Start Up: after retail collapse, what?, a new iPhone killer text, the death of blogs, and more


The end of this kind of thing? The dotJS conference in 2017. Photo by dotJS conferences on Flickr.

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A selection of 11 links for you. This, too, must pass. I’m @charlesarthur on Twitter. Observations and links welcome.

TV, retail, advertising and cascading collapses • Benedict Evans

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As ecommerce keeps growing, at some point we will start to see certain retailers disappear – it’s common to say there are strong parallels with newspapers, in that they have a fixed cost base, falling revenue, and the wrong assets & skills. When internet reading or internet buying was 5%, it felt as though it might be additive to newspapers or retails – at 10 or 20%, as it is now, it becomes an existential problem. That is, at a certain point they stop being able to cut costs at the margin and start closing stores, or radically changing format etc. So, rhetorically (or apocalyptically) speaking, when Sears and Macy’s go bust, how many malls do they take with them, and how many other retailers that might have been doing fine on their own will go or lose a lot of their footprint because of that? And, where were those retailers advertising? What was their TV budget? How much of this is self-reinforcing – the more you buy online, the more you buy online? Conversely, did Aeropostale’s customer base go online to buy all the same kinds of clothes when the stores went bust, or buy different cloths, or buy different things? That is, do email failures caused (partly) by ecommerce cause further ecommerce adoption and further failures?

…There’s a famous Jeff Bezos quote that “your margin is my opportunity” – right now Amazon is building a billion dollar ad business in its own search results, but I suspect he also looks at the $500bn that’s spent every year on advertising and the further $500bn that’s spent on marketing and sees money that should be going to lower prices and same-day or 1-hour delivery. P&G spent 11% of revenue on advertising last year and plenty more on marketing. What will that look like in 10 years, where will it be spending it and how will people be buying?

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link to this extract


If this link is texted to you over iMessage, it’ll freeze your iPhone • Buzzfeed

Nicole Nguyen:

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When someone texts you a link to a website through Messages in iOS, the app generates a preview of the link. Apple’s software guidelines allow developers to insert a few characters into their website’s HTML to customize the image and title of that link preview in Messages.

Instead of a few characters, Masri inputted hundreds of thousands of characters into his webpage’s metadata, much more than the iOS operating system expected, which is why, Masri suspects, the Messages app crashes. He then hosted the bug’s code on GitHub, which made it available for other people to use.

The chaiOS GitHub page has been taken down and Masri’s account was suspended. But that doesn’t mean iOS users are safe.

“My GitHub is publicly accessible, so anyone can copy [the code]. I’m pretty sure someone else has posted it, but I’m not going to rehost it,” Masri said. Github initially suspended Masri’s account, then restored it a few hours later. The chaiOS repository appeared to have been removed from Masri’s account page.

The malicious code has likely been reuploaded elsewhere, and there may be other bad links exploiting the chaiOS vulnerability circulating around. Masri said he published the bug to alert Apple: “My intention is not to do bad things. My main purpose was to reach out to Apple and say, ‘Hey, you’ve been ignoring my bug reports.’ I always report the bug before releasing something.”

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Masri tweeted “here’s the link… do not use it for bad stuff.” Yeah, that’ll work. (I wonder if people are texting him the link.)

Apple says it’s working on a fix, probably for next week. Might be an annoying weekend for some. (But at least we have an idea of why these “crashing text” things happen.)
link to this extract


Six Chinese ships covertly aided North Korea. The US was watching • WSJ

Michael Gordon and Chun Han Wong:

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Satellite photographs and other intelligence gathered by U.S. officials provide what they say is detailed evidence of at least six Chinese-owned or -operated cargo ships violating United Nations sanctions against North Korea.

The U.S. compiled the information from Asian waters as part of the Trump administration’s strategy to pressure North Korea into giving up its nuclear weapons and long-range missiles.

The effort identified the ships by name and tracked their movements. The ships either entered ports in North Korea and transported what U.S. officials concluded was illicit cargo to Russia and Vietnam or made ship-to-ship transfers at sea.

