China’s TikTok fury is your problem

The Big Story

China might lose TikTok, but the real fight's just starting

ByteDance founder Zhang Yiming is furious. As negotiations continue between TikTok, Trump and Microsoft, Zhang told his employees that "this is not their goal, or even what they want. Their real objective is to achieve a comprehensive ban." Zhang also disagreed with the CFIUS decision that ByteDance has to sell TikTok U.S., saying that the company has "always firmly protected the security of users' data, the platform's independence and transparency."

• China's state-run media took things even further. "The U.S. administration's bullying of Chinese tech companies stems from data being the new source of wealth and its zero-sum vision of 'American first,'" read an editorial in the China Daily, accompanied by a truly extraordinary picture you really need to see.
• The editorial also called Trump's move on TikTok a "theft" and a "smash and grab" and vowed it had "plenty of ways to respond."

Is this just yelling on top of other yelling on top of other yelling? Of course. And in terms of retaliation it's not like China can kick out the American equivalent of TikTok — say, Facebook or Snapchat — because it already doesn't allow those companies in.

The fallout from all of this could actually be widespread, because China still has options.

• There are plenty of companies Beijing could kick out in favor of a homegrown rival. Apple would be the splashiest, and demanding it sell out to Huawei would really stick it to the Trump administration. It could also kick out AWS in favor of Alibaba and others. And there would be a certain symmetry in banning Microsoft, which currently does a lot of business in China.
• One key difference: If China were to go on the offensive against software, it actually has the resources, infrastructure and legal framework to ban an app. As the App Association's Morgan Reed told The Wall Street Journal: "They can not only deplatform our apps, but they can also shut off the apps that already exist." Getting TikTok out of the U.S. would be much harder.
• The really high-stakes stuff, such as quantum and 5G and AI, seems like a less likely avenue for China to strike out at. But you never know.

All you tech CEOs: Now is the time for worst-case-scenario planning. As with every piece of this saga, seemingly anything could happen in the next several weeks, but there's now a very real chance that the Chinese government deems this whole thing a step too far. After so many years of making plans to get into the world's biggest market, you might need to start making plans to do without it.

Startups

Maybe 'jack of all trades' is the thing to be

Parker Conrad loves supposedly boring software. After founding Zenefits to fix HR systems — and eventually leaving the company in the midst of serious compliance and company-culture issues — he's now building Rippling, a tool for managing employee information and data. "We give you one button to click where you say, 'I'm going to hire an employee,'" Conrad said. "And then everything that needs to happen to get that employee up and running," all the email lists and Slack channels and app permissions, "just happens."

Boring software certainly has its perks: Rippling just raised $145 million, valuing Conrad's company at $1.35 billion. And Conrad told me the last three months have been Rippling's best sales months ever. In part, he said, because the company didn't try to just do one thing really well.

• In fact, Conrad said Rippling's ability to solve a lot of problems at once is exactly what customers are looking for. "For a long time, the advice for entrepreneurs building software was to do one extremely narrow thing very well. And one of the problems that has created is that every business has a hundred separate disconnected systems."
• At many startups, he said, "what they do is they build functional department systems. You know, they build an IT system, an HR department system, a finance department system." Rippling flipped that idea on its head, and revolved all those around employees instead.

Rippling sits at the front of a crucial trend in tech right now. Every company is dealing with all sorts of informational sprawl: Conrad said he likes to look at companies' checklists for onboarding employees, because buried in those laundry lists is a map to how a company really works.

• Whether it's payroll and device management, sales and customer data, or projects and documents, everything seems to be everywhere right now. One way or another, the pieces need to be put back together again.

Streaming

Disney can't stop tweaking the streaming formula

I like to imagine there was a Disney executive brainstorm a few years ago, filled with ideas about the future of streaming and TV. And then when Bob Chapek was named CEO, he took all the ideas from that brainstorm and just went, "yeah, let's do 'em all."

The latest streaming plan from Disney: It's going to release "Mulan" in September, as a $30 rental (funky new price) on top of Disney+ (funky new idea). It's also building an entirely new streaming service (because you know, what's one more) called Star, that'll be available internationally.

• Here's how Chapek explained the "Mulan" plan: "We're looking at 'Mulan' as a one-off as opposed to saying there's some new business windowing model that we're looking at."
• Which I would believe, except then he said this: "That said, we find it very interesting to take a new offering to consumers at a $29.99 cost." Translation: If this goes well, we'll do it again.

This could be huge for Disney if it goes well: It would basically be charging movie-theater prices without giving up movie-theater royalties. Honestly at this point it's one plane fleet away from basically owning the entire life cycle of a movie. (Oh, and you know who's going to hate this? Every movie theater everywhere.)

