Category: Web/Tech

Small business aid through Fintech?

Consumers open up Facebook, Instagram, Snap, and WhatsApp dozens of times a day. Businesses, on the other hand, are checking Square, Stripe, QuickBooks, Netsuite, Brex, FreshBooks, Xero, Gusto, DoorDash, Mindbody, Toast and other tools that show them sales, orders, customers, and expenses. Almost every one of these platforms has been granted permission to access—read and write—bank accounts, and helps run the business.

The stimulus bill is going to direct funds through the Small Business Administration, but the SBA doesn’t really make loans. It simply guarantees loans made by banks. For many banks, the way you apply for an SBA 7a loan is to prepare tons of documents, go to your local branch, and then wait as long as 90 days. Wells Fargo has a fancy website, but for SBA loans it directs you to your local branch for a process that takes dozens of hours of form collections and physical signatures followed by months of waiting. Many private lenders approve loans in hours, so the SBA process has historically been an adverse selection lending trap.

It’s March of 2020, the world is under quarantine, all financial data exists in digital form, and billions of people use the internet—we can and should do better. Here’s how this can work, and Silicon Valley is standing by to build this, open source it, and get it out in days so that these small businesses can weather this storm.

Each and every financial services company can place a button on their website or in their app that sucks in relevant data from each business—much of it unforgeable, like credit card receipts as validated by the credit card processor—and spits out an instant machine readable package for aid. If Federal assistance needs to go through an SBA-approved bank (an odd construct, since most of these loans are meant to be forgiven) then this machine readable package can go out to whatever bank out of the 3000+ active SBA lenders can authorize it the quickest. To prevent fraud, that bank can be granted permission to the same set of financials—without loan officers, in person visits, scans and faxes. And if it comes back clean, route the money to the financial service that has already performed the Know Your Customer check on that merchant. A very complex problem is reduced to several hundred lines of code, aided by tools that nearly every small merchant in the United States uses.

That is by Alex Rampell, there is more at the link.  More generally, we need to be honest with ourselves about who is capable of generating rapid response and who is not.  Here is a Reason piece on the successes of the tech community.

Emergent Ventures winners, eighth cohort

Eibhlin Lim, Penang and University of Chicago.

“I interview founders from different industries and around the globe and share their origin stories to inspire the next generation of founders to reach for their own dreams. I previously shared these stories in Phoenix Newsletters, an online newsletter that organically grew to serve more than 7000 high school and university student subscribers primarily from Malaysia. In July 2018, I decided to self-publish and distribute a book, ‘The Phoenix Perspective’, which contains some of the most loved stories from Phoenix Newsletters, after learning that some of our biggest fans did not have constant access to the Internet and went through great lengths to read the stories. With the help of founders and organizations, I managed to bring this book to these youths and also 1000+ other youths from 20+ countries around the globe. I hope to be able to continue interviewing founders and share their origin stories, on a new website, to reach even more future founders from around the world.”

Carole Treston/Association of Nurses in AIDS Care

To jump-start a Covid-19 program to produce cheap informational videos and distribute them to their nurse network for better information and greater safety, including for patients.

Kyle Redelinghuys

“Right now, the main sources of data for Coronavirus are CSV files and websites which make the data fairly inaccessible to work with for developers. By giving easy access to this data more products can be built and more information can be shared. The API I built is an easily accessible, single source of Coronavirus data to enable developers to build new products based on COVID19 data. These products could be mobile applications, web applications and graphed data…The API exposes this data in JSON which is the easiest data format to work with for web and mobile developers. This in turn allows for quick integration in to any products. The API is also completely free to users.”

Seyone Chithrananda

17 year old from Ontario, wishes to work in San Francisco, he does computational biology with possible application to Covid-19 as well, Twitter here.  His Project De Novo uses molecular machine learning methods for novel small molecule discovery, and the grant will be used to scale up the cloud computing infrastructure and purchase chemical modelling software.

Joshua Broggi, Woolf University

To build an on-line university to bring learning programs to the entire world, including to businesses but by no means only.  His background is in philosophy and German thought, and now he is seeking to change the world.

Congratulations!

There is also another winner, but the nature of that person’s job means that reporting must be postponed.

Here are previous Emergent Ventures winners, here is an early post on the philosophy of Emergent Ventures.  You will note that the Covid-19-related work here is simply winning regular EV grants, these are not the prizes I outlined a short while ago.  I expect more prize winners to be announced fairly soon.

That was then, this is now, the new world of coronavirus romance

Jeremy Cohen, a freelance photographer, noticed a woman dancing on her rooftop. He wanted to ask her out, but New York City residents have been attempting to socially distance to slow the spread of COVID-19, as the city has become an epicenter of the virus in the US. So he got creative, and flew a drone to her roof with his number attached.