According to the U.S., which presented the information to a U.N. sanctions committee, the ships also made extensive maneuvers designed to disguise their violations of the U.N. sanctions. In August, the Security Council banned North Korean exports of coal, iron ore, lead and seafood, which have generated an estimated $1bn a year in hard currency for North Korea.

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$1bn might not sound much, but it’s a significant proportion of North Korea’s GDP. Problem, though: how do you censure China effectively?
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Silicon Valley would be wise to follow China’s lead • FT

Michael Moritz, famed Silicon Valley venture capitalist:

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In California, the blogosphere has been full of chatter about the inequity of life. Some of this, especially for women, is true and for certain individuals their day of reckoning has been long overdue. But many of the soul-sapping discussions seem like unwarranted distractions. In recent months, there have been complaints about the political sensibilities of speakers invited to address a corporate audience; debates over the appropriate length of paternity leave or work-life balances; and grumbling about the need for a space for musical jam sessions. These seem like the concerns of a society that is becoming unhinged.

These topics are absent in China’s technology companies, where the pace of work is furious. Here, top managers show up for work at about 8am and frequently don’t leave until 10pm. Most of them will do this six days a week — and there are plenty of examples of people who do this for seven. Engineers have slightly different habits: they will appear about 10am and leave at midnight. Beyond the week-long breaks for Chinese new year and the October national holiday, most will just steal an additional handful of vacation days. Some technology companies also provide a rental subsidy to employees who choose to live close to corporate HQ.

In California, this sort of pace might be common for the first couple of years of a company, but then it will slow. In China, by contrast, it is quite usual for the management of 10 and 15-year-old companies to have working dinners followed by two or three meetings. If a Chinese company schedules tasks for the weekend, nobody complains about missing a Little League game or skipping a basketball outing with friends.

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Damn Silicon Valley slackers. How dare they consider other things than making someone else rich? Or try to treat all people as deserving attention? Sure, China doesn’t have free elections, freedom of speech and its air and soil have colossal pollution, but they’re making other people rich!
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EFF and Lookout uncover new malware espionage campaign infecting thousands around the world • Electronic Frontier Foundation

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The Electronic Frontier Foundation (EFF) and mobile security company Lookout have uncovered a new malware espionage campaign infecting thousands of people in more than 20 countries. Hundreds of gigabytes of data has been stolen, primarily through mobile devices compromised by fake secure messaging clients.

The trojanized apps, including Signal and WhatsApp, function like the legitimate apps and send and receive messages normally. However, the fake apps also allow the attackers to take photos, retrieve location information, capture audio, and more.

The threat, called Dark Caracal by EFF and Lookout researchers, may be a nation-state actor and appears to employ shared infrastructure which has been linked to other nation-state actors.

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Fear not, though: it works through phishing links which then direct people to third-party app stores. (None hit iOS, for this reason.) Stick to the legit stuff, you’re OK.

Still amazing that people do this, ten years after mobile app stores arrived.
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The end of the conference era • Marco.org

Marco Arment, picking up Chris Adamson’s observation that there’s a contraction in the number of iOS and related conferences:

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It’s getting increasingly difficult for organizers to sell tickets, in part because it’s hard to get big-name speakers without the budget to pay them much (which would significantly drive up ticket costs, which exacerbates other problems), but also because conferences now have much bigger competition in connecting people to their colleagues or audiences.

There’s no single factor that has made it so difficult, but the explosion of podcasts and YouTube over the last few years must have contributed significantly. Podcasts are a vastly more time-efficient way for people to communicate ideas than writing conference talks, and people who prefer crafting their message as a produced piece or with multimedia can do the same thing (and more) on YouTube. Both are much easier and more versatile for people to consume than conference talks, and they can reach and benefit far more people.

Ten years ago, you had to go to conferences to hear most prominent people in our industry speak in their own voice, or to get more content than an occasional blog post. Today, anyone who could headline a conference probably has a podcast or YouTube channel with hours of their thoughts and ideas available to anyone, anywhere in the world, anytime, for free.

