The Platform Responsibility Cost And What It Implies For Startups

Morning Report: Let’s check in on what Big Tech is up to.

Normally on these pages we deal with startups and issues that directly impact them. Venture capital drying up? Not good for startups. IPO window closed? Well, that hasn’t mattered for years, but you get the idea.

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However, let’s take a look at what the tech industry’s largest players are dealing with, as it can help us better understand the market that smaller tech shops are growing up inside of.

So on that point, here are a few headlines from the last 24 hours or so:

• Google will ban all cryptocurrency-related advertising [CNBC].
• YouTube will add information from Wikipedia to videos about conspiracies [The Verge].
• Facebook bans Britain First pages [BBC].

There is a common theme to the above, namely that the largest domestic tech companies are struggling to control their platforms from a content perspective: Google is moving to mop up crypto-focused advertising after the ICO boom took off, YouTube is working to limit its video platform from being a nexus of disinformation after it grew into the role, and Facebook is struggling to figure out how to police political content after it came under fire for being a tool of political distortion.

The scale of the problem that the big players have to deal with, in terms of keeping their platforms mostly free from abuse, is staggering. Observe the following headline from the last day:

• In 2017, Google removed 3.2B ‘bad ads’ and blocked 320K publishers, 90K sites, 700K mobile apps [TechCrunch].

Hot damn.

Something notable in the current tech boom has been the incredible dominance of the current cohort of platform companies (what we essentially call the Big 5, since they are worth the most). But that power has brought with it huge responsibilities, and liabilities, which this recent headline details:

• France to Take Legal Action Against U.S. Tech Giants [Bloomberg].

It’s at once a very good time to be Facebook—Snap isn’t blowing up, profits are good, and Zuck has yet to trash his reputation further by running for President—and not, given the company’s prior, unwitting role in political disinformation campaigns and the ensuing fallout. The same goes for YouTube, whose cultural relevance may be at an all-time high, but which has taken shots for hosting and serving inappropriate content to kids along with helpings of conspiracy theories. And so on.

Of course, these are problems that startups would love to have as they come with mega-scale. But they are problems all the same. Perhaps the next generation of platform companies can learn from the current misery of today’s platforms, helping them better design what we use next.

From The Crunchbase Daily:

Google bans all crypto ads

• Google will no longer allow ads about cryptocurrency-related content, including initial coin offerings, wallets, and trading advice across any of its advertising platforms.The move follows a similar ban by Facebook earlier this year. Timing coincides with a congressional hearing on ICOs and crypto assets.

Egnyte details Iow-burn SaaS path

• As Dropbox looks to join its historical-competitor Box in the public markets, Egnyte, a company that competes with both, released some of its own financial results, showing growing revenues as well as positive cash flow. Crunchbase News delves into the details.

Outdoor Voices raises $34 million for workout clothes

• Outdoor Voices, a retailer of comfy clothes for sports and recreation, has raised $34 million in a new financing led by Alphabet’s GV. The round brings total funding for the four-year-old Austin-based company to $64 million.

Healthy Ventures scales up

• Healthy Ventures, founded by two female partners, Anya Schiess and Enmi Kendall, is putting $40 million to work in a fund focused on healthcare infrastructure. In a show of commitment, the partners themselves are providing a quarter of the capital.

Illustration: Li-Anne Dias