Geoengineering could solve our climate problems if anyone allowed it

This weekend, I finished reading Oliver Morton’s The Planet Remade (thanks to reader Eliot Peper for recommending it). Morton has a multitude of goals with the book, but there were two I think are deeply valuable. First, geoengineering is a plausible approach to solving our climate problems this century, and second, engineering the climate generates […]

This weekend, I finished reading Oliver Morton’s The Planet Remade (thanks to reader Eliot Peper for recommending it). Morton has a multitude of goals with the book, but there were two I think are deeply valuable. First, geoengineering is a plausible approach to solving our climate problems this century, and second, engineering the climate generates tough policy challenges, but also opportunities to make the planet more equitable.

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First and foremost: the book is mind-expanding in the best way possible. Morton confronts an extremely contentious issue with judicious facts and supreme insight gleaned over many years of studying geoengineering. Whether you are a dedicated acolyte of cloud seeding and veils or a committed opponent to any tampering of earth’s environment, he has developed a book that forces us to think about our actions and ultimately what the consequences of those choices are.

Frankly, those choices offer stark consequences. Morton describes the challenge of climate this century:

The world’s population is expected to grow from seven billion today to more or less ten billion by 2100. By that time the number of people enjoying rich-world energy privileges should also reach ten billion. So the challenge is to achieve for an extra eight billion people in the twenty-first century what was achieved for two billion in the twentieth century. Meeting that challenge implies a lot more energy usage.

Morton is a staunch environmentalist and deeply concerned about environmental justice and the inequities of the planet. But he is also a “climate realist” — he understands that our current solutions to climate change are not really solutions at all, since they either lack the scale required to solve the problem, or will continue to exacerbate existing inequities between different people of this planet.

For example, take emissions-free nuclear power, which is brought up as a panacea to our fossil fuel-driven economy. Morton writes:

If the world had the capacity to deliver one of the largest nuclear power plants ever built once a week, week in and week out, it would take 20 years to replace the current stock of coal-fired plants (at present, the world builds about three or four nuclear power plants a year, and retires old ones almost as quickly).

Sure, nuclear power plants are a literal solution, but most definitely not a pragmatic one since the scale required is just not there.

He also spends significant time deconstructing recent climate negotiations, finding that the focus on carbon has been something of a red herring (many other emissions are far worse than carbon and less directly connected to the modern industrial economy). Instead, they have been driven by the alignment of different environmentally-concerned parties:

Carbon dioxide suited scientists because it seemed like a straightforward measure of the problem. It suited greens because it was a pretty good proxy for the industrial society against which their movement was a reaction. The international negotiations that set up the UNFCCC showed that it suited developing countries because it was primarily a developed-country issue; at the time of Rio, the vast majority of all the industrial emissions since the the eighteenth century had come from Europe and America.

Carbon is of course a problem, but it has become a tagline, a brand, a cri de coeur of the international climate movement. Yet the challenges facing the planet are so much deeper than just carbon.

To avoid that narrow focus, Morton argues for a complete reframing of the climate debate toward solutions that can actually repair the climate, and even improve it for diverse populations around the world.

Now, the term “geoengineering” brings with it a bag of Hollywood-induced imagery of nuclear winters and globe-spanning hurricanes. Morton addresses those risks across his chapters, noting that geoengineering can indeed go wrong.

Even so, he convincingly argues that there are geoengineering techniques designed around key climate processes that can be high leverage, reversible, testable, and that have the scale required to actually solve climate challenges in a sustainable way. These processes aren’t speculation — we (mostly) understand the science today, and have pathways toward the technology required to execute a strategy.

The real challenge — as it always is — are humans and their governments. Morton notes that climate change has a huge deleterious impact on nations such as Maldives, but that it can also benefit certain regions by transitioning them from colder to more temperate climates.

That means that any geoengineering solution is going to face the prospect of creating winners and losers. Any international agreement is going to have to contend with those politics, and design mechanisms to ameliorate their effects.

Much as Morton calls for a planet remade, he sees an opportunity for geoengineering to trigger reflection among governments on their own interests:

Much better, rather than treating geoengineering as a technocratic way of avoiding politics, to use it as a way of reinventing politics. Exploring the potential of geoengineering could spur and shape the development of a new way of making planetary decisions. The aim should not be the development of a thermostat alone; it should be the development of a new hand to use it.

Environmentalists may balk at the idea of allowing humans to have their hands on any part of the earth system. But we are here, all seven billion of us, and we already have our brutal hands on the system. The question is whether we can start to use our hands in a far more productive way that can make the earth sustainable for centuries to come. As Morton notes, “The planet has been remade, is being remade, will be remade.” Geoengineering technologies offer solutions, if we can agree in how to use them.

Share your feedback on your startup’s attorney

My colleague Eric Eldon and I are reaching out to startup founders and execs about their experiences with their attorneys. Our goal is to identify the leading lights of the industry and help spark discussions around best practices. If you have an attorney you thought did a fantastic job for your startup, let us know using this short Google Forms survey and also spread the word. We will share the results and more in the coming weeks.

Stray Thoughts (aka, what I am reading)

Short summaries and analysis of important news stories

Why Gutenberg can still recognize the book

Craig Mod wrote a compelling piece in Wired on the future of the book, and why today’s books essentially look the same as when the printing press was first invented. Despite the prognosticators expecting books to have moving pictures, interactivity, and dynamic narratives, almost nothing in that direction has actually occurred as readers continue to enjoy the traditional format. Instead, where the real innovation has taken place is on the business side, where new models from crowdfunding to email subscriptions have transformed the economics of book publishing.

