Category: Making Money Online

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Data Custody Decentralisation and Neutrality Making Money Online Personal Finance The Next Computer Wellness when Always-On

My portfolio of US stocks for the post-pandemic world

The New York Times:

The coronavirus pandemic has accelerated trends that were building for years by forcing large swaths of the population to work from home and shop online. And many obscure companies are taking off, driven by investors who expect them to flourish in an economy whose future arrived ahead of schedule.

“When it comes to remote work in particular, the past 10 weeks have seen more changes than we’ve seen in the previous 20 years”

Erik Brynjolfsson

Erik Brynjofsson co-wrote the seminal The Second Machine Age in 2014 – he is a keen observer of this trend.

Surveys conducted by Mr. Brynjolfsson and economists at the Massachusetts Institute of Technology found that the share of Americans working from home jumped to about 50 percent this year, from around 15 percent before the pandemic.

The article describes companies whose stocks have risen much faster than the overall tech-dominated NASDAQ index:

Fastly is up more than 310 percent this year. Zscaler is up over 180 percent. Chegg and Veeva are up 75 percent and 90 percent. In a tech universe dominated by Apple, Amazon, Microsoft and Google, the share prices of little companies you’ve probably never heard of are soaring… Zoom — the suddenly ubiquitous video conferencing service — has been an investor darling, up close to 500 percent this year as workplaces shut down. Peloton, the home video cycling company, is up almost 200 percent amid widespread gym closures… [Docusign’s] shares are up 166 percent this year.

My own US stock portfolio are based on a similar thesis, and have seen similar performances this year. My qualifying criteria for companies are the following (as with things like this they are perennially a work in progress):

  1. B2B companies enabling
    ~ Remote working
    ~ At-home lifestyle
    ~ Small business commerce
    ~ Internet infrastructure
  2. Dominant in one of above categories
  3. Low political risk domestic (US) and international
  4. Resilient during the March-April 2020 crash
  5. A business I understand

Some companies in my portfolio:

A. Companies other than ones mentioned in the article:
~ Atlassian
~ Cloudflare
~ Twilio
~ Nvidia
~ Wix

B. Companies also mentioned in the NYT article:
~ Shopify
~ Docusign
~ Peloton
~ Fastly

C. Companies that are Big Tech but fall within my thesis
~ Amazon (because of AWS)
~ Microsoft (Office, Teams, Github, Azure)
~ Apple (iPad, Macbooks)

Featured image photo credit: Rohit Tandon/Unsplash.

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Data Custody Making Money Online Privacy and Anonymity

The Social Dilemma and Software as Tools

I am watching the recent Netflix documentary The Social Dilemma. Obviously, it discussed many of the issues I write about regularly on this site. So I have a few opinions about it that I will think about and post here later. For now, this bit from Tristan Harris stood out:

… we’ve moved away from having a tools-based technology environment to an addiction and manipulation-based environment. That’s what’s changed. Social media isn’t a tool that’s just waiting to be used. It has its own goals. And it has its own means of pursuing them by using your psychology against you.

He’s articulated what have felt for a long time. Software used to be tools. Some were free and open-source, others were paid. Either way, business was separate from product, in the same way that business and editorial are separate in a well-run news organisation. Now some of the companies that we depend on every day no longer make money by customer paying for their software, they make money from other software paying for their customers.

You can see this with open source software. When you use the email client Thunderbird with an email account from your domain name provider, you’re using it as a tool. The relationship is simple and straightforward. You owe Thunderbird nothing; Thunderbird takes nothing from you. When you use Gmail.com with your Gmail email address, it’s a lot less simple. If you were old enough to use IRC, it was simply a tool you used to chat with friends and strangers online. Whatsapp on the other hand is hardly a tool. The relationship is much more unequal, in Whatsapp’s and Facebook’s favour.

While it may be already too late to live your existing life and maintain your existing relationships without using software from companies like Google and Facebook, you can learn from documentaries like this and make much more deliberate choices about these same tools – specifically, are you getting what you want from them, or are you doing what they want you to do?

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Making Money Online

When your work network is no stronger than your other networks

In a free flowing look at how the move to remote work will impact cities, the office, the way people approach a job itself, even politics, I found this interesting:

Working from home, our connection to the office weakens, and our connection to the world outside the office expands. At the kitchen counter, hunched over your computer, you are as close to the people and communities on LinkedIn, Twitter, and Instagram as you are to the Slack messages and chats of your bosses and colleagues. By degrees, the remote experiment can weaken the bonds between workers within companies and strengthen the connections between some workers and professional networks outside the company.

With the effect of

I am alone, and I might as well monetize the fact of my independence. A new era of entrepreneurship may be born in America, supercharged by a dash of social-existential angst.

