Thursday, April 19, 2018

Money, Murder and Sadomasochism: A Look At the L.A. Tech Scene

With the passing of a year since the SNAP IPO—up a dollar from the IPO price on the "paper anniversary", and Amazon's purchase of fancy doorbell Co. Ring last month, I was thinking about Los Angeles venture capital.

Here's CB Insights with more:
March 2:
Amazon’s Acquisition Of Ring Is LA Tech’s Third-Biggest VC-Backed Exit
Snap's IPO still reigns as the top exit for LA tech startups, as Ring adds to the list of $1B+ exits from the LA metro area.
Earlier this week, Amazon announced that it would acquire Santa Monica-based video doorbell company Ring. At $1.8B, this would be the tech giant’s second-largest acquisition, after its $13.7B acquisition of Whole Foods in June 2017. 
 
The deal also marks the third-largest exit for an LA metro area-based tech startup since 2009.
Ring, which was rejected by judges on business reality show Shark Tank in 2013, went on to raise $183.7M in equity funding in less than 6 years. The company’s cohort of investors includes high-profile angel, VC, and corporate venture names like Richard Branson, Goldman Sachs, Qualcomm Ventures, Upfront Ventures, and Kleiner Perkins Caufield & Byers, among others.
The largest LA exit of all time went to Snap: the mobile social media company went public for $3.4B in March 2017, earning a valuation of nearly $25B. Facebook’s $2B acquisition of VR headset maker Oculus VR in 2014 ranks second. 

Notably, all three of the biggest LA tech exits — Snap, Oculus VR, and Ring — offer some sort of consumer-focused video product.

Compared to NYC, LA has historically lagged in overall exits, though the city has had some notable big winners. The trend continues with Ring, which is the eighth $1B+ exit of a VC-backed tech company from the LA metro area since 2011. While LA’s biggest exits span a range of industries, a majority of the top 10 startups focus either on consumer products or media & entertainment solutions.
Using the CB Insights database, we compiled the ten largest exits of LA-based VC-backed tech startups since 2009. Check it out:...MORE
And our headline story from July 2016:

From Epic Magazine:

Silicon Is Just Sand
THE ACCUSED
August 29, 2015, is a hot night on Venice Beach. Normally the superheated inland desert sucks the damp air off the ocean, blanketing the coast with a layer of moisture all the way to the 405. But tonight, something has gone wrong. There’s no fog, and the sky is boiling, even at 2 am.
A dark SUV pulls in front of the Cadillac Hotel, a two-star lodging better known for its cheap rooms and stained carpets than its views of the ocean. The car’s lights wash over a homeless man sitting on the sidewalk. The homeless live all over Venice Beach and have for as long as anyone can remember, particularly at the northern end of the boardwalk on the edge of Santa Monica. Their tents line the small grassy hills between the sidewalk and sand. Stuffed sleeping bags, shopping carts, signs and bedding made from cardboard. You almost wouldn’t know how much this place has changed recently.
The SUV’s lights stay on, illuminating the scene as Sris Sinnathamby, the owner of the Cadillac Hotel, steps out of the passenger side. He’s followed by the driver, identified by multiple witnesses as Francisco Cardenaz Guzman. Guzman is known to the police as a member of the Venice 13, a gang with ties to the Sureños, who control the local drug trade. He has been arrested many times, for gun possession, robberies, and car theft.

Sinnathamby and the man identified as Guzman have just returned from the James’ Beach bar, a five-minute drive down the street. Sinnathamby walks up to the homeless man and tells him to get away from the front of the hotel. A security camera at a nearby café records the scene.
Sinnathamby is not like Guzman. He was born in Sri Lanka and came to the US in his twenties. According to the LA Weekly, he happened to be passing through Venice 25 years ago when he ran out of money. He took a job cleaning hotel rooms at the Cadillac, then worked his way up to manager. When the owner retired, Sinnathamby bought the place from him. It’s not fancy, but it faces the ocean, and pretty or not, it has dramatically risen in value in the past decade.
The run-up in real estate prices has been driven in part by the explosion of tech companies along the beach on the west side of Los Angeles. Google, Snapchat, Hulu, BuzzFeed, YouTube, Netflix, and Facebook have overtaken an archipelago of properties, bringing an influx of programmers, sales executives, and the refined retail that follows such massive migrations of well-paid people. They call it Silicon Beach.

The homeless don’t necessarily mind the newcomers, but the newcomers mind the homeless. Sinnathamby is not one of the newcomers, but they have been very good for his business interests. In addition to the Cadillac, Sinnathamby owns the gourmet eatery Dudley Market, a parking lot on Ocean Front Walk, and other Venice properties. Sinnathamby again tells the homeless guy to get moving. The man rises and shuffles toward the boardwalk, 20 feet away.
The beach used to belong to the people. Now it’s illegal to be here from midnight to 5 am. In fact, a 2012 law designated the boardwalk part of the beach, making it illegal to sleep on the boardwalk as well. The justification was public safety. Homeless advocates have filed lawsuits challenging the ordinance. In the meantime the homeless feel harassed, people always kicking their feet, telling them to move. Venice is a place with a long history of art and activism and, now, a flood of wealth. Tempers run high on all sides.
Sinnathamby’s efforts to move the homeless man attract the attention of a group of nearby boardwalk denizens. “Leave him alone,” says Shakespeare, a 26-year-old rapper and poet who frequently sleeps on the boardwalk near the Cadillac. Sinnathamby walks over to him, passing a man pushing a cart, who exchanges greetings with Sinnathamby. Everyone knows each other.

The homeless have been drinking. They had a party earlier on Hippie Hill, a mound of grass nearby, to celebrate Shakespeare finishing a new recording. Maybe it’s the booze. Maybe it’s the heat. Or maybe it’s the money. Rising property values have unpredictable effects on community relations.
Shakespeare argues with Sinnathamby, insisting the man has a right to stay on the sidewalk. But then Guzman, who has so far hung back on the boardwalk by himself, suddenly pulls out a gun and fires four shots down the beach. Shakespeare gets even more agitated, gesturing toward Guzman as if to challenge him. Sinnathamby stands between the two men, keeping them apart. Guzman waves his gun in a threatening manner.

Two women, friends of Sinnathamby who were waiting in the SUV, now get out and walk over to him. He turns to the women, and as he does Shakespeare shifts to his right. Guzman notices Shakespeare making his way around the women, and Shakespeare uses the moment to lunge at Guzman. Guzman shoots him three times, stepping aside like a bullfighter as Shakespeare falls past him, exiting the frame of the surveillance video. Guzman waits for a moment, then gestures for the women and Sinnathamby to come with him. But they stay. Finally Guzman runs to the SUV and drives away. At least that’s how it all appears on the video.