Automattic’s Newspack to drive revenue for smaller publishers

While content management systems have been around for decades, almost none of these systems are designed to create revenues for their users out of the box. WordPress doesn’t have any subscription features or advertising networks built-in, which means that sites that want to make money have to spend a lot of dollars just to get setup and started.

So the announcement this morning that Automattic, the owner of WordPress.com, is going to offer a new platform combining content management with revenue called Newspack is both interesting and definitely needed. It’s a proper extension of their existing platform, and a reminder for product managers that the sustainability of their customers is critical for long-term success.

Huawei sales executive arrested in Poland

We have been following Huawei’s travails in the West for some time. One major point of contention is whether the company spies on behalf of the Chinese government. Western governments have argued that it does, but as China has repeatedly noted, they have never provided any proof.

On Friday in Poland, a Huawei executive was arrested for alleged espionage, which could provide the first public evidence of collusion between Huawei and Beijing. The company subsequently fired the executive and claimed that his actions were unrelated to the company. Poland has since called on NATO countries to remove Huawei equipment from their telecommunications infrastructure. Huawei equipment is widely installed in Europe and European governments have so far evaded calls by the U.S. to boycott the company. As the largest telecom equipment manufacturer in the world, Huawei’s response could have vast repercussions for the deployment of 5G networks.

PG&E – oh boy

Silicon Valley’s (and much of California’s) gas and electric utility is going bankrupt following massive liability claims against the utility due to its equipment sparking wildfires over the past few years. California may lead the world in innovation, but it seems to always be on the precipice of disaster when it comes to infrastructure.

What’s next & obsessions

  • I am reading The Color of Law by Richard Rothstein
  • Arman and I are interested in societal resilience startups that are targeting areas like water security, housing, infrastructure, climate change, disaster response, etc. Reach out if you have ideas or companies here.

The nation-state of the internet

The internet is a community, but can it be a nation-state? It’s a question that I have been pondering on and off this year, what with the rise of digital nomads and the deeply libertarian ethos baked into parts of the blockchain community. It’s clearly on a lot of other people’s minds as well: when […]

The internet is a community, but can it be a nation-state? It’s a question that I have been pondering on and off this year, what with the rise of digital nomads and the deeply libertarian ethos baked into parts of the blockchain community. It’s clearly on a lot of other people’s minds as well: when we interviewed Matt Howard of Norwest on Equity a few weeks back, he noted (unprompted) that Uber is one of the few companies that could reach “nation-state” status when it IPOs.

Clearly, the internet is home to many, diverse communities of similar-minded people, but how do those communities transmute from disparate bands into a nation-state?

That question led me to Imagined Communities, a book from 1983 and one of the most lauded (and debated) social science works ever published. Certainly it is among the most heavily cited: Google Scholar pegs it at almost 93,000 citations.

Benedict Anderson, a political scientist and historian, ponders over a simple question: where does nationalism come from? How do we come to form a common bond with others under symbols like a flag, even though we have never — and will almost never — meet all of our comrades-in-arms? Why does every country consider itself “special,” yet for all intents and purposes they all look identical (heads of state, colors and flags, etc.) Also, why is the nation-state invented so late?

Anderson’s answer is his title: people come to form nations when they can imagine their community and the values and people it holds, and thus can demarcate the borders (physical and cognitive) of who is a member of that hypothetical club and who is not.

In order to imagine a community though, there needs to be media that actually links that community together. The printing press is the necessary invention, but Anderson tracks the rise of nation-states to the development of vernacular media — French language as opposed to the Latin of the Catholic Church. Lexicographers researched and published dictionaries and thesauruses, and the printing presses — under pressure from capitalism’s dictates — created rich shelves of books filled with the stories and myths of peoples who just a few decades ago didn’t “exist” in the mind’s eye.

The nation-state itself was developed first in South America in the decline and aftermath of the Spanish and Portuguese empires. Anderson argues for a sociological perspective on where these states originate from. Intense circulation among local elites — the bureaucrats, lawyers, and professionals of these states — and their lack of mobility back to their empires’ capitals created a community of people who realized they had more in common with each other than the people on the other side of the Atlantic.

As other communities globally start to understand their unique place in the world, they import these early models of nation-states through the rich print culture of books and newspapers. We aren’t looking at convergent evolution, but rather clones of one model for organizing the nation implemented across the world.

That’s effectively the heart of the thesis of this petite book, which numbers just over 200 pages of eminently readable if occasionally turgid writing. There are dozens of other epiphanies and thoughts roaming throughout those pages, and so the best way to get the full flavor is just to pick up a used copy and dive in.

For my purposes though, I was curious to see how well Anderson’s thesis could be applied to the nation-state of the internet. Certainly, the concept that the internet is its own sovereign entity has been with us almost since its invention (just take a look at John Perry Barlow’s original manifesto on the independence of cyberspace if you haven’t).

Isn’t the internet nothing but a series of imagined communities? Aren’t subreddits literally the seeds of nation-states? Every time Anderson mentioned the printing press or “print-capitalism,” I couldn’t help but replace the word “press” with WordPress and print-capitalism with advertising or surveillance capitalism. Aren’t we going through exactly the kind of media revolution that drove the first nation-states a few centuries ago?