Disney+ is obviously doing well — it's up to 60.5 million subs — but I do wonder how complicated Disney can make the system before users start to revolt. Diverse revenue streams are a good thing! But paying for a subscription only to pay surprise extra fees for content feels like … cable.

A MESSAGE FROM QUALTRICS

Qualtrics' Work Different free virtual event, on August 12, will explore how successful organizations like Atlassian, Microsoft, the NBA, and many others are listening to and taking action on the feedback from their customers and employees to create a "new better" for their business. Register now at Qualtrics.com.

People Are Talking

Anthony Levandowski was sentenced to 18 months in prison, and Judge William Alsup said it's a warning to engineers everywhere:

• "They're factoring in the risk of detection. 'If I do get caught, I'll just get probation like they gave to Levandowski,' giving a green light to any engineer to steal trade secrets. Prison time is the answer to that."

All the bluster about the FCC and TikTok and everything else is just about Trump's own agenda, Ron Wyden said:

• "Beyond the fact that this is a colossal Constitutional mess, I don't think even Donald Trump believes he's going to be able to get away with this. What Donald Trump is doing is basically working the refs. He's trying to bully the tech companies in order to get better treatment."

Andrew Bosworth posted an interesting look into how reviews work at Facebook — and why positive feedback isn't a big part of them:

• "Never pitch or present your work in an overly positive light, because you will get less useful support and you risk losing trust and credibility. Don't be surprised if the review is focused on areas of critical feedback."

Making Moves

Phil Schiller is now an Apple Fellow. He'll keep overseeing the App Store and Apple's events, but Greg Jozwiak is now Apple's head of worldwide marketing. (If "Apple Fellow" sounds to you like a nebulous title that probably means Schiller's stepping back over time, I'd say you're probably right.)

Jonathan Benassaya is the new chief product officer at Life360. He comes from Deezer, and has been working on subscription products for a long time.

Ajey Gore is leaving Gojek. He's stepping down as the company's CTO, and joining Sequoia India as an operating partner. Gayatri Vasudeva Yadav is also joining as CMO, and Shweta Rajpal Kohli to run public policy.

Tom Moss is taking Skydio international. He's heading back to Japan — where he was based for years as Google's Android GM in Asia — to take the self-flying drone company to Asia.

Christina Smedly is Robinhood's new CMO. She comes from Facebook's Novi / Libra project — one of the few fintechs more controversial than Robinhood! — and has worked at Amazon and PayPal.

Booking.com is laying off up to 25% of its staff, which amounts to around 4,000 employees.

In Other News

• Square's earnings got scooped by Bloomberg, which published them a day early. It didn't trouble investors: The company's 64% year-on-year revenue jump drove its stock up 11% after hours.
• From Protocol: TikTok's U.S. employees really, really like working there. But will that stay true if Microsoft acquires it?
• Headspin's valuation has dropped nearly 80%, from $1.16 billion in February to less than $250 million today, The Information reports. That's because of financial irregularities, which have led the company to return up to $95 million to investors. CEO Manish Lachwani is, unsurprisingly, out.
• From Protocol: Xbox's game streaming service has a launch date: Sept. 15. That's when you'll be able to stream "over 100" games to your Android devices — a move that could help Microsoft leapfrog Google Stadia in cloud gaming.
• Tencent is reportedly in talks to merge Huya and DouYu, two Chinese alternatives to Twitch. That would create a $10 billion behemoth, giving Tencent greater control over the huge Chinese market.
• Don't miss this analysis of Big Tech's struggle with election misinformation from our friends at POLITICO. It increasingly looks like tech might be in the firing line post-November, no matter who wins.
• Ever wondered how TikTok surmounted cultural differences as it stormed the U.S., India, and the Middle East all at the same time? Eugene Wei explains how it was thanks to a ridiculously good algorithm.
• Uber employees can work-from-home until June 2021. Seems like Google set a trend.
• You could watch Samsung's big Galaxy Unpacked event today. Or you could just read this summary of all the leaks and teasers. In short: a new Note, a new Fold, a new tablet, a new smartwatch and wireless headphones.

One More Thing

The webcams! They're improving!

So Apple launched a new iMac yesterday. It's … medium exciting: faster, better screen, normal new-computer stuff. BUT! The iMac's best new feature is a 1080p webcam, which is somehow both a decades-old technology and still a gigantic improvement for Apple webcams. (The only way to get one before was to buy an iMac Pro, which costs approximately as much as a used car.) The new iMac also has an improved microphone. First Apple fixed the butterfly keyboard, now we get a video-chat setup that doesn't suck? What a world.

A MESSAGE FROM QUALTRICS

Qualtrics' Work Different free virtual event, on August 12, will explore how successful organizations like Atlassian, Microsoft, the NBA, and many others are listening to and taking action on the feedback from their customers and employees to create a "new better" for their business. Register now at Qualtrics.com.