Pinterest launches an AR-powered Try-on experience for eyeshadow

Pinterest is expanding its virtual makeup try-on capabilities with today’s launch of a new augmented reality feature that allows online shoppers to virtually try on new eyeshadow. Initially, Pinterest is allowing try-on with 4,000 shades from brands like Lancome, YSL, Urban Decay, and NYX Cosmetics.

The feature leverages Pinterest’s existing Lens visual search technology, its skin tone ranges feature, and computer-vision powered recommendations, the company says. We also understand Pinterest is incorporating elements from data partner ModiFace, including digitization parameters that ensure the products recognized are mapped to ModiFace’s database for higher-quality rendering.

This not Pinterest’s first virtual makeup feature. The company had previously launched an AR try-on experience for lipstick a year ago, which has now grown to include 10,000 shades, discoverable from 48 million beauty pins from brands like Estée Lauder, bareMinerals, Neutrogena, NARS, Cle de Peau, Thrive Causemetics, NYX Professional Makeup, YSL Beauté, Lancôme, and Urban Decay. Retailers, including Kohl’s, have also used AR try-on to reach consumers.

With the newly launched eyeshadow try-on, users can filter the product search results by factors like color, price range, and brand. if they find something they like, they can then purchase it immediately, save it to a board, or browse a “more like this” section to find more Pins offering similar shades.

video of AR eyeshadow effect

Image Credits: Pinterest

The expansion to eyeshadow means users can now experiment with more of a full makeup look, rather than just try on individual shades. There’s a toggle that lets users switch between lipstick and eyeshadow to try on multiple products at once, Pinterest says.

AR-powered virtual makeup experiences have been growing in popularity over the years, thanks in part to AR beauty apps  like ModiFace’ YouCam MakeupSephora’s Virtual ArtistUlta’s GLAMLab and others. L’Oréal has also offered Live Try-On on its website, and partnered with Facebook to bring virtual makeup to the site. Target’s online Beauty Studio also offers virtual makeup.

More recently, Google entered the AR virtual makeup space, initially with the launch of a more limited feature on YouTube that allowed some beauty influencers to incorporate an AR try-on experience for products in their videos. In December 2020, however, Google more fully embraced AR try-on with the launch of virtual makeup try-on within Google Search, also in partnership with ModiFace.

But Pinterest’s expansion to eyeshadow means it’s once again ahead of Google when it comes to visual search technology and virtual makeup. Not only does it offer more lipstick shades than Google, it now also offers eyeshadow try-on.

Pinterest says the AR try-on feature is being made available for free to brands who want to create visual shopping experiences and reach customers earlier in their decision-making process. The company says it continues to generate revenue through ads, including shopping ads, and not by monetizing its AR features or doing any revenue share on the try-ons that turn into sales.

“As we make Pinterest more shoppable through products like AR Try on, the platform becomes more engaging and actionable to Pinners, which can result in increases in usage and click-through of ads,” a spokesperson explains. “Organic features like Try on and ingestion of catalogs to create Product Pins can oftentimes complement a paid strategy where brands drive traffic across the site,” they noted.

The support for eyeshadow try-on is timely. Some beauty brand sales have been depressed by the pandemic, and particularly lipsticks, since it makes no sense to use lip color when your face is under a mask. Instead, current beauty trends have shifted to highlighting the eyes, with bright and bold colors for eyeshadow shades, the wild floating eyeliner look, large false lashes, and more — trends that are also designed to look good when filmed for social media posts, of course.

Pinterest says it has indications that its AR features are converting undecided shoppers to customers. In 2020, Pinterest found that users would try-on an average of 6 lipstick shades once they began the AR try-on experience, and then were 5 times more likely to show purchase intent on try-on compared with standard Pins.

The new eyeshadow try-on is live starting today using the Lens camera in the Pinterest app for iOS and Android.

App stores saw record 218 billion downloads in 2020, consumer spend of $143 billion

Mobile adoption continued to grow in 2020, in part due to the market forces of the COVID-19 pandemic. According to App Annie’s annual “State of Mobile” industry report, mobile app downloads grew by 7% year-over-year to a record 218 billion in 2020. Meanwhile, consumer spending grew by 20% to also hit a new milestone of $143 billion, led by markets that included China, the United States, Japan, South Korea and the United Kingdom.

Consumers also spent 3.5 trillion minutes using apps on Android devices alone, the report found.

In another shift, app usage in the U.S. surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours on their mobile device.

The increase in time spent is a trend that’s not unique to the U.S., but can be seen across several other countries, including both developing mobile markets like Indonesia, Brazil and India, as well as places like China, Japan, South Korea, the U.K., Germany, France and others.