Perhaps, but it’s an extraordinarily simplistic comparison, one that misses some of the key originators of these nation-states.

Photo by metamorworks via Getty Images

One of the key challenges is that nation-states weren’t a rupture in time, but rather were continuous with existing power structures. On this point, Anderson is quite absolute. In South America, nation-states were borne out of the colonial administrations, and elites — worried about losing their power — used the burgeoning form of the nation-state to protect their interests (Anderson calls this “official nationalism”). Anderson sees this pattern pretty much everywhere, and if not from colonial governments, then from the feudal arrangements of the late Middle Ages.

If you turn the gaze to the internet then, who are the elites? Perhaps Google or Facebook (or Uber), companies with “nation-state” status that are essentially empires on to themselves. Yet, the analogy to me feels stretched.

There is an even greater problem though. In Anderson’s world, language is the critical vehicle by which the nation-state connects its citizens together into one imagined community. It’s hard to imagine France without French, or England without English. The very symbols by which we imagine our community are symbols of that community, and it is that self-referencing that creates a critical feedback loop back to the community and reinforces its differentiation.

That would seem to knock out the lowly subreddit as a potential nation-state, but it does raise the question of one group: coders.

When I write in Python for instance, I connect with a group of people who share that language, who communicate in that language (not entirely mind you), and who share certain values in common by their choice of that language. In fact, software engineers can tie their choices of language so strongly to their identities that it is entirely possible that “Python developer” or “Go programmer” says more about that person than “American” or “Chinese.”

Where this gets interesting is when you carefully connect it to blockchain, which I take to mean a technology that can autonomously distribute “wealth.” Suddenly, you have an imagined community of software engineers, who speak in their own “language” able to create a bureaucracy that serves their interests, and with media that connects them all together (through the internet). The ingredients — at least as Anderson’s recipe would have them — are all there.

I am not going to push too hard in this direction, but one surprise I had with Anderson is how little he discussed the physical agglomeration of people. The imagining of (physical) borders is crucial for a community, and so the development of maps for each nation is a common pattern in their historical developments. But, the map, fundamentally, is a symbol, a reminder that “this place is our place” and not much more.

Indeed, nation-states bleed across physical borders all the time. Americans are used to the concept of worldwide taxation. France seats representatives from its overseas departments in the National Assembly, allowing French citizens across the former empire to vote and elect representatives to the country’s legislature. And anyone who has followed the Huawei CFO arrest in Canada this week should know that “jurisdiction” these days has few physical borders.

The barrier for the internet or its people to become nation-states is not physical then, but cognitive. One needs to not just imagine a community, but imagine it as the prime community. We will see an internet nation-state when we see people prioritizing fealty to one of these digital communities over the loyalty and patriotism to a meatspace country. There are already early acolytes in these communities who act exactly that way. The question is whether the rest of the adherents will join forces and create their own imagined (cyber)space.

How issues of microtransit, congestion and parking are closing in on cities

Earlier this week in a new experimental newsletter I’ve been helping Danny Crichton on, we briefly discussed transit pundit Jarrett Walker’s article in The Atlantic arguing against the view that ridesharing and microtransit will be the future of mass transit. Instead, his thesis is that a properly operated and well-resourced bus system is much more […]

Earlier this week in a new experimental newsletter I’ve been helping Danny Crichton on, we briefly discussed transit pundit Jarrett Walker’s article in The Atlantic arguing against the view that ridesharing and microtransit will be the future of mass transit. Instead, his thesis is that a properly operated and well-resourced bus system is much more efficient from a coverage, cost, space, and equality perspective.

Consider this an ongoing discussion about Urban Tech, its intersection with regulation, issues of public service, and other complexities that people have full PHDs on.  I’m just a bitter, born-and-bred New Yorker trying to figure out why I’ve been stuck in between subway stops for the last 15 minutes, so please reach out with your take on any of these thoughts: @Arman.Tabatabai@techcrunch.com.

From an output perspective, Walker argues that by operating along variable routes based on at-your-door pick ups, microtransit actually takes more time to pick up fewer people on average. Walker also gives buses the edge from a cost and input perspective, since labor makes up 70% of transit operating costs in a pre-autonomous world and buses allow you to service more customers for the price of one driver.

“The driver’s time is far more expensive than maintenance, fuel, and all the other costs involved.  In almost every public meeting I attend, citizens complain about seeing buses with empty seats, lecturing me about how smaller vehicles would be less wasteful. But that’s not the case. Because the cost is in the driver, a wise transit agency runs the largest bus it will ever need during the course of a shift. In an outer suburb, that empty big bus makes perfect sense if it will be mobbed by schoolchildren or commuters twice a day.”

But transit is not solely an issue of volume and unit economics, but one of managing public space. Walker explains that to ensure citizens don’t use more than their fair share of space, cities can either provide vehicles that are only marginally bigger than a human body, i.e. bikes and scooters, or have many people share large-scale vehicles, i.e. mass transit. Doing the latter through a mass fleet of on-demand microtransit solutions, Walker argues, increases congestion and makes it harder to manage scheduling and allocate infrastructure.

While the article offers an effective comparison of unit economics and acts as a useful primer on the various considerations for city transit agencies, some of the conclusions are a bit binary.  The discussion is a bit singular in its focus of microtransit as a replacement of public transit rather than an additive service and doesn’t give much credit to the trip planning and space management capabilities of many microtransit services, nor changes in consumer expectations towards transportation.

