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February 14, 2021
This week on the Source Code podcast: Hirsh Chitkara on Bumble's big IPO, Anna Kramer on Libby and the future of digital books, and Tomio Geron on PayPal's plan to win the future of finance.
For more on the topics in this episode:
- Hirsh on Twitter
- Bumble's IPO: Everything you need to know
- Anna on Twitter
- Libby is stuck between libraries and e-book publishers
- Tomio on Twitter
- PayPal wants to be an all-in-one super app. It has its work cut out.
David Pierce
David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.
Power
Everything you need to know about the Coinbase direct listing
Coinbase's IPO valuation could be the largest by a U.S. tech company since Facebook went public.
Coinbase will go public on Feb. 25.
Image: Chesnot/Getty Images
February 25, 2021
Hirsh Chitkara (@ChitkaraHirsh) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians.
Jane Seidel is Protocol's social media manager. She was previously a platform producer at The Wall Street Journal, creating mobile content and crafting alert strategy. Prior to that, she worked in audience development at WSJ and on digital editorial at NBC Universal. She lives in Brooklyn.
February 25, 2021
Coinbase, the cryptocurrency exchange, filed its S-1 on Feb. 25 to go public via direct listing on Nasdaq. In the lead-up to the IPO, Coinbase shares traded on the Nasdaq Private Markets at $373, yielding a company valuation of over $100 billion, per Axios. If share prices remain at or above these levels, Coinbase's IPO valuation could be the largest by a U.S. tech company since Facebook went public in 2012. The company hasn't yet set a date for its trading debut.
Depending on who you ask, the Coinbase IPO could be the latest symptom of a major financial bubble or a significant milestone in the restructuring of the global financial system. Coinbase's mission is to "create an open financial system to the world." It believes the prevailing system of global finance, with the U.S. dollar serving as the global reserve currency, is outdated and inefficient. This mission pits the interests of Coinbase squarely against many of the world's most powerful nations, making regulation a grave and — if cryptos continue gaining momentum — probable risk.
What does Coinbase do?
<p>If you want to buy Bitcoin or Ethereum or other crypto, you can begin the costly, labor-intensive and extremely technical process of mining. Or you can turn to a crypto exchange like Coinbase, which allows retail buyers and sellers to meet in the middle.</p><p>Coinbase also believes today's financial system relies on too many intermediaries (banks, brokers, clearinghouses, payment processors, exchanges, etc.), and that relying on this web limits access, efficiency and costs for users. The internet transformed the way we communicate and live, and Coinbase believes that the financial system has hardly been affected in the same way. By enabling anyone with an internet connection — and a bank account, with funds to invest — to easily invest in crypto assets, Coinbase aims to "democratize" access to the crypto economy. </p><p>The company isn't vastly unlike other cryptocurrency exchanges, which have come and gone since crypto trading hit the zeitgeist in 2017. General finance apps have jumped into crypto as of late, including Robinhood and Square, and crypto-specific competitors include Gemini, Kraken and Binance. Coinbase has stuck around largely because of its efficiency, but also by keeping users' personal data secure. "From the early days, we decided to focus on compliance, reaching out to regulators proactively to be an educational resource," CEO Brian Armstrong writes in the S-1. "We invested heavily in cybersecurity, built novel key storage mechanisms, and obtained a cybercrime insurance policy." </p><p>The company's exchange service is its main offering, but it also has a few other lines of business. <a href="https://commerce.coinbase.com" target="_blank" rel="noopener noreferrer">Coinbase commerce</a> provides online retailers with software that lets them accept crypto payments (like PayPal, but for crypto). <a href="https://www.coinbase.com/card" target="_blank" rel="noopener noreferrer">Coinbase Card</a> is in the early stages, giving users a physical Visa debit card and accompanying app. Coinbase even offers its own cryptocurrency, <a href="https://www.coinbase.com/usdc" target="_blank" rel="noopener noreferrer">USD Coin</a>, built on Ethereum and tied to the U.S. dollar, so the price remains stable. </p><p>At the end of 2020, the company had 2.8 million monthly active users and 43 million verified users (about 6.5% of users are active, monthly). </p>Coinbase's financials
<p>Coinbase had a stellar 2020. It recorded $1.1 billion in revenue for the year, up 136% from the $483 million in revenue from 2019. This increase in revenue tracks closely with the 142% increase in trading volume between 2019 and 2020.</p><p>Coinbase derives almost all of its net revenue (96% in 2020) from transaction fees, which have been correlated with fluctuations in the value of cryptocurrencies. The rise in institutional trading volume has been a major source in revenue growth for Coinbase over the course of 2020. For instance, in Q1 2020, institutional trading volume rose to 6x the volume of Q1 2019. And even over the course of the year, institutional trading volume went from $18 billion in Q1 2020 to $57 billion in Q4 2020. Retail trading volume went from $12 billion to $32 billion in that same timeframe. </p><p>Bitcoin accounted for approximately 41% of trading volume on Coinbase in 2020, followed by Ethereum (15%) and other crypto assets (44%). </p><p>Coinbase posted a net income of $322 million in 2020, which is pretty incredible for a company that says it's choosing "to prioritize growth because we believe that global scale is central to achieving our mission and the potential of our business model." The biggest expenses in 2020 were "general and administrative," which represented 22% of total revenue, and "technology and development," which represented 21% of total revenue. In 2019, Coinbase reported a net loss of $31 million. </p>What could go wrong?