The trend isn’t isolated to any one demographic, either, but is seen across age groups. In the U.S., for example, Gen Z, millennials and Gen X/Baby Boomers spent 16%, 18% and 30% more time in their most-used apps year-over-year, respectively. However, what those favorite apps looked like was very different.

For Gen Z in the U.S., top apps on Android phones included Snapchat, Twitch, TikTok, Roblox and Spotify.

Millennials favored Discord, LinkedIn, PayPal, Pandora and Amazon Music.

And Gen X/Baby Boomers used Ring, Nextdoor, The Weather Channel, Kindle and ColorNote Notepad Notes.

The pandemic didn’t necessarily change how consumers were using apps in 2020, but rather accelerated mobile adoption by two to three years’ time, the report found.

Investors were also eager to fuel mobile businesses as a result, pouring $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year. According to Crunchbase data, 26% of total global funding dollars in 2020 went to businesses that included a mobile solution.

From 2016 to 2020, global funding to mobile technology companies more than doubled compared with the previous five years, and was led by financial services, transportation, commerce and shopping.

Mobile gaming adoption also continued to grow in 2020. Casual games dominated the market in terms of downloads (78%), but Core games accounted for 66% of games’ consumer spend and 55% of the time spent.

With many stuck inside due to COVID-19 lockdowns and quarantines, mobile games that offered social interaction boomed. Among Us, for example, became a breakout game in several markets in 2020, including the U.S.

Other app categories saw sizable increases over the past year, as well.

Time spent in Finance apps in 2020 was up 45% worldwide, outside of China, and participation in the stock market grew 55% on mobile, thanks to apps like Robinhood in the U.S. and others worldwide, that democratized investing and trading.

TikTok had a big year, too.

The app saw incredible 325% year-over-year growth, despite a ban in India, and ranked in the top five apps by time spent. The average monthly time spent per user also grew faster than nearly every other app analyzed, including 65% in the U.S. and 80% in the U.K., surpassing Facebook. TikTok is now on track to hit 1.2 billion active users in 2021, App Annie forecasts.

Other video services boomed in 2020, thanks to a combination of new market entrants and a lot of time spent at home. Consumers spent 40% more hours streaming on mobile devices, with time spent in streaming apps peaking in the second quarter in the west as the pandemic forced people inside.

YouTube benefitted from this trend, as it became the No. 1 streaming app by time spent among all markets analyzed except China. The time spent in YouTube is up to 6x that of the next closet app at 38 hours per month.

Of course, another big story for 2020 was the rise of e-commerce amid the pandemic. This made the past year the biggest ever for mobile shopping, with an over 30% increase in time spent in Shopping apps, as measured on Android phones outside of China.

Mobile commerce, however, looked less traditional in 2020.

Social shopping was a big trend, with global downloads of Pinterest and Instagram growing 50% and 20% year-over-year, respectively.

Livestreaming shopping grew, too, led by China. Downloads of live shopping TaoBao Live in China, Grip in South Korea and NTWRK in the U.S. grew 100%, 245% and 85%, respectively. NTWRK doubled in size last year, and now others are entering the space as well — including TikTok, to some extent.

The pandemic also prompted increased usage of mobile ordering apps. In the U.S., Argentina, the U.K., Indonesia and Russia, the app grew by 60%, 65%, 70%, 80% and 105%, respectively, in Q4.

Business apps, like Zoom and Google Meet among others, grew 275% in Q4, for example, as remote work and sometimes school, continued.

The analysis additionally included lists of the top apps by downloads, spending and monthly active users (MAUs).

Although TikTok had been topping year-end charts, Facebook continued to beat it in terms of MAUs. Facebook-owned apps controlled the top charts by MAUs, with Facebook at No. 1 followed by WhatsApp, Messenger and Instagram.

TikTok, however, had more downloads than Facebook and ranked No. 2 by consumer spending, behind Tinder.

The full report is available only as an online interactive experience this year, not a download. The report largely uses data from both the iOS App Store and Google Play, except where otherwise noted.

Pinterest says it will adopt workplace culture recommendations

Pinterest has committed to adopting the recommendations from its special committee of the Board of Directors, the company wrote in a blog post today. The committee formed earlier this year in June, shortly after two former employees, Ifeoma Ozoma and Aerica Shimizu Banks, went public with their allegations of racial and gender discrimination while working at Pinterest.

The committee, which retained law firm WilmerHale to conduct a workplace review, spoke with more than 350 current and former employees to make its recommendations geared toward improving diversity, equity and inclusion at Pinterest. Here are a few of those recommendations:

  • mandatory unconscious bias training for every employee, including managers and executives
  • offer additional trainings on inclusivity and unconscious bias
  • include “diverse employees” in interview panels with job candidates
  • reward employees for their efforts to support and promote DEI
  • publish a diversity report twice a year for at least two years; after two years, publish the report annually
  • establish criteria for promotion eligibility
  • enhance Pinterest’s harassment and discrimination policy
  • create a centralized workplace investigations team to ensure consistent and fair outcomes

You can see all of the recommendations here. Pinterest, in a statement to TechCrunch, said it’s committed to making those changes.