But all of that media can’t really replace the socializing, networking, and simply fun that happened as part of (or sometimes despite) the conference formula.

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Wonder whether anyone tracks Windows and/or Android developer conferences, and how numbers of those have changed?
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‘Time well spent’ is shaping up to be tech’s next big debate • The Verge

Casey Newton:

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Today, one of [ex-Googler Tristan] Harris’ collaborators returned the volley. In a pair of closely argued essays on Medium, Joe Edelman — who says he coined the term “time well spent” with Harris five years ago — lays out a suggested path forward for Facebook.

”It’s possible (but very tricky) to design software so as to address the users’ sense of meaning,” Edelman wrote in the first essay. “But it requires profound changes to how software gets made! These changes make others your company has gone through (such as the adoption of machine learning, the transition from web to mobile) look easy.”

Less than a month into the new year, “time well spent” promises to become the “fake news” of 2018: a term overused into oblivion by partisans of every stripe. To Zuckerberg, “time well spent” means independent research showing that people value the time they spend on Facebook, and feel better about themselves afterward. To Harris, it represents a shift away from measuring comments and shares to emphasizing companies’ positive contributions to users’ lives. There’s overlap, but there are also some fundamental differences. In 2018, the battle will play out.

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link to this extract


Too much music: a failed experiment in dedicated listening • NPR

James JAckson Toth, aged 39, felt he’d lost his critical faculty through having too much music to choose from, and tried an experiment for 2017: listen only to one album per week. He gave up within three days:

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The notion that there is something to be gained by choosing this type of scarcity, by actively inviting a kind of regression, suddenly seems, to this Western mind, pretty stupid. It dawns on me that I’ve made this choice not for reasons of spiritual asceticism or worldly good, but nostalgia, the last refuge of the middle-aged sad-sack. I begin feeling like a Civil War reenactor, or the man at the Renaissance Faire who scolds you for wearing a watch; a pedant, an anachronism. The very embodiment of everything about a 40-year old that baffles a 20-year old.

Perhaps I’m being too hard on myself. When asked in a 2009 interview with the Wall Street Journal whether he thought the epic novel was still relevant to modern readers, author Cormac McCarthy surprised me by conceding the following: “The indulgent, 800-page books that were written a hundred years ago are just not going to be written anymore and people need to get used to that. If you think you’re going to write something like The Brothers Karamazov or Moby-Dick, go ahead. Nobody will read it. I don’t care how good it is, or how smart the readers are. Their intentions, their brains are different.”

He may be right. As long as we try to maintain the Sisyphean task of trying to experience everything, our brains, unable to adapt and forever lagging behind exponential technological progress, will continue to struggle. “Computing power is still doubling every 18 months,” notes cryptographer and technology writer Bruce Schneier, “while our species’ brain size has remained constant.”

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There are lots of insightful gems in this – don’t miss the bit about your favourite 10 albums.
link to this extract


Carillion’s failure: the many questions that need answers • Forbes

Frances Coppola on the abrupt collapse of a listed company which was the largest provider of services to the UK central and local government:

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Valuing Carillion’s assets – or even identifying them – is something of a black art. Carillion Group’s balance sheet is highly opaque. It has made extensive use of off-balance sheet “special purpose companies” (SPCs) to manage its many joint ventures and special projects. Many of these are thought to be highly indebted, but the debt does not appear on Carillion Group’s balance sheet. What does appear is a whopping intangible asset called “goodwill,” which according to the notes to the 2016 accounts is derived from the projected net cash flows of Carillion Group’s subsidiaries. At the end of 2016, this “goodwill” made up one third of Carillion Group’s total assets.

The problem is that goodwill valued on net cash flow is entirely ephemeral. If the cash flow dries up, goodwill evaporates. And that is what happened to Carillion. The June 2017 interim report shows that cash income was substantially lower than expected. This forced the company to reduce its cash flow projections and impair its goodwill asset.

