-demand services. Users are required to play system integrator, performing research outside the app, copy-pasting and coaching delivery assistants through basic tasks.

As services like Postmates generate significant (and in many cases incremental) volume, retailers and other service providers will rush to rewrite their customer experience:

Standard UI: in-app menu / order flow

Real-time knowledge: Wait time / Inventory / Availability

Critically, this will benefit customers regardless of whether they use Postmates or choose to travel on their own to a given location ("walk to the Starbucks at 3rd and Main to pickup your latte.")

None of this is to suggest that Postmates is set to rule the world, but the broad horizontal platforms that end up winning logistics will generate a "peace dividend" for everyone.

Every marketplace that isn't Uber needs to get 10x more clever about supply side liquidity (or use Uber) pic.twitter.com/46rFqM3SRH

— Anand Babu (@fuelcut)

January 22, 2015

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fuelcut · 10 years

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Disrupting the system of individual auto ownership

More so than any other industry in the last century, the auto industry has profoundly shaped America’s physical landscape:

making roads the exclusive domain of cars, not pedestrians

allocating 30-40% of our urban areas to parking

driving the creation of interstate highways and suburbanization

giving rise to single-family zoning (being de facto protection from home value depreciation e.g.. “I’m moving to the nicer suburb just another exit down the highway”)

usurping 30-40% of a typical home lot for driveway / garage

In turn, cars have shaped our culture (16 = age of “independence”) and personal economics ($1 of every $2 spent on cars and houses.) This re-ordering of priorities wasn't simply the result of the auto industry making awesome products.

In the 1920, auto makers faced a highly entrenched transportation system with established hierarchy of pedestrians, horses, transit, land owners, regulators etc. So they took a systems design approach and looked for "key points of leverage" to upset the existing system.

We have met the enemy.. and it is the pedestrian!

Rather than just waging a campaign based on price, convenience or sex appeal, auto makers chose to overturn existing value systems. A great example of social engineering was a series of "shaming" campaigns targeting jaywalkers:

What comes after cars: on-demand mobility

We are now on the cusp of another massive sea change in transportation. "On-demand mobility" or access to transit of the right type at the right time provides even greater convenience and more favorable economics vs. traditional car ownership. (Note that I deliberately conflate transit search apps like Citymapper, "ride sharing" apps like Uber/Lyft/Bridj.com as well as "car sharing" apps like Getaround/Car2go. There is no one size fits all..yet.)

But change of this scale won’t come easy. Like auto makers did 100 years ago, disruptors must be great at both software and social engineering.

We are still in the very early stages of this campaign. The foes are obvious: incumbents with hundreds of billions of asset value e.g.

taxi / transit unions preserving artificial scarcity

auto mfgs. protecting a system where cars are used <5% of the time

So far the battle being fought is one of "innovation" vs. "old economy." That's powerful and the side of innovation has fantastic case studies. But the old economy is pretty good at fighting back. Could there be an even stronger, more inclusive campaign for on-demand mobility? Let me speculate...

New allies in the fight for on-demand mobility

Cities (emboldened by longstanding residents / NIMBY groups) have traditionally made high density developments run a gauntlet:

How accessible is [this development] to jobs, shopping etc. via transit (and hence how often is auto the only dependable form of transit)?

How many parking spaces will the development include?

How much traffic will it generate?

On-demand mobility - engineered into the core of a development - resolves many parking / traffic concerns associated with higher density. A fantastic example is this Berkeley development:

Traditional codes required 1:1 ratio of units:parking and lower density to reduce generated traffic. Following these codes would have led to much higher unit costs due to the expense of parking garages

Instead, the project has 10:1 ratio of units:parking thanks to - bundled transit passes for residents - car sharing svc operated by www.getaround.com (provisioned for 96% availability)

Who benefits from higher densities? Higher-density cities generate less carbon (go sustainability advocates!) Higher-density infill development in suburban areas enable lower income families to send kids to better schools (go affordable housing advocates!) New allies on the left.... that conveniently fragment support for the "old economy"!