The ocean is as calm as a sheet of paper.

THE JOURNALIST
Nine days later, I arrive in Venice. I move into a small two-bedroom with a roommate on Pacific and Breeze, one block from the beach, four blocks from the Cadillac. It’s ferociously hot, and like most places this close to the ocean, this one has no air-conditioning. I have a small carry-on bag with me, a pair of jeans, two T-shirts, a pair of shorts. No return ticket.
On the boardwalk near my apartment, some people and local community organizations have erected a memorial for Shakespeare at the base of one of the boardwalk’s pagodas—the usual candles and flowers, a pink bow, a poster signed by his friends, a framed picture of Shakespeare in a tan jacket, a stuffed panda bear. A group of homeless men and women lounge in the pagoda, one of only a handful of slivers of shade.

I’ve been sent here to figure out why Google has moved into so many buildings in the area, why there are so many accelerators and shiny new office-sharing facilities. Snapchat chose Venice over Silicon Valley and is now valued at $20 billion, with more than 800 employees. What is happening here?

That’s my assignment....MORE
HT: Longform 

In Other News: "Gucci and Guess settle nine year legal battle over the letter G"

The writer, Alys Key's mini-bio: "I report on vice, leisure, the creative industries, luxury.".
What's not to like?

From City AM:
A nine-year battle over the letter G has finally come to an end.

http://www.cityam.com/assets/uploads/main-image/cam_standard_article_main_image/moet-and-chandon-celebrates-2nd-annual-moet-moment-film-festival-and-kick-off-of-golden-globes-week-arrivals-631002164-5ad8a88ad952e.jpg 
Gucci and Guess have been at loggerheads over the interlocking G logo (Source: Getty)
Fashion brands Gucci and Guess jointly announced today that they have signed an agreement that will end all outstanding legal battles between the two companies.

The terms of the agreement were not disclosed, but in a joint statement, Gucci and Guess said: "The agreement is an important step for both companies in recognising the significance of protecting their respective intellectual property portfolios and design creativity."...MORE
Weaklings.
As we've retailed elsewhere, the lawsuit in Dickens Bleak House, "Jarndyce v Jarndyce" went on for so long that no one remembered what it was about but even that can't compare with the apparent world record which ended in 1966 having been filed in 1205.
Judgement was for the plaintiff.
Now that's commitment to the case.

Back to Dickens as the S&P 500 was attempting to get through some serious restance:
Chartology: S&P at 2100--Maybe the 43rd Time IS the Charm

We are still betting on 2250 but this is starting to look like the lawsuit in Bleak House:
"...Innumerable children have been born into the cause; innumerable young people have married into it; innumerable old people have died out of it. Scores of persons have deliriously found themselves made parties in Jarndyce and Jarndyce, without knowing how or why; whole families have inherited legendary hatreds with the suit. 
The little plaintiff or defendant, who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled, has grown up, possessed himself of a real horse, and trotted away into the other world. 
Fair wards of court have faded into mothers and grandmothers; a long procession of Chancellors has come in and gone out; the legion of bills in the suit have been transformed into mere bills of mortality; there are not three Jarndyces left upon the earth perhaps, since old Tom Jarndyce in despair blew his brains out at a coffee-house in Chancery Lane..."

Autonomous Vehicles: "Velodyne invented modern lidar—it’s about to face real competition"

From Ars Technica:
We talked to Austin Russell, CEO of lidar startup Luminar.
David Hall invented modern three-dimensional lidar more than a decade ago for use in the DARPA Grand Challenge competitions. His company, Velodyne, has dominated the market for self-driving car lidar ever since. Last year, Velodyne opened a factory that it said had the capacity to produce a million lidar units in 2018—far more than any other maker of high-end lidars.

Now Velodyne is starting to see some serious competition. Last week, lidar startup Luminar announced that it was beginning volume production of its own lidar units. The company expects to produce 5,000 units per quarter by the end of 2018.

Meanwhile, Israeli startup Innoviz is also getting ready to manufacture its InnovizPro lidar in significant volume. The company declined to give Ars exact production numbers, only telling us it has orders for thousands of units. Innoviz believes it can scale up manufacturing quickly to satisfy that demand.

Obviously, making lidar a mainstream automotive technology will require millions of lidar units—not just thousands. At this point, Velodyne's rivals are still focused primarily on distributing units to companies for evaluation, testing, and development. The ultimate goal is to convince customers to put in much larger orders for lidar sensors a year or two down the road for use in shipping products.
Both Velodyne and Innoviz say they expect their lidar units to cost hundreds rather than thousands of dollars in the long run. But the companies are keeping the exact specs and prices of their products secret, making it hard to figure out how far they are from this goal or who really has the lead.

To build his original lidar, David Hall mounted 64 lasers on a spinning gimbal that rotated several times per second. Since then, Velodyne has created a number of different lidar models that operate on the same basic principle. Today, Velodyne has models that use 16, 32, 64, and 128 lasers.

Luminar and Innoviz take a dramatically different approach from Velodyne's. Both sell lidars with a single laser that scans across the landscape with the help of a tiny moving mirror. There's an obvious cost advantage to using just one laser, and this approach can give more flexibility about the vertical resolution and scanning frequency of a lidar unit.

But a big downside of this design is that it can't provide 360 degree coverage. Luminar says it can cover 120 degrees horizontally. In practice, this means that a vehicle needs four Luminar units to provide the same 360-degree coverage as a single Velodyne unit.

Velodyne is also producing a solid-state lidar called the Velarray. But based on conversations with the company, spinning lidars continue to be their main focus.

Luminar says its lidar is a cut above rivals
In an interview with Ars, Luminar CEO Austin Russell argued that the big feature that sets Luminar's lidar apart from virtually all its rivals is the wavelength of its laser....
...MUCH MORE

If interested see also:

Autonomous Vehicles: The King of LiDAR
A first rate piece on the backstory of the future.
From The Verge:

The billion-dollar widget steering the driverless car industry
No matter what it took, David Hall was going to kill that clown. He maneuvered Drillzilla for another ramming run....
For a quick primer on this stuff we have on offer:
Izabella Kaminska In Conversation With the Financial Times' Auto Industry Correspondent, Peter Campbell, on the Prospects for Autonomous Vehicles
Track the link to the vid.
And a little test of your knowledge:
"Mapped: The Top 263 Companies Racing Toward Autonomous Cars"
Think you know the players?

