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A Wall Street titan comes for Jack Dorsey
Good morning! This Monday, there's a fight over taxation and startup equity, a battle for control over Twitter, and a new study about what your Netflix habit does to the environment.
People Are Talking
There could be a different way for companies to use your data, Brave's chief policy officer, Johnny Ryan, told Protocol:
- "Right now, big tech companies are taking data from one bit of their business, and they have an internal free-for-all that allows them to use that data to prop up another bit of their business."
Male investors overlooked Pinterest, said Benchmark's Sarah Tavel:
- "It was the first moment I realized that being a woman could be an edge. In venture you're always looking for your unfair advantage … it can come from your own experiences and who you are. Pinterest was a product none of the men got."
Elon Musk picks a drone over a fighter jet, just in case you were wondering:
- "The competitor should be a drone fighter plane that's remote controlled by a human, but with its maneuvers augmented by autonomy. The F-35 would have no chance against it."
Even if the world switches to digital money, it'll still need something like cash, said the Bank for International Settlements:
- "This flight to cash has been seen in many crisis episodes, including recent ones. If, in the future, cash were no longer generally accepted, a severe financial crisis might create further havoc by disrupting day-to-day business and retail transactions."
The Big Story
Why an investment firm wants Jack Dorsey gone
Paul Singer's investment firm, Elliott Management, bought about $1 billion in Twitter stock, and has decided it wants Jack Dorsey out as CEO. (This is the same Elliott Management that's doing something similar at SoftBank. And did it to eBay and AT&T last year.) What does Elliott want? Is this just a billion-dollar play to finally get an edit button?
- Elliott is concerned with Dorsey splitting his time between Square and Twitter, CNBC reports (though it's not like Elliott bought a big stake in Square). And it's also worried about Dorsey's plan to move to Africa.
- Dorsey has never publicly said he's moving to Africa, by the way. He tweeted last year that he plans to spend "3-6 months" of 2020 on the continent, but seems to plan to come back.
Twitter's had a perplexing few years: It's more relevant than ever thanks to President Trump's use of the platform and a generally frenetic news environment, yet unable to make much money or improve its stock price while Facebook continues up and to the right.
- The biggest knock on Dorsey the last couple of years has been speed. The company talks openly and thoughtfully about its problems — and then talks about them for a while longer, before deciding to talk about them some more. Elliott and other investors would likely prefer a leader more biased toward action.
- Now's a crucial time to decide Twitter's future. It's an election year and an Olympics year, and with coronavirus at the top of everyone's mind, Twitter is poised to thrive as the world's best information-sharing network. Or to miss the boat.
More reports of his company's future surely won't bother Dorsey himself — just throw this one on the pile with the other angry shareholders pushing for his removal, and that time Disney decided not to buy Twitter because "the nastiness is extraordinary."
- Still, Protocol's Emily Dreyfuss writes that somewhere in the midst of his seemingly never-ending apology tour, Dorsey may have lost Twitter a long time ago.
Bernie to tech workers: I'm the taxman, yeah
It's hard to imagine a quicker way to rile up Tech Twitter than to drop this combination of words: "Bernie Sanders wants to change the way startup equity is taxed."
And rile up Twitter it did. It almost — emphasis on almost — eclipsed coronavirus as the biggest topic of conversation this weekend:
- "If you are in the startup ecosystem and not speaking out against Bernie, you should really see what he's up to," Cyan Banister tweeted.
- DCVC's Matthew Ocko called it an "all-out attack on one of the few working systems for 'workers to own the means of production'" and compared it to "convulsive Hard Socialism of Chavez."
- Ryan Graves took a similar swing, calling it "a direct attack against the American dream."
- As Twitter fights are wont to do, the whole thing also spawned a "what is the best kind of tech company" fight and a "how should you pay your people" fight and a "who can most slyly brag about all the options they got" fight.