We have met the enemy.. and it is the parking spot!

That's fantastic in the abstract.. but we need a simpler message if we want to embark on widespread social engineering. We might even need an enemy.

What if we villainize the unsuspecting 9' x 18' parking spot? Seemingly innocuous, these pieces of pavement - increasingly underutilized thanks to on-demand mobility - can be made to symbolize lost opportunity. Lost parks. Lost housing. Lost years in the battle against climate change.

NYC 9x18 proposal “tie # of pkng spaces to #/size of apts, affordability, transit proximity” @Uber should champion! http://t.co/qQCsaWsagE

— Anand Babu (@fuelcut)

September 15, 2014

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fuelcut · 10 years

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thoughts on Microsoft + Minecraft

With the rumored acquisition of Minecraft, Microsoft is poised to own the next great generative platform after Excel.

Microsoft democratized desktop publishing two decades ago, yet no one in the establishment has democratized CAD http://t.co/1fJkll7KVe

— Anand Babu (@fuelcut)

September 14, 2014

One [major] exception: @Minecraft has quietly brought collaborative “CAD” to tens of million people..

— Anand Babu (@fuelcut)

September 14, 2014

Meanwhile dramatically superior input (touch/pen, gesture, 3d scanning) and output methods (3d printing) are just maturing

— Anand Babu (@fuelcut) September 14, 2014

potential for @Microsoft + @Minecraft is huge. @satyanadella tear down the walls btw virtual & physical creativity! pic.twitter.com/IWqZnYmtjQ

— Anand Babu (@fuelcut) September 14, 2014

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fuelcut · 10 years

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Uber and evolution of the on-demand economy

The on-demand economy is exploding. Across transit, local labor/services, retail and travel, a new crop of apps makes it dramatically easier for people to complete “real world” transactions with a couple taps - enabled by armies of independent contractors.

But the current market structure is not sustainable. With hundreds of apps, each with varying capabilities and regional presence, there’s no easy way for users to discover the right app at the right time. As a result, the vast majority of apps will struggle to reach the required critical mass to sustain local network effects. This creates a huge problem and platform opportunity. How might this market evolve? While there are *many* potential scenarios, let’s consider two:

Scenario 1: Smart Siri

Visualized in this epic blog post, this scenario suggests a middlemen (e.g. Siri) emerges. The defining element isn’t just voice as UI but rather an underlying service broker that executes complex transactions via unified knowledge of user, world and apps (capabilities, inventory etc.) 3P providers are incentivized to participate via carrot and sticks approach (e.g. limited time exclusivity for key verticals coupled with the threat of being locked out of a significant new discovery / engagement channel.) Core challenge include incentives (provider fear of commoditization) and of consumer behavior (i.e. relative to all of the possible things I can say, how do I know what [Siri] is actually capable of doing?)

Scenario 2: Dominant Uber

“Uber is no more about taxis than Amazon is about books”

There’s plenty of analysis about Uber’s ability to disrupt transit/logistics and win a $100B+ market. But in this scenario, Uber expands its addressable market to $500B+ by embracing its core competence of operating a network of locally-dense independent contractors. It takes two steps to reposition itself as “instant gratification for all local services.” (diagram above)

Add new service types - Most services are consumed at point of production. Usually that means the customer travels to the service provider. But often the service provider comes to the customer. In these cases, Uber’s existing transit-oriented platform provides value particularly when transit accounts for significant opportunity cost for the provider (e.g. logistics/moving, meals/meal delivery, cleaning, babysitting, install, repair/quotes, gardening, tutoring..)