"These Ex-Spies Are Harvesting Facebook Photos For A Massive Facial Recognition Database" (FB)

From Forbes:
When Mark Zuckerberg appeared before the House Energy and Commerce Committee last week in the aftermath of the Cambridge Analytica revelations, he tried to describe the difference between "surveillance and what we do." "The difference is extremely clear," a nervous-looking Zuckerberg said. "On Facebook, you have control over your information... the information we collect you can choose to have us not collect."

But not a single member of the committee pushed the billionaire CEO about surveillance companies who exploit the data on Facebook for profit. Forbes has uncovered one case that might shock them: over the last five years a secretive surveillance company founded by a former Israeli intelligence officer has been quietly building a massive facial recognition database consisting of faces acquired from the giant social network, YouTube and countless other websites. Privacy activists are suitably alarmed.

That database forms the core of a facial recognition service called Face-Int, now owned by Israeli vendor Verint after it snapped up the product's creator, little-known surveillance company Terrogence, in 2017. Both Verint and Terrogence have long been vendors for the U.S. government, providing bleeding-edge spy tech to the NSA, the U.S. Navy and countless other intelligence and security agencies.

As described on the Terrogence website, the database consists of facial profiles of thousands of suspects "harvested from such online sources as YouTube, Facebook and open and closed forums all over the globe." Those faces were extracted from as many as 35,000 videos and photos of terrorist training camps, motivational clips and terror attacks. That same marketing page was online in 2013, according to internet archive the Wayback Machine, indicating the product is at least five years old. The age of the product also suggests far more than 35,000 videos and photos have been raided by the Face-Int technology by now, though Terrogence co-founder and research lead Shai Arbel declined to comment for this article.

Raising the stakes of facial recognition
Though Terrogence is primarily focused on helping intelligence agencies and law enforcement fight terrorism online, LinkedIn profiles of current and former employees indicate it's also involved in other, more political endeavours. One ex-staffer, in describing her role as a Terrogence analyst, said she'd "conducted public perception management operations on behalf of foreign and domestic governmental clients," and used "open source intelligence practices and social media engineering methods to investigate political and social groups." She was not reachable at the time of publication.

And now concerns have been raised over just how Terrogence has grabbed all those faces from Facebook and other online sources....MUCH MORE

FT Alphaville's Dan McCrum: When the Student Becomes The Master

We looked at the professional style of FT Alphaville's founder Paul Murphy a few times:

Possibly The Funniest (Profitable) Stock Recommendation of All Time (PSON)
...For our younger readers, here is Mr. Subliminal on Donald Trump cheating on his wife Ivana in 1990:

                                                                               Comedian
And here's FT Alphaville's editor, Paul Murphy,
 
Hard-bitten journalist
on former FT Alphaville owner Pearson and its stock, Dec. 1, the day the Financial Times was handed over to Nikkei, while appearing to be having a normal conversation with Alphavillein Bryce Elder:

...PM
(So here’s our advice on the stock at 832p….)
PM
Run )
BE
...Today, though, the message is dovish. So we’re all choosing to forget about 2016.
PM
Scarper )
PM
Get out )

...MUCH MORE

And:
Watch as a Master Trolls the Trolls: Pluto Edition
Some say "Don't feed the trolls".

Hah!

Here Paul Murphy doesn't just chum them in.
He gets 'em close and then shoves the gavage tube down their troll throats to force-feed the little buggers and  create a 42-comment foie gras.

Hah!
So you've got that  Now stir in a bit of Izabella Kaminska, only the second editor in Alphaville's history, as she riles up the crypto crowd:
Why blockchain is a belief system
109 comments
Bitcoin’s fractioning problem
110 comments
Busting the myth that bitcoin is actually an efficient payment mechanism
189 comments
(and many, many more posts)

Mix well and:

Sell all crypto and abandon all blockchain

et voilà:
160 comments

I looked at the story a couple hours after it was posted and "What the hell?..."
There were already something  on the order of  50 comments. Some brilliant:

It's a common enough behaviour to have it's own vocabulary: gazumping and gazundering. Who knows why people do things? I didn't say double spending was possible with proof of work, only gazumping.
And some straight up deranged.

I think even Mr. McCrum was a bit impressed:

Meanwhile in China: "City installs water-spraying poles to stop pedestrian traffic violations"

One of the news feeds we don't link to often enough. Excellent for understanding what the Chinese government wants folks to see. From the Wikipedia entry:
The China News Service (Chinese: 中国新闻社) is the second largest state-owned news agency in the People's Republic of China, after the Xinhua News Agency. It serves mainly overseas Chinese and residents of Hong Kong, Macau and Taiwan....
The "E" is the English version.
From ECNS,
http://www.ecns.cn/cns-wire/2018/04-19/U470P886T1D299791F12DT20180419163957.jpg
Yellow poles that can spray water are installed on two sides of a zebra crossing in Daye, Hubei Province. 
(Photo provided to Beijing News)
Daye City in Central China's Hubei Province has added water-spraying poles to stop pedestrian traffic light offences.

Local police have installed lines of yellow poles on two sides of a zebra crossing, which can spray water on pedestrians who ignore red lights. The system also gives the warning of "please obey traffic rules."

Devices include an image capturing and face-recognition system to record the offence and also a colorful gateway system to guide pedestrians, said a police officer surnamed Wan in charge of public relations, who added that tap water is used that will not affect public health.
Wan said the city's police spent 1.3 million yuan ($207,000) on research and development of the system in cooperation with a local company over two months.

The system is designed to stop traffic violations as Daye applies to become a "national civilized city," a city ranking honor, Wan said.

It can capture a photo of a pedestrian running a red light, collect and store facial information, and upload the information to the city's Big Data investigation center, where the rule-breaker's identity will be verified with the help of Internet searches. The person is then shamed on a giant electronic screen.

The water will make clothes wet but will not scare people or cause pollution, said the police officer, adding that there have been a drop in violations since the introduction....MORE

Wednesday, April 18, 2018

"Machine Learning’s ‘Amazing’ Ability to Predict Chaos"

When you have one complex-chaotic system, say an ag or energy derivatives market overlaid on another complex-chaotic system, say, for example, weather; the ability to foretell the progression from the initial condition of one, or better yet both, systems would have some pecuniary advantage*

https://d2r55xnwy6nx47.cloudfront.net/uploads/2018/04/Fire_2880x1220.gif
Researchers have used machine learning to predict the chaotic evolution of a model flame front.