“We value our employees and know it’s our responsibility to build a diverse, equitable and inclusive environment for everyone at Pinterest,” a Pinterest spokesperson said. “Because we understand the urgency for change, we have taken actions over the past months to ensure everyone at Pinterest feels safe, welcomed and championed and believe we’re on a path to ensuring a culture where all employees feel included and supported.”

In a note to employees, Pinterest CEO Ben Silbermann said that everyone at the company will have an opportunity to discuss the recommendations and ask questions later this week. Silberman also said he felt encouraged that many of the suggestions “mirror efforts we already have underway to build a culture where all employees feel included and supported.”

Earlier this week, Pinterest settled a gender discrimination lawsuit with former COO Francoise Brougher for $22.5 million. But that hefty payout highlighted some of the inequities in tech. Brougher filed her lawsuit in August, after Ozoma and Banks went public with their allegations. While Brougher walked away with millions, Ozoma and Banks received less than one year’s worth of severance.

“So we, like in many, many, many other cases, Black women put ourselves on the line, shared absolutely everything that happened to us, then laid the groundwork for someone else to swoop in and collect ‘progress,’ ” Ozoma previously told TechCrunch. “No progress has been made here because no rights have been made with people who harm has been done to.”

Pinterest’s $22.5M settlement highlights tech’s inequities, say former employees who alleged discrimination

When Ifeoma Ozoma and Aerica Shimizu Banks, formerly of Pinterest’s policy team, alleged racial and gender discrimination at Pinterest in June, the hope was for Pinterest to make them whole and address its culture of alleged discrimination, Ozoma told TechCrunch. But that’s not what happened.

Just two months later, former Pinterest COO Françoise Brougher sued Pinterest, alleging gender discrimination, which yesterday resulted in a $22.5 million settlement. As part of the settlement, Pinterest will pay $20 million to Brougher and her attorneys, the company wrote in a filing.

“It’s about as plain a case of disparate treatment and discrimination as you can come up with,” Ozoma said.

On a call with TechCrunch today, Ozoma and Banks described a double standard in their experiences compared to Brougher’s. While Brougher received a $20 million payout, Ozoma and Banks received less than one year’s worth of severance.

“This follows the time-honored tradition in America where Black women come forward, blazing a trail, revealing injustice and white women coming in and reaping all the benefits of that,” Banks told TechCrunch.

Earlier this month, a group of shareholders filed a lawsuit against Pinterest executives, including CEO Ben Silbermann, alleging they enabled a culture of discrimination. The complaint goes on to allege that culture of discrimination has harmed Pinterest’s reputation and led to financial harm.

For Ozoma and Banks, however, they say they’ve exhausted all of their legal options and will not pursue a lawsuit. Banks said it is important to keep in mind the fact that Brougher, a former COO, had far more resources to pursue litigation.

“So we, like in many, many, many other cases, Black women put ourselves on the line, shared absolutely everything that happened to us, then laid the groundwork for someone else to swoop in and collect ‘progress,'” Ozoma said. “No progress has been made here because no rights have been made with people who harm has been done to.”

As a part of the settlement, both Pinterest and Brougher will commit $2.5 million toward “advancing women and underrepresented communities” in the tech industry.

“Francoise welcomes the meaningful steps Pinterest has taken to improve its workplace environment and is encouraged that Pinterest is committed to building a culture that allows all employees to feel included and supported,” Pinterest and Brougher said in a joint statement detailing the settlement.

Ozoma took issue with Pinterest and Brougher donating $2.5 million to charity. She said, “it smells rotten,” noting that she herself is an individual and not a charity.

TechCrunch reached out to Pinterest regarding Ozoma and Banks’ recent statements. Pinterest declined to comment, saying the company doesn’t comment on legal matters. In June, however, Pinterest said in a statement to TechCrunch:

We took these issues seriously and conducted a thorough investigation when they were raised, and we’re confident both employees were treated fairly. We want each and every one of our employees at Pinterest to feel welcomed, valued, and respected. As we outlined in our statement on June 2nd, we’re committed to advancing our work in inclusion and diversity by taking action at our company and on our platform. In areas where we, as a company, fall short, we must and will do better.

Pinterest employees staged a walkout in August shortly after Brougher filed her suit. In addition to the walkout, a petition circulated throughout the company demanding systemic change. The change they sought entailed full transparency about promotion levels and retention, total compensation package transparency and for the people within two layers of reporting to the CEO to be at least 25% women and 8% underrepresented employees.