But despite some of the gaps in the piece, Walker highlights two ideas that spill over to some broad areas that have caught my interest lately: Tolls and Parking.

Tolls

Photo by Michael H via Getty Images

“To succeed, microtransit would have to help people get around cities better, not just make them feel good about hailing a ride on a phone. Full automation of vehicles, if indeed it ever arrives, might solve the labor problem—although it would put thousands of drivers out of work. But the congestion problem will remain.”

Like many, Walker argues that ridesharing aggravates city traffic rather than alleviates it.  Even though ridesharing’s long-term impact on traffic is widely contested, nearly everyone agrees that a solution to urban congestion is desperately needed.

What’s interesting is that regardless of the discourse that surrounds them, trends in US tolling mechanisms seem to suggest American cities may be moving closer to congestion pricing methods.

As an example, solutions to congestion are top of mind behind the New York state election that saw Democrats taking control of both state legislative houses. Though it seems like the argument resurfaces every few years, the elections have brought renewed debate over the possible implementation of congestion pricing in New York City.  In essence, congestion pricing is a system where drivers would pay higher prices for using high-traffic streets or entering high-traffic zones, allowing cities to better dictate the flow of drivers and reduce congestion.   

Outside of the obvious political tension created by effectively implementing a new tax, some lawmakers have pushed back on the effectiveness of a congestion pricing policy, with some arguing that it can aggravate income inequality or that a policy addressing construction and pedestrians, rather than vehicles, would have a bigger impact on traffic.

However, over the past year or so, an increasing number of states have been rolling out highway tolls that are priced dynamically, instead of using traditional fixed-price tolls. The exact drivers behind the toll prices vary, with some cities charging prices based on traffic conditions and others charging varying prices for the use of express and HOV lanes.

Several new technologies and companies have also made it easier for local governments to implement more sophisticated, adjustable toll pricing or congestion fees at a much lower cost. In the past, congestion pricing systems around the world have required physical detection systems that can be extremely costly to implement.

Now, companies like ClearRoad are helping governments use a wide range of connected vehicle technologies to establish and collect road usage pricing from any location without the need for physical infrastructure. Oregon is one geography working with ClearRoad to manage its new opt-in road usage program where the state is able to calculate drivers’ usage of certain roads and their gas consumption, and then reimburse them for gas taxes they’re paying.

So even though people are still screaming at each other in state capitols, it seems like we may be closer to seeing congestion pricing in major cities than we think. And while executing these programs can be difficult and painfully slow (often needing to satisfy city regulations and tax laws forty layers deep), if these smaller-scale programs we’re seeing in the US are actually effective, congestion pricing may be a solution to plug chunky budget gaps, better finance infrastructure projects and replace lost gas tax revenue in an electric vehicle future.

Parking

In his piece, Walker goes back to some basic principles of urban design, highlighting that at their core, functioning cities come down to how millions of people share a comparatively tiny amount of space.  

Walker explains that city dwellers that travel with cars and solo rideshare trips rather than with large-scale shared transit are effectively taking up more than their fair share of public space.  While the argument is made in the context of ridesharing and congestion, the same idea applies to the less-discussed impact mass-transit ridesharing can have on city parking.

At least in the near-term, certain cities have seen ridesharing actually increase vehicle usage rather than reduce it (a claim rideshare companies dispute), resulting in an even wider gap between the supply and demand for available parking spots.  And if people are using ridesharing but still choosing to own cars regardless, in an indirect fashion, they are similarly reducing the stock of available parking space by more than their fair share.

And while it makes sense that rideshare vehicles should receive a larger portion of the parking stock, given that it serves more passengers, the use of available parking by these vehicles can and has caused tension with local residents that have to store their cars further away.

There are companies like the mobility-focused data platform, Coord, that are working on tools geared towards helping cities and citizens more effectively allocate and plan parking strategies for the future multi-modal transportation network. And theoretically, ridesharing should reduce the number of vehicles in search of parking in the long-term. But at least for now, the impact on parking congestion is just another unintended consequence that weakens the argument for ridesharing as mass transit.

And lastly, some reading while in transit:

Daily Digest: Technology and tyranny, lying to ourselves, and Spotify’s $1b repurchase

Want to join a conference call to discuss more about these thoughts? Email Arman at Arman.Tabatabai@techcrunch.com to secure an invite. Hello! We are experimenting with new content forms at TechCrunch. This is a rough draft of something new – provide your feedback directly to the authors: Danny at danny@techcrunch.com or Arman at Arman.Tabatabai@techcrunch.com if you […]

Want to join a conference call to discuss more about these thoughts? Email Arman at Arman.Tabatabai@techcrunch.com to secure an invite.

Hello! We are experimenting with new content forms at TechCrunch. This is a rough draft of something new – provide your feedback directly to the authors: Danny at danny@techcrunch.com or Arman at Arman.Tabatabai@techcrunch.com if you like or hate something here.

Harari on technology and tyranny

Yuval Noah Harari, the noted author and historian famed for his work Sapiens, wrote a lengthy piece in The Atlantic entitled “Why Technology Favors Tyranny” that is quite interesting. I don’t want to address the whole piece (today), but I do want to discuss his views that humans are increasingly eliminating their agency in favor of algorithms who make decisions for them.

