el producto #286 🚀
Crypto-climate regulations, Klarna funding, Reducing PM bias, Remote status-quo, Switching costs, Airbnb party ban, Facebook takes on Discord, & more
Hey team,
Happy weekend & welcome to a new edition of el producto
🎰 The week in figures
$650M: Klarna is nearing a deal to raise new funding at a $6.5B valuation; the lending and payments company is raising about $650M; if completed, it would be a massive discount on the company’s valuation; Klarna was last valued at $45.6B in June 2021
$581M: Indian food delivery platform Zomato bought quick commerce startup Blinkit for $568.1M in an all-stock transaction; Blinkit was previously valued at over $1B following a $100M round in June 2021
$260M: OppZo, a Miami-based mission-driven fintech focused on easing access to capital for small and medium-sized businesses, raised over $260M in debt and equity funding; OppZo makes affordable loans available to SMBs in economically-distressed areas of the U.S. where investors can earn a tax benefit when they are invested in
$105M: Healthcare job marketplace Nomad Health raised $105M in debt and equity; 4,000 companies use Nomad for staffing nurses; the company is on track for $700M in revenue, Nomad takes commissions on placing nurses
$100M: HR software provider Pave raised a $100M Series C at a $1.6B valuation; Pave’s software helps HR teams understand the compensation landscape; Pave also acquired Option Impact, a competitor
$25M: FTX is acquiring crypto lender and trading platform BlockFi for around $25M; BlockFi’s last private round was a $500M Series E at a $4.8B valuation
2,500: Indian Ed-tech company Byju's has let go of 1,500+ staff from two acquisitions, Toppr and WhiteHat Jr; Byju’s also laid off ~1,000 from its core operations teams; Byju’s is currently exploring an acquisition of US Ed tech company 2U
1/3: Bitcoin’s energy use has dropped by more than a third over the last few weeks, according to recent estimates. As the value of BTC has taken a nosedive, price levels have dipped to a point where miners' electricity costs could exceed what they can earn from mining new tokens — leading some miners to press pause on their less efficient machines. Check the Emerging Trends section below for more on crypto emissions
29.5%: Halfway through the year, the Nasdaq is down 29.5% in 2022. When you look at individual YTD performances, you see something of a pattern. Big-tech stocks whose businesses are more insulated from economic gyrations and other competitive issues have outperformed the Nasdaq. Previous highfliers like Amazon, Meta Platforms and Netflix have fallen significantly more. But many other smaller tech stocks have done much worse, reflecting either previously overhyped valuations or weakening growth prospects:
Apple, Microsoft and Alphabet -23% to -25%
Amazon -36.3%, reflecting its fall from grace
Meta Platforms -52%, ditto
Netflix -71%, ditto
Uber -51%
Lyft -69%, reflecting its concentration in U.S. ride hailing, unlike Uber
Airbnb -46.5%
DoorDash - 56.9%
Snowflake -59%
Netflix -71%
Snap -72%
Rivian -75%
Affirm -82%
Bird -93%
📰 What’s going on
Spotify launched a new personalized playlist option called “Supergrouper” that lets you create your own supergroup consisting of up to five artists; after you create and name your group, Spotify will curate a playlist of songs from the artists you selected, which you can also share on social media
Facebook Groups is testing a left-aligned sidebar and channels, similar to Discord; groups will be listed with rounded square icons; Groups channels can be text chats, audio rooms, or feeds
Meta is now allowing select creators to showcase NFTs on Facebook; the testers can post the digital collectibles on their profile pages using a new dedicated tab, according to the company
Meta Platforms has reduced its hiring target for engineers (from 10k to 6k) and plans to dial down performance goals to thin out its employee ranks, according to Mark Zuckerberg; the CEO told employees on Thursday that he anticipates “one of the worst downturns that we’ve seen in recent history"
Instagram rolled out Reels APIs for developers; the new endpoints added to Instagram’s developer platform will allow developers to schedule Reels, publish to Instagram Business accounts, access social interaction metrics, reply to or delete comments, hide or unhide comments, disable or enable comments, find public Reels tagged with specific hashtags and identify Reels where an Instagram Business or Creator’s alias has been tagged or @mentioned
YouTube is going to prevent channels from hiding subscriber counts to make it more difficult to impersonate larger accounts; the platform will also block some special characters used in channel names and introduce an “increase strictness” comment moderation setting
Airbnb has made a temporary ban on parties permanent; originally established in 2020 as a COVID measure, Airbnb is solidifying the rule to not disrupt neighbors; in 2021, Airbnb banned 6,600 guests for partying
TikTok competitor Triller confidentially filed for a US IPO; the company recently abandoned a $5B merger with SeaChange; SeaChange is a smaller publicly-listed ad tech company that Triller was going to use for a reverse merger
Google AI researchers introduced Minerva, a language model that can solve math and science questions using step-by-step reasoning; while GPT-3, BERT, and other NLP models have reached a high level of sophistication in generating text, they've fallen short of human-level performance in solving quantitative reasoning problems, according to the researchers
Amazon rolled out its Store Analytics service, which lets brands track the performance of their products at Amazon Go and Amazon Fresh stores, where it has deployed its Just Walk Out and Dash Cart technologies; brands can also measure the effectiveness of their promotions and ad campaigns
Snapchat adds paid subscription with more features for power users; starting this week, Snap will begin offering an optional subscription called Snapchat Plus that unlocks exclusive and early access features; priced at $3.99 a month, the subscription is geared toward “the people who spend most of their time communicating with their closest friends on Snap,” the company’s SVP of Product, Jacob Andreou