Spoiler: It worked….

The couple finally met face-to-face, with a special trick made to keep them both safe amid the virus. The two met up for a walk, while Cohen was inside a giant inflatable bubble. Cignarella wore plastic gloves and Cohen had a bouquet of flowers in his hand, and the two walked down the streets of Brooklyn, side by side.

Here is the full story, with photos, maybe all done for “affect” but still something like this will be a trend.  Via Michael Rosenwald.

My Conversation with Ross Douthat

We do another CWT, here is the audio and transcript (link corrected), a very good installment in the series.  Here is part of the summary:

Ross joined Tyler to discuss why he sees Kanye as a force for anti-decadence, the innovative antiquarianism of the late Sir Roger Scruton, the mediocrity of modern architecture, why it’s no coincidence that Michel Houellebecq comes from France, his predictions for the future trajectory of American decadence — and what could throw us off of it, the question of men’s role in modernity, why he feels Christianity must embrace a kind of futurist optimism, what he sees as the influence of the “Thielian ethos” on conservatism, the plausibility of ghosts and alien UFOs, and more.

A welcome relief from Covid-19 talk, though we did cover Lyme disease.  Here is one excerpt:

COWEN: Does the Vatican have too few employees? There’s a Slate article — it claimed in 2012, the Roman Curia has fewer than 3,000 employees. Walmart headquarters at the time had 12,000. If the Church is a quite significant global operation, can it be argued, in fact, that it’s not bureaucratic enough? They don’t actually have state capacity in the sense that state capacity libertarianism might approve of.

DOUTHAT: Right. State capacity libertarianism would disapprove of the Vatican model. And it reflects the reality that media coverage of the Catholic Church doesn’t always reflect, which is that in Catholic ecclesiology and the theory of the institution, bishops are really supposed to be pretty autonomous in governance. And the purpose of Rome is the promotion of missionary work and the protection of doctrine, and it’s not supposed to be micromanaging the governance of the world Church.

Now, I think what we’ve seen over the last 30 years — and it’s been thrown into sharp relief by the sex abuse crisis — is that the modern world may not allow that model to exist; that if you have this global institution that has a celebrity figure at the center of it, who is the focus of endless media attention, you can’t, in effect, get away with saying, “Well, the pope is the pope, but sex abuse is an American problem.”

And to that extent, there is a case that the Church needs more employees and a more efficient and centralized bureaucracy. But then that also coexists with the problem that the model of Catholicism is still a model that was modern in the 16th century. It’s still much more of a court model than a bureaucratic model, and pope after pope has theoretically tried to change this and has not succeeded.

Part of the reality is, as you well know, as a world traveler, the Italians are very good at running courts that exclude outsiders and prevent them from changing the way things are done. Time and again, some Anglo-Saxon or German blunderer gets put in charge of some Vatican dicastery and discovers that, in fact, the reforms he intends are just not quite possible. And you know, in certain ways, that’s a side of decadence that you can bemoan, but in certain ways, you have to respect, too.

Definitely recommended, a very fun CWT with lots of content.  And again, here is Ross’s (recommended) book The Decadent Society: How We Became a Victim of Our Own Success.

The three ideas you all are writing me the most about

1. Segregating old people, and letting others go about their regular business.  Given how many older people now work (and vote), and how many employees in nursing homes are young, I’ve yet to see a good version of this plan, but if you favor it please do try to write one up.  One of you suggested taking everyone over the age of 65 and encasing them in bubble wrap, or something.

2. Tracking and surveillance by smart phones.  Here is one story, here is another.  Here is an Oxford project.  Singapore is using related ideas, China has too.

3. Testing as many Americans as possible, or at least a representative sample, to get data.

I hope to analyze these more in the future.

Robert Browning and Ingmar Bergman in a Bloomberg column

With all those fools going to bars and concerts, or running marathons, it is evident we still need to solve the problem of entertainment, as I argue in my new Bloomberg column.

It is instructive to look back to the days of World War II. The U.S. government played a critical role in encouraging Hollywood to make cheery movies, and it helped by not trying to force every actor into the armed services. Major league baseball, the national pastime of the era, continued to hold a regular season and a World Series, again to distract people from wartime worries. Many top players, such as Ted Williams, were away fighting, but there were adequate replacements. The government knew that wartime drama could not be the only drama on tap.

With Covid-19, the goal is to keep people at home, at least if they are not essential workers. But if staying at home is too boring, cabin fever will take over and people will run out to social gatherings when they ought to be staying put. So solving the entertainment problem is one very real piece of the puzzle for minimizing the effects of the coronavirus and keeping Americans not just in good spirits but healthy.

