Meta
This year’s big tech/finance story about Facebook - Meta, whatever - was its first ever quarterly drop in users. It was covered exhaustively (even here!), and it hit the company’s share price hard, as investors and markets and vibe-scryers thought it a prelude to a downturn. In response, the company froze hiring, cut back on its ‘metaverse’ vaporware projects, and coalesced around pivoting more heavily to video and stuffing Instagram full of more algorithmic bullshit.
Mostly overlooked at the time was a mention by its finance chief of slow growth in India, a market Facebook needs to conquer to satisfy Wall Street’s insatiable need to see lines go up and to the right. Facebook’s research teams had been studying its Indian business, and released a damning report earlier this year:
Many women have shunned the male-dominated social network because they're worried about their safety and privacy, according to the Meta research, which hasn't been previously reported.
[…]
Other obstacles included nudity content, the perceived complexity of its app design, local language and literacy barriers and a lack of appeal among internet users seeking video content, according to the research, which was based on surveys of tens of thousands of people as well as internal user data.
We’ve talked ad nauseum about Facebook’s deeply inadequate risk and content management practices in countries outside the US, and it seems India is no exception:
Men accounted for 75% of Facebook's monthly active users in India last year. That compared with 62% of internet users more broadly in early 2020, the researchers found.
[…]
The researchers found that 79% of female Facebook users had "expressed concern about content/photo misuse", while 20-30% of overall users were estimated to have seen nudity on the platform within the last seven days in the largely conservative country.
India ranked highest globally on the latter metric; around 10% of users surveyed in the United States and Brazil said they had seen nudity in the past week, for example, and under 20% in Indonesia, according to a survey conducted in August 2021.
Facebook in India is heavily male dominated, and those men use it to abuse and offend women. Sounds fun! The company has focused on aggressive expansion - even building Internet infrastructure in Africa to juice user numbers - to the exclusion of all else, and its Blue (NewsFeed) product has become a miserable wasteland, evidenced by the steady decline in users.
Facebook may be full of abuse, racism, and porn for the average Indian citizen, but don’t worry, it’s also full hate speech and calls for ethnic cleansing from leaders and elected officials:
Reports of social media–fueled horrors within India—attacks on Muslims, lower-caste peoples, women, the poor, and refugees—have been troublingly commonplace for a half-decade now. Yet what the Facebook Papers confirm is not just that the network failed to curb Hindu nationalist hate speech and inadequately directed resources to monitor a nation with 340 million users; it also actively granted impunity to the worst offenders.
India is being run by an authoritarian Hindu nationalist government that is happy to use Facebook as a megaphone for its vitriol. Facebook is incentivized to keep India’s worst actors on the platform, because it desperately needs user growth and the country that will soon become the world’s most populous is their best bet, regardless of the consequences for said users, or Indian society.
Podcast Payola
The term payola refers to undisclosed pay-for-play schemes - we’ve talked about it as it relates to songs on the radio. Nowadays, podcasts are a big, lucrative part of the listening market, and wouldn’t you know it:
Welcome to the golden era of pay-for-play podcasting, when guests pay handsomely to be interviewed for an entire episode.
As the author admits, it’s difficult to get a handle on just how many guests and podcasts are exchanging money, because neither party is under any disclosure requirements. The word ‘podcast’ doesn’t appear anywhere in the FTC’s guidelines for social media influencers. And, as the Spotify debate lays bare, podcasts may exist in a gray area between terrestrial radio, social media, and blogging. Podcast hosts may be required to disclose when a brand is paying them to review a product, but what about a guest who’s paying an appearance fee?
“But this is our general guidance: Regardless of the medium in which an advertising or promotional message is disseminated, deception occurs when consumers acting reasonably under the circumstances are misled about its nature or source, and such misleading impression is likely to affect their decisions or conduct regarding the advertised product or the advertising,” says the FTC spokesperson.
Is an interview advertising or promotion? Many of the popular podcast categories - wellness, crypto, and entrepreneurial drivel - are pretty serious revenue drivers:
One of [John Lee] Dumas’s guests, Nick Unsworth, a business coach and CEO of Life on Fire, says he paid Dumas’s show $35,000 for two appearances and 12 weeks of ads. In the end, he made $150,000 in revenue by converting free podcast listeners into customers who paid for access to his business courses.
And the hosts are raking it in as well:
For The Skinny Confidential Him and Her Podcast, a popular lifestyle show [Michael Bosstick] co-hosts with his wife, Lauryn Evarts Bosstick, the company charges $20,000 to $40,000 per interview, or whatever it costs to buy out their ad inventory.
The skinny confidential, it seems, is the hosts making forty grand for an hourlong softball interview. Though a careful listener might find a few clues:
“I know, after this episode, I will never in my life forget my minerals every morning,” Lauryn Evarts Bosstick gushed before interviewing [Robert] Slovak in July. “You guys are going to be blown away about the importance of minerals. I have my dad on them now. I told my sisters about them—my brother. I have got everyone in my family on minerals.”
