Good morning! This Tuesday, coronavirus hit the markets, a songwriter fights the streaming power, and SoulCycle comes to your living room.
People Are Talking
Salesforce told the SEC it's seriously worried about what coronavirus will do to business:
- "The ongoing coronavirus epidemic could potentially disrupt the supply chain of hardware needed to maintain these third-party systems or to run our business. As we increase our reliance on these third-party systems, our exposure to damage from service interruptions may increase."
The whole internet must decide what to do about political ads, Vint Cerf thinks:
- "Because then we would see consistency of treatment — and that's important because there are so many different platforms available for purposes of — not just advertising but political speech."
Sure, Twitter made a deal with Elliott. But Scott Galloway doesn't think Jack is safe:
- "This 'partnership' means total and near-unconditional surrender by @twitter. I challenge anybody to find an activist campaign, levied against a $10b+ company, that has resulted in 3 board seats in 5 business days."
Elon Musk was 40 minutes late to give a keynote speech and then got … emotional:
- "If we don't improve our pace of progress, I'm definitely going to be dead before we go to Mars."
The Big Story
The coronavirus hits just keep coming
Sunday, everyone lost an hour of sleep. Monday, everyone felt like they lost a year off their life as they woke to see the lines in their stocks app heading down into the abyss.
Today ... well, at this point I'd be foolish to guess what today will bring. But I can tell you this: The tech world is now inexorably changed by coronavirus. And it might be changed forever.
- As Protocol's Shakeel Hashim and Charles Levinson report, while macroeconomic trends haven't descended quite to 2008-era levels, the rout on tech stocks remains very much on.
- While that's bad news for everyone, it could be a win for the giants in the long run — they have the resources to weather the storm, and are already being seen as the safer plays in a volatile market.
- The same might be true for the old-school finance system. At least, if apps like Robinhood — which crashed again on Monday — can't figure out how to keep up.
Meanwhile, thousands of employees are being told to work from home this week, which means adjusting to new tools and figuring out new virtual-office dynamics. And there's this weird thing that happens when people work remotely: Studies show they hardly ever want to go back to the office.
- In Buffer's 2020 State of Remote Work report, 98% of remote workers said they want to continue work at least in part remotely for the rest of their careers.
Tech companies are still working out exactly how to do right by their staff, particularly hourly and gig workers who can't just be told to do their job from the sofa. At the same time, as Protocol's JP Mangalindan reports, tech workers are trying to figure out how best to prepare their personal lives for whatever comes next.
- JP talked to people stockpiling vodka (smart), toilet paper (smart), and bottled water (totally unnecessary). They're re-thinking school systems, changing vacation plans, and buying Frosted Flakes by the cartful.
A high-stakes war over fractions of a penny
In a few hours, 53-year-old country music songwriter George Johnson will stand in court, lawyerless and alone, against the U.S. government's Copyright Royalty Board. His goal? To change what writers like him earn from streaming music.
Johnson told Protocol's Matt Drange about his goal to force streaming services to start paying artists at "reasonable" rates. Right now, he says, they're anything but:
- Songwriters earn only a fraction of a penny per stream — somewhere around $0.000198 to $0.00055 — on Spotify, Google Music, Amazon Music and Pandora.
- That means even a popular song streamed 1 million times can turn out just a couple hundred dollars for a songwriter (or precisely $5,679 for an international monster hit).
- Back when consumers still purchased CDs, a songwriter who wrote the music for a popular album could earn $100,000 or more, Johnson told Matt.
This is hardly news. A law was even passed in 2018 attempting to solve it. But nothing's really changed: In the streaming era, Johnson says songwriters lose out on the sale of the underlying intellectual property, making it nearly impossible for them to make ends meet.
The streaming giants have remained noticeably quiet on the issue. But their legal teams will line up against Johnson this morning in court.
A MESSAGE FROM GOLDMAN SACHS
See yourself here
At Goldman Sachs, we think who you are makes you better at what you do. Discover Joan's journey as an engineer and explore our open engineering roles.
The cashierless future, coming to a store near you
The name is as straightforward as the user experience: Just Walk Out. That's what Amazon is calling the tech behind its cashierless Go stores, which it's now selling to retail stores everywhere. And per Reuters, Amazon already has several deals in place.
The JWO tech works mostly like the Go stores — using cameras and weight sensors to track what you grab, then charging you after you leave. But there is one key difference:
- With Just Walk Out, shoppers enter the store by inserting a credit card into a turnstile — not a mobile app, like the Go stores require.
- It's a smart change for Amazon, which has dealt with customers frustrated by the idea of logging into yet another app just to enter a store. Credit cards are also a key loyalty program for many retailers, so Amazon can fit into their ecosystems pretty easily this way.