Harari writes in his last section:

Even if some societies remain ostensibly democratic, the increasing efficiency of algorithms will still shift more and more authority from individual humans to networked machines. We might willingly give up more and more authority over our lives because we will learn from experience to trust the algorithms more than our own feelings, eventually losing our ability to make many decisions for ourselves. Just think of the way that, within a mere two decades, billions of people have come to entrust Google’s search algorithm with one of the most important tasks of all: finding relevant and trustworthy information. As we rely more on Google for answers , our ability to locate information independently diminishes. Already today, “truth” is defined by the top results of a Google search. This process has likewise affected our physical abilities, such as navigating space. People ask Google not just to find information but also to guide them around. Self-driving cars and AI physicians would represent further erosion: While these innovations would put truckers and human doctors out of work, their larger import lies in the continuing transfer of authority and responsibility to machines.

I am not going to lie: I completely dislike this entire viewpoint and direction of thinking about technology. Giving others authority over us is the basis of civilized society, whether that third-party is human or machine. It’s how that authority is executed that determines whether it is pernicious or not.

Harari brings up a number of points here though that I think deserve a critical look. First, there is this belief in an information monolith, that Google is the only lens by which we can see the world. To me, that is a remarkably rose-colored view of printing and publishing up until the internet age, when gatekeepers had the power (and the politics) to block public access to all kinds of information. Banned Books Week is in some ways quaint today in the Amazon Kindle era, but the fight to have books in public libraries was (and sometimes today is) real. Without a copy, no one had access.

That disintegration of gatekeeping is one reason among many why extremism in our politics is intensifying: there is now a much more diverse media landscape, and that landscape doesn’t push people back toward the center anymore, but rather pushes them further to the fringes.

Second, we don’t give up agency when we allow algorithms to submit their judgments on us. Quite the opposite in fact: we are using our agency to give a third-party independent authority. That’s fundamentally our choice. What is the difference between an algorithm making a credit card application decision, and a (human) judge adjudicating a contract dispute? In both cases, we have tendered at least some of our agency to another party to independently make decisions over us because we have collectively decided to make that choice as part of our society.

Third, Google, including Search and Maps, has empowered me to explore the world in ways that I wouldn’t have dreamed before. When I visited Paris the first time in 2006, I didn’t have a smartphone, and calling home was a $1/minute. I saw parts of the city, and wandered, but I was mostly taken in by fear — fear of going to the wrong neighborhood (the massive riots in the banlieues had only happened a few months prior) and fear of completely getting lost and never making it back. Compare that to today, where access to the internet means that I can actually get off the main tourist stretches peddled by guidebooks and explore neighborhoods that I never would have dreamed of doing before. The smartphone doesn’t have to be distracting — it can be an amazing tool to explore the real world.

I bring these different perspectives up because I think the “black box society” as Frank Pasquale calls it by his eponymous book is under unfair attack. Yes, there are problems with algorithms that need addressing, but are they worse or better than human substitutes? When eating times can vastly affect the outcome of a prisoner’s parole decisions, don’t we want algorithms to do at least some of the work for us?

Lying to ourselves

Photo: Getty Images / Siegfried Kaiser / EyeEm

Talking about humans acting badly, I wrote a review over the weekend of Elephant in the Brain, a book about how we use self-deception to ascribe better motives to our actions than our true intentions. As I wrote about the book’s thesis:

Humans care deeply about being perceived as prosocial, but we are also locked into constant competition, over status attainment, careers, and spouses. We want to signal our community spirit, but we also want to selfishly benefit from our work. We solve for this dichotomy by creating rationalizations and excuses to do both simultaneously. We give to charity for the status as well as the altruism, much as we get a college degree to learn, but also to earn a degree which signals to employers that we will be hard workers.

It’s a depressing perspective, but one that’s ultimately correct. Why do people wear Stanford or Berkeley sweatshirts if not to signal things about their fitness and career prospects? (Even pride in school is a signal to others that you are part of a particular tribe). One of the biggest challenges of operating in Silicon Valley is simply understanding the specific language of signals that workers there send.

Ultimately, though, I was nonplussed with the book, because I felt that it didn’t end up leading to a broader sense of enlightenment, nor could I see how to change either my behavior or my perception’s of others’ behaviors as a result of the book. That earned a swift rebuke from one of the author’s last night on Twitter:

Okay, but here is the thing: of course we lie to ourselves. Of course we lie to each other. Of course PR people lie to make their clients look good, and try to come off as forthright as possible. The best salesperson is going to be the person that truly believes in the product they are selling, rather than the person who knows its weaknesses and scurries away when they are brought up. This book makes a claim — that I think is reasonable — that self-deception is the key ingredient – we can’t handle the cognitive load of lying all the time, so evolution has adapted us to handle lying with greater facility by not allowing us to realize that we are doing it.

No where is this more obvious than in my previous career as a venture capitalist. Very few founders truly believe in their products and companies. I’m quite serious. You can hear the hesitation in their voices about the story, and you can hear the stress in their throats when they hit a key slide that doesn’t exactly align with the hockey stick they are selling. That’s okay, ultimately, because these companies were young, but if the founder of the company doesn’t truly believe, why should I join the bandwagon?

Confidence is ambiguous — are you confident because the startup truly is good, or is it because you are carefully masking your lack of enthusiasm? That’s what due diligence is all about, but what I do know is that a founder without confidence isn’t going to make it very far. Lying is wrong, but confidence is required — and the line between the two is very, very blurry.