<p>The short answer: a lot.</p><p>Coinbase is driven by a techno-utopian/libertarian mission, and its long-term success is predicated on overhauling global power structures. This comes with a long list of risk factors, but some of the most significant include: regulation by a cohort of nations to protect the central banking system, loss of public confidence in cryptocurrencies and revenue loss that would come with greater stability in cryptocurrency prices. </p><p>"If the world ran on a common set of standards, that could not be manipulated by any company or country, the world would be a more fair and free place, and human progress would accelerate," Armstrong wrote in the S-1's introduction. </p><p>There's a lot to unpack here, but let's start with the bit about financial standards that "could not be manipulated by any company or country." This vision would mean the U.S. dollar loses its status as the dominant global reserve currency, <a href="https://www.federalreservehistory.org/essays/bretton-woods-created#:~:text=The%20Bretton%20Woods%20system%20was,gold%20at%20the%20official%20price." target="_blank" rel="noopener noreferrer">a system established</a> at Bretton Woods following World War II. It would render The Federal Reserve — with its fiscal toolkit intended to provide economic stability — obsolete. With cryptocurrencies such as Bitcoin, there are a finite number of tokens, so quantitative easing isn't possible. </p><p>It isn't in the interest of many nations, particularly the U.S., to give up central banking control due to cryptocurrencies becoming the global reserve currency. </p><ul><li>Coinbase writes that new regulations and laws "may adversely impact the development of the crypto economy as a whole and our legal and regulatory status in particular by changing how we operate our business, how our products and services are regulated, and what products or services we and our competitors can offer, requiring changes to our compliance and risk mitigation measures, imposing new licensing requirements, or imposing a total ban on certain crypto asset transactions, as has occurred in certain jurisdictions in the past."</li><li>It also details how loss of institutional support could impact its business: "We may face difficulty establishing or maintaining banking relationships due to our banking partners' policies and some prior bank partners have terminated their relationship with Coinbase or have limited access to bank services. … In addition, financial institutions in the United States and globally may, as a result of the myriad of regulations or the risks of crypto assets generally, decide to not provide account, custody, or other financial services to us or the cryptoeconomy generally."</li></ul><p>This regulatory uncertainty hinders institutional adoption of cryptocurrencies. </p><ul><li>For instance, in January, Ray Dalio of Bridgewater Associates <a href="https://www.bridgewater.com/research-and-insights/our-thoughts-on-bitcoin" target="_blank" rel="noopener noreferrer">wrote</a>: "For now, though, we do not see it as a viable storehold of wealth for large institutional investors, thanks mainly to a high degree of volatility, regulatory uncertainty, and operational constraints. Rather, we see it as more like buying an option on potential 'digital gold' — it has a wide cone of outcomes, with one path leading to it becoming a true institutionally accepted alternative storehold of wealth."</li></ul><p>Now let's tackle the first part of Armstrong's statement about a world that runs "on a common set of standards." For Coinbase to succeed, it needs cryptocurrencies to remain valuable and worth transacting.</p><ul><li>"The development of new technologies for mining, such as improved application-specific integrated circuits (commonly referred to as ASICs), or changes in industry patterns, such as the consolidation of mining power in a small number of large mining farms, could reduce the security of blockchain networks, lead to increased liquid supply of crypto assets, and reduce a crypto's price and attractiveness," Coinbase writes.</li><li>Another potential risk factor comes with "security issues, bugs, and software errors" of crypto assets that "could adversely affect its price, security, liquidity, and adoption."</li></ul><p>Finally, there's a contradiction within Coinbase's current business model that bears mentioning: Coinbase derives most of its revenue from transaction fees, which are highly correlated with fluctuations in the value of cryptos. The contradiction lies in the fact that cryptocurrency price volatility is seen as one of the primary barriers in something like Bitcoin realizing its potential as an exchange currency rather than an asset class. </p><p>Coinbase believes this isn't actually an issue, since the dynamics will change over the long term. The company writes: </p><ul><li>"Over the long term, we expect further diversification of market participants, to add support for more crypto assets, and for crypto asset use cases to expand. We believe these factors will contribute to diversification in the composition of our Trading Volume and reduce the correlation to both Bitcoin price and Crypto Asset Volatility, subsequently leading to lower volatility in transaction revenues. Further, we expect that diversifying our sources of revenue towards subscription and services revenue will contribute to less fluctuation in our results from operations."</li></ul>Who gets rich?
<p>Coinbase has divided its shares into Class A and Class B, with Class B receiving 20 votes per share and Class A receiving only one. Class B shareholders are also allowed to convert their shares to Class A at any time.</p><p>This setup makes it difficult to say precisely which entities will own Coinbase when it makes its trading debut. As of Jan. 31, 2021, some of Coinbase's largest institutional shareholders included Andreessen Horowitz, Tiger Global, Ribbit Capital, Union Square Ventures and Paradigm. Some of the largest individual shareholders included Frederick Ernest Ehrsam III (the co-founder of Coinbase), Armstrong and CPO Surojit Chatterjee.</p>What people are saying
<ul><li><strong>"The @coinbase<a href="https://twitter.com/coinbase" target="_blank" rel="noopener noreferrer"> </a>Direct Listing will either confirm direct listings as a reasonable on-ramp for companies or kill it all together by making retail the true bag holders. If institutional investors use this period to manipulate the stock from a $54B valuation on Jan29 to $100B now... And then sell to retail at $100B or greater, it will be the ultimate form of stock manipulation. If the stock snaps back at a much lower valuation, each private txn preceding the DL seems manipulative. Good luck to all the players...I'm sitting out. The process stinks."</strong> —Chamath Palihapitiya <a href="https://twitter.com/chamath/status/1364960892958433285" target="_blank" rel="noopener noreferrer">on Twitter.</a></li><li><a href="https://twitter.com/chamath/status/1364960892958433285" target="_blank" rel="noopener noreferrer"></a><strong>"Given the Crypto Cycle, I expect Coinbase IPO to be very successful and price to pump hard. A NYSE 'exchange' security trading >$100B should help drive up Crypto Exchange tokens. I can see a bull market narrative where something like UNISWAP is compared to Coinbase in cap."</strong> — Bob Loukas <a href="https://twitter.com/BobLoukas/status/1364974896493826054" target="_blank" rel="noopener noreferrer">on Twitter</a>.</li></ul>
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Hirsh Chitkara (@ChitkaraHirsh) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians.
Sponsored Content
Building better relationships in the age of all-remote work
How Stripe, Xero and ModSquad work with external partners and customers in Slack channels to build stronger, lasting relationships.
Image: Original by Damian Zaleski
February 21, 2021
February 8, 2021
Every business leader knows you can learn the most about your customers and partners by meeting them face-to-face. But in the wake of Covid-19, the kinds of conversations that were taking place over coffee, meals and in company halls are now relegated to video conferences—which can be less effective for nurturing relationships—and email.
Email inboxes, with hard-to-search threads and siloed messages, not only slow down communication but are also an easy target for scammers. Earlier this year, Google reported more than 18 million daily malware and phishing emails related to Covid-19 scams in just one week and more than 240 million daily spam messages.