Since then, Pinterest has made some changes at the board level. A couple of days after the walkout, Pinterest announced Andrea Wishom as the company’s first-ever Black board member. In October, Pinterest added its second Black board member, Salaam Coleman Smith.

Pinterest says it has also enhanced its hiring and interview processes to try to improve diversity at senior levels, updated its inclusion training and launched an internal wiki detailing how Pinterest makes compensation decisions.

Pinterest had long been considered a leader in diversity and inclusion. When asked about whether that has ever been true — if Pinterest had effectively enacted a solid DEI strategy, Ozoma was clear.

“No. If it were true, I don’t think we’d be having a conversation right now.”

Discrimination, particularly toward Black women, is systemic in the tech industry. Earlier this month, Dr. Timnit Gebru said Google fired her for an email speaking out about ethics in artificial intelligence. Banks and Ozoma told TechCrunch they are worried about a chilling effect on other Black women coming forward.

One person reached out to her, Banks said, asking about what hope other Black women have.

“That’s why we said something,” Ozoma said. “We’re not in a position that someone in the C-suite would have been. But our integrity means more than anything else, and if we can help other folks, we will.”

Pinterest settles gender discrimination lawsuit with former COO for $22.5 million

Pinterest today announced it has settled the gender discrimination lawsuit brought forth by former COO Francoise Brougher. In August, Brougher sued Pinterest, alleging gender discrimination, retaliation and wrongful termination.

As part of the settlement, Pinterest will pay $20 million to Brougher and her attorneys, and both Pinterest and Brougher will commit $2.5 million toward “Advancing women and underrepresented communities” in the tech industry, the company wrote in a filing.

“Pinterest recognizes the importance of fostering a workplace environment that is diverse, equitable and inclusive and will continue its actions to improve its culture,” Pinterest and Brougher said in a joint statement detailing the settlement. “Francoise welcomes the meaningful steps Pinterest has taken to improve its workplace environment and is encouraged that Pinterest is committed to building a culture that allows all employees to feel included and supported.”

Shortly after Brougher went public with her claims, Pinterest employees staged a walkout in response to her accusations as well as in response to the claims of two former Black Pinterest employees. Prior to Brougher’s claims, Aerica Shimizu Banks and Ifeoma Ozoma accused Pinterest of racial discrimination.

In addition to the walkout, a petition circulated throughout the company demanding systemic change. The change they sought entailed full transparency about promotion levels and retention, total compensation package transparency and for the people within two layers of reporting to the CEO to be at least 25% women and 8% underrepresented employees.

Since then, Pinterest has notably made some changes at the board level. A couple of days after the walkout, Pinterest announced Andrea Wishom as the company’s first-ever Black board member. In October, Pinterest added its second Black board member, Salaam Coleman Smith.

Pinterest says it has also enhanced its hiring and interview processes to try to improve diversity at senior levels, updated its inclusion training and launched an internal wiki detailing how Pinterest makes compensation decisions.

Pinterest adds favorites, notes and a new toolbar after increased use of boards during pandemic

Pinterest today is adding a few new features — notes, favorites and a board toolbar — aimed at helping those who use their boards for making lists of gift ideas, or who have a hard time navigating and sorting through boards with a larger number of items. The additions follow a blowout third quarter for the social platform which benefited from the increases in screen time during the Covid-19 pandemic, which kept people indoors to shop, socialize, and plan online.

According to Pinterest, there’s been a 35% increase in the number of monthly boards created during the last six months, and a 30% increase in the number of collaborative boards.

To make it easier for those who are using boards to remind them of things to try or — as the holidays roll out — buy as gifts, a new “Notes to self” feature could be useful. This allows users to add private notes to their Pins on either their public or private boards, including on boards where they’re collaborating with others. This feature is interesting because it could also serve as a rudimentary communication system between multiple parties who are working on projects together, where resources are organized on Pinterest’s platform.

Image Credits: Pinterest

Connecting Pinterest users with a broader audience is something the company has been experimenting with, as of late. As we reported in November, Pinterest has been testing an online events feature that allows influencers and creators to use the platform to host classes, organize class materials, and group chat with attendees. A “notes” feature was part of this test, as well.

Another new addition rolling out today is a board toolbar designed for active boards with over 150 Pins. The toolbar makes it easier to sort through the Pins by offering to connect users to actions that can be taken on board. This includes things like organizing the board, creating to-do’s, or exploring more ideas that are related to the Pins.

Image Credits: Pinterest

Similarly, a board favorites feature is being launched today to help users better organize boards that have many Pins. Though it doesn’t require a large board to work, the feature could help to surface a user’s top Pins from a larger list of items. To mark a Pin as a favorite, you’ll just use the star icon on the board toolbar.