Hey, I've made that bet! It's called "The ol' just light large-denomination banknotes on fire to avoid the hassle of feigning any type of skill or expertise in  weird instruments you don't understand trade."**

From Quanta Magazine:
In new computer experiments, artificial-intelligence algorithms can tell the future of chaotic systems.
Half a century ago, the pioneers of chaos theory discovered that the “butterfly effect” makes long-term prediction impossible. Even the smallest perturbation to a complex system (like the weather, the economy or just about anything else) can touch off a concatenation of events that leads to a dramatically divergent future. Unable to pin down the state of these systems precisely enough to predict how they’ll play out, we live under a veil of uncertainty.

But now the robots are here to help.

In a series of results reported in the journals Physical Review Letters and Chaos, scientists have used machine learning — the same computational technique behind recent successes in artificial intelligence — to predict the future evolution of chaotic systems out to stunningly distant horizons. The approach is being lauded by outside experts as groundbreaking and likely to find wide application.

“I find it really amazing how far into the future they predict” a system’s chaotic evolution, said Herbert Jaeger, a professor of computational science at Jacobs University in Bremen, Germany.
The findings come from veteran chaos theorist Edward Ott and four collaborators at the University of Maryland. They employed a machine-learning algorithm called reservoir computing to “learn” the dynamics of an archetypal chaotic system called the Kuramoto-Sivashinsky equation. The evolving solution to this equation behaves like a flame front, flickering as it advances through a combustible medium. The equation also describes drift waves in plasmas and other phenomena, and serves as “a test bed for studying turbulence and spatiotemporal chaos,” said Jaideep Pathak, Ott’s graduate student and the lead author of the new papers....MUCH MORE
*Initial conditions - very important. Just ask grandmother.
A couple variations depending on whether she was feeling chatty or taciturn:
Grandmother would say something like "If the initial condition given is 'The sky is falling', your course of action would be to short sky, try the eggplant"
The long version, also re: trajectories, 2013's:

The Future Price Trajectory of Copper and Aluminum and the Implications for Oil
In Which Our Hero Explains the Importance of Recent Events and Their Impact on the Cost of Day-to-Day Living
...For Izabella I believe the story was an intellectual challenge to piece together disparate bits of  information into a coherent matrix while battling the forces of darkness (seriously, the word murky doesn't do justice to these markets) and disinformation. 
For me it was how to approach the profit possibilities; much in the same way Grandmother would quiz: "Your initial conditions are 'The sky is falling, the sky is falling', what is your course of action?" to which I'd reply "I'm this many: ||||, four" and she'd say, "No silly, your course of action is 'Short sky'"
**Tama Churchouse describes his introduction to derivatives sales and the first product he put together and marketed:
"...No matter. I persevered, and three months later, in November I structured and sold my first structured note.
I remember drafting the product term sheet.
I christened it a “Bermudan Callable Three Times Leveraged Inverse HIBOR in-arrears Resettable Step-up Snowball Note.”
No, I’m not kidding…The notional value of the note was HKD100mn (around US$13mn), and we booked around EUR100k of profit...."

Jeff Bezos Letter to Amazon Shareholders (including 1st disclosure of Amazon Prime membership #'s and perfect handstands)

From the SEC:

EX-99.1 2 d456916dex991.htm EX-99.1 LOGO Exhibit 99.1
To our shareowners:

The American Customer Satisfaction Index recently announced the results of its annual survey, and for the 8th year in a row customers ranked Amazon #1. The United Kingdom has a similar index, The U.K. Customer Satisfaction Index, put out by the Institute of Customer Service. For the 5th time in a row Amazon U.K. ranked #1 in that survey. Amazon was also just named the #1 business on LinkedIn’s 2018 Top Companies list, which ranks the most sought after places to work for professionals in the United States. And just a few weeks ago, Harris Poll released its annual Reputation Quotient, which surveys over 25,000 consumers on a broad range of topics from workplace environment to social responsibility to products and services, and for the 3rd year in a row Amazon ranked #1.

Congratulations and thank you to the now over 560,000 Amazonians who come to work every day with unrelenting customer obsession, ingenuity, and commitment to operational excellence. And on behalf of Amazonians everywhere, I want to extend a huge thank you to customers. It’s incredibly energizing for us to see your responses to these surveys.

One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’. I see that cycle of improvement happening at a faster rate than ever before. It may be because customers have such easy access to more information than ever before – in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether something’s in stock, find out how fast it will ship or be available for pick-up, and more. These examples are from retail, but I sense that the same customer empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.

How do you stay ahead of ever-rising customer expectations? There’s no single way to do it – it’s a combination of many things. But high standards (widely deployed and at all levels of detail) are certainly a big part of it. We’ve had some successes over the years in our quest to meet the high expectations of customers. We’ve also had billions of dollars’ worth of failures along the way. With those experiences as backdrop, I’d like to share with you the essentials of what we’ve learned (so far) about high standards inside an organization.

Intrinsic or Teachable? 
First, there’s a foundational question: are high standards intrinsic or teachable? If you take me on your basketball team, you can teach me many things, but you can’t teach me to be taller. Do we first and foremost need to select for “high standards” people? If so, this letter would need to be mostly about hiring practices, but I don’t think so. I believe high standards are teachable. In fact, people are pretty good at learning high standards simply through exposure. High standards are contagious. Bring a new person onto a high standards team, and they’ll quickly adapt. The opposite is also true. If low standards prevail, those too will quickly spread. And though exposure works well to teach high standards, I believe you can accelerate that rate of learning by articulating a few core principles of high standards, which I hope to share in this letter.

Universal or Domain Specific? 
Another important question is whether high standards are universal or domain specific. In other words, if you have high standards in one area, do you automatically have high standards elsewhere? I believe high standards are domain specific, and that you have to learn high standards separately in every arena of interest. When I started Amazon, I had high standards on inventing, on customer care, and (thankfully) on hiring. But I didn’t have high standards on operational process: how to keep fixed problems fixed, how to eliminate defects at the root, how to inspect processes, and much more. I had to learn and develop high standards on all of that (my colleagues were my tutors).

Understanding this point is important because it keeps you humble. You can consider yourself a person of high standards in general and still have debilitating blind spots. There can be whole arenas of endeavor where you may not even know that your standards are low or non-existent, and certainly not world class. It’s critical to be open to that likelihood.

Recognition and Scope 
What do you need to achieve high standards in a particular domain area? First, you have to be able to recognize what good looks like in that domain. Second, you must have realistic expectations for how hard it should be (how much work it will take) to achieve that result – the scope.

Let me give you two examples. One is a sort of toy illustration but it makes the point clearly, and another is a real one that comes up at Amazon all the time.