<p>To keep the lines of communication wide open in this new reality, organizations are adopting new cloud solutions at a rate CIOs expected to see years from now. In fact, 79% of CIOs agree that the pandemic will force their organizations to digitally transform faster than planned, according to <a href="https://slack.com/blog/transformation/people-partners-systems-slack" rel="noopener noreferrer" target="_blank">J.P. Morgan</a>. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>But executive leaders know it takes more than just adopting a communication platform or software bundle to build relationships remotely. You have to find the <em>right</em> solution that meets both your internal and external collaboration needs. That's why competitive businesses today are turning to Slack, the <a href="https://slack.com/features/channels" rel="noopener noreferrer" target="_blank">channel-based messaging platform, </a>to close communication gaps with partners and customers in the age of remote work. Companies can securely collaborate with external parties using <a href="https://slack.com/help/articles/360017938993-What-is-a-channel" rel="noopener noreferrer" target="_blank">Slack channels</a>, a single place to share files and messages, in the same <a href="https://slack.com/resources/using-slack/setting-up-a-shared-channel" rel="noopener noreferrer" target="_blank">Slack workspace</a> through <a href="http://slack.com/connect" rel="noopener noreferrer" target="_blank">Slack Connect</a>.</p><p>With Slack Connect, organizations can build stronger customer and partner relationships through real-time communication. And unlike email—which leaves users open to the risk of spam and phishing—companies and external parties receive communications only from <a href="https://slackhq.com/introducing-new-layers-of-enterprise-grade-security" rel="noopener noreferrer" target="_blank">verified members in Slack channels</a>. Plus, Slack workspace administrators can maintain control over data and monitor external access. </p><p>Here's a closer look at how teams at Stripe, Xero and ModSquad are using Slack Connect to engage customers, prospects and partners in real-time and close deals faster. </p><h4>Stripe: Expediting sales deals while building lasting relationships with customers</h4><p><a href="https://stripe.com/" rel="noopener noreferrer" target="_blank">Stripe</a> is an online payment provider with a mission to support e-commerce. The Stripe sales team works with early-stage startups all the way through global Fortune 500 companies, and uses Slack Connect to engage with customers, keep communication organized and teams in sync, and jump on sales opportunities.</p><p>Jeanne DeWitt Grosser, head of Americas revenue and growth at Stripe, says communicating with prospective customers in Slack has been instrumental in maintaining engagement and closing deals.</p><p class="pull-quote">"Historically, the gold standard of a deep relationship in sales was getting the person on text," says DeWitt Grosser. "Now the gold standard is getting them into a Slack channel."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Usually at the beginning of a sale, DeWitt Grosser explains, reps used to double down on communication using the "law of 2x." Essentially, you start with a meeting and then follow up a week later. But this strategy no longer makes the cut: A lot could change in a week, and Slack is more in line with the tempo of the digital workplace. </p><p>"In Slack channels, the dialogue with the prospect happens in real time, as opposed to the next time you align your schedules," DeWitt Grosser says. "This kind of personal, persistent connection grows customer loyalty and retention."</p><p>Often sales reps have to communicate with a variety of departments to seal the deal. Instead of emailing them separately and creating silos, Stripe's account executives and solution architects set up a Slack channel with key customer stakeholders, like developers, the head of payments and a finance representative. </p><p>"When you need to move quickly, email is not the right format: It's more formal and responses take longer," says James Dyett, Stripe's head of global product sales and payments optimizations. "Slack has super powers. It's a much better experience." </p><h4>Xero: Working with external partners like they're on the same team</h4><p>If the pandemic has taught us one thing, it's that relationships matter. Whether it's launching a marketing campaign with a partner or hiring contractors to complete a specific project, we can't—and shouldn't—try to do everything ourselves. <br><br>When it comes to nurturing partnerships in the midst of the pandemic, <a href="https://www.xero.com/" rel="noopener noreferrer" target="_blank">Xero</a>, a cloud-based accounting software company, affirms that working in Slack Connect has been a game changer. Justine Wallendorf, New Zealand partner marketing manager at Xero, says Slack Connect helped her team launch a joint online marketing campaign with partners, <a href="https://www.figured.com/en-us/figured-xero" rel="noopener noreferrer" target="_blank">Figured</a> and <a href="http://paysauce" rel="noopener noreferrer" target="_blank">Paysauce</a>. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>The three companies were offering a complete software solution for farmers looking to manage their business digitally. By coming together in one Slack channel, #xero-partners, the sales and marketing teams across all three businesses could connect and ensure alignment on: </p><ul class="ee-ul"><li>Immediate universal access to all campaign details</li><li>Consistent messaging across sales enablement deliverables, such as one pagers and slide decks</li><li>Quick feedback and turnaround times for deliverables</li><li>Clear leadership signoffs</li></ul><p class="pull-quote">"Working in Slack Connect guaranteed that everyone was beating the same drum and speaking the same language, positioning our partnership as best as possible in the market," Wallendorf says.</p><h4>ModSquad: Winning customer loyalty with exceptional customer support</h4><p>With so much uncertainty in the world, efficient and reliable customer support is akin to a safe harbor in a storm. That's why Slack customer, <a href="https://modsquad.com/" rel="noopener noreferrer" target="_blank">ModSquad</a> has its support teams troubleshoot customer issues in real time with Slack Connect.</p><p>As a customer experience outsourcer, ModSquad knows good customer service. Each day, ModSquad's global crew of experts—the Mods—help their customers engage with their audiences online through customer support, content moderation, community management and social media. </p><p>ModSquad works with its clients in Slack Connect to set up service level agreements and incorporate support dashboards. With the <a href="https://slack.com/apps/A0108APQFQC-geckoboard" rel="noopener noreferrer" target="_blank">Geckoboard Slack integration</a>, ModSquad monitors clients' incoming calls and chats—without ever leaving Slack. Whenever the team sees an uptick in activity or service impacting issues, they can quickly alert clients and internal teams for quick resolution. The team also relies on a <a href="https://slack.com/apps/A9WFQ3M0B-zendesk" rel="noopener noreferrer" target="_blank">Zendesk Slack integration</a> to track service desk tickets, troubleshoot and resolve issues.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>According to Steve Henry, senior vice president, client services at ModSquad, Slack channels also help build a culture of transparent communication and trust with clients.</p><p>"Establishing trust with our clients is very important, and Slack provides a crucial component for all of our efforts" Henry says. "With Slack, we can provide world-class support solutions and improvements for our clients, driving efficiencies while growing their business in the process."</p><h4>In an all-remote world, Slack Connect builds strong partnerships</h4><p>Slack Connect is available for <a href="https://slack.com/pricing/paid-vs-free" rel="noopener noreferrer" target="_blank">all paid plans</a>. If you're already a customer but new to Slack Connect, feel free to <a href="http://slack.com/contact" rel="noopener noreferrer" target="_blank">reach out</a> or learn more on <a href="https://slack.com/resources/using-slack/setting-up-a-shared-channel" rel="noopener noreferrer" target="_blank">how to get started</a>. And if you want to see how others are using Slack Connect to work with external partners, check out a few of our recent <a href="https://slack.com/blog/collections/slack-connect-shared-channels-shared-success" rel="noopener noreferrer" target="_blank">customer stories</a>. </p>
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People
Citizen’s plan to keep people safe (and beat COVID-19) with an app
Citizen CEO Andrew Frame talks privacy, safety, coronavirus and the future of the neighborhood watch.