The big question for many retailers is going to be privacy. How much information do these companies want to collect and store about shoppers? And maybe more important, how much of that information do they want to share with Amazon?
- Just Walk Out says it only collects the data it needs to give shoppers an accurate receipt, but that doesn't narrow things down much.
Before we even get to those questions, though, Amazon may find itself running into some very basic — and very real — retail challenges. "It's hard enough getting an in-store employee to help troubleshoot a problem with traditional Point of Sale registers," analyst Paula Rosenblum told Protocol's Andrea Peterson. Networks of interconnected cameras are a whole other challenge.
Facebook named two new women to its board: Nancy Killefer, a former director at McKinsey, and Tracey Travis, CFO at Estée Lauder. They bring Facebook's board of directors up to 40% female, which for a tech company is a genuinely impressive achievement.
Cisco EVP David Goeckeler is leaving the company to run Western Digital. Cisco also re-organized its engineering team under three SVPs, putting enterprise networking and cloud under Todd Nightingale, mass-scale infrastructure under Jonathan Davidson and emerging tech and incubation under Liz Centoni.
TCV named Neil Tolaney as its newest general partner. Tolaney worked for the firm years ago, but was most recently at Francisco Partners after stints at LegalZoom and elsewhere.
In Other News
- Today in coronavirus: We have a big story about that, so I won't rehash everything here. But virtually every tech stock was down big — and so were their corresponding billionaires. Airbnb and others told employees to work from home. Facebook banned fask mask sales, and all that happened was they got more expensive. Cadillac canceled the debut of its new electric car. Google said no more visitors in Silicon Valley and New York. iPhone sales in China were down more than 60% last month. A NASA employee tested positive for coronavirus, and the agency told everyone in Silicon Valley to work from home. And someone built a tool for telling you what to sing while you wash your hands.
- The latest startup perk? Free child care during school breaks. Protocol's Biz Carson tells me that Australian design unicorn Canva added the vacation care program so parents could take children to work and not have to fork over for expensive camps or babysitters. Any kid aged 4-12 can tag along to work and spend the break visiting museums or planting herb gardens — and there's time for lunch with their parents. Childcare of any kind is pretty rare at companies, particularly startups, but Canva said the investment makes it easier on parents and reduces the burden on working moms in particular. "It's all about challenging the status quo," said Canva spokesperson Lachlan Andrews.
- SoulCycle launched its Peloton home-bike competitor, weeks after Flywheel's was shut down. It's $2,500, and a lot of newly homebound SoulCycle enthusiasts are going to be extremely into this. (I suspect Protocol executive editor Tim Grieve might also be extremely into this.)
- What do you call a bank robbery that the bank actually agrees to? Whatever it is, that's what Finix did to Sequoia. The company raised $21 million from Sequoia, before the investor decided Finix conflicted too much with Stripe — a prize Sequoia jewel. So Sequoia ended its involvement with Finix, but left it the $21 million free and clear. How's that for a revenue model?
- It's launch day for Call of Duty: Warzone, the franchise's Fortnite-style battle royale game. So ends the productivity of workers everywhere, who I figure will only be able to resist the pull of their console until about 9:45 a.m. today.
- Don't miss this story on what happened to all the Warby Parker clones. It wasn't so long ago that Harry's, Casper, Brandless and all the others were the future of everything. That story explains why it all came crashing down.
- Remember that deceptive Biden video I wrote about yesterday? Facebook eventually decided that it, too, would take action — it now labels the clip "partly false information."
- A company called Pink Unicorn Labs was actually a front for an AI firm called Banjo, Motherboard reported, which used the fake company to build apps that scraped social media data. A Banjo lobbyist once said "we essentially do most of what Palantir does, we just do it live."
One More Thing
Streaming TV meets the channel dial
I don't really know how to describe MSCHF. The New York Times called it "Banksy for the internet," which feels … close enough? Anyway, the group's newest project, All The Streams, is an amazing thing: pirate radio for streaming video. It's got subscriptions to all the streaming services, and is streaming live feeds of each one. You can flip between services like flipping channels, or text in a request. More than radio, it's a kick back to what TV was before TV had hundreds of channels and everything on demand. It's not legal, and it won't last. But I streamed a random episode of "The Office" with almost 300,000 other people last night and it was pretty great.
A MESSAGE FROM GOLDMAN SACHS
Accelerating innovation at Goldman Sachs
Entrepreneurship is central to the culture of Goldman Sachs. That's why we created GS Accelerate, a firmwide platform to foster innovation and provide our people the resources to build new businesses.
Thoughts, questions, tips? Send them to me, firstname.lastname@example.org, or our tips line, email@example.com. Enjoy your Thursday, see you tomorrow.
Correction: An earlier version of this article misidentified Lachlan Andrews' name. The article was updated on March 10.