Pinterest says the features were built with user feedback and none of the new additions will be used for ad targeting. A three features are available globally and will roll out across all platforms, starting today.

Pinterest tests online events with dedicated ‘class communities’

Pinterest is getting into online events. The company has been spotted testing a new feature that allows users to sign up for Zoom classes through Pinterest, while creators use Pinterest’s class boards to organize class materials, notes, and other resources, or even connect with attendees through a group chat option. The company confirmed the test of online classes is an experiment now in development, but wouldn’t offer further details about its plans.

The feature itself was discovered on Tuesday by reverse engineer Jane Manchun Wong, who found details about the online classes by looking into the app’s code.

Currently, you can visit some of these “demo” profiles directly — like “@pinsmeditation” or “@pinzoom123,” for example — and view their listed Class Communities. However, these communities are empty when you click through. That’s because the feature is still unreleased, Wong says.

When and if the feature is later launched to the public, the communities would include dedicated sections where creators will be able to organize their class materials — like lists of what to bring to class, notes, photos, and more. They could also use these communities to offer a class overview and description, connect users to a related shop, group chat feature, and more.

Creators are also able to use the communities — which are basically enhanced Pinterest boards — to respond to questions from attendees, share photos from the class, and otherwise interact with the participants.

When a user wants to join a class, they can click a “book” button to sign up, and are then emailed a confirmation with the meeting details. Other buttons direct attendees to download Zoom or copy the link to join the class.

It’s not surprising that Pinterest would expand into the online events space, given its platform has become a popular tool for organizing remote learning resources during the coronavirus pandemic. Teachers have turned to Pinterest to keep track of lesson plans, get inspiration, share educational activities, and more. In the early days of the pandemic, Pinterest reported record usage when the company saw more searches and saves globally in a single March weekend than ever before in its history, as a result of its usefulness as a online organizational tool.

This growth has continued throughout the year. In October, Pinterest’s stock jumped on strong earnings after the company beat on revenue and user growth metrics. The company brought in $443 million in revenue, versus $383.5 million expected, and grew its monthly active users to 442 million, versus the 436.4 million expected. Outside of the coronavirus impacts, much of this growth was due to strong international adoption, increased ad spend from advertisers boycotting Facebook, and a surge of interest from users looking for iOS 14 home screen personalization ideas.

Given that the U.S. has failed to get the COVID-19 pandemic under control, many classes, events and other activities will remain virtual even as we head into 2021. The online events market may continue to grow in the years that follow, too, thanks to the kickstart the pandemic provided the industry as a whole.

“We are experimenting with ways to help creators interact more closely with their audience,” a Pinterest spokesperson said, when asked for more information.

Pinterest wouldn’t confirm additional details about its plans for online events, but did say the feature was in development and the test would help to inform the product’s direction.

Pinterest often tries out new features before launching them to a wider audience. Earlier this summer, TechCrunch reported on a Story Pins feature the company had in the works. Pinterest then launched the feature in September. If the same time frame holds up for online events, we could potentially see the feature become more widely available sometime early next year.

Former Facebook and Pinterest exec Tim Kendall traces “extractive business models” to VCs

Last month, former Facebook and Pinterest executive Tim Kendall told Congress during a House hearing on the dangers of social media that Facebook made its products so addictive because its ad-driven business model relies on people paying attention to its product longer every day. He said much the same in the Netflix documentary “The Social Dilemma,” in which Kendall — along with numerous other prominent early employees of big tech companies — warns of the threat that Facebook and others pose to modern society.

Kendall — who today runs Moment, an app that helps users monitor device habits and reinforces positive screen-time behavior — isn’t done campaigning against his former employer yet. On Friday morning, we talked with him about the FTC inching closer to filing an antitrust lawsuit against Facebook for its market power in social networking; what he thinks of the DOJ’s separate antitrust lawsuit against Google, filed last Tuesday; and how venture capital contributed to the “unnatural” ways the companies have commanded our attention — and advertisers’ dollars along with it.

Our conversation has been excerpted. You can hear the full conversation here.

TC: Like everyone else, you wrestle with addiction to the apps on your phone. At what point did you decide that you wanted to take a more public role in helping to identify the problem and potentially help solve it.

TK:  I’ve always been interested in willpower, and the various things that weaken it. I have addiction in various parts of my family and extended family, and I’ve seen up close substance abuse, drug abuse. And as I started to look at this problem, it felt really similar. It’s the same shape and size as being addicted to drugs or having a behavioral addiction to food or shopping. But it didn’t seem like anyone was treating this with the same gravity.

TC: What has been the reaction of your colleagues to you turning the tables on this industry?