Citizen added COVID-19 tracking to its app over the summer — but its bigger plans got derailed.
Photo: Citizen
February 24, 2021
David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.
February 24, 2021
Citizen is an app built on the idea that transparency is a good thing. It's the place users — more than 7 million of them, in 28 cities with many more to come soon — can find out when there's a crime, a protest or an incident of any kind nearby. (Just yesterday, it alerted me, along with 17,900 residents of Washington, D.C., that it was about to get very windy. It did indeed get windy.) Users can stream or upload video of what's going on, locals can chat about the latest incidents and everyone's a little safer at the end of the day knowing what's happening in their city.
At least, that's how CEO Andrew Frame sees it. Critics of Citizen say the app is creating hordes of voyeurs, incentivizing people to run into dangerous situations just to grab a video, and encouraging racial profiling and other problematic behaviors all under the guise of whatever "safety" means. They say the app promotes paranoia, alerting users to things that they don't actually need to know about. (That the app was originally called "Vigilante" doesn't help its case.)
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</div></p><p>Above all, Citizen raises questions: When does safety trump privacy? What are people willing to give up or risk in order to keep themselves and their loved ones safe? What does "safety" even mean in an increasingly digital world?</p><p>Frame joined the <a href="https://www.podpage.com/sourcecode/" target="_blank">Source Code podcast</a> to discuss all that and more. He talked about the app's history, what it means to promote safety above all else, how his company tried — and failed — to fight COVID-19 long before other tech companies got involved and what it means to be a good Citizen citizen.</p><div class="rm-embed embed-media"><iframe frameborder="no" height="200px" scrolling="no" seamless="" src="https://player.simplecast.com/1cb18adc-4514-4097-b9a5-3c9a5c2e5408?dark=true" width="100%"></iframe></div><p><em>The following excerpts from our conversation have been lightly edited for length and clarity.</em><br></p><p><strong>Citizen has had sort of a windy history, so maybe go all the way back to the beginning of the product and the company. What was the thing you were trying to build when you started out building it?</strong></p><p>I wanted to build something that was consumer [facing], because that's where my passion lies. And I feel like that's the only thing I'm sort of good at. It had to be mobile first, network-effect driven, with a very noble mission so that once the network effect activates, hopefully, it becomes the gift that keeps on giving. </p><p>As soon as I identified wanting to build a safety product, the question was, how do you get to market with a product that keeps people safe? There was a moment where I was sitting outside, and I was just thinking about, what is the Trojan horse to build a safety system? And it just dawned on me: I think all of us remember playing with police scanners, and listening to police. It's this incredible data stream that is filled with people in need of help. And it was just this closed system that had open access for listening. When a fire hits a building, nobody knows except the fire department. Why don't the 1,000 people inside of the building know that their building is on fire? The information is right there, transmitted right through the walls of that building. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>And so it just instantly hit me: Let's open this system, create a trusted shared safety system where police and civilians and everybody has access to the same information. There are so many great byproducts of creating this open, shared system, one of which is you get the people out of the burning building. You get the kidnapped kid back because you got the whole neighborhood engaged. You eliminate police brutality, because now you've built what I call "conditional transparency." It's not a radical transparency. It's a conditional transparency, meaning the transparency hits once a kid is missing. It doesn't mean there's overhead planes surveilling, there's no surveillance state in this. It's simply transparency when it is urgently needed. And that was kind of the genesis of this thing.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p><strong>I'm getting ahead of myself here, but you kind of already got into what over the years has been complicated in how people think about Citizen. The reason to not tell the people in the building that there's a fire is that you don't want to cause a panic, right? And the reason to not tell people in the neighborhood is that you don't want them running toward the fire, because some people will run toward a fire.</strong> </p><p><strong>All the pushback I've ever seen about Citizen has basically been about that fundamental question. Is it productive to have all of this information given to everyone all the time? At some point, do you just have to decide that, on balance, you believe it is?</strong></p><p>You know, there would be no innovation if people were just fixated on worst-case scenarios. On any product, we can think about worst-case scenarios. And of course, there are valid reasons. But it's not going to stop you from building something great. </p><p>Just take Uber, right? I was taught not to hitchhike, that'd be a very dangerous thing. And if we were all in a room thinking about what happens when you just allow people to hitchhike with their neighbors, and build it as a global platform? People would say, "Oh, my gosh, that's the worst idea of all time."</p><p><strong>A lot of people did say that about Uber!</strong> </p><p>Yeah. So you know, it's just so easy to just fixate on the worst-case scenario. This is no longer an idea. This is something that is prevalent across 28 cities, we have ZIP codes, where 60[%], 70[%], 80% of the entire ZIP code are active Citizen users. We don't have those stories. Believe me, I was also terrified of this. At the beginning, it gave me and the team a huge amount of anxiety, because we also thought about the worst-case scenario. But we also thought about the best-case scenario, which is why we built this and why we're scaling. And it far exceeds the unfounded fear of some of these worst-case scenarios.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p><strong>I feel like COVID has become kind of a bigger part of Citizen than I would have expected. Rewinding to the early days of the pandemic, was it obvious to you that Citizen needed to be part of this, needed to help be the solution here?</strong></p><p>At first, everybody in the company wanted to pitch COVID ideas. It wasn't until we realized just the architectural model of contact tracing — a very simple idea of just enabling Bluetooth and allowing everybody's Bluetooth radio to say hello to each other as you come in close physical contact — that it was like, OK, wait a sec, we already have distribution. We had 30% of New York City on the app back in March. </p><p>We just went, "Oh, my goodness, we have the safety platform, all we have to do is ask these 30% of New Yorkers to turn on Bluetooth." Suddenly, we have the largest and most dense contact-tracing system in any big city in the world, in ground zero, which was New York at the time. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>Unfortunately, we never got the approval to launch it. </p><p><strong>What happened?</strong> </p><p>It's a complicated story. Apple and Google had their own plans. We came forward with this architecture, and we needed help. We needed allies. We needed Apple, we needed Google, we needed the government. </p><p>We created a product that integrated at-home testing and contact tracing. Because we knew those were the two tactics on how to manage this here in the U.S. Our ask was basically, a) obviously we need to get it in the App Store; b) we wanted the government to pay for all that at-home testing for the U.S. Labcorp was working on their at-home test kit. And basically, you could just ship a test kit to anybody that asks for it within 24 hours, saliva sample, they send it back, and the result is delivered in the app. So it'll say, "You're negative for COVID." </p><p>Keep in mind, this is back in March that we had this. We built prototypes and everything inside the company, we were taking tests and getting the results in the app. Now, if you are positive, it would automatically inform all of the people that your Bluetooth recently saw that "you have had a potential exposure to COVID." Those people would then be offered a free test that would show up the next day. You can imagine if we partnered with Amazon on the logistics side, where Amazon is trucking these. It's like OK, tech, come together and let's go, like, what can we do about COVID? There was zero government support. None whatsoever. We needed them to pay for the tests. It'd be great if Amazon did the logistics. But we called it the "testing-tracing flywheel." And this is, again, back in March, people had never even heard of contact tracing.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
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</div></p><p>We didn't get the support. We didn't get the alliances, we were on our own on this one. And the government, there was a Contact Tracing Task Force, we were selected as the app to provide contact tracing to America, before [the task force] was suddenly just disbanded and dissolved and just went away one day.</p><p><strong>My question was going to be, wouldn't this be a useful time to do things like partner with local governments, but you're saying you did, and then it fell apart?</strong></p><p>Well, there was no official partnership. But we were told that this was by far the best system for America. And there were just a bunch of meetings that didn't really go anywhere. And then suddenly, you know, they put a bunch of great technology entrepreneurs on the task force, who we knew! We knew all these people, and it was great. Sometimes government needs entrepreneurs to step up and solve problems. And in this case, it seemed like something was going to happen, but then it was just instantly disbanded with no plan. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
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</div></p><p><strong>Looking back now with almost a year of hindsight, was there anything else you could have done? Should you have just pushed through and said, "We'll figure something else out, screw all the rest of you?"</strong></p><p>No, we couldn't, we didn't have approval from the app stores. Right now, innovation is no longer open. You have to go through the app stores, and they will decide if your innovation can reach the world. This is not how it was, pre-mobile. With the internet, you can build anything you want. And you have an open, uncensored, unfiltered internet. And with app stores, you don't. You must get through the process.</p><p><strong>This is actually sort of a perfect example of the kind of tension we were talking about earlier. You have an obvious societal good. No one is going to argue that curbing the spread of COVID-19 is not a good thing. We're all on the same page about that. But then, and this is what I think we spent maybe six months too long debating, you have all of the privacy implications of that. What does it mean that there's now a system that knows that not only do I have COVID, but who gave it to me and where they got it from? Were those the kinds of debates that you were having, even back in March? Was that the holdup?</strong></p><p>That actually annoyed me, because I just don't think that COVID was this mass privacy thing. All of the data was protected, nobody would know. But most likely, just through the social interaction, like people, every person that has COVID has told me. It's not like, "Oh, my gosh, this person has COVID. Nobody can know." </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8">
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</div></p><p>And we didn't expose the name. We did expose the location. There was a big fight even with the app stores, because we thought that the location was super relevant. Why? Because it protects more people. If you went to a superspreader dinner, it should say, here's the time and place you got COVID. We can say Friday night, 8 p.m., here's the location. We're not going to tell you who, but you're like, "Oh, that was the birthday party." What's the next step? Tell everybody at the birthday party that there was an exposure there, because not everybody has the contact tracer. </p><p>This was about beating COVID. I just think that there was this red herring around privacy that stopped everything. Privacy became the fundamental discussion, when it's like, OK, we won on the privacy side, but how are we doing as a nation now? Printing trillions of dollars, small businesses all going out of business. What mattered more: this privacy thing that seems to be extremely unfounded and a red herring, or beating COVID?</p><p><strong>That's the big existential question around all of this, right? And it goes back to what you were saying before about best- and worst-case scenarios. There's just always going to be a tension between privacy and safety, right? Even as we talk about things like encryption, there's always going to be that tension. And at some point, all you can do is pick a side and be clear about which side you've picked.</strong></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="9">
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</div></p><p>Yeah. I mean, you've got to use judgment. And this is really where mission comes in. What is this privacy preservation that we're even talking about? I mean, the amount of tracking going on by Big Tech is thousands of times more privacy-invading than the COVID thing we were talking about. </p><p>The fact that we just got so sucked up talking about privacy preservation being the only issue, when in the meantime, COVID is spreading rapidly and just destroying families and small businesses and American restaurants that'll never come back. I think that the focus was on the wrong area.</p>
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David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.
Transforming 2021
Blockchain, QR codes and your phone: the race to build vaccine passports
Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.
One day, you might not need to carry that physical passport around, either.
Photo: CommonPass
February 23, 2021
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
February 23, 2021
There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.
Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.