Empower owners of “hard assets” to bundle services - Rather than broker all types of services (scenario 1), Uber focuses on those tied to soft assets (and hence capable of being served by independent contractors.) It then creates a platform for owners of “hard assets” (e.g. restaurants, retailers, health/medical centers etc.) to enrich offerings by bundling Uber services. This enables complete experiences for consumers while increasing asset utilization, turnover and margin (Uber providing referral margin) for partners. Early examples include Uber’s platform launch for travel services / restaurants (e.g. United Airlines, Hyatt, Opentable, Starbucks, Timeout, TripAdvisor) that wish to bundle transit. Of course this is just the start.

In taking the steps above, Uber becomes a multi-sided marketplace that aggregates consumers, service providers & partners/developers. As the platform scales, it becomes more valuable to each party:

consumers - customers want integrated “experiences” which require bundling of capabilities from multiple providers (e.g. night out = restaurant reservation + babysitting + taxi, new apartment = moving + ikea delivery & assembly). With the most service providers & the most partners/developers on the same platform, Uber can offer the most “experiences” possible at the lowers cost / friction (e.g. waiting time, payment method, trust, UI..)

service providers - Service providers want to maximize return for a fixed amount of time, skills and assets. A platform that aggregates the most consumers and partners enables service providers to maximize revenue while minimizing costs (marketing, transit/fuel, real estate.)

partners - Partners benefit from a platform that enables more experiences for more consumers capable of pulling thru their underlying products or services at the lowest cost. Given the cost of integrating with each provider (costs going beyond simply adopting a particular API but also including full training of support etc.), partners are incented to standardize on a few platforms that reach the broadest set of consumers / service providers. It’s worth noting that many partners are national in scope (i.e. large chain retailers, restaurant/medical aggregators) suggesting not only local, city-level network effects but also national network effects.

As a broker of intent and payments, Uber’s platform has the potential to have massive reach and profitability

Is “Dominant Uber” believable?

At its core, Uber is a contextual search engine and real-time marketplace. Let’s examine the underlying experiences / platform and their applicability to other verticals.

Providers “publish” their intent, availability and context into a real-time index. Consumers also create a query: intent + availability + context. The search engine then ranks results among available inventory - with underlying marketplace building blocks being key to the process:

Reputation - the platform uses reviews and implicit payment / messaging history to ensure high quality service

Yield management / logistics optimization - To ensure sufficient inventory, the platform provides service providers with incentives (i.e. surge pricing / higher revenue) to respond to demand. This can be done on a hyperlocal basis in order to optimize logistics for providers

Lastly, operations is critical to the health of the platform. In Uber’s case, over 50% of headcount (~500) handles operations. Maintaining high quality service across tens of thousands of independent contractors requires ongoing quality control and recruiting - not to mention significant legal work to ensure freedom to operate across diverse markets.

At a high level, all of these components are relevant across verticals, but let’s explore what specifically needs to change across consumer, provider and partner experiences as Uber expands.

Consumers

Today, defining intent is limited to designating service level (e.g. uberX, black car etc.) Availability and context are inferred (e.g. the act of opening the Uber app at a particular location sufficiently defines the query.) Can Uber expand into new domains (babysitting, meals, cleaning, tutoring..) with different intent schema?

Also, what happens if the consumer cannot define intent on their own (e.g. for repair or gardening, the contractor may need to visit the customer’s home to assess before quoting a price.)

Availability and context also become far more nuanced (e.g. at what times is the customer available for a haircut? when will they be at home to let the gardener in?)

But these are solvable problems e.g.

Flexible UI - Uber can move from its trademark moving maps interface (primarily useful for beginners) to a free form interface similar to Thumbtack. Subsequent screens in the flow could be tailored for each vertical.

Companion apps - By launching “Uber Calendar” or “Uber To Do”, Uber can expand the query surface area. Perhaps the user’s calendar can be used to define availability for service providers. A to-do list can help transition the mental model of Uber as synchronous demand-based service to one that is also asynchronous. Proof points here include Tempo (coincidentally an Uber platform launch partner) and Wunderlist.