Perfect Handstands 
A close friend recently decided to learn to do a perfect free-standing handstand. No leaning against a wall. Not for just a few seconds. Instagram good. She decided to start her journey by taking a handstand workshop at her yoga studio. She then practiced for a while but wasn’t getting the results she wanted. So, she hired a handstand coach. Yes, I know what you’re thinking, but evidently this is an actual thing that exists. In the very first lesson, the coach gave her some wonderful advice. “Most people,” he said, “think that if they work hard, they should be able to master a handstand in about two weeks. The reality is that it takes about six months of daily practice. If you think you should be able to do it in two weeks, you’re just going to end up quitting.” Unrealistic beliefs on scope – often hidden and undiscussed – kill high standards. To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be – something this coach understood well. 
Six-Page Narratives 
We don’t do PowerPoint (or any other slide-oriented) presentations at Amazon. Instead, we write narratively structured six-page memos. We silently read one at the beginning of each meeting in a kind of “study hall.” Not surprisingly, the quality of these memos varies widely. Some have the clarity of angels singing. They are brilliant and thoughtful and set up the meeting for high-quality discussion. Sometimes they come in at the other end of the spectrum.

In the handstand example, it’s pretty straightforward to recognize high standards. It wouldn’t be difficult to lay out in detail the requirements of a well-executed handstand, and then you’re either doing it or you’re not. The writing example is very different. The difference between a great memo and an average one is much squishier. It would be extremely hard to write down the detailed requirements that make up a great memo. Nevertheless, I find that much of the time, readers react to great memos very similarly. They know it when they see it. The standard is there, and it is real, even if it’s not easily describable.

Here’s what we’ve figured out. Often, when a memo isn’t great, it’s not the writer’s inability to recognize the high standard, but instead a wrong expectation on scope: they mistakenly believe a high-standards, six-page memo can be written in one or two days or even a few hours, when really it might take a week or more! They’re trying to perfect a handstand in just two weeks, and we’re not coaching them right. The great memos are written and re-written, shared with colleagues who are asked to improve the work, set aside for a couple of days, and then edited again with a fresh mind. They simply can’t be done in a day or two. The key point here is that you can improve results through the simple act of teaching scope – that a great memo probably should take a week or more.

Skill 
Beyond recognizing the standard and having realistic expectations on scope, how about skill? Surely to write a world class memo, you have to be an extremely skilled writer? Is it another required element? In my view, not so much, at least not for the individual in the context of teams. The football coach doesn’t need to be able to throw, and a film director doesn’t need to be able to act. But they both do need to recognize high standards for those things and teach realistic expectations on scope....
 ...MUCH MORE

Equities Are In A Potentially Dangerous Spot: 2000 Market Crash as Analogue

We are not fans of analogues, you have to be careful with this stuff.
Humans are pattern-recognizing machines and are so good at it that we can see patterns that don't even exist.* We call it the Rock Man Syndrome.**

We are leaning toward Jeremy Grantham's original melt-up target of S&P 3300 as a blow off top. He hedged a bit in conversation with The Economist April 10 but said there was still a 40% possibility.
"An update from Jeremy Grantham"

From Northman Trader via ZeroHedge: 

On The Big Market Tops
Following the exuberance in January and subsequent corrective actions in February and March and now into April there has been a lot of speculation that markets may have topped in this cycle or are in the process of topping. While earnings are expected to hit record highs in 2018 due to the recent tax cuts much uncertainty has crept into markets due to concerns of reduced liquidity offered by central banks, rising rates into record debt levels, tariff policies emerging and previous bulletproof tech stocks such as $FB, $GOOGL and $AMZN entering a period of unfavorable news cycles, in some cases of their own making.

Given this backdrop I wanted to share some thoughts on market tops and analyze if the lessons of previous big market tops can be informative for our current markets.

Firstly, let’s look at the current situation. What made the first quarter notable was the strong outperformance of the Nasdaq versus other indices. Specifically we can observe that the Nasdaq made a new high in March while the $DJIA, for example, did not:
Notably we’ve seen a similar constellation before. If you are guessing the year 2000 you are guessing correctly. Not only did we see a similar event, but it also occurred during a comparable time frame:
2000:
New high for $NDX in March with a lower high in $DJIA. Given this similarity it seems fair to ponder if history will rhyme here....MUCH MORE
See also January 20's "When to Sell in a Bull Market". 
Failure to retake the all-time highs in the S&P 500 (2,872.87) and DJIA (26,616.71) would be the set-up for the analogue.

DJIA  24,784.78
S&P    2,710.84
NDX    6,809.31

*On the other hand here's an example of what incisive pattern recognition can accomplish. This chart is from early June 2007 and foresaw what was coming:

Jan. 20, 2009
Technical Analysis: S&P Black Swan Formation
blackswanchartael4.png
"The very rare black swan formation - note both feet and neck are complete and the rare vampire tooth variation is in place.  This is very bad. Very very bad."...

**The Rock Man Syndrome comes from a close reading of Harry Nilsson's The Point!:
...The Rock Man said, "Say, babe, there ain't nothing pointless about this gig. The thing is you see what you want to see and you hear what you want to hear. You dig? Did you ever see Paris?"
"No."  
"Did you ever see New Delhi?"
"No."  
"Well, that's it. You see what you want to see and you hear what you want to hear." 
And with that the Rock Man fell soundly asleep...

How Domino’s Pizza Drove a 90x Increase in Stock Value by Acting Like a Tech Startup

Domino's was only the ninth biggest gainer on the Zen Trader list linked in March 26's "The Best and Worst Performing Stocks Since the March 2009 Start of this Historic Bull Market", table after the jump.

That said, this is one hell of a case study. There's a mini-MBA in this piece.

From Product Habits:
Startups can learn some of the most valuable lessons on product and marketing from the growth of the world’s biggest pizza chain.

The story of Domino’s Pizza is a hero’s journey. It’s a story of reinvention. Domino’s had a 180-degree company overhaul and turned critics into superfans by being honest with themselves about their weaknesses. They took a huge, scary risk and completely scrapped and remade their core product: pizza.

At the same time, the company has been perceptive about where their true value is for customers. They know customers love them because they’re convenient—and in recent years they’ve used technology to double down on the convenience and reliability that define the core of their brand.
This self-awareness, and the guts to act on it, has paid off. Now they’re punching far above their weight class. Domino’s stock has grown 90x from $2 to $180 since 2010. These growth rates dwarf those of Facebook, Google, Amazon, and Apple.
https://producthabits.com/wp-content/uploads/2018/04/Screen-Shot-2018-02-26-at-6.25.16-PM.png
They’re also seeing a ton of engagement and feedback on social media from customers-turned-brand-advocates.