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</div></p><p>But building a system that everyone agrees with — and can access — is no small task. There are several companies working on competing projects to verify vaccinations. But beyond that, there are more than a few hurdles that could prevent vaccine passports from succeeding, from antiquated medical records systems to interoperability issues and privacy concerns. Here's how they could actually succeed. </p><h3>Competing projects, similar standards</h3><p>Pretty much since the first blockchain white paper, people have been looking for perfect examples of where a distributed, immutable ledger could be valuable. There's obviously the push to use it for currencies, and companies have tried to use it for things like tracking <a href="https://www.protocol.com/ibm-blockchain-supply-produce-coffee" target="_self">food production</a> and <a href="https://www.govtech.com/products/Blockchain-Voting-Debate-Heats-Up-After-Historic-Election.html" rel="noopener noreferrer" target="_blank">voting</a>, but there are few use cases that have truly taken off, at least so far. "We've been working on this since 2014; we never thought that health care would be the kind of the use case that we take this mainstream," Jamie Smith, the senior director of business development at Evernym, a company focused on using the blockchain as a basis for verifying identities, told Protocol. </p><p>Smith said Evernym had been discussing its concepts with automakers, retailers, telcos, governments, loyalty companies and banks prior to the pandemic. One of those companies was IAG, the airline group that owns British Airways, which had been interested in the idea of contactless travel based on a single identity credential that follows you from the airport check-in to your gate. With the pandemic, that morphed into thinking about ways to verify that passengers have had negative COVID tests, and eventually, that they've received a vaccine. "From our perspective, it was a really easy lift to see," Smith said. "We're doing contactless travel, and we just added verifiable credentials for test results."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>It's a similar genesis for IBM's Digital Health Pass initiative, which leader Eric Piscini said started about two years ago as a way to store people's entire health records in a safe, accessible platform. It also relies on the blockchain for its immutable record of proof, and both Evernym and IBM are part of an open-standards group called the Good Health Pass Collaborative, which aims to bring private credentialed vaccine records to business and people around the world. Companies are working on their own implementations of the standards, but Evernym's Smith said the data is meant to be portable from one passport to another. </p><p>Most of the companies working on passports say their systems are private by design, especially given that they're mainly working off the same open standards. In most cases, the health information only ever remains on a user's phone, but where it asks to verify that the user's information meets a system's standards — such as whether this person has had two COVID vaccines and should be allowed into an office — that information is recorded on a blockchain. "You can, using blockchain technologies, verify that someone has been tested recently, without having access to the underlying data," Piscini said. "I don't know any other technology where you can do that."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>Similarly, the nonprofit Commons Project's CommonPass, backed by the likes of Oracle, Microsoft and Salesforce, started out as a project to bring an analog to Apple Health for Android. JP Pollak, a senior researcher at Cornell and founder of the Commons Project, first launched CommonHealth to bring the sort of data and insights that Apple Health offers to iPhone owners to Android users. Last summer, the group started building an app that could take health data and privately share it with others — in that case, it was to help truckers stuck at the borders in <a href="https://www.newtimes.co.rw/opinions/digital-technology-re-opening-africa" rel="noopener noreferrer" target="_blank">East African countries</a> who couldn't easily prove they'd taken COVID tests. This morphed into vaccine credentialing, with the group now working to pull together the various data streams needed to get a project like this off the ground. </p><p>"Health care institutions, EMR vendors, retail pharmacies, state vaccine registries, all issuing people a digital verifiable credential of their vaccination record that they could then use in the app of their choice, to be able to get access to various kinds of services," Pollak said. CommonPass is also working with the Mayo Clinic, as well as Epic Systems and Cerner, two of the largest EMR vendors. </p><h3>Something for everyone </h3><p>With so many competing efforts to become the world's digital vaccine passport, it might seem that the country is heading for some sort of VHS versus Betamax format war for proving everyone has had COVID vaccines. But given that so many of the efforts are using the same standards, and in many cases, looking to embed their tech in someone else's app rather than their own, the race might be less about the best tech winning, and more about various approaches working in different situations. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>"The intent is not to be the only company; we don't want to be the proprietary platform that everybody has to use because they have no choice," IBM's Piscini said. "That's not who we are right now: That's the IBM from 30 years ago, not the IBM of today."</p><p>For IBM, though, the selling point is that the company already works with so many other massive companies. Why look elsewhere for a vaccine passport solution if your airline booking system is already powered by IBM? "We believe our network is going to be more valuable than any other because of our scale and our ability to integrate the platform with CRM systems, building systems or stadium systems — we can do that every day," Piscini said.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY2NTc3NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyMTM1MjYyM30._ykxxCyx3_wDbZrYgCcmK0QT2Ue1tZFdP5pf60kOmPU/img.jpg?width=980" id="c81c9" class="rm-shortcode" data-rm-shortcode-id="3967636652192acfdaad341861263bc8" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">IATA's digital passport app.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Photo: IATA</small></p><p>For other companies, it's about securing new partnerships with major players in the hopes of finding that scale. Evernym, for example, is working with International Air Transport Association, the airline industry's trade association, on an air travel-specific app called Travel Pass. IATA is working with airlines and local governments to ensure it has the latest requirements to feed the app's rules engine. "It will say, 'Hey, you're flying JFK to Heathrow, you need a PCR test 48 hours in advance before you can land,'" Evernym's Smith said. "And of course, those policy changes are changing every day." Qatar, Emirates and Etihad Airways are all <a href="https://simpleflying.com/qatar-iata-travel-pass-launch/" rel="noopener noreferrer" target="_blank">expected</a> to start trialing the app in the next few weeks.<br></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>In other instances, the technology will live inside other companies' existing apps; why make someone download yet another app and add another hurdle to compliance? Instead, the experience will be rather like adding a loyalty account or TSA PreCheck number when booking a flight. Airlines and other venues restricting access will require uploading negative test results or vaccine records using one of these services. "You're going to be using the United or the Delta app, and they'll be using our solution or somebody else's, but you will do it via their app," IATA's Travel Pass lead, Alan Murray Hayden, told Protocol.</p><p>The World Health Organization is also working on its own offering, and recently convened the <a href="https://www.who.int/groups/smart-vaccination-certificate-working-group" rel="noopener noreferrer" target="_blank">Smart Vaccination Certificate Working Group</a>. It's built upon the WHO's nearly century-old notion of the "yellow card" vaccination record, which first was used to document that travelers had been inoculated against diseases such as cholera and yellow fever. Evernym Chief Trust Officer Drummond Reed is part of the working group; he said there should be more to share in the coming months. </p><h3>What could go wrong?</h3><p>It's entirely possible that as more people start to get vaccinated, vaccine passports start to become the norm. You walk to work — still masked, of course — scan a QR code reader in the lobby, and are let in. You go out for lunch, and your loyalty card app has a discount for in-store shoppers verifying they're vaccinated. Your concert ticket is also tied to health pass information that you shared earlier in the day with Ticketmaster. But there are more than a few hurdles ahead of the companies rushing to turn these concepts into realities. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
