Data Sheet—How Silicon Valley Keeps Providing Fodder for HBO’s ‘Silicon Valley’

Shyp, a company that probably never should have been, ceased to be on Tuesday. It charged consumers $5 to pick up and deliver pretty much anything, a business proposition permanently tilted against itself.

In the modern history of Silicon Valley startups, Shyp’s demise isn’t all that unusual. There’s a fill-in-the-blank quality to its short (5-year) story. Half-baked idea. Check. Gobs of money ($60 million) from big-name investors (Kleiner Perkins, Sherpa). Check, check. Repeated “pivots.” Check. (Fast Company’s Harry McCracken has a thorough review of Shyp’s history.)

What makes Shyp’s swan song somewhat unique is that entrepreneur Kevin Gibbon put words to the music in a much-praised apologetic post about his experience. While Gibbon intended his essay as a way to cop to mistakes, I found it interesting as an almost perfectly distilled example of why the HBO show Silicon Valley (just back for a fifth season) has done such a good job mocking the real people of Silicon Valley.

Like many founders in this upside-down land, Gibbon is simultaneously sorry for his mistakes and oblivious to how little chance he ever had. He notes his company’s “initial explosive growth” without analyzing whether what looked to him like an impressive start ever made any financial sense. He identifies his mistakes as focusing on consumers, but there’s no evidence he could make a business from serving businesses either. He says even after a successful shift toward businesses—a time during which, cliché alert, Shyp “fought tooth and nail”—the company was left “with too little runway” to continue. That last comment is a meaningless euphemism best translated as: ‘We had run out of money and couldn’t persuade our investors to give us more.’

Stories like Shyp’s are valuable to those outside Silicon Valley who think this stuff is easy, that piles of money last forever, and that attracting famous VCs guarantees success. It also makes the tales of those who succeed that much more powerful.

(Update: this story was corrected to remove Google Ventures as an investor in Shyp.)

NEWSWORTHY

Rotten peaches. The citizens of Atlanta are suffering under a malware attack that crippled parts of the city's government. Ticket payments can't be processed, new water service requests are frozen and applications for jobs are suspended, among other problems, the Atlanta Journal-Constitution reported.

Skinny TV. As Adam mentioned, HBO's Silicon Valley is back on the air for its fifth season and, wouldn't you know it, video compression is back in the news. It's not fictional Pied Piper CEO Richard Hendricks' magical algorithm, but a new standard called AV1 that uses 30% to 40% less bandwidth to stream video at the same quality as the current HEVC and VP9 standards. The open source AV1 standard is backed by the Alliance for Open Media, an industry group that includes Netflix, Apple, Google, Microsoft, Amazon, and Facebook.

Bashing Bezos. Shares of Amazon fell 4% on Wednesday after Axios reported more details about President Trump's antipathy towards the e-commerce giant. "He’s wondered aloud if there may be any way to go after Amazon with antitrust or competition law," an unnamed source told the site. On Thursday morning, Trump repeated his concerns in a tweet: "Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!"

Opaque, oblique, opportune. With fallout from Facebook's data scandal still spiraling out of control, the company said it would curb information sharing with data brokers like Acxiom and Experian.

Diving for dollars. In the private market, consumer finance startup Credit Karma raised $500 million in venture capital backing in a deal valuing the company at roughly $4 billion. And on the public markets, digital documents startup DocuSign filed to go public and raise $100 million. The company revealed that it lost $115 million on $382 million of revenue last year.

FOOD FOR THOUGHT

Developing newer drugs is hard, super hard even, so why not harness the power of supercomputers? Fortune's Erika Fry and Sy Mukherjee have the story of how the health care industry is trying to bring artificial intelligence and big data analysis to bear on the challenge. In one example, Amgen R&D chief Sean Harper saw promise in a huge collection of genetic data held by a small company called deCode.

Its trove of data allowed the company to mine the population for genetic variants and connect those variants to clinical outcomes in diseases ranging from cancer to schizophrenia. As the cost of sequencing plummeted in sync with the rise of computer processing power, Harper saw an undervalued asset for drug discovery: Amgen bought the company in 2012 for $415 million.

That purchase has utterly transformed Amgen’s R&D process. Prior to the deCode acquisition, only 15% of Amgen candidate molecules had been validated against specific genetic targets. After the purchase, Amgen began evaluating all of its drug candidates against deCode’s database. The review exposed some clear losers; in the case of 5% of its candidate molecules, there was evidence the agent wouldn’t work. Managers killed those programs (including one highly anticipated drug aimed at coronary disorders that was about to head into human trials) and prioritized others where there was a clear genetic target for the drug. Amgen also green-lighted more than a dozen drugs for which it found confirmation in deCode’s genetic data.

IN CASE YOU MISSED IT

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Apple CEO Tim Cook Criticizes Facebook's Approach to Privacy By Jonathan Vanian

Netflix Adds Former Obama National Security Advisor and U.N. Ambassador Susan Rice to Board By Jonathan Vanian

Reddit No Longer Accepts Bitcoin By Chris Morris

Dropbox CEO Dreamed of Having His Own Company and Now Runs a $12 Billion Powerhouse By Susie Gharib

T-Mobile Contest Will Back Teenagers Who Want to Change the World By Aaron Pressman

'I Don't Like That:' Apple CEO Tim Cook Throws Shade At Amazon's HQ2 'Beauty Contest' By Natasha Bach

BEFORE YOU GO

CBS's far-too-long-running sitcom The Big Bang Theory gets a special guest appearance tonight: Bill Gates. The Microsoft billionaire says he had a blast and was thrilled to participate. Let's tune in and see if he's funny.