The very worst scenario is that the coronavirus itself — how it is playing out, how officials and celebrities and neighbors are reacting — becomes our main entertainment. It could become an ongoing horror show that drives us crazy and makes people even more cynical about politics.

To avoid such a mix of frustration and terror, I have a modest proposal: We should restructure a few of our traditional entertainments to be safe from the coronavirus.

As suggested on Twitter, how about inducing a few of the cable providers to offer free streaming for a few months?  The Met has announced a big increase in opera streaming.  And:

Or how about proceeding with some version of the NBA Finals? Take a subset of the best qualifying teams, test every player for coronavirus, isolate them in a remote area with a college gymnasium, and have them proceed with a shortened version of the real thing in front of only a TV crew. With so many other public events closed down, television viewership would probably reach an all-time high, and the sense of drama would be incredible. It would be one NBA Finals we would never forget, and the quality of play would respond to the very high psychological stakes.

Ben Golliver serves up a concrete NBA proposal.  You’ll have to click through to get to the Browning and Bergman parts, the latter being Easter egg.  At least the Candidate’s Tournament still seems to be on in chess, you can all watch that for the next few weeks, starts Tuesday I believe, try www.chessbomb.com.

Lecturing alone won’t work: we really do need to make it more fun for people to stay at home!

China sentences of the day maybe it is what God intended

Tinder Has Become A News Service About Coronavirus, Which Is Not What God Intended…Setting my tinder to Wuhan so I can get the real scoop on what’s going on,” one user wrote…US-based Twitter user @drethelin tweeted “Setting my tinder to Wuhan so I can get the real scoop on what’s going on” on Jan. 28 — just before the World Health Organization declared COVID-19 was a public health emergency.

Here is the story, via Michael Rosenwald.

Age and high-growth entrepreneurship

Many observers, and many investors, believe that young people are especially likely to produce the most successful new firms. Integrating administrative data on firms, workers, and owners, we study start-ups systematically in the United States and find that successful entrepreneurs are middle-aged, not young. The mean age at founding for the 1-in-1,000 fastest growing new ventures is 45.0. The findings are similar when considering high-technology sectors, entrepreneurial hubs, and successful firm exits. Prior experience in the specific industry predicts much greater rates of entrepreneurial success. These findings strongly reject common hypotheses that emphasize youth as a key trait of successful entrepreneurs.

That is from a newly published AER paper by Pierre Azoulay, Benjamin F. Jones, J. Daniel Kim, and Javier Miranda.

How the coronavirus is changing the culture of science and publication

A torrent of data is being released daily by preprint servers that didn’t even exist a decade ago, then dissected on platforms such as Slack and Twitter, and in the media, before formal peer review begins. Journal staffers are working overtime to get manuscripts reviewed, edited, and published at record speeds. The venerable New England Journal of Medicine (NEJM) posted one COVID-19 paper within 48 hours of submission. Viral genomes posted on a platform named GISAID, more than 200 so far, are analyzed instantaneously by a phalanx of evolutionary biologists who share their phylogenetic trees in preprints and on social media.

“This is a very different experience from any outbreak that I’ve been a part of,” says epidemiologist Marc Lipsitch of the Harvard T.H. Chan School of Public Health. The intense communication has catalyzed an unusual level of collaboration among scientists that, combined with scientific advances, has enabled research to move faster than during any previous outbreak. “An unprecedented amount of knowledge has been generated in 6 weeks,” says Jeremy Farrar, head of the Wellcome Trust…

The COVID-19 outbreak has broken that mold. Early this week, more than 283 papers had already appeared on preprint repositories (see graphic, below), compared with 261 published in journals. Two of the largest biomedical preprint servers, bioRxiv and medRxiv, “are currently getting around 10 papers each day on some aspect of the novel coronavirus,” says John Inglis, head of Cold Spring Harbor Laboratory Press, which runs both servers. The deluge “has been a challenge for our small teams … [they] are working evenings and weekends.”

Here is the full story, via Michael Nielsen.

Does digital socialism have a future?

No, not a good future, according to Jesús Fernández-Villaverde:

Can artificial intelligence, in particular, machine learning algorithms, replace the idea of simple rules, such as first possession and voluntary exchange in free markets, as a foundation for public policy? This paper argues that the preponderance of the evidence sides with the interpretation that while artificial intelligence will help public policy along with several important aspects, simple rules will remain the fundamental guideline for the design of institutions and legal environments. “Digital socialism” might be a hipster thing to talk about in Williamsburg or Shoreditch, but is as much of a chimera as “analog socialism.”

The paper is an excellent response to a growing set of claims, I would add further material on the work of Michael Polanyi and the importance of inarticulable knowledge.