TK: It has evolved in the sense that, at the beginning of this, I was kinder to Facebook. When I started talking publicly about my work with Moment, I said, ‘Look, I think that those folks are focused on the right issues. And I think they’re going to solve the problem.’ And I was out there throughout 2018, saying that. Now I’ve gotten a lot more vocal [about the fact that] I don’t think they’re doing enough. And I don’t think it’s happening quickly enough. I think they’re absolutely negligent. And I think the negligence is really about not fully and accurately understanding what their platforms are doing to individuals and what their platforms are doing to society. I just do not think they have their arms around it in a complete way.

Is that deliberate? Is that because they’re delusional? I don’t know. But I know that the impact is very serious. And they are not aligned with the rest of us in terms of how severe and significant that impact is.

I think everyone within Facebook has confirmation bias, probably in the same way that I have confirmation bias. I am picking out the family at the restaurant that’s not looking at each other and staring at their phones and thinking, ‘Look at Facebook, it’s ruining families.’ That’s my confirmation bias. I think their confirmation bias is ‘There’s so much good that Facebook has done and is doing for the world.’ I can’t dispute that, and I suspect that the leaders there are looking to those cases more often and dismissing the severity of the cases that we talk about, [including] arguably tipping the election in 2016, propagating conspiracy theories, propagating misinformation.

TC: Do you think that Facebook has to be regulated the FTC?

TK: I think that something has to change. What I would really like to see is the leaders of government all over the world, the consumers that really care about this issue, and then the leaders of the company get together and maybe at the start it’s just a discussion about where we are. But if we could just agree on the common set of facts of the situation that we’re in, and the impact that these platforms are having on our world, if we could just get some alignment in a non-adversarial dynamic, I believe that there is a path whereby [all three can] come together and say, ‘Look, this doesn’t work. The business model is incongruent with the long-term well-being of society, and therefore —  not unlike how fossil fuels are incongruent with the long-term prospects for Earth, we need to have a reckoning and then create and a path out of it.’

Strict regulation that’s adversarial, I’m not sure is going to solve the problem. And it’s just going to be a drawn-out battle whereby more individuals are going to get sick [from addiction to their phones], and [companies like Facebook are] going to continue to wreak havoc on society.

TC: If this antitrust action is not necessarily the answer, what potentially could be on the regulatory front, assuming these three are not going to come together on their own?

TK: Congress and the Senate are looking really closely at Section 230 of the Communications Decency Act that allows — and has allowed since it got put in place in 1996 — platforms like Google and Facebook to operate in a very different way than your traditional media company does, in that they’re not liable for the content that shows up on their network.

That seemed like a great idea in 1996. And it did foster a lot of innovation because these bulletin board and portal-ike services were able to grow unabated as they didn’t have to deal with the liability issues on every piece of content that got posted on their platform. But you fast forward to today, it sure seems like one of the ways that we could solve misinformation and conspiracy theories and this tribalism that seems to take root by virtue of the social networks.

If you rewind five or 10 years ago, the issue that really plagued Facebook and to a lesser extent, Google, was privacy. And the government threatened Facebook again and again and again, and it never did anything about it. And finally, in 2019, it assessed a $5 billion fine and then ongoing penalties beyond that  for issues around privacy. And it’s interesting. It’s been a year since those were put in place, and we haven’t had any issues around privacy with Facebook.

TC: You were tasked with developing Facebook’s ad-driven business and coming up with a way for Pinterest to monetize its users. As someone who understands advertising as well as you do, what do you think about this case that the DOJ has brought against Google. What’s your hot take?

TK: If you’re trying to start an online business, and you want to monetize that business through advertising, it’s not impossible, but it is an incredibly steep uphill battle.

Pinterest ultimately broke through when I was president of Pinterest and working on their revenue business. But the dominance of both Google and Facebook within advertising makes it really difficult for new entrants. The advertisers don’t want to buy from you because they basically can get to anyone they want in a very effective way through Google and Facebook. And so what do they need Pinterest for? What do they need Snap for? Why do they need XYZZ startup tomorrow?

That’s on the advertising side. On the search side, Google has been stifling competition for years, and I mean that less in terms of allowing new entrants into search — although the government may be asserting that. I actually mean it in terms of content providers and publishers. They’ve been stifling Yelp for years. They’ve been basically trying to create these universal search boxes that provide the same local information that Yelp does. [Yelp] shows up organically  when I search for sandwich shops in downtown San Mateo, but then [Google puts] their own stuff above it and push it down to create a wedge to hurt Yelp’s business so that [Google] can support and build up their own local business. That’s anti-competitive.

TC: Along with running Moment, you’ve been talking with startups that are addressing some of the issues we’re seeing right now, including startups that tell you if a news outlet is left- and right-leaning so you’re aware of any biases ahead of time. Would you ever raise a fund? We’re starting to see these solo GPs raise pretty enormous first-time funds and people seemingly just as happily entrust their money to you.