Providers

Currently, Uber/UberX drivers have very little to input - with intent, availability and context being mostly implicit. Drivers accrue reputation through implicit signals (e.g. successful trip completion) and explicit customer reviews. To enable providers across new verticals, Uber will need to innovate in UI and underlying marketplace building blocks:

Recommended Tasks - If Uber started as “everyone’s private driver” it must now become every [task worker’s] private executive assistant. Given a set of skills (e.g. gardening, home repair, etc.) and customer demand curve by geography, what is the highest value / lowest cost agenda for a given day? The system should be able to suggest compound tasks where relevant e.g. perhaps a provider should shuttle passengers from a neighborhood to the mall, pick up a Nest thermostat at the Home Depot and install it at a home nearby.

Adaptable Reputation - eBay is notorious for distorted seller ratings. Sellers would sell 1000 low-value trinkets with objective quality to accumulate positive feedback and then pivot to selling high-value trinkets of subjective quality. Buyers would have little warning, rendering the rating system unreliable. Hence, reputation that’s portable across verticals is both a problem and opportunity. A system that lets service providers of a system progressively grow reputation over time across verticals is hugely valuable for all parties. Perhaps certain attributes are portable (e.g. trustworthiness, on-time behavior etc.) whereas others are not. A sufficiently compelling reputation system could be disruptive. In the future, service workers might refuse to work at a business that doesn’t enable participation in individual-level reputation system (e.g. Haircuttery or Massage Envy supporting provider-level reputation since after all that’s what impacts quality.)

Schema innovation - Long term, treating service providers as interchangeable widgets may result in commoditization and a race to the bottom. A successful platform needs to offer providers continued ability to differentiate their offerings while maintaining a base level of standardization (e.g. an Uber driver that can also serve as an expert Napa tour guide.) Perhaps Uber can offer both closed and open schema search options - with location and reputation serving as key filters.

Quoting workflow - Related to the point above, many services are hard to standardize: plumbing, gardening, roofing etc. The state of the art today is Thumbtack who's made significant investments in a task taxonomy / customer Q&A to enable fast quotes. But in practice, the experience is complex. The user is bombarded by providers (most of which are middlemen) all of which still "need to see your place." Then there's a scheduling rigmarole. If Uber becomes a real-time, hyperlocal broker of intent for services, the user flow could become "I need a plumber" -> "here's one 3 miles away that can stop by in 10 minutes to give you a quote." And for the provider, Uber maximizes qualified leads & jobs with minimal driving/downtime etc.

Partners

With partners financially committed to the platform (they receive rev share on Uber transactions), they are now incented to provide input to Uber on expanding coverage. Which geographies? Which new services? This win-win partnership enables new opportunities:

Aggregation - Partners like United use the Uber API for payment, booking confirmation etc. However, Uber the app lacks awareness of these partner flows. Can the “bundles” that partners create be aggregated back into the main Uber app to drive visibility for the partner and expand capabilities for Uber? Over time, can Uber evolve into a service catalog that spans retailers / places etc.? (e.g. what’s the best way to get my car CarPlay enabled?)

Service Graph - While partnership usage might focus on bundled Uber services (particularly transit), eventually consumers and partners may begin to see Uber as a “Service Graph” capable of brokering / recommending local services to users on a standalone basis. Uber becomes the jumping off point for any local service (e.g. Zocdoc, MyTime..).

All above may sound crazy or speculative.. but there is an existence proof for a horizontal, local services platform. It’s called Craigslist. With minimal moderation and a relatively open structure / schema, Craigslist serves as a marketplace for a shockingly diverse set of services. [Many of the on demand services we know and love were bootstrapped from Craigslist e.g. Airbnb.] Craigslist’s saving grace from spam/abuse is its hyper-locality, relying on messaging and in-person payments to establish trust.

Imagine: What if Craigslist had actually innovated in the last decade? Perhaps it would look a lot like Uber.

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