Losing the Thread: Tech Innovation

The arc of technology has been somewhat circumscribed over the last almost 2 decades. The advent social media, starting with Myspace, then Facebook, Twitter, Snapchat, Insta etc has had a familiar trajectory. Early hyper-growth, followed by monetization, then shifting the focus from the members to the advertisers and business partners, and then finally treating the business partners like shit as they extract the maximum profit from the audiences.

That is the Enshittification cycle.

The directions from a shampoo bottle are useful at this point: Lather, Rinse, Repeat.

It is as predictable as the rise of the sun in the east, and the setting in the west.

I actually started this post over a month ago, when I watched the video below. It was on the absolute flood of gambling, and all the pivoting by the tech industry into this space. First, an aside:

I do not gamble. I don't get a thrill from the risk, and the potential reward. I have never gone to Vegas (or Atlantic City) to lay a bet. I do trade shows in Vegas, and I have to walk past the tables, and the one armed bandits, and I have never even been remotely tempted to sit in.

It's not because I am opposed to it, but it is because I can math, and I understand the odds. And I know that the casinos take all their gambler's money. How else could they afford to build scale Eiffel Towers, Pyramids, and Venetian canals?

If you like to hit the tables, and you don't go too far, have at it. But the problem is that most people have no idea about how the odds work for or against you.

That described the world until May, 2018. To gamble, you had to go to a casino, or to an OTB (Off Track Betting) venue, and place a bet. Oh sure, there has always been the illegal bookies, the mob run operations, but to be legal, legit, there were rules.

What happened in 2018? Well, the illustrious SCOTUS ruled on a case called "Murphy v. National Collegiate Athletic Association" that essentially stripped the Federal Government from banning gaming, and that means that the states could decide.

And it was off to the races.

As I mentioned in the above aside, I have pretty much been able to just not think about gambling, and as someone who really doesn't watch "ball" sports[1], I missed the major repurcussions of this landmark ruling. But my wife does, and that means that occasionally I glance at the TV when she's getting her dopamine hit (she's a Stanford football fan), and holy shit, are there a glut of advertisements for the online gambling platforms. Fanduel and Draftkings are assaulting your senses, and are impossible to avoid.

I mean, I know that internet poker was a thing that required you to take steps to navigate off-shore, to convert money into some intermediary that allowed you to partake in games of chance. But that friction kept it mostly a fringe. Now? It's just on your phone, and with you everywhere.

And there is a lot of behavioural nudges to get you to do it constantly. Side bets, parlays, and all the engagement farming that has been developed and perfected by the social media companies, all to keep you on the platform, placing bets, and maximizing the draining of your cash, all in search of the next "hit" of adrenaline.

Does it ever work, and how.

But there is one wrinkle, the ruling referenced above applied to the Federal Government, leaving it to the states to regulate. And some states did prevent the upbiquity of gambling apps (my state, California is one). Yet, our TV's are flooded with these ads.

But never fear, there are some options for you! The "Predictions Market" apps, are not gambling (wink wink), but instead they are regulated as part of the commodities futures market, because they are like the market for futures.

But what if the futures were things like "what if the third pitch of the second batter in the third inning of the Dodgers/Giants game bounced on home plate?" or "What if the Arizona Wildcats scored less than 79 points in a certain game?"

And those are things that can have ties to players shaving points, or flubbing a pitch.

Clearly, these predictions markets are skirting the rules, and need to be reined in.

But wait, there's more

The VC's are all in to build new businesses to take advantage of this. Our friends at a16z (Marc Andreesen's fund) are incubating "cheddr". Just what we need, more in your face sports betting.

I also heard of an early stage investment by the a16z crowd that would let you wager on your bills (rent, utilities) and a chance to double or nothing. I shit you not, someone had a pitch deck for that, and some VC's will toss money at that.

Ain't it a great time to be alive?

The Point ...

You might be wondering why I have typed nearly 1,000 words on this?

Last week, Substack announced that they have an official partnership with Polymarket, one of the "prediction markets" companies from above. This pertnership will make a "widget" available that authors can include, to provide access to specific predictions.

This is the reaction by Dave Karpf, he of "Bretbug Stephens" fame:

Substack announced a new partnership with Polymarket earlier this week. I guess if Substack is the future of media (it isn’t), then the future of media is gambling. (That’s bad though. You see why that’s bad, right?)

Unsurprisingly, I hate it. 

This is going to spur him to make the move. I recommend reading his post, and reflecting on the decline of Substack further:

Yeah, so... Substack, I’m out.

The Polymarket partnership is the last straw.

The Future, Now and ThenDave Karpf

1 - Baseball, football, soccer, rugby, volleyball, cricket, etc. Never been a fan, just not my jam