Domino’s Pizza went from being an underperforming company in a very traditional industry with a bad core product to an inspiring, once-in-an-industry example of flawless brand awareness, product development, and marketing.
The kicker is that they pulled it off by thinking like a startup. Let’s take a closer look at how:
  • Domino’s Pizza grew their company and brand in the early days and cemented their reputation for fast, cheap, convenient pizza delivery.
  • Domino’s listened to—and acted on—customer feedback and completely recreated their pizza recipe in response to criticism about the terrible taste.
  • Domino’s continued to reimagine ways to order pizza and is using all of the technology available to them to double down on convenience in ordering and delivery.
Go ahead and order a pizza while you read on—it will be there soon.

1960-2007: Convenience as a brand
Fifty years before Apple released its brand-defining iPhone, forty years before Salesforce brought software to the cloud, and thirty years before Tim Berners-Lee invented the World Wide Web, two brothers started a pizza company that would become an innovator in business and technology and one of the most loved brands in America.

The winding hero’s journey from growing franchise to public embarrassment to—finally—the stock-picker favorite began with some of the same best practices that we use in business today. Domino’s built a strong foundation for longevity because they understood their own core value and knew what their market wanted.

Now, almost sixty years later, they’re still growing at a crazy pace. Their pace of innovation is putting other food brands, and even tech companies, to shame.
https://producthabits.com/wp-content/uploads/2018/04/dominos.jpg
In 2017, Domino’s began testing self-driving delivery vehicles. [Source]
And though their delivery guarantees, marketing campaigns, and even the pizza itself have gone through radical changes, most of their core principles are the same.

When Tom and Jim Monaghan took over an old pizza parlor in 1960 and started growing their own pizza business, they hit the top moves from the basic business playbook. Tom and Jim did a ton of research about the pizza industry and the competitors. They thought carefully about operations behind the scenes as they franchised and scaled. They entered into the market with one product, pizza, and began to expand out into a pizza ecosystem by adding new products like Cheesy Bread and Cinna Stix....MUCH, MUCH MORE
As mentioned, a major case study that we'll probably be referring back to.
And as promised, Zen Trader's Top 10:

https://www.zeninvestor.org/wp-content/uploads/2018/03/Bull-mkt-winners.png

"Researchers Map Seven Years of Arctic Shipping"

When the next generation of icebreakers come into service it is going to get crowded up there.
From gCaptain:
The Arctic’s declining sea ice has meant more opportunities for the shipping industry to expand its use of the region that in decades past was unnavigable for the vast majority of the year.

The Northwest Passage through Canada and the Northern Sea Route, or Northeast Passage, north of Russia and Siberia, are both valued because they could significantly shorten ship transit times between Asia, Europe, and North America.

In August 2017, a newly designed LNG carrier with an ice-hardened hull became the first merchant ship to sail across the Arctic Ocean without the aid of an icebreaker. The vessel, the Christophe de Margerie, made the voyage in just 19 days, nearly a week faster than the traditional route through the Suez Canal.

In February, a similar tanker, the Eduard Atoll, completed its own unescorted trip through the region in the dead of winter, marking another historic first. During that voyage, the vessel sailed South Korea to Sabetta terminal in northern Russia, where it loaded LNG produced at a new $27 billion plant and transported it to France.

To illustrate this increase in ship activity in the Arctic, a team of scientists has banded together to analyze and map more than 120 million data points in order to track where ships are most using the region.

To make the map, the team, led by Paul Arthur Berkman, director of the science diplomacy center at Tufts University, and Greg Fiske, a geospatial analyst at the Woods Hole Research Center, used data compiled by SpaceQuest, a company designs microsatellites that can monitor the track Automatic Identification System (AIS) signals from ships.

Once the data was plotted, there were some interesting observations to be made.
http://3kbo302xo3lg2i1rj8450xje.wpengine.netdna-cdn.com/wp-content/uploads/2018/04/Unique-Ship-Visits-Arctic.jpg

This map shows unique ship visits to Arctic waters between September 1, 2009, and December 31, 2016. Credit: NASA Earth Observatory
Looking at the data, Berkman, Fiske, and their colleagues found that the mean center of shipping activity moved 300 kilometers north and east—closer to the North Pole—over the 7-year span.
Notably, they were particularly surprised to find more small ships, such as fishing boats, wading farther into Arctic waters. The team also plotted the AIS ship tracks against sea ice data from NSIDC and found that ships are encountering ice more often and doing so farther north each year....MORE
I mention the icebreakers because both sea ice extent and sea ice thickness seem to have been increasing the last 3-4 years. Combine the two and you get sea ice volume and that has also been rising off the lows.
In the maps below note in particular the thickness along the right side, the Russian Northern Sea Route:
http://ocean.dmi.dk/arctic/icethickness/images/FullSize_CICE_combine_thick_SM_EN_20080416.png
And:

Questions Americans Want Answered: "Should the 5% Convention for Statistical Significance be Dramatically Lower?"

Can you hear the clamor?
From The Conversable Economist:
For the uninitiated, the idea of "statistical significance" may seem drier than desert sand. But it's how research in the social sciences and medicine decides what findings are worth paying attention to as plausible true--or not. For that reason, it matters quite a bit. Here, I'll sketch a quick overview for beginners of what statistical significance means, and why there is controversy among statisticians and researchers over what research results should be regarded as meaningful or new.
To gain some intuition , consider an experiment to decide whether a coin is equally balanced, or whether it is weighted toward coming up "heads." You toss the coin once, and it comes up heads. Does this result prove, in a statistical sense, that the coin is unfair? Obviously not. Even a  fair coin will come up heads half the time, after all. 
You toss the coin again, and it comes up "heads" again. Do two heads in a row prove that the coin is unfair? Not really. After all, if you toss a fair coin twice in a row, there are four possibilities: HH, HT, TH, TT. Thus, two heads will happen one-fourth of the time with a fair coin, just by chance.

What about three heads in a row? Or four or five or six or more? You can never completely rule out the possibility that a string of heads, even a long string of heads, could happen entirely by chance. But as you get more and more heads in a row, a finding that is all heads, or mostly heads, becomes increasingly unlikely. At some point, it becomes very unlikely indeed.  
Thus, a researcher must make a decision. At what point are the results sufficiently unlikely to have happened by chance, so that we can declare that the results are meaningful?  The conventional answer is that if the observed result had a 5% probability or less of happening by chance, then it is judged to be "statistically significant." Of course, real-world questions of whether a certain intervention in a school will raise test scores, or whether a certain drug will help treat a medical condition, are a lot more complicated to analyze than coin flips. Thus, so practical researchers spend a lot of time trying to figure out whether a given result is "statistically significant" or not.