Deliveroo will expand advertising on its app in July, including by adding ads to its order-tracking page as it chases profitability
Digital Bank Volt Bank shuts down; the CEO of failed neobank Volt still believes there is merit in trying to disrupt Australia’s banking oligopoly, saying his firm’s technology and products were competitive, but it just couldn’t raise the capital to keep growing; Volt said it was intending to hand its banking licence back to the regulator and would return $100M to its customers
FIFA says it will use AI and semi-automated technologies to detect offside positions during the 2022 Men's World Cup; the tech will include sensors embedded in balls as well as limb-tracking technology for players, according to the soccer governing body
Tencent officially announced its entry into extended reality (XR); the announcement follows countless rumors that the company was growing an XR division; according to Tencent's gaming chief, Steven Ma, the company plans to "seize the opportunity in the next four to five years to actively experiment in software, content, systems, SDK tools, hardware and other links to create virtual reality experiences; which can be industry benchmarks"
EU agrees on landmark crypto and climate regulations; crypto companies in the EU will have to disclose just how much climate damage is tied to the tokens they're hawking; while the new law does not restrict how much operations can pollute, it will require telling crypto investors precisely how much energy crypto assets consume and how much carbon is emitted in the process; it’s a major step toward making crypto's impact on the climate less of a black box
📚 Good reads
Charlie and the Feature Factory, by Klaas Hermans. An entertaining product take on the classical novel Charlie and the chocolate factory, highlighting the typical wrongdoings of tech organizations. “Everything on this product roadmap is a feature, and even I start looking like one!”
Reducing Bias as a Product Manager. Jens-Fabian Goetzmann looks at the bookThinking, Fast and Slow (one of my favourites) and applies its systems to explain some common PM bias, and how we can overcome them
List of YC companies that started as a Chrome Extension. An interesting compilation of projects that show how you can sometimes get simple side-project up and running, and later get it backed to success
Switching costs: the product dark side. Recognizing that customers might have chosen your product in the past, but now cannot really get out as all they can see is switching costs. “It is true that we all want customers to engage with our products and love them, but for the profit line to increase or at least, not drop, fear of leaving suffices”. NOTE: This article highlights a bunch of (short-term) effective, but ethically questionable practices. I was tempted to take it out of the newsletter, but opted to keep it in, intending to help product folks identify when they may be incurring onto such practices indadvertedly
Stack Overflow published the results of its annual developer survey. The report was compiled based on responses to survey questions by around 73,200 developers from 180 countries:
JavaScript continues to be the most commonly used programming language. Among professional developers, TypeScript increased from 36.42% last year to 40.08% this year
The usage of JavaScript and HTML/CSS decreased fractionally by 0.72% and 0.97%, respectively
Professional developers use PostgreSQL, MS SQL Server, Redis, and Elasticsearch more extensively than those learning to code
Similar to databases, cloud platforms are also used differently by professional developers and student developers. Professionals prefer AWS, Azure, and Google Cloud, while students prefer Heroku, Google Cloud, and Firebase
React Native and Flutter are the two most widely used cross-platform frameworks
🔮 Emerging trends
Problem: Bitcoin gets a bad rap because of its energy intensive proof-of-work (PoW) system used to settle transactions. Data from a University of Cambridge study pegs Bitcoin's annual power drain at more than 121 terawatt-hours (TWh), ranking it in the top 30 electricity consumers worldwide
Complication: Until now few studies have evaluated the efficiency of Bitcoin compared to classical monetary and payments systems
Another perspective: Recently published peer-reviewed research follows the emissions journey of a classical card transaction (VISA payment → ePoS acceptance → central bank clearing → settlement mechanisms). It asserts Bitcoin is 1.2x to 5x more energy efficient (5x when using modern hardware)
Despite current market situation, cryptocurrencies are here to stay and efforts to reduce their environmental impact are critical. Some interesting focus areas include:
More energy efficient currencies such as XRP or Ziliqa which use a different ‘proof-of-stake’ system to verify transactions
The Crypto Climate Accord (CCA) launched last year with the goal of transitioning the world’s cryptocurrencies to 100% renewable power by 2025
Cryptocurrencies like ToucanProtocol which are being used to bring transparency to the carbon markets
Remote hires now represent 62% of all new contracts signed by US startup employees
The percentage of remote hires has doubled since 2017.
The majority of new hires are remote for all startups, with the exception of the smallest and youngest companies
Firms with valuations between $1M and $10M have a 60/40 split favoring in-state hiring
Furthermore, the smallest companies are the most likely (85%) to adjust compensation based on an employee’s location
Companies valued at $500M to $1B and $1B to $10B are substantially less likely (76%) to consider location when establishing salary
When making decisions about pay grades, companies have established four top-tier metro areas in the US: San Francisco, New York, Seattle, and San Jose-Santa Clara
As remote work becomes more common, pay scales are slowly inching toward convergence around the standard set by San Francisco
That’s all for today! Let me know what you think by replying back to this email
Angel
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