Spotify may repurchase up to $1b in stock

Photo by Spencer Platt/Getty Images

Before the market opened this morning, Spotify announced plans to buy back stock starting in the fourth quarter of 2018. The company has been authorized to repurchase up to $1 billion worth of shares, and up to 10 million shares total. The exact cadence of the buybacks will depend on various market conditions, and will likely occur gradually until the repurchase program’s expiration date in April of 2021.

The announcement comes on the back of Spotify’s quarterly earnings report last week, which led to weakness in the company’s stock price behind concerns over its outlook for subscriber, revenue and ARPU (Average Revenue Per User) growth, despite the company reporting stronger profitability than Wall Street’s expectations.

After its direct-offering IPO in April, Spotify saw its stock price shoot to over $192 a share in August. However, the stock has since lost close to $10 billion in market cap, driven in part by broader weakness in public tech stocks, as well as by fears about subscription pricing pressure and ARPU growth as more of Spotify’s users opt for discounted family or student subscription plans.

Per TechCrunch’s Sarah Perez:

…The company faces heavy competition these days – especially in the key U.S. market from Apple Music, as well as from underdog Amazon Music, which is leveraging Amazon’s base of Prime subscribers to grow. It also has a new challenge in light of the Sirius XM / Pandora deal.

The larger part of Spotify’s business is free users – 109 million monthly actives on the ad-supported tier. But its programmatic ad platform is currently only live in the U.S., U.K., Canada and Australia. That leaves Spotify room to grow ad revenues in the months ahead.

The strategic rationale for Spotify is clear despite early reports painting the announcement as a way to buoy a flailing stock price. With over $1 billion in cash sitting on its balance sheet and the depressed stock price, the company clearly views this as an affordable opportunity to return cash to shareholders at an attractive entry point when the stock is undervalued.

As for Spotify’s longer-term outlook from an investor standpoint, the company’s ARPU growth should not be viewed in isolation. In the past, Spotify has highlighted discounted or specialized subscriptions, like family and student subscriptions, as having a much stickier user base. And the company has seen its retention rates improving, with churn consistently falling since the company’s IPO.

The stock is up around 1.5% on the news on top of a small pre-market boost.

What’s next

  • We are still spending more time on Chinese biotech investments in the United States (Arman perviously wrote a deep dive on this a week or two ago).
  • We are exploring the changing culture of Form D filings (startups seem to be increasingly foregoing disclosures of Form Ds on the advice of their lawyers)
  • India tax reform and how startups have taken advantage of it

Reading docket

Why we lie to ourselves, every day

Human action requires motivation, but what exactly are those motivations? Donating money to a charity might be motivated by altruism, and yet, only 1% of donations are anonymous. Donors don’t just want to be altruistic, they also want credit for that altruism plus badges to signal to others about their altruistic ways. Worse, we aren’t […]

Human action requires motivation, but what exactly are those motivations? Donating money to a charity might be motivated by altruism, and yet, only 1% of donations are anonymous. Donors don’t just want to be altruistic, they also want credit for that altruism plus badges to signal to others about their altruistic ways.

Worse, we aren’t even aware of our true motivations — in fact, we often strategically deceive ourselves to make our behavior appear more pure than it really is. It’s a pattern that manifests itself across all kinds of arenas, including consumption, politics, education, medicine, religion and more.

In their book Elephant in the Brain, Kevin Simler, formerly a long-time engineer at Palantir, and Robin Hanson, an associate professor of economics at George Mason University, take the most dismal parts of the dismal science of economics and weave them together into a story of humans acting badly (but believing they are great!) As the authors write in their intro, “The line between cynicism and misanthropy — between thinking ill of human motives and thinking ill of humans — is often blurry.” No kidding.

Elephant in the Brain by Kevin Simler and Robin Hanson. Oxford University Press, 2018

The eponymous elephant in the brain is essentially our self-deception and hidden motivations regarding the actions we take in everyday life. Like the proverbial elephant in the room, this elephant in the brain is visible to those who search for it, but we often avoid looking at it lest we get discouraged at our selfish behavior.

Humans care deeply about being perceived as prosocial, but we are also locked into constant competition, over status attainment, careers, and spouses. We want to signal our community spirit, but we also want to selfishly benefit from our work. We solve for this dichotomy by creating rationalizations and excuses to do both simultaneously. We give to charity for the status as well as the altruism, much as we get a college degree to learn, but also to earn a degree which signals to employers that we will be hard workers.

The key is that we self-deceive: we don’t realize we are taking advantage of the duality of our actions. We truly believe we are being altruistic, just as much as we truly believe we are in college to learn and explore the arts and humanities. That self-deception is critical, since it lowers the cost of demonstrating our prosocial bona fides: we would be heavily cognitively taxed if we had to constantly pretend as if we cared about the environment when what we really care about is being perceived as an ethical consumer.

Elephant in the Brain is a bold yet synthetic thesis. Simler and Hanson build upon a number of research advances, such as Jonathan Haidt’s work on the righteous mind and Robert Trivers work on evolutionary psychology to undergird their thesis in the first few chapters, and then they apply that thesis to a series of other fields (ten, in fact) in relatively brief and facile chapters to describe how the elephant in the brain affects us in every sphere of human activity.

Refreshingly, far from being polemicists, the authors are quite curious and investigatory about this pattern of human behavior, and they realize they are pushing at least some of their readers into uncomfortable territory. They even begin the book by stating that “we expect the typical reader to accept roughly two-thirds of our claims about human motives and institutions.”

