What's Appening: Fall of a Tech Bank 🏦📉

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👀 TLDR:

In this week’s What’s Appening, we cover the fall of SVB. The bank famously courted startups and tech companies, leading to mass panic over the weekend until the government stepped in to protect deposits. But what went wrong at Silicon Valley Bank? We dive into the story below. Elsewhere, we have news of a new app from Meta, which wants to create a decentralized rival to Twitter. We also report on Spotify’s new look app feed, which sees it take another step toward becoming a super app. Our Stat of the Week looks at Bing’s success with new users flocking to use its AI-assisted search. And What’s dAppening has a story on Sesame Street’s new collection of NFTs, starting with the Cookie Monster. Nom, nom, nom. 🍪🍪

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Takes 🎬️

🏦👎 SVB – What Happened to America’s Bank for Tech Startups?

The biggest story in tech - and business - this week surrounded the collapse of a bank. Not just any bank, of course, but Silicon Valley Bank. As the name suggests, SVB was pretty tech-friendly; the institution of choice for many companies based in – or that wanted to be associated with – the epicenter of America’s tech industry. But there was more to it than that. SVB had 50% of US VC-backed startups as customers😲. You can read the financial media reporting to get the full breakdown of why and how SVB collapsed, but here it is in a nutshell: SVB had invested heavily in the US bond market. Typically bond investments are low risk, low(ish) reward. Safe as houses, except for one important fact: the bond market has an inverse relationship with interest rates, which have been rising steadily this past year. So, SVB’s strategy was fine in, say, 2021, when interest rates were at record lows. But as the Fed raised rates across 2022, those bonds started to look like a bad investment. As 2022 saw a general slowdown in tech sector revenues, customers started withdrawing their deposits, meaning SVB had to start selling its bonds at a loss. When news of the selling of assets at a loss broke last week, it triggered a bank run (fueled by social media speculation) among customers looking for money SVB just didn’t have. That’s arguably an all too simplistic breakdown, but it gets to the point. Over the weekend, there was mass panic across every stratum of America’s tech industry, ranging from low-key sellers on Etsy who couldn’t process payments to Chinese-backed biotech companies that were scrambling to assure investors. For now, the disaster seems to be averted as the government stepped in to guarantee deposits on Sunday night. This has caused huge relief in the tech sector, despite fears of contagion across the US banking system. What happens next? Regulators will certainly look at what happened, and there’s already finger-pointing at the repealing of (parts of) the Dodd-Frank Act under the Trump Administration, which untightened a lot of banking regulation. The Biden Administration is already calling for new rules. There’ll also be a focus on VCs and so-called tech elites. Why did so many in the tech industry put all their eggs in one basket? Was it ignorance or hubris that led them to ask no questions as SVB’s management invested customer funds so unwisely? We will get more answers as the dust settles. But for now, let’s hope the crisis is contained. #SVBye Read more here.

🐣📱Meta – New Text-Based Decentralized Social Media App in the Works

Last week on What’s Appening, we brought you news of Bluesky, the decentralized Twitter alternative backed by Jack Dorsey. Well, on Friday, Meta announced it would be building something similar, signaling it would launch a text-based social network, although they weren’t very forthcoming on how it would look or when it would come out. The app, which has the codename “P92” (we assume they’ll come up with something catchier), is also being framed as an alternative to Twitter. It begs the question, then, why is everyone rushing to build Twitter alternatives? Well, this is about much more than how everyone feels about Elon Musk. The key is the Mastodon-like principles of decentralization, with distinct servers hosting separate communities and moderators. The idea is that there is no central control or even ownership (technically) of the network. For Mark Zuckerberg, who seems to have his butt hauled in front of Congress every week to explain what’s going on at Facebook, you can see the attraction in terms of accountability. As with Jack Dorsey’s vision for Bluesky, it’s a somewhat idealistic concept for social media but not an unworkable one. Indeed, it’s worth noting that there are several upcoming web3 projects, notably Lens Protocol, that envisage truly decentralized social media networks that put the power into users’ hands. A future of social media without central control is growing closer. #MetaNewApp Read more here.

🆕📻 Spotify – New Look App Has an Experience Designed for Scrolling

We always knew that Spotify aimed to be more than just an online iPod, albeit one with 70 million songs on it. This is evident with its moves into podcasts, audiobooks, and even its steps into web3 with NFTs and artist communities. But with its latest revamp (rolled out in the US last week), Spotify has more than a touch of the social media experience about it. Described as “part TikTok, part Instagram, and part YouTube”, the revamp makes it much easier to explore the Spotify ecosystem via a vertical scroll feed. The goal here, or so it seems, is to create a Spotify experience where you don’t go looking for a specific album or podcast. Instead, the future of Spotify will lie in discovering people, i.e., creators. It’s been a stated goal from CEO Daniel Ek for the platform to host over 50 million “audio creators” one day, and this new feed design is a step toward users starting to think differently about what the platform offers. #SpotifyRevamp Read more here.

🧐 Stat of the Week: 100M DAUs

🔎🤖 Microsoft – ChatGPT Integration Helps Search Engine Pass User Milestone

How many daily active users did Bing have before the launch of its AI-assisted chat feature? Nobody really knows, as mean-old Microsoft bosses never released the official figures. But now we know it has surpassed one hundred million, with around one-third of those “new to Bing”, so we can make some educated guesses. While it still lags behind Google (over 1 billion DAUs), we know the AI integration is providing the often-maligned Bing with plenty of momentum. Indeed, Microsoft looks increasingly confident of seeing an acceleration in Bing users as new AI-powered features roll out. How long before it reaches 200 million DAUS? Can it dethrone Google? Watch this space. #KingBing Read more here.

🕸️ What’s dAppening?

A dApp is a decentralized app. Here’s the latest in web3, NFTs and blockchain apps.

🍪👹 NFTs – Sesame Street Launches First Wave of Digital Collectibles

Yesterday, we got the intriguing news that Sesame Street would be releasing a collection of NFTs on the VeVe platform. Starting with a series of 5,555 digital collectibles based on the Cookie Monster, the NFTs will cost $60 each. The choice of VeVe is a good one for family-friendly intellectual property like Sesame Street, as it has vast experience (over 8 million NFTs minted), fantastic ‘green’ credentials, and a ready-made community that will surely steam in to start buying the NFTs (the launch is on March 19th). However, we wonder who the target market is here. Is it kids who will pester their parents to pay the steep price of $60 for a collectible? Or will it be hard-nosed NFT collectors that will jack up the floor price? Our guess is that it will be mostly the latter. Even if the price stays at $60, that feels high for a brand that was built on the idea of free education and inclusivity. This feels like cashing in. C is for Cash, right? #MeWantNFTs Read more here.

Meanwhile at 3Advance…

Our CEO Paul is in Austin for SXSW this week. It’s been a while, but there are now four members of the 3Advance team based in ATX, so it’s a great opportunity for a get-together. Paul and Chris Lawson (of GetCurrent.co) will be hosting a St Patrick’s Day-themed Happy Hour at 5.30 at Foxy’s Proper Pub on Wednesday. Sure, it’s not technically Paddy’s Day (that’s Friday), but the aim is to bring a bit of Irish craic to the festivities at SXSW. The guys will be keen to meet up with old friends and new ones, so if you are in the area on Wednesday, March 15th, drop into the pub for a Guinness or two and say “Lá Fhéile Pádraig sona duit!” (Happy St Patrick’s Day) to Paul, Chris, and the rest of the gang.

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