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Data Custody Decentralisation and Neutrality Making Money Online Privacy and Anonymity The Dark Forest of the Internet The Next Computer

Mozilla’s Grand Internet Opportunity – Part 2

(Part 1)

But it means so much more to be a viable alternative to the internet giants of today, particularly with regard to being a good steward of public information and interpersonal communication.

Imagine a neutral paid subscription service for the following:

  • Contacts, calendar, reminders/todos
  • Documents
  • Notes
  • Photos

Now imagine that neutral service expanding to include

  • A secure email service and client a la Protonmail
  • A private 1:1 and group messaging service a la Telegram
  • A private video-calling service – there is no good privacy oriented provider today. Telegram has claimed it will add video support later in 2020
  • Collaborative documents, such as that available with NextCloud Hub if you self-host

Let’s talk about self-hosting. Mozilla could improve upon the Nextcloud concept to bundle domain, hosting and productivity/communications right out of the box. We saw a few months ago how web hosting companies could be the new internet giants if only they could be more imaginative of their own role in the internet. Mozilla could be that web host.

The arc of awareness is bending inexorably towards a substitute to the centralised web that came to characterise the 2010s.

Tight bundling of PIM, media and messaging on mobile leaves little room for a third party. Microsoft has tried to be it, but has little to offer by way of differentiation. Mozilla on the other hand has a clear positioning – and two decades of delivering on its promises. It doesn’t need to win the majority of phone users today – it can count on a minority that cares growing into a plurality.

(Part 3 – Mozilla seems rather far from that vision today)

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Data Custody Decentralisation and Neutrality Making Money Online Privacy and Anonymity The Dark Forest of the Internet The Next Computer

Mozilla’s Grand Internet Opportunity – Part 1

Mozilla recently announced that it’d be laying off a quarter of its workforce. This also includes a “new focus on technology” and “a new focus on economics”.

The Verge’s article has the Mozilla Corp CEO say “… Mozilla will initially focus on products such as Pocket, its VPN service, its VR chatroom Hubs, and new “security and privacy” tools.”, although I cannot find that in the blog post she authored.

In the original blog post, the CEO stated that Mozilla’s long-term goal was “to build new experiences that people love and want, that have better values and better characteristics inside those products.”, which is neither here nor there.

I think Mozilla has a huge opportunity here, but its vision, at least as articulated publicly, is not broad enough.

The opportunity I see is the following: there is a growing section of people who have become aware, through increased press coverage, of the dominance of a few american internet companies and their own dependence on these companies [1]. They aren’t going to be Stallman-like in their use of technology any time soon – the trade off is far too unfavourable – but they are looking for reasonable alternatives and are willing to pay for them. Baker the CEO has said exactly this, that Mozilla plans to “build and invest in products and services that will give people alternatives to conventional Big Tech.”

Well to begin with, Mozilla should create a set of paid privacy-oriented products that anyone can setup on their phone to attain a basic level of privacy protection: the Firefox browser (exists), a VPN (available in a small set of countries), an DNS-sinkhole adblocker, a password manager and a second-factor authenticator app. They’ll need great documentation and guides about how to set this up – in this regard the Mozilla community is a great asset.

[1] See the reporter Kashmir Hill’s 2019 attempt to go a month and a half without services from Amazon, Apple, Facebook, Google and Microsoft.

(Part 2 – It gets even bigger)

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Decentralisation and Neutrality Making Money Online Privacy and Anonymity Real-World Crypto

The internet’s payments layer

This provocatively titled essay makes an important point about the economics of the online media today and its direct, immediate impact on society:

… the New York Times, the New Yorker, the Washington Post, the New Republic, New York, Harper’s, the New York Review of Books, the Financial Times, and the London Times all have paywalls. Breitbart, Fox News, the Daily Wire, the Federalist, the Washington Examiner, InfoWars: free!

A white supremacist on YouTube will tell you all about race and IQ but if you want to read a careful scholarly refutation, obtaining a legal PDF from the journal publisher would cost you $14.95, a price nobody in their right mind would pay for one article if they can’t get institutional access…

On the other hand, pseudo-scholarhip is easy to find. Right-wing think tanks like the Cato Institute, the Foundation for Economic Education, the Hoover Institution, the Mackinac Center, the American Enterprise Institute, and the Heritage Foundation pump out slickly-produced policy documents on every subject under the sun.

– The Truth Is Paywalled But The Lies Are Free

In our series on 21st Century Media, we imagined an operation that was reader-funded: “I am confident that people across income and interest segments will pay for something truly useful”. While 21st Century Media would be paywalled, we also sketched the outline of a micropayments system through which readers would frictionlessly pay for every article they read.

However, when it comes to the issue that this essay writer raises, which is widespread access to truth, the micropayments based system gets in the way – unless it’s widely used. Signing up to the micropayments system cannot be too much friction for the visitor who just wants access to that one article important to them at that moment.