Yet, the book is essentially making one claim, just applied in a myriad of ways. It’s unclear to me who the reader would be who accepts only parts of the book’s premise. Either you have come around to the cynical view of humans (pre or post book), or you haven’t — there doesn’t seem to me to be a middle point between those two perspectives.

Worse, even after reading the book, I am left completely unaware of what exactly to do with the thesis now that I have read it. There is something of a lukewarm conclusion in which the authors push for us to have greater situational awareness, and a short albeit excellent section on designing better institutions to account for hidden motivations. The book’s observations ultimately don’t lead to any greater project, no path toward a more enlightened society. That’s fine, but disappointing.

Indeed, for a book that arguably strives to be optimistic, I fear its results will be nothing more than cynical fodder for Silicon Valley product designers. Don’t design products for what humans say they want, but design them to punch the buttons of their hidden motivations. Viewed in this light, Elephant in the Brain is perhaps a more academic version of the Facebook product manual.

The dismal science is dismal precisely because of this cynicism: because as a project, as a set of values, it leads pretty much nowhere. Everyone is secretly selfish and obsessed with status, and they don’t even know it. As the authors conclude in their final line, “We may be competitive social animals, self-interested and self-deceived, but we cooperated our way to the god-damned moon.” Yes we did, and it is precisely that surprise from such a dreary species that we should take solace in. There is indeed an elephant in our brain, but its influence can wax and wane — and ultimately humans hold their agency in their own hands.

In State Tectonics, an explosive ending for the future of democracy

An omnipotent data infrastructure and knowledge-sharing tech organization has spread across the planet. Global conspiracies to disseminate propaganda and rig elections are ever present. Algorithms determine what people see as objective truth, and terrorist organizations gird to bring down the monopoly on information. Malka Older faces a problem few speculative science fiction authors face in […]

An omnipotent data infrastructure and knowledge-sharing tech organization has spread across the planet. Global conspiracies to disseminate propaganda and rig elections are ever present. Algorithms determine what people see as objective truth, and terrorist organizations gird to bring down the monopoly on information.

Malka Older faces a problem few speculative science fiction authors face in their lifetimes: having their work become a blueprint for reality. The author, who began formulating her Centenal Cycle series just a few years ago, now finds that her plots have leapt off the page and have become the daily fodder for cable news programs and Congressional investigations. Her universe is set decades into the future, but history is accelerating, and decades into the future can now mean 2019.

So we arrive at the third and final volume of a trilogy that began as a single work called Infomocracy and has proliferated into Null States and now State Tectonics. Ending a trilogy is rarely easy, but State Tectonics does what Older has always done best with her works, smashing together ideas about the future of politics with a medley of thriller styles to deliver an ample helping of thought-provoking nuance.

Older’s world is built on two simple premises. First, through a project called microdemocracy, the world has been subdivided into 100,000 person governing units known as centenals, and every citizen in the world has the right of migration to choose the government they want. This creates strange artifacts — for instance, in dense areas like New York City, citizens can change governments from a corporate-backed libertarian paradise to a leftist environmental oasis in as quick as a subway stop.

Second, to ensure that citizens can make the best choices for themselves, a global organization called Information (a hybrid Google, United Nations, and BBC) tirelessly works to provide objective information to citizens about politics and the world, verifying claims about everything from election promises to the taste of items on a restaurant menu.

Together, they allow Older to explore a world of information manipulation and electoral strategy while meditating on the meaning of objective truth. Across the trilogy, we follow a crew of Information staffers as they uncover political plots and intrigue around a series of global elections. This structure allows Older to create paced thrillers without losing the intellectual spirit of speculative fiction.

While in her last work Null States, the focus was on inequality and lack of access to information, in State Tectonics, Older interrogates the meaning of Information’s monopoly on … information itself. In this microdemocratic world, it is a crime to provide unverified information to people, and yet, Information hardly has infinite knowledge about the world. A shadowy group starts to purvey local information about cities and people outside the normal Information channels, and that raises profound questions — who ultimately “owns” reality? How do we decide what objective truth even is?

In the background of this central question is a trial for an Information staffer accused of the crime of algorithmic bias, of adjusting reality to suit her own ends. Sound familiar?

As a work of speculative fiction — particularly about a subject as complex as the future of democracy — State Tectonics is superlative. Older is striking in her frenetic ability to weave together idea after idea into vignettes that caused this reader to constantly stop and wander in thought. In just this book, we have discussions on the future of politics, mental health, infrastructure finance, transportation, food, nationalism, and identity politics. The dynamic range here is exhilarating.

Unfortunately, that enormous range forces Older to sacrifice depth, not only in the sophistication of some of these topics, which are often only conceived in slight brushstrokes, but also in the characters themselves. After three reasonably hefty books, I still don’t feel as if I truly know the characters I’ve spent so much time with. They are like friends in a transient city such as New York City, people to hang out with on weekends, but not worth a followup once they move on.

More pejoratively, the book feels constantly weighed down by extraneous details that at times can feel more like Wikipedia than assiduous worldbuilding. In this regard, Older has actually matured as a writer from her earlier works, as the detailed digressions are fewer and far between, but they remain as distracting from her core plot, and take time away from the needed work of fleshing out her characters further.