Minerals! Cool. Every podcast host interviewed for the article insisted paid guest appearances are rare, but with so little transparency and inconsistent regulatory oversight, why not take the sweet payola if you can get away with it?
Adam Neumann
Thought you’d heard the end of Adam Neumann? Well, guess what, he’s back:
Andreessen Horowitz has signed a $350 million check to Flow, Neumann's new startup that is eyeing the housing market in order to "address" the housing crisis in the U.S., the firm wrote in a blog on Monday. The New York Times reported that this was "the largest individual check Andreessen Horowitz has ever written in a round of funding to a company.”
Awesome. So what is Flow, exactly?
Details are light on what Flow actually is, or how it would address the housing crisis. Its website is essentially a blank splash page, but Andreessen writes that it will aim to let "renters receive the benefits of owners," and rethink "the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders."
Excellent. A vague hand-wavey idea to let renters receive benefits, and rethink the value chain. And the country’s most prominent VC firm has made their largest ever investment into whatever it is. Neumann has been using his WeWork billions to acquire stakes in apartment buildings:
In January, the [WSJ] reported that Neumann had bought majority stakes in more than 4,000 apartments worth over $1 billion in Miami, Atlanta, Nashville, Fort Lauderdale, and other cities across the South.
Considering the smoking crater WeWork left behind in the commercial real estate business, the idea of him owning billions’ worth of residential real estate feels ominous, to put it mildly.
So what is Andreessen’s angle here? It could be the large buckets of cash it wants to invest, and Neumann’s unique ability to, uh, deploy said cash:
The firm is investing out of more than $12 billion — across venture, growth, crypto, bio, gaming, and its seed fund. All that money has got to go somewhere and what is more cash consumptive than a real estate business with Adam Neumann at the helm?
Also, it may be due in part to a personal grudge between its founder and one of Neumann’s former investors, who trashes him in the WeWork tell-all:
Even though Benchmark made money off WeWork, it’s obvious to anyone who has watched WeCrashed that the venture firm has a dim view of Neumann these days.
So if you’ve made an enemy out of Benchmark, where better to go raising money than Andreessen Horowitz. After all, Andreessen once said about Benchmark’s Bill Gurley, “I can’t stand him,” and described Gurley as the Newman to his Jerry Seinfeld.
It’s extremely cool that a billionaire best known for vaporizing more investor cash than anyone in history and upending office rental costs is now setting his sights on ‘adding value’ to the residential rental market. Dozens or hundreds of apartment buildings going belly up due to Neumann’s unhinged personality and proven inability to run a company or manage financials could impact a lot of people, drive up costs for renters, and likely still somehow enrich investors like Marc Andreessen, who is busy making sure no affordable housing enters his wealthy neighborhood.
Bolt Mobility
We’ve talked about destroying piles of unwanted bikeshares with bulldozers, but what if a bikeshare company - called ‘micromobility’ these days - simply pulls out of a city without putting its bikes in a landfill? Well:
Bolt has stopped operating in at least eight U.S. cities, including Portland, Oregon, Burlington, South Burlington and Winooski in Vermont, Richmond, California and Richmond, Virginia, and St. Augustine, Florida according to city officials. Some city representatives also said they were unable to reach anyone at Bolt, including its CEO Ignacio Tzoumas.
[…]
“We learned a couple of weeks ago (from them) that Bolt is ceasing operations,” [Bryan] Davis told TechCrunch via email, noting that Bolt ceased operations July 1, but actually informed the county a week later. “They’ve vanished, leaving equipment behind and emails and calls unanswered. We’re unable to reach anyone, but it seems they’ve closed shop in other markets as well.”
Not great! Now cities are left scrambling to figure out what to do with the bikes, most of which are inoperable. The company that built the bikes for Bolt is trying to help as well, working with cities and partners to help unlock the bikes to get them removed or running again.
Even though Bolt had contracts with cities around the country and paid the requisite fees, the sudden closure is a grim reminder that while a startup’s founders and investors can walk away when the money runs out, someone is always responsible for cleaning up the mess.
Short Cons
CNN - “The fifth-largest commercial bank in the US was fined by the Consumer Financial Protection Bureau for illegally accessing consumer credit reports and opening accounts without their permission.”
NBC News - “All of the Carlyle executives exchanged their company holdings into tax-free shares, valued at a combined $4.57 billion, according to figures from the lawsuit and the stock's price at the time.”
Rest of World - “Meanwhile, social media platforms are flooded with complaints claiming unethical behavior by Indian edtech companies. At least six users who spoke to Rest of World narrated experiences of company executives ghosting them if they requested refunds within the trial window.”
NY Times - “For nearly a decade, families visited a small coffee shop in suburban Long Island for pastries and gelato. Many were unaware of the longstanding operation playing out just feet away from them: Mafia members were running a secret underground gambling den in the store.”
Tips, thoughts, or newsletter payola to scammerdarkly@gmail.com