But it continued to increase its borrowing. Short-term debt, in particular, rose enormously: the FT reports that by the time of its collapse, Carillion Group’s revolving credit was a whopping £790m, more than half of the total amount owed to banks.

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“Goodwill” is a dangerous financial drug that to a large extent exists only to make balance sheets, well, balance. As it’s an intangible asset, you quickly discover that it’s not something to rely on. Just for comparison, Apple’s goodwill at November 1 2017 was $5.7bn – that’s 1.5% of its total assets; Google’s was $16.7bn, or 8.8% of its total assets.

For more reading on goodwill-to-asset ratios, this 1997 paper talks about the then companies in the US with the largest GTA ratios. Top at the time? Worldcom. It later went spectacularly bust. At a guess, it was the rise in goodwill which tipped hedge fund companies off to Carillion’s increasingly dire position.
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The end of the Awl and the vanishing of freedom and fun from the internet • The New Yorker

Jia Tolentino used to work at The Awl, which was set up in 2009 (and where she worked, later) but which is now closing:

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now, in 2018, the economics of online publishing are running everyone off the map. I sometimes think, with some regretful wonder and gratitude, about an Awl chat-room conversation that took place in 2013. Some annoying mini-scandal had transpired on the Internet, and everyone else who worked for the little network—they all had years of experience on me—was typing out lively scenarios of what they would do if our online infrastructure magically burned down. Sitting in my little blue house in Ann Arbor, I kept quiet for a while, and then typed something like, “Aww guys, no, the Internet is great.” I meant it, though the sentiment now feels as distant as preschool. Reading the Awl and the Hairpin, and then working with the people that ran them, had actually convinced me that the Internet was silly, fun, generative, and honest. They all knew otherwise, but they staved off the inevitable for a good long while.

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“How did you go bankrupt?” “Two ways. Gradually, then suddenly.”
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Please don’t kill the blogs • Seth’s Blog

Seth Godin:

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I’m aware that you don’t charge the people who use GMail for the privilege. In fact, we’re the product, not the customer. Your goal is to keep people within the Google ecosystem and to get the writers and marketers who use email as a permission asset to instead shift to paying money (to Google) to inform and reach their audience.

So you invented the ‘promotions’ folder.

It seems like a great idea. That spam-like promo mail, all that stuff I don’t want to read now (and probably ever) will end up there. Discounts on shoes. The latest urgent note from someone I don’t even remember buying from. The last time I checked, you’ve moved more than 100,000 messages to my promotions folder. Without asking.

Alas, you’ve now become a choke point. You take the posts from this blog and dump them into my promo folder–and the promo folder of more than a hundred thousand people who never asked you to hide it.

Emails from my favorite charities end up in my promo folder. The Domino Project blog goes there as well. Emails from Medium, from courses I’ve signed up for, from services I confirmed just a day earlier. Items sent with full permission, emails that by most definitions aren’t “promotions.”

Here’s a simple way to visualize it: Imagine that your mailman takes all the magazines you subscribe to, mixes them in with the junk mail you never asked for, and dumps all of it in a second mailbox, one that you don’t see on your way into the house every day. And when you subscribe to new magazines, they instantly get mixed in as well.

It’s simple: blogs aren’t promotions. Blogs subscribed to shouldn’t be messed with. The flow of information by email is an extraordinary opportunity, and when a choke point messes with that to make a profit, things break.

The irony of having a middleman steal permission is not lost on me. That’s what you’re doing. You’re not serving your customers because you’re stealing the permission that they’ve given to providers they care about it. And when publishers switch to SMS or Facebook Messenger, that hardly helps your cause.

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I don’t use Google’s Inbox for pretty much this reason – I have stuck with the classic old version. But I use the web interface as rarely as possible; you can get IMAP (also free!) on your computer or phone, and then you can triage as you like.

But Google doesn’t really care about blogs; if it did it wouldn’t have killed Reader.
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Errata, corrigenda and ai no corrida: none notified

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