Several questions arise here.

1) Why 5%? Why not 10%? Or 1%? The short answer is "tradition." A couple of year ago, the American Statistical Association put together a panel to reconsider the 5% standard. The

Ronald L. Wasserstein and Nicole A. Lazar wrote a short article :"The ASA's Statement on p-Values: Context, Process, and Purpose," in  The American Statistician  (2016, 70:2, pp. 129-132.) (A p-value is an algebraic way of referring to the standard for statistical significance.) They started with this anecdote:
"In February 2014, George Cobb, Professor Emeritus of Mathematics and Statistics at Mount Holyoke College, posed these questions to an ASA discussion forum:
Q:Why do so many colleges and grad schools teach p = 0.05?
A: Because that’s still what the scientific community and journal editors use.
Q:Why do so many people still use p = 0.05?
A: Because that’s what they were taught in college or grad school.
Cobb’s concern was a long-worrisome circularity in the sociology of science based on the use of bright lines such as p<0 .05:="" because="" blockquote="" do="" e="" it="" nbsp="" s="" teach.="" teach="" we="" what=""> But that said, there's nothing magic about the 5% threshold. It's fairly common for academic papers to report the results that are statistically signification using a threshold of 10%, or 1%. Confidence in a statistical result isn't a binary, yes-or-no situation, but rather a continuum....MORE

Capital Markets: "Greenback is Firm, While Soft Inflation Drags Sterling from Perch"

From Marc to Market:
The US dollar is enjoying a firmer tone against major and most emerging market currencies. Sterling, which has become a market darling, hit an air pocket after softer than expected CPI.

UK headline CPI rose 0.1% in March, while the market expected a 0.3% increase. The recently introduced preferred measure, CPIH slipped to 2.3% from 2.5%, the weakest in a year. The core rate unexpectedly eased to 2.3% from 2.4%, while the market anticipated a 2.5% increase. Input and output prices for producers were softer. With earnings growth above the inflation, a BOE rate hike next month is still the most likely scenario. That said the high earnings and lower inflation are not expected to boost March retail sales, which will be reported tomorrow. The median forecast calls for a decline in retail sales, according to the Bloomberg survey.

Sterling had reached its highest level since the 2016 referendum yesterday as it approached $1.44. It had traded $1.50 on the day of the referendum. On the back of today's news, sterling, which had already been trading off in the face of the broadly firmer US dollar, traded to $1.4175, where bids were found. These losses brought sterling to near the 50% retracement (~$1.4170) of the last leg up, which began after sterling dipped below $1.40 on April 5. The 20-day moving average is found near $1.4140, and the 61.8% retracement is just below $1.4125.

The euro was trading near GBP0.7800 before the referendum.The recent slide in the cross saw the euro trade near one-year lows against sterling (~GBP0.8620) yesterday before recovering smartly today through GBP0.8700. The euro had put in a bullish hammer candlestick at the end of last week, suggesting that a bottom was at hand, but it took today's CPI report to solidify it. It tested the 20-day moving average (~GBP0.8720) and has not closed above it in a month.

Meanwhile, the UK faces another challenge. The House of Lords will take up the "Withdrawal Bill" today. There is a risk that it insists on staying the customs union. The bill was delayed in the House of Commons when it appeared that the government's intention to withdraw from the customs union faced a likely defeat....MORE

Tuesday, April 17, 2018

ICYMI: The Most Valuable AI Start-up Inthe World Does Facial Recognition

Some thought us mad with our focus on countermeasures to the surveillance state. But there was a method to that madness.

We've looked at responses ranging from simple dazzle camouflage back in 2013's How to Hide From Cameras:

http://static.squarespace.com/static/514f916de4b04c6ad186e00d/514f94d2e4b05df537e5224e/514f94d2e4b05df537e5267d/1231283416153/DAZZLE.jpg/1000w

To hairstyles + makeup that confuse facial recognition algos:

responsivehttps://i.guim.co.uk/img/media/396302866244e3539e54bc5571e27fb512f1e59f/62_0_885_531/master/885.png?w=620&q=55&auto=format&usm=12&fit=max&s=eefd8e09624ac90c3d07802fa5fe591b
...but this raises its own set of problems, not the least of which is 
taking a half hour to apply just so you can go down to the lobby.

To Hyperface clothing with thousands of pseudo-facial "hits" that simply overwhelm the computer:
"Anti-Surveillance Clothing Aims to Hide Wearers From Facial Recognition "

https://i.guim.co.uk/img/media/f28edd54e33cb391aea9f19448b8ff11ecb5fa54/25_0_663_398/master/663.png?w=620&q=55&auto=format&usm=12&fit=max&s=b052101fa6e1777fe2c8bfdf7ff395f7

From the scholarly stuff such as "Fooling The Machine: The Byzantine Science of Deceiving Artificial Intelligence".
To, as noted in ""Magic AI: 'These are the Optical Illusions that Trick, Fool, and Flummox Computers.":
...First though a bit of housekeeping.
Just so you know, I don't actually use the make-up techniques featured in the earlier posts. Despite the fact they have some efficacy at fooling the camera they make you look like a moron to human observers on the street. Better to just put on some glasses and blend into the crowd.
https://hips.hearstapps.com/toc.h-cdn.co/assets/cm/14/37/540fe7c50c224_-_tc-iconic-kennedy-weddings-9.jpg
Can you pick out the Kennedys in this photo?

Here's why we cared: There is big money in this stuff!!
From Bloomberg, April 8: 

China Now Has the Most Valuable AI Startup in the World
SenseTime Group Ltd. has raised $600 million from Alibaba Group Holding Ltd. and other investors at a valuation of more than $3 billion, becoming the world’s most valuable artificial intelligence startup.

The company, which specializes in systems that analyze faces and images on an enormous scale, said it closed a Series C round in recent months in which Singaporean state investment firm Temasek Holdings Pte and retailer Suning.com Co. also participated. SenseTime didn’t outline individual investments, but Alibaba was said to have sought the biggest stake in the three-year-old startup.

With the deal, SenseTime has doubled its valuation in a few months. Backed by Qualcomm Inc., it underscores its status as one of a crop of homegrown firms spearheading Beijing’s ambition to become the leader in AI by 2030. And it’s a contributor to the world’s biggest system of surveillance: if you’ve ever been photographed with a Chinese-made phone or walked the streets of a Chinese city, chances are your face has been digitally crunched by SenseTime software built into more than 100 million mobile devices.