TK. I think traditional venture capital, with traditional limited partners, and the typical timeframe of seven years from when the money goes in and the money needs to come out, created some of the problems that we have today. I think that companies are put in a position, once they take traditional venture capital, to do unnatural things and grow in unnatural ways. Absolutely the social networks that took venture capital felt the pressure at the board level from traditional venture capitalists to grow the user base faster and monetize it more quickly. And all those things led to this extractive business model that we’re looking at today with a critical eye and saying, ‘Oh, whoops, maybe this business model is creating an outcome that we don’t really like.’

If I ever took outside money to do more serious professional-grade investing, I would only take it from wealthy individuals and there would be an explicit term that basically said, ‘There’s no time horizon. You don’t get your money back in seven to 10 years necessarily.’ I think that’s the criteria you need to have if you’re really going to do investing in a way that doesn’t contribute to the problems and misaligned incentives that we’re dealing with today.

Why are VCs launching SPACs? Amish Jani of FirstMark shares his firm’s rationale

It’s happening slowly but surely. With every passing week, more venture firms are beginning to announce SPACs. The veritable blitz of SPACs formed by investor Chamath Palihapitiya notwithstanding, we’ve now seen a SPAC (or plans for a SPAC) revealed by Ribbit Capital, Lux Capital, the travel-focused venture firm Thayer Ventures, Tusk Ventures’s founder Bradley Tusk, the SoftBank Vision Fund, and FirstMark Capital, among others. Indeed, while many firms say they’re still in the information-gathering phase of what could become a sweeping new trend, others are diving in headfirst.

To better understand what’s happening out there, we talked on Friday with Amish Jani, the cofounder of FirstMark Capital in New York and the president of a new $360 million tech-focused blank-check company organized by Jani and his partner, Rick Heitzmann. We wanted to know why a venture firm that has historically focused on early-stage, privately held companies would be interested in public market investing, how Jani and Heitzmann will manage the regulatory requirements, and whether the firm may encounter conflicts of interest, among other things.

If you’re curious about starting a SPAC or investing in one or just want to understand how they relate to venture firms, we hope it’s useful reading. Our chat has been edited for length and clarity.

TC: Why SPACs right now? Is it fair to say it’s a shortcut to a hot public market, in a time when no one quite knows when the markets could shift?

AJ: There are a couple of different threads that are coming together. I think the first one is the the possibility that [SPACs] works and really well. [Our portfolio company] DraftKings [reverse-merged into a SPAC] and did a [private investment in public equity deal]; it was a fairly complicated transaction and they used this to go public and the stock has done incredibly well.

In parallel, [privately held companies] over the last five or six years could raise large sums of capital, and that was pushing out the the timeline [to going public] fairly substantially. [Now there are] tens of billions of dollars in value sitting in the private markets and [at the same time] an opportunity to go public and build trust with public shareholders and leverage the early tailwinds of growth.

TC: DraftKings was valued at $3 billion when it came out and it’s now valued at $17 billion, so it has performed really, really well. What makes an ideal target for a SPAC versus a traditional IPO? Does having a consumer-facing business help get public market investors excited? That seems the case.

AJ: It comes down to the nature and the growth characteristics and the sustainability of the business. The early businesses that are going out, as you point out, tend to be consumer based, but I think there’s as good an opportunity for enterprise software companies to use the SPAC to go public.

SPAC [targets] are very similar to what you would want in a traditional IPO: companies with large markets, extremely strong management teams, operating profiles that are attractive, and long term margin profiles that are sustainable, and to be able to articulate [all of that] and have the governance and infrastructure to operate in a public context. You need to be able to do that across any of these products that you use to get public.

TC: DraftKings CEO Jason Robins is an advisor on your SPAC. Why jump into sponsoring one of these yourselves?

AJ: When he was initially approached, we were, like most folks, pretty skeptical. But as the conversations evolved, and we began to understand the amount of customization and flexibility [a SPAC can offer], it felt very familiar. [Also] the whole point of backing entrepreneurs is they do things differently. They’re disruptive, they like to try different formats, and really innovate, and when we saw through the SPAC and the [actual merger] this complex transaction where you’re going through an M&A and raising capital alongside that and it’s all happening between an entrepreneur and a trusted partner, and they’ve coming to terms before even having to talk about all of these things very publicly, that felt like a really interesting avenue to create innovation.

For us, we’re lead partners and directors in the companies that we’re involved with; we start at the early stages at the seed [round] and Series A and work with these entrepreneurs for over a decade, and if we can step in with this product and innovate on behalf of our entrepreneurs and entrepreneurs in tech more broadly, we think there’s a really great opportunity to push forward the process for how companies get public.