For context, here's the short version of what Sanders is proposing:
- Startup employees making more than $130,000 a year, and vesting more than $100,000 worth of stock a year (so: a small set of employees) would be taxed on any stock after that first $100K when it vests — not when they exercise it.
- It wouldn't change how much employees pay in taxes, just when they do it. But critics argue that employees don't have the money to pay the taxes. And since holding equity in a startup is like holding a lottery ticket with the first three numbers right but two balls left to go, they could end up paying taxes on money they never make.
- The law itself is aimed not at startup employees but at CEOs deferring huge taxes — it's called the "CEO and Worker Pension Fairness Act." Tech workers with shares in their startup are just a side-effect.
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The environmental cost of 'Love is Blind'
Measuring the environmental cost of computing is still a new, and somewhat inexact, science. (Remember when everyone was worried that bitcoin mining would sap all the planet's available energy?) According to a new study, it's not as bad as previously thought:
- One long-cited figure says that streaming 30 minutes of Netflix has roughly the environmental impact of driving four miles.
- George Kamiya, of the International Energy Agency, says that's way off: With data center and streaming tech becoming more efficient, it's more like driving one city block. Not nothing! But not as bad as we thought.
For the environmentally minded streamer, though, Kamiya has a few points about what makes the biggest difference:
- TVs consume far more electricity than laptops, which consume far more electricity than smartphones. And streaming over cellular requires about four times as much energy as using Wi-Fi.
- Watching movies on your phone, at home, is the best thing you can do for the environment. Take that, Martin Scorsese.
Coming Up This Week
Obviously the story of the week is coronavirus. We're looking to see how SXSW is affected — Jack Dorsey and Twitter have already canceled their appearances — as well as upcoming events from Google, Apple and others.
Super Tuesday is tomorrow, with more than a dozen Democratic primaries happening simultaneously. We'll know a lot more about the shape of this election by Wednesday.
On the earnings calendar, HP and Zoom both report their results this week.
In Other News
- Protocol's Issie Lapowsky sends this in: A new Knight Foundation/Gallup poll found that 72% of Americans say political campaigns shouldn't be able to target online ads to specific populations based on information they get from tech platforms. Plus, 81% said companies should refuse ads that misinform the opposing candidates' supporters about the date of the election. Luckily Facebook, Google and Twitter already do.
- Intel CEO Robert Swan is in the midst of changing the way his company runs. One important step: convincing Intel employees to stop believing so much in Moore's Law.
- Nokia's CEO, meanwhile, is stepping down. Pekka Lundmark, CEO of energy company Fortum Oyj and a former Nokia exec, will replace Rajeev Suri in September, the company announced Monday. Investors seem optimistic that the change might fix Nokia's woes: Its stock leapt up on the news.
- The Swiss government has filed a criminal complaint over the CIA's ownership and use of Crypto AG for spying purposes. If you still haven't read the great Washington Post piece that helped spur this, you need to.
- Google Stadia may not be working very well. Business Insider reports that developers say Google isn't offering enough money for them to build games for the streaming platform, and that they're worried Google's eventually just going to kill the product. Aren't we all.
- From Protocol: The spouses of H-1B visa holders are suing the Trump administration for delaying their work authorizations.
- TikTok has become a hive for showing off fake luxury products. With that, it's become an easy way to learn how to find knockoffs online.
- Facebook redesigned the Messenger app to more prominently feature Stories, demoting chatbots and some of the app's other features. Yet another example of Stories becoming the dominant way people talk to each other now.
One More Thing
A laundry list of the web's hidden gems
Late last week, a Redditor asked a simple question: "What is the coolest website you've visited that no one knows about?" Thousands of comments later (13,100 later as I write this), there's no shortage of ideas: an emulator for every old video game ever; a way to listen to the radio through space and time; chat logs from old internet chatrooms; so, so, so many Rick-rolls. Did you know people have memorized the end of the "Never Gonna Give You Up" YouTube URL, just in case? There's even a mnemonic: XcQ, leave it blue. Anyway, the whole Reddit list is great — just keep an eye out for XcQ.
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