The coronavirus requires startups to conserve cash, a VC firm says
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People of a certain age in Silicon Valley all remember the Sequoia Capital “R.I.P. Good Times” presentation from 2008. It was a common-sense PowerPoint presentation—or it may have been Keynote, but no matter—that advised the venture-capital firm’s portfolio companies to prepare for the worst.
Sequoia published the 2020 version of a general-purpose warning message Thursday. (It used Medium to disseminate its words of wisdom this time.) The document, “Coronavirus: The Black Swan of 2020,” is a must-read not only for tech types but for businesspeople everywhere.
Most of this document is of a greatest-hits-for-crises variety, which doesn’t make it any less useful. It advises business leaders to conserve cash, to consider raising more, to challenge internal forecasts, and to consider laying off employees sooner rather than later. (“This might be a time to evaluate critically whether you can do more with less and raise productivity” is its unsentimental language.)
Sequoia knows this global health situation is a human tragedy, but it confines its advice to business matters. It reminds readers that Sequoia itself has weathered many crises in its almost half a century of business. Adaptability, it says, quoting Darwin, is more important than strength or intelligence.
The business world has lived through and led the world through exceedingly interesting times just in the last quarter century. The dot-com bubble was an epic up and a dramatic down. The financial crisis of 2008-2009 was a generational collapse that, though less severe, was no less traumatic than the Great Depression. This crisis, a public-health scare first and an economic calamity second, is quickly become something no one alive has ever seen.
Sequoia ends its treatise by asking its readers to “Stay healthy, keep your company healthy, and put a dent in the world.” I’ll add to that: Keep your loved ones close, be kind to your neighbors, and think positive thoughts.
This edition of Data Sheet was curated by Aaron Pressman.
Hurry boy, it's waiting there for you. With an activist hedge fund banging on Twitter's gates, CEO Jack Dorsey is re-considering his planned sojourn to Africa. Elliott Management, which owns 4% of Twitter shares, wants Dorsey fired. Last year, Dorsey said he planned to spend several months in Africa studying digital currencies. On Thursday, he called that declaration "a mistake" and cited the coronavirus outbreak as a concern that could force a change in his plans.
It's gonna take a lot to drag me away from you. Under criticism for allowing political ads with false claims, Facebook removed ads from President Trump's re-election campaign that told viewers to click on a link to the “Official 2020 Congressional District Census” but was actually a link to the campaign's web site. “There are policies in place to prevent confusion around the official U.S. Census and this is an example of those being enforced,” the company said.
The wild dogs cry out in the night. When is a security hole not a security hole? Weeks after researchers found six vulnerabilities in PayPal's systems, the company has not fixed the problems. "There are multiple additional compensating controls for users whose accounts are compromised," PayPal claims. Meanwhile, another group of security researchers say they've found an "impossible to fix" flaw in all Intel chips produced in the past five years. The flaw "destroys the chain of trust for the platform as a whole," Mark Ermolov of Positive Technologies, who helped uncover the issue, says.
There's nothing that a hundred men or more could ever do. Here's one you don't hear every day–a startup raised new money at a lower private valuation. Quantum computing company Rigetti Computing raised $71 million recently but had to take "a significant cut" to its value, TechCrunch reports, without citing the exact figures.
I bless the rains down in Africa. Food in space, if you have ever looked into the subject, is not that great. But current and future astronauts can look forward to somewhat tastier pre-dinner courses in the future. A new study out on Friday found lettuce grown in space can be safely consumed by humans. Now they just have to get to work on a good Italian dressing for zero-G.
FOOD FOR THOUGHT
For some years, the Immigration and Customs Enforcement service has used an algorithm to decide whether or not to lock up people arrested for immigration violations. In New York until mid-2017, the algo recommended that about half of those detained be locked up long term. But after June 2017, the algo started calling for 97% to be jailed. The changes to the formula and its outputs are now the subject of a lawsuit from the New York Civil Liberties Union. Hannah Bloch-Wehba, a law professor at Drexel University, explores the issues in the case in an essay for the Washington Post.
When the government turns to automated decision-making, transparency all too often falls by the wayside. Critics have frequently pointed out that algorithms can be biased and faulty — but so can human decision-makers. However, the opacity of decisions made by software presents a unique set of difficulties. It is not just that algorithms can, as appears to be the case here, systematically lead to unjustified outcomes. It is also that victims of the system and watchdog groups often have no way of knowing why and how the decisions are made, which forecloses accountability.
FOR YOUR WEEKEND READING PLEASURE
A few long reads that I came across this week:
Hideo Kojima’s Strange, Unforgettable Video-Game Worlds (New York Times Magazine)
He’s an auteur whose bizarre creations — the Metal Gear Solid series and, most recently, Death Stranding — have become huge blockbusters. Why do gamers find them so captivating?
Build a Rover, Send It to the Moon, Sell the Movie Rights: 30 Years of iRobot (IEEE Spectrum)
Colin Angle on iRobot's 14 failed business models and the lessons the company learned from those failures.
Personal Essay: Coronavirus Lockdown Is A 'Living Hell' (NPR)
The city has been locked down for more than a month. Every night before falling asleep I have been confronted by an unreal feeling and many questions.
The Man Behind Trump’s Facebook Juggernaut (The New Yorker)
Brad Parscale used social media to sway the 2016 election. He’s poised to do it again.
IN CASE YOU MISSED IT
Accenture’s Julie Sweet on evolving in real time By Ellen McGirt
AT&T nabs Google Cloud for 5G services partnership By Aaron Pressman
Why are patients who recover from coronavirus testing positive again? By Naomi Xu Elegant
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
After NASA put out a call for students to propose names for the newest Mars rover, about 28,000 kids sent in essays with their ideas. On Thursday, the space agency announced the winner, seventh grader Alexander Mather, and brought him out to read his essay. Mather started by noting that the names of past rovers, Curiosity, Insight, Spirit, Opportunity, reflected human qualities. He went on:
“But if rovers are to be the qualities of us as a race, we miss the most important thing: Perseverance. We as humans evolved as creatures who could learn to adapt to any situation, no matter how harsh. We are a species of explorers, and we will meet many setbacks on the way to Mars. However, we can persevere. We, not as a nation, but as humans will not give up. The human race will always persevere into the future.”