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</div></p><p>First off, there's the … reality … of the real world that any digital system has to contend with. For anyone without access to the internet, digital vaccine credentials will prove difficult to acquire, though all the companies Protocol spoke with said they would offer a paper-based QR code for people who don't have smartphones. But there's also the issue of having to corral so many different stakeholders into one system, especially when some health care providers are still reliant on antiquated database systems or <a href="https://www.protocol.com/manuals/health-care-revolution/electronic-health-records-after-coronavirus" target="_self">even paper records</a>. "The amount of inefficiency in the system is tremendous," IBM's Piscini said. </p><p>But in the U.S. at least, all vaccinators are required to report COVID-19 vaccines to their state. Piscini said that even for people who just received a paper copy of their vaccine records, systems like IBM's can likely link up to the state's immunization registry and allow people to import records to a vaccine passport.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY2NTc4My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzNzg3MTM2M30.RZtqR7F_FuXK1S24V6jVaqUZ0xOSG-gCwj00xU3fxcM/img.png?width=980" id="b0bd3" class="rm-shortcode" data-rm-shortcode-id="11d8002d92c0cd6ef39b12fc7b8dccf8" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">How CommonPass's app shows your records. </small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Image: CommonPass</small></p><p>And states are willing to help out, Pollak said, adding that CommonPass has started working with Hawaii to roll out its offering for would-be tourists. "We're seeing a lot of state governments stepping up and doing a really good job with this," Pollak said. "It would be surprising if there wasn't a coordinated federal effort very soon." That being said, while <a href="https://www.cbc.ca/news/canada/north/iceland-covid-passports-canada-1.5904828" rel="noopener noreferrer" target="_blank">many countries around</a> the world are committing to working on vaccine passports, getting a straight answer out of the U.S. government on what it's doing has proven difficult. The State Department, which maintains America's traditional, analogue passports, referred me to Homeland Security, which referred me to the White House. The acting director and chief of staff of the White House's Office of Science and Technology Policy, Kei Koizumi, told Protocol that "OSTP can't discuss projects we are working on before they are publicly announced."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
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</div></p><p>But even with systems in place at a federal level, there's still a fair amount of education that needs to happen before people will trust systems like these. "There's a substantial gap in understanding and knowledge of how these systems work, and people's views, in terms of who should get access to which data," Pollak said. </p><p>"We assume there's a Facebook Borg in the sky, monitoring every interaction," Smith said. "The emergence of verifiable credentials breaks down that mental model, where actually it becomes more like decentralized bits of paper that I can carry around, and no one's to know that I've been sharing this information."</p><p>"Our belief is that if you do the right thing, from a platform point of view, protecting your privacy, and giving you control and access to the platform to everybody who wants to use it," Piscini said. "I think those are very basic things that allow the core of the platform that we build to generate adoption by the individuals."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8">
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</div></p><p>Even with a system that works, there may still be holdouts to this potential new normal. "Some people are saying, 'I will never get vaccinated,'" Piscini said, "and I don't know if the airlines are going to say, 'Well, maybe you will never fly again.'"</p>
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Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
People
Anjali Sud is reinventing Vimeo and the future of video
It's not a YouTube competitor anymore. It's something much bigger.
Anjali Sud has been CEO of Vimeo since 2017, and has totally changed the company in that time.
Photo: Vimeo
February 10, 2021
David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.
February 10, 2021
Anjali Sud's first day as Vimeo CEO was an eventful one. Not only was she standing in front of the company as its new leader, she was telling them that things were about to change. A lot. After more than a decade operating as a home for streaming content — sometimes a YouTube competitor, other times coming for Netflix, never quite reaching either goal — Vimeo was going to become a SaaS company. It would be wooing IT managers and vice presidents, not A-list directors and Golden Globes voters. Even after the initial shock wore off, she knew it would take a while to change the structures, incentives, goals and workflows to become a different kind of company.
That was 2017. Now it's early 2021, and Vimeo is on a tear. Sud and her team are getting ready to spin out of Barry Diller's IAC later this year, turning Vimeo into a public company in its own right. They've raised $450 million in capital ahead of that change, and are currently valued at about $5.7 billion. Vimeo has more than 200 million users, 1.5 million of whom pay for its services. Its revenue increased 54% in the most recent quarter compared to a year ago, and by some measures the company is already profitable.
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The wildest part of it all, Sud said, is that most people still have no idea what Vimeo's up to. "Everybody still thinks of us as, like, the indie version of YouTube," she said. "They definitely do not think of us as a B2B SaaS company that's powering the town halls and trainings and marketing videos of Fortune 100 organizations." The new Vimeo doesn't sound as sexy as the old Vimeo, but it's turning into a much better business.</p><div class="rm-embed embed-media"><iframe frameborder="no" height="200px" scrolling="no" seamless="" src="https://player.simplecast.com/d46fb426-90f8-4781-afb7-65bcbcf570a9?dark=true" width="100%"></iframe></div><p><em>Anjali Sud was also this week's guest on the Source Code podcast — you can listen to our full interview above. The questions and answers below have been lightly edited for length and clarity.</em></p><div class="horizontal-rule">
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<strong>I'm guessing you've gotten really good at the 30-second "what Vimeo is now" pitch.</strong>
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You'd think that I would be better! But I think so. The pandemic really crystallized things for us, to be honest. Anytime you're embarking on a new strategy, you have conviction, you have passion, but you don't have certainty. You don't know it's the right strategy. And there are many times along the way where you sort of question, "OK, this is the angle we're coming into the market, is it the right one? Are we off about X, are we off about Y? The idea that even large organizations are going to be using video in every way they communicate, is that a little crazy?"
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Those questions, I think, are ones that we've really wrestled with. That I've wrestled with. And the pandemic has really helped accelerate the demand. Today, if I said to you "you know, large organizations are going to use video to train employees, or to do product demos or support," you would think that makes total sense. But three years ago, people were very skeptical. It's much easier now to just say it in terms everyone gets and understands.