The latest financing will bankroll investments in parallel fields such as autonomous driving and augmented reality, cover the growing cost of AI talent and shore up its computing power. It’s developing a service code-named “Viper” to parse data from thousands of live camera feeds -- a platform it hopes will prove invaluable in mass surveillance. And it’s already in talks to raise another round of funds and targeting a valuation of more than $4.5 billion, according to people familiar with the matter.

“We’re going to explore several new strategic directions and that’s why we shall spend more money on building infrastructure,” SenseTime co-founder Xu Li said in an interview. The company turned profitable in 2017 and wants to grow its workforce by a third to 2,000 by the end of this year. “For the past three years the average revenue growth has been 400 percent.”...MUCH MORE
Both Futurism and Quartz zoomed in (CCTV term) on the surveillance bit:
World’s Most Valuable AI Startup Also Happens To Be Part of “the World’s Biggest System of Surveillance”
The billion-dollar, Alibaba-backed AI company that’s quietly watching people in China

Some of our previous posts on various related subjects:
"The selling of facial recognition technology—and the staggering consequences"
Facial recognition In China
We'll be coming back to what has become a bit of an obsession on the blog, and the countermeasures thereto, but for now, just some of the applications. Remember, this isn't the state of the art, this is stuff that is being deployed right now.
The state of the art is really spooky....
 
"Who Owns Your Face?"
"China’s Surveillance State: AI Startups, Tech Giants Are At The Center Of The Government’s Plans"
"Casino ATMs are Using Facial Recognition to Spot Money Launderers in Macau"
DNA Techniques Could Transform Facial Recognition Technology
 Bank Robbers’ Aluminum Invisibility Cloaks Foiled by CCTV
Memo: New York Calling For Face Recognition Cameras At Bridges, Tunnels
Adversarial Images, Or How To Fool Machine Vision
Cargill Invests In Facial Recognition For Cows
And many, many more. Use the 'search blog' box if interested. 

Now, if you'll excuse me for a bit, I have to go out in public for a bite to eat:


https://media.allure.com/photos/58e4005b82145034c5ad10da/master/pass/Untitled-3.jpg

Interesting House (with view) Asks $40 Million

Reaction to the style at first glance: "Ewww, that's a bit much even for Califauxnia " but then...
From Curbed San Francisco:

Jazz guitarist lists Pebble Beach mansion for $40 million
Comes with seven fireplaces from castles in England and France
Boasting cobblestones from London, leaded windows, exposed beams and trusses, seven fireplaces from English and French castles, and a fountain pulled from Roman aqueducts, it’s hard to imagine this mega property isn’t located high atop a mountain in Europe. Au contraire. This eye-popping estate can be found in tony Pebble Beach.

Purchased in the 1990s by Ron Wright, a jazz guitarist and real-estate investor, and his wife, Madeline, the couple “renovated an existing property and rebuilt it with a lot of ‘blood, sweat and tears,’” according to Wall Street Journal. Completed in 2004, the French and English Tudor-style home is a special kind of place for a special kind of buyer.

“Mr. Wright, 59, previously tried to sell the property off-market for an undisclosed price, but this is the first time it has been formally listed for sale,” notes WSJ. “He said the home is not exactly his style and he wants to move on to something different.”
Featuring four beds, four and a half baths, and 7,403 square feet, 3208 17 Mile Drive brings to mind storybook homes but on a much larger scale. The main property consists of three bedrooms, while a detached guest house comes with one bedroom, one bath, and a full kitchen....
Beamed ceilings aren't tacky per se, some examples we've posted over the years seem to fit right in:

This hammer beam style really opens up the space


https://upload.wikimedia.org/wikipedia/commons/d/dd/Interior_Great_Hall.JPG
Great Hall of Stirling Castle, Scotland, view towards the north showing screens passage, with minstrels' gallery above
Can't argue with a minstrels' gallery either.

And:
Look Inside the Most Expensive House on Earth
An exclusive tour of Villa Les Cèdres, a 187-year-old mansion now for sale along the coast of Saint-Jean-Cap-Ferrat.

A living room at Villa Les Cèdres.

Then there was:
Whoever buys the villa, listed by the US-based property agency Handsome Properties International, will also get their hands on the original deed, which describes the Sistine Chapel painter as “a dear sculptor and Florentine citizen”....

So it's not a knee-jerk reaction but stuff like this kitchen doesn't have much of a Pebble Beach feel to it:

https://cdn.vox-cdn.com/thumbor/n1GOWK0Hr2hvkmJzlBeAVwNi1MA=/0x0:3025x3966/920x0/filters:focal(0x0:3025x3966)/cdn.vox-cdn.com/uploads/chorus_asset/file/10631351/_RBP9542_Edit.jpg 
But then... 

https://cdn.vox-cdn.com/thumbor/vMTgCZMkuPSAAiNos1epasrVWIs=/0x0:4239x2831/920x0/filters:focal(0x0:4239x2831)/cdn.vox-cdn.com/uploads/chorus_asset/file/10631387/_RBP9404_Edit.jpg

Oh.

"SoftBank is in talks to invest in data storage company Cohesity at a $1 billion valuation"

Storage is the unheralded tech at the very core of all the IoT, smart-city, vehicle-to-infrastructure-databases stuff that the technocratic world seems to be headed toward. As noted in "UPDATED—NVIDIA Wants to Be the Brains Behind the Surveillance State (NVDA)" we're starting to see GPU-accelerated, water-cooled storage and retrieval systems arrive on the scene.

And from Recode, April 13, a slightly different angle:

The five-year-old company is led by prominent CEO Mohit Aron.
SoftBank’s Vision Fund is in late talks to fund a hot data-storage company, Cohesity, in a deal that would value the company at about $1 billion.

Investors would place at least $150 million into the company, people familiar with the matter say, in what would be the latest romp on a deal spree by the massive technology investing firm. The Vision Fund-led round is still in the process of closing, the people said, and the numbers could change slightly.

Cohesity would be valued in the ballpark of $900 million before the new money.
The Vision Fund declined to comment. Cohesity did not respond to requests for comment.
The five-year-old company is led by prominent CEO Mohit Aron, who previously co-founded a different enterprise software company, Nutanix, that went public in late 2016. Aron has raised about $160 million for his company from investors like Sequoia Capital, Wing Ventures and Google Ventures. It was last valued at $470 million a year ago, before the cash, according to PitchBook.
The funding is a sign of momentum for Cohesity, which is competing against legacy players like Dell EMC and CommVault in addition to other startups.

Often compared to Rubrik, another similar-stage, similarly aged venture-backed data company, Cohesity offers “secondary storage” capabilities to its customers, such as Harris Teeter or Tribune Media. Cohesity sells its platform which tries to protect and upload backup data to the cloud....MORE