This is a challenge, but also an opportunity – a massive one – to create a frictionless, universal, cheap, privacy-first micropayments system.

It’s tough to check all these off at once:

If it needs to be universal, Apple and Google, who have a browser and mobile OS duopoly, are in the best position to create such a system, and would get the most publishers to sign up. But there’d be serious concerns about privacy, particularly with Google.

A privacy-first browser such as Brave has a better shot at addressing privacy concerns, and has attempted to create one such cryptocurrency-based system built in, but the browser itself simply hasn’t gotten enough traction (and there are concerns about privacy among those that do use it.)

For the system to be cheap, it couldn’t use credit cards on file, which Apple and Google have hundreds of millions of, because the transaction costs are too high. Cryptocurrency-based wallets such as the one Brave implements could work, but adoption is an even bigger problem, although one worth solving.

India’s UPI system is widely used within the country, is natively digital, has near-zero transaction costs, but its use reintroduces privacy as a concern.

It’s a problem in the vein of “fast, good and cheap: pick any two”. But the payoff, a payments layer for the internet, is incomprehensibly large.

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Audience as Capital Discovery and Curation Making Money Online

Twitter as professional network

The newsletter Not Boring had a very different view of Twitter in a recent issue:

Twitter thinks it’s Facebook, but it’s LinkedIn. 

Twitter thinks it’s an ad product, but it’s a subscription product. It thinks it’s an Aggregator, but it’s a Platform. It thinks it’s a social network, but it’s a professional network: one built for the Passion Economy, based on the strength of ideas instead of past experience.

That realization should be liberating for Twitter and Jack Dorsey. Instead of being the world’s least innovative social network, it can be its mostinnovative professional network. Twitter should be the beating heart of the Passion Economy, and begin capturing some of the tremendous value it creates. 

The newsletter goes on to make the point that with this shifty in positioning comes a shift in monetisation. Like Linkedin, which generates a large part of its revenue from what it calls ‘talent solutions’ as opposed to from ads , Twitter too could create paid products for people who use it like a professional network. As it says, 10% of its users generate 80% of its tweets, so there are clear power users who would be willing to pay for access to privileges and tool.

I think this has merit. This tweet from three years ago resulted in a lot of replies from people across many fields:

For many, Twitter is an invaluable aid to their careers. Their network of followers and the people they follow is their professional network. I have seen people among those I follow use Twitter to build a brand, communicate with prospects, promote clients, build a reputation, just like they would on Linkedin. When we use the terms VC Twitter, Investing Twitter, Crypto Twitter, Science Twitter we’re not just talking about interest-based communities, but the extraordinarily deep engagement between professionals in those fields and their followers. Both derive value from it in a way well beyond what you would expect in a typical social network. There are almost certainly hundreds of such “{Interest} Twitter”s.

End-note: In fact professionals are very likely more effective on Twitter than on Linkedin.

Linkedin’s Facebook-like 2-way connection model means that people are flooded with connection requests (that are solely meant for low-effort lead generation). The volume is now such that the norm is to accept by default, leading to people’s feed being inundated with posts from connections they have no affinity to and no desire to hear from. The signal-to-noise ration is much weaker on Linkedin than Twitter.

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Audience as Capital Discovery and Curation Making Money Online The Dark Forest of the Internet

Infinite reach, micro-brands and linear commerce – Part 2

(Part 1)

In his piece ‘Never-ending Niches‘, the writer Ben Thompson articulates in a new way some points we have discussed before in the context how the Internet has opened up exponential opportunities for people to build powerful micro-brands. In this post we look at one of these points.

So it was with the Internet and the trade-off between reach and time: suddenly every single media entity on earth, no matter how large or small, and no matter its medium of choice, could reach anyone instantly. To put it another way, reach went to infinity, and time went to zero…

… there were three strategies available to media companies looking to survive on the Internet. First, cater to Google. This meant a heavy emphasis on both speed and SEO, and an investment in anticipating and creating content to answer consumer questions. Or you could cater to Facebook, which meant a heavy emphasis on click-bait and human interest stories that had the potential of going viral. Both approaches, though, favored media entities with the best cost structures, not the best content, a particularly difficult road to travel given the massive amounts of content on the Internet created for free.

That left a single alternative: going around Google and Facebook and directly to users.

Old Media relies on paid social for reach and discovery. 21st Century Media relies on organic social. Old Media gamifies sharing on social and on dark forests. 21st Century Media is shared because it speaks directly to readers’ interests.

Put another way, Old Media optimises for reach and hopes that will create a relationship. 21st Century Media optimises for relationships because it knows that will create its own reach.

This reminds me strongly of the upside-down funnel that the cofounder of the email service Mailchimp described seven years ago:

What he describes is, in a nutshell, what drives independent publishers:

When you start a business, you don’t have a budget for marketing. You probably don’t have the time or talent for it, either. The only thing you’ve got is your passion. That damned, trouble-making passion that suckered you into starting your business in the first place. Take that passion and point it at your customers.