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<strong>Let's walk through that a little bit, actually, because I think understanding the video space is tough. When we talk about video, we either tend to talk about Zoom or Netflix. Those are the two sides of the spectrum here. And I feel like you're exploring, and in some sense kind of inventing, this new third space: what video is for people at work. Is that right? Paint the ecosystem for me here a little bit.</strong>
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As you think about the evolution of video, it started as a form of entertainment. You had Hollywood Studios, and then you have Netflix, and it's a form of entertainment. And that's awesome. And then you had the consumer wave with social media and phones, and it actually became a form of personal expression. You look at what's happening with TikTok, it's a form of personal expression.
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Then I think you have this third wave that we're going through now, which is now businesses using video for communication. It started with the meeting; meetings have been video-ified. And that's permanently changed behavior.
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Then the next phase of that is really taking these other pieces of video, and how do you actually bring that into businesses and how they communicate? And I'll give you just like some examples. A meeting, you know, there's a meeting, but then what about events? Conferences? Town halls? What about onboarding and training new employees? What about marketing? What about every Instagram post being a video because it gets higher clicks and engagement, and is prioritized in feeds? What about when you go to a website, whether it's a product demo or support tutorial, being able to use video to make purchase decisions?
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If you actually look at the ecosystem today, very few businesses are doing it. And the reason is that the barriers are high. And that's what we're trying to solve at Vimeo. We're trying to really make it easy for any business to use video to communicate externally with potential customers and internally with their employees using professional-quality video. We launched an app called Vimeo Create, and it'll help you make quick social media videos in a couple clicks and in a couple minutes. We use AI, and we provide stock footage and licensed music and creative templates. And you can totally customize it, make your own. But those are the types of ways to lower barriers and make it easier. Otherwise, you're not going to see the kind of mass adoption that we now see with meetings.
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</div><p>Even once people buy into the concept, Sud said, building great video tools is a tricky business. There's a glut of professional tools, from Premiere to Final Cut to Avid, all of which have huge power and huge learning curves. Meanwhile, apps like Snapchat and TikTok are building increasingly functional — but extremely platform-specific — tools into their own services. Vimeo is trying to occupy a middle ground: powerful enough to make interesting stuff, simple enough to be approachable for anyone at a company with a few minutes and an Instagram account.<br>
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"There are two categories of users we have," said Vimeo's CTO and chief product officer, Mark Kornfilt. He called the first category "video is my business," referring to longtime Vimeo users who host and share their stuff on the platform. The second category is "video helps my business," which he said, is where Vimeo's biggest market lies: flower shops that want to get people in the store; retailers who want to show off their new stuff; real estate agents who want to shoot fun virtual listings. Video is a means to an end for all those businesses, which means Vimeo needs to get them through a video as quickly as possible.
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One of Vimeo's favorite metrics is the time it takes people to create something — even if it's bad — in the app. With a couple of photos and a logo, "before we even show you the editor, we'll show you a video that you've just created," Kornfilt said. "We try to bring the satisfaction of seeing the content as quickly as possible in the process."
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Social videos are a particular focus for Vimeo, Sud said, as companies look to leverage the billions of people who use Facebook/Instagram/LinkedIn/TikTok /Snapchat/every other social app out there. But most of those companies don't have the resources to build teams or content for every platform, so Vimeo's trying to automate the process.</p><div class="horizontal-rule">
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<strong>One thing that we're learning about TikTok and Instagram and Facebook and all these places that people want to be able to do their brand-building, is that they all want totally different things. And it feels like the challenge of being a business right now is that you need a team of 1,000 people just to program all of these different places. Can you roll all of that stuff up into one place inside Vimeo?</strong>
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We think we can. The way I see it, this again goes to the business model. All of these platforms are ad-based, and so what you're seeing is that each is becoming a walled garden. They want content created just for that platform. And they want to keep the creator and the viewer on the platform, because they literally monetize the eyeballs.
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So if there's a battle for eyeballs, we're the Switzerland for the creators. We are neutral, we want to help you put your content everywhere, we actually have tools today that allow you to natively publish with one click from Vimeo to multiple platforms. And we bring the analytics back into one place, so that you can actually understand what's happening. And actually, most social media platforms have been thrilled to partner with us on this, because if we can help more people create video content, that is good for them. So this is an example where I think the SaaS business model allows us to be totally aligned with the success of our customers with the success of a business in a way that social platforms are not able to. And so again, I think it's incumbent upon us to build these tools, if we really want to make it easier for people to use video.
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<strong>I guess that's true, that for these people getting a lot of TikTok followers is not actually the point of your business. It's a fine means to an end. But that's not what you're here for.</strong>
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But also you don't have to sacrifice that! We want you to make content — and by the way, we're working on using our API and our data to actually tell you, "Here's a video you just made, we just optimized it for TikTok, Instagram, Twitter, LinkedIn and Facebook. Press this button, and each version will go out, and you can see what you want to do with it." We're going to automatically optimize the thumbnails and do X, Y and Z. The real thought here is that right now, the platforms are asking businesses to choose, and you shouldn't have to choose, and we don't want you to have to choose.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
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</div><p>Sud said that Vimeo's not trying to out-Zoom Zoom, but it has its eyes on almost every other part of a businesses workflow, from staff events to training videos to virtual yoga classes.
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By not caring about being a destination, Vimeo has been able to get a head start on becoming the internet's infrastructure for making video. It has partnerships with GoDaddy, Shopify, MailChimp and others that allow users to use Vimeo's video-making tools from within those other platforms. Sud said: "And it's specifically designed again to just open up the market because the biggest barrier is people just not trying video."
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That's what Sud keeps coming back to, the real task in front of her and the entire video industry: convincing everyone that video is actually achievable, a task worth their time and energy that won't take up much of either.
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As Vimeo gets ready to strike out on its own and make a name for itself all over again, Sud said she's confident the industry is ready for what Vimeo is selling. (Maybe even sooner than she guessed, thanks to the pandemic.) She likes to compare video right now to websites in the internet's early days. "Today, any restaurant, any mom-and-pop shop can build a website in a matter of clicks. Ten years ago, you would have had to spend hundreds of thousands of dollars and six months, and have an in-house group of engineers. Now we look back and we think, 'Wow, that's so easy.' And professional quality video should be so easy that anybody can do it," she said. "We just have a lot of work to do to get there."
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David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.
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