State Tectonics, like its earlier siblings, is the best and worst of fusion cuisine: the brilliant items on the menu can inspire us to think radically beyond our traditional categories and beliefs, but the vast majority of the dishes end up being mishmashes that are ultimately ephemeral and forgotten. The novel is brilliant in discoursing on the future of democracy, and if that is a topic of keen interest, few books will satisfy that urge like this one will.

In Bad Blood, a pedestrian tale of heuristics and lies

In a world where thousands and thousands of startups are started in the Bay Area every year, becoming a name that everyone recognizes is no small feat. Theranos reached that summit, and it all came crashing down. The story of the fraudulent rise and precipitous fall of the company and its entrepreneur, Elizabeth Holmes, is […]

In a world where thousands and thousands of startups are started in the Bay Area every year, becoming a name that everyone recognizes is no small feat.

Theranos reached that summit, and it all came crashing down.

The story of the fraudulent rise and precipitous fall of the company and its entrepreneur, Elizabeth Holmes, is also the singular story of the journalist who chronicled the company. John Carreyrou’s tenacious and intrepid reporting at the Wall Street Journal would ultimately expose one of the largest frauds ever perpetrated in Silicon Valley.

Bad Blood is the culmination of that investigative reporting. The swift decline of Theranos and its protective legal apparatus has done this story a lot of good: many of the anonymous sources that underpinned Carreyrou’s WSJ coverage are now public and visible, allowing the author to weave together the various articles he published into a holistic and complete story.

And yet, what I found in the book was not all that thrilling or shocking, but rather astonishingly pedestrian.

Part of the challenge is Carreyrou’s laconic WSJ tone, with its “just the facts” attitude that is punctuated only occasionally by brief interludes on the motivations and psychology of its characters. That style is appreciated by this subscriber of the paper daily, but the book-length treatment suffers a bit from a lack of charisma.

The real challenge though is that the raw story — for all of its fraud — lacks the sort of verve that makes business thrillers like Barbarians at the Gate or Red Notice so engaging. The characters that Carreyrou has to work with just aren’t all that interesting. One could argue that perhaps the book is too early — with criminal charges filed and court trials coming, we may well learn much more about the conspiracy and its participants. But I don’t think so, mostly because the fraud seems so simple in its premise.

At the heart of this story is the use of heuristics by investors and customers to make their largest decisions. Theranos is a story of the snowball effect blown up to an avalanche: a retired and successful venture capitalist seeds the company, leading to other investors to see that name and invest, and onwards and upwards for more than a decade, eventually collecting a cast of characters around the table that includes James Mattis, the current Secretary of Defense, and Henry Kissinger.

Take Rupert Murdoch, the billionaire owner of News Corporation (and by extension the Wall Street Journal), who invested $125 million into Theranos near the end of the company’s story. He met Holmes at a dinner in Silicon Valley:

During the dinner, Holmes came over to Murdoch’s table, introduced herself, and chatted him up. The strong first impression she made on him was bolstered by [Yuri] Milner, who sang her praises when Murdoch later asked him what he thought of the young woman.

….

But unlike the big venture capital firms, he did no due diligence to speak of. The eighty-four-year-old mogul tended to just follow his gut, an approach that had served him well …

He made one call before investing $125 million.

To some readers, that might be a breathtaking sum, but it really is something of a pittance for Murdoch, whose reported net worth today is roughly $17 billion. In the denouement of the Theranos story, Carreyrou notes that, “The media mogul sold his stock back to Theranos for one dollar so he could claim a big tax write-off on his other earnings. With a fortune estimated at $12 billion, Murdoch could afford to lose more than $100 million on a bad investment.”

For Murdoch, a bad heuristic around the company cost him roughly 1% of his net wealth, and with the tax loss, may not have cost him much of anything at all.

That’s the challenge of the book: for all the fraud committed by Theranos and its founder, its financial losses were ultimately borne by the ultra-rich. This is not the 2008 Financial Crisis, where millions of people are thrown out of their homes due to the chicanery of Wall Street fat cats.

If there is a lesson in all of this, it is that the right heuristics would have helped these investors to an extraordinarily degree. Take for example the rapid turnover of Theranos’ workforce, which could have been checked on LinkedIn in minutes and would have signaled something deeply wrong with the company’s culture and leadership. It doesn’t take many questions to discover the fraud here if they are the right questions.

Beyond the investors and workers though, the harm is even hard to track to patients. There are perhaps no more serious consequences around Theranos’ fraud than for patients, who took tests on the company’s proprietary Edison machines and received inaccurate and at times faked results. Yet, Carreyrou strangely hasn’t compiled a compelling set of patients for whom Theranos caused morbidity. If any industry comes out positively in this book, it is the doctors of patients who reorder tests and ask additional questions when results didn’t make sense.

Ultimately, Bad Blood is a complete book about an important story. I’m reminded a bit of the 2012 documentary The Act of Killing, in which the filmmakers travel to Indonesia to have the killers of the 1965 communist genocide recreate the murders they perpetrated. The director’s cut is long and at times remarkably tedious, and yet, that is in many ways precisely the point. As a viewer, you become inured to the murder, bereft of emotion while waiting for the ending credits to roll.

Bad Blood is the same: its direct, to the point, and relatively sparing in any deep thrills. And that is its point. The book gives us a pinprick in our belief that Silicon Valley’s vaunted investors and founders are immune to stupidity. If you didn’t already know that before, you certainly now have a one-word household name of a startup to reference.