(Part 3 – a ‘Cambrian explosion’ of direct-to-consumer companies)

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Audience as Capital Discovery and Curation Making Money Online

Infinite reach, micro-brands and linear commerce – Part 1

The writer and media entrepreneur John Battelle describes a form of media arbitrage in the ad industry today:

A big publisher like Buzzfeed or Cheddar sells a million-dollar advertising deal to a marketing brand. The media company guarantees the marketer’s message will collect a certain number of audience impressions or views, charging the marketer a “cost per thousand” for those impressions. (Known as “CPM,” cost per thousand pricing ranges widely, from a few pennies to $25-40 for “premium” placements)…

Because (Facebook and Google are cheaper, have better targeting), publishers have become audience buyers on Facebook, Google, and other networks. Enterprising publishers began packaging their own content with marketing messages from their sponsors, then they got busy promoting that bundle to audiences on Twitter, Facebook, and Youtube, among others.

This is where “the arb” comes in: The publisher will charge the marketer, say, a $15 CPM, but acquire their audiences on Facebook for $7, clearing an $8 profit on every thousand impressions.

But marketers still prefer this approach to simply advertising on social themselves because they

… still believe that the context of a media brand can help their messaging perform better, and they’re not wrong in that belief. So they’ll pay a bit more to have their messaging associated with what they believe is quality editorial.

These practices – “packaging their own content with marketing messages from their sponsors” on social media – will lead to the erosion of the media company’s brand.

The one way sponsorship works is when the publisher has a direct relationship with a defined, loyal audience. Think of websites like Daring Fireball, podcasts like Joe Rogan’s or newsletters like the Morning Brew, each of them their own micro-brand. In this case when the sponsor’s message is packaged with the publisher’s content, the targeting is sharper, it happens on the publisher’s medium, the publisher controls the narrative, and the audience hears about it in a transparent context – this last is Battelle’s main point, the intermixing of content and marketing on social ruins context, which is why it’s disingenuous.

Sponsorship via direct-to-audience properties becomes the norm in the 21st century. This value that these independent publishers capture is the return they see on the capital they have built up in the form of their audience.

(Part 2 – what about the Internet makes micro-brands more attractive than large publishers)

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Audience as Capital Data Custody Discovery and Curation Making Money Online The Dark Forest of the Internet

For newsletters to become the new blogs, discovery is the missing piece

The last couple of posts described why online archival of sites and blogs is something I’m interested in. Specifically, the web is getting old, domains expire, blog hosting services change. That reminded me of this article from 2013 by the blogger Jason Kottke:

Instead of blogging, people are posting to Tumblr, tweeting, pinning things to their board, posting to Reddit, Snapchatting, updating Facebook statuses, Instagramming, and publishing on Medium. In 1997, wired teens created online diaries, and in 2004 the blog was king. Today, teens are about as likely to start a blog (over Instagramming or Snapchatting) as they are to buy a music CD. Blogs are for 40-somethings with kids.

Kottke himself is one of the Internet’s most well-known, longest-published bloggers, having written for twenty-two years running, with well over ten of those full-time. But his essay highlighted a trend that has continued unabated. There are more people writing online than ever before, but that has increasingly been on closed platforms like Medium.

The trend around newsletters is encouraging. We have talked before of how major journalists moving to their own newsletters could even spawn a wave of independent, reader-supported journalism. There are many hundreds of high-quality newsletters now, to the point where discovering them is going to be an issue. There is no good search/browse/recommend for newsletters yet.

Newsletters are email, a technology much older than the web itself. But they’re easier to keep track of someone’s writing than a blog. RSS and RSS Readers never really caught one because it was one more piece of software readers had to use, but everyone has an email inbox. For the writer, publishing an email is as simple as, probably simpler than publishing a blog post.

The downside is discovery – where do you find interesting things people are writing?

Discovery is going to particularly important if newsletters are to thrive as an easy means of causal writing and distribution for the average person – because while newsletters have been around from very early on in the form of people just mailing a group of friends and growing organically from there, the latest wave of newsletter services typefied by the venture-funded Substack for who monetization is an important goal. That changes what the service optimizes discovery and promotion for: newsletters about topics that are ‘current’, that have the highest chance of conversion to paid, and not the long tail. It starts looking like other Silicon Valley businesses:

Arguably, it’s another example of money and prestige coming for an internet-age creative format that was better when it was a hush-hush community activity—non-remunerative, an anti-discovery algorithm, full of in-speak, artistically strange (see: podcasts, blogs, fan fiction, memes).

Without discovery, newsletters aren’t going to replace social media as the place most people share what’s interesting to them. Nevertheless, they remain an extremely hopeful medium for independent, direct-to-reader journalism.