Our Cyborg Future

The only way to beat the AIs is to join with them. Our cyborg future is well illustrated in this video from Bertolt Meyer who has an artificial arm that he has hacked to control other devices.

I am in the process of building a device (the “SynLimb”) that attaches to my arm prosthesis instead of the prosthetic hand. The SynLimb converts the electrode signals that my prosthesis picks up from my residual limb into control voltages (CV) for controlling my modular synthesizer. The SynLimb thus allows me to plug my prosthesis directly into my snythesizer so that I can control its parameters with the signals from my body that normally control the hand. For me, this feels like controlling the synth with my thoughts. I show the prototype(s), explain how we put it together and how it works, and do a little demo.

In one way this is obvious. There is very little difference between sending electrical signals from the brain to the hand and then using the hand to control the synthesizer and sending electrical signals from the brain through the artificial hand directly to the synthesizer. As Meyer notes the whole process feels very natural. The fact that it is obvious and natural will make adoption very quick.

Hat tip: John Backus

Does GDPR even boost privacy?

Maybe not:

This paper studies the effects of the EU’s General Data Protection Regulation (GDPR) on the ability of firms to collect consumer data, identify consumers over time, accrue revenue via online advertising, and predict their behavior. Utilizing a novel dataset by an intermediary that spans much of the online travel industry, we perform a difference-in-differences analysis that exploits the geographic reach of GDPR. We find a 12.5% drop in the intermediary- observed consumers as a result of GDPR, suggesting that a nonnegligible number of consumers exercised the opt-out right enabled by GDPR. At the same time, the remaining consumers are more persistently trackable. This observed pattern is consistent with the hypothesis that privacy-conscious consumers substitute away from less efficient privacy protection (e.g, cookie deletion) to explicit opt out, a process that would reduce noise on remaining consumers and make them more trackable. Further in keeping with this hypothesis, we observe that the average value of the remaining consumers to advertisers has increased, offsetting most of the losses from consumers that opt-out. Our results highlight the externalities that consumer privacy decisions have both on other consumers and for firms.

That is from a new paper by Guy Aridor, Yeon-Koo Che, William Nelson, and Tobias Salz, emphasis added by me.  Via the excellent Kevin Lewis.

Why is VC Twitter so peculiar?

Here is an email from an anonymous MR reader, on exactly that question:

– VCs are in the business of speculating about the future and identifying underestimated trends. They are subjective to evolutionary pressure that selects for heterodoxy.

– As capital supply increases, the importance of differentiation on other axes increases. VCs have a growing incentive to personally market their product.

– VCs lack conventional bosses who could sanction them if they say something ill-advised on Twitter.

– VCs face some of the most asymmetric return distributions of any profession. Two instances of being correct can outweigh being wrong in every other case.

– Much of what supposedly-controversial VCs say is not actually contrarian but widely shared but repressed since most people have a strong disincentive to attract opprobrium. This disparity heightens the oddity of VC twitter.

– Unlike many occupations that profess to be about ideas but often put form above substance, VCs in some substantial sense actually are. What can seem like naivete is often a genuine engagement with the basic questions.

– Therefore, in our shared pursuit of novel ideas, we should give thanks to VC Twitter. Which category of Twitter users is most similar?

Should we expect those seeking VC money to tweet in similarly idiosyncratic ways?  They too face long odds on particular projects and tend to end up in equity-heavy positions.  Should the most “conservative” tweeters be those with high perks but no job security, for instance still untenured professors?  Heads of philanthropic foundations?

Overall, I find it striking that most individuals use Twitter for “double down” strategies, rather than “portfolio diversification” insurance strategies.  For instance, people who pursue overall risky courses of career action don’t play it safe on Twitter as a kind of career fall-back or insulation.  Perhaps that means at the margin “marketing” is more scarce and valuable than “insurance,” and thus start-ups — and venture capitalists — should pay heed to that.

Is 5G underperforming?

…Samsung, which makes both handsets as well as 5G network equipment, told investors on its own call that it expects its 5G business in South Korea to “shrink somewhat compared to last year.”

That last revelation is sobering. South Korea was the first market to deploy 5G services on a wide basis. Service launched in April 2019, but by year’s end consumers already were complaining that it didn’t live up to the hype. Part of the problem is that services marketed under the 5G label can vary widely in terms of speed and availability. Some aren’t much faster than existing 4G networks. And the fastest—including those using millimeter wave technology—currently are available only in certain dense urban areas due to their signal limitations.

Meanwhile, 5G devices remain expensive. Samsung’s new 5G phones range in price from $999 to $1,399.

Here is more from Dan Gallagher at the WSJ.  All the more reason to make sure your 5G rollout has the right provider.