TC: You raised $360 million for your SPAC. Who are its investors? Are the same institutional investors who invest in your venture fund? Are these hedge funds that are looking to deploy money and also potentially get their money out faster?

AJ: I think a bit of a misconception is this idea that most investors in the public markets want to be hot money or fast money. You know, there are a lot of investors that are interested in being part of a company’s journey and who’ve been frustrated because they’ve been frozen out of being able to access these companies as they’ve stayed private longe. So our investors are some are our [limited partners], but the vast majority are long-only funds, alternative investment managers, and people who are really excited about technology asa long term disrupter and want to be aligned with this next generation of iconic companies.

TC: How big a transaction are you looking to make with what you’ve raised?

AJ: The targets that we’re looking for are going to look very similar to the kind of dilution that a great company would take going public —  think of that 15%, plus or minus, around that envelope. As you do the math on that, you’re looking at a company that’s somewhere around $3 billion in value.  We’re going to have conversations with a lot of different folks who we know well, but that’s that’s generally what we’re looking for.

TC: Can you talk about your “promote,” meaning how the economics are going to work for your team?

AJ: Ours [terms] are very standard to the typical SPAC. We have 20% of the original founders shares. And that’s a very traditional structure as you think about venture funds and private equity firms and hedge funds: 20% is is very typical.

TC: It sounds like your SPAC might be one in a series.

AJ: Well, one step at a time. The job is to do this really well and focus on this task. And then we’ll see based on the reaction that we’re getting as we talk to targets and how the world evolves whether we do a second or third one.

TC: How involved would you be with the management of the merged company and if the answer is very, does that limit the number of companies that might want to reverse-merge into your SPAC?

AJ: The management teams of the companies that we will target will continue to run their businesses. When we talk about active involvement, it’s very much consistent with how we operate as a venture firm, [meaning] we’re a strong partner to the entrepreneur, we are a sounding board, we help them accelerate their businesses, we give them access to resources, and we leverage the FirstMark platform. When you go through the [merger], you look at what the existing board looks like, you look at our board and what we bring to bear there, and then you decide what makes the most sense going forward. And I think that’s going to be the approach that we take.

TC: Chamath Palihapitiya tweeted yesterday about a day when there could be so many VCs with SPACs that two board members from the same portfolio company might approach it to take it public. Does that sound like a plausible scenario and if so, what would you do?

AJ: That’s a really provocative and interesting idea and you could take that further and say, maybe they’ll form a syndicate of SPACs. The way I think about it is that competition is a good thing. It’s a great thing for entrepreneurship, it’s a good thing overall.

The market is actually really broad. I think there’s something like 700-plus private unicorns that are out there. And while there are a lot of headlines around the SPAC, if you think about technology-focused people with deep tech backgrounds, that pool gets very, very limited, very quickly. So we’re pretty excited about the ability to go have these conversations.

You can listen in on more of this conversation, including around liquidation issues and whether FirstMark will target its own portfolio companies or a broader group or targets, here.

Microsoft is building a price comparison engine into its Edge browser

With its Edge browser now stable, Microsoft’s current focus for its Chromium-based browser is to build features that differentiate it from the competition.

With the holiday season coming up fast (though who knows what that will actually look like this year), it’s maybe no surprise that one of the first new features the company is announcing is a price comparison tool as part of its ‘Collections’ bookmarking service. That was always an obvious next step, but it’s nice to see Microsoft add some more functionality here.

Also coming to Edge is the general availability of its integration between Collections and Pinterest, as well as a new screenshot tool for capturing web content, improved PDF support and an update to its Teleparty extension for streaming TV shows in sync with your friends and chat about it in your browser’s sidebar.

In addition, you can now also start free video meetings with your friends and family (or co-workers), right from the browsers through an integration with Microsoft’s Meet Now service. You can have up to 50 people in these video chats, share screens and record these sessions. While this is rolling out in Edge first, it’s also coming to Outlook on the web and the Windows 10 taskbar in the next few weeks.

Image Credits: Microsoft

You can’t say Microsoft held back on new features with this release, but the highlight is surely the new price comparison engine, though.

“We’ve been talking about how collections is a great feature for anyone who wants to do research — whether that’s research in education or work, but a lot of people do research for shopping,” said Divya Kumar, Microsoft’s Director of Product Management for its browser and search tools. “We’ve really started to talk about this rhythm of, ‘okay, if use drop things into Collections, we should be really smart enough to give you the data that you’re looking for.’ This felt like a really natural next step for us to do.”

As long as Edge — through its connection with Microsoft Bing‘s existing price comparison engine — recognizes that you’re saving a product site, maybe from Amazon or Best Buy, it’ll show you the option to compare prices right in the browser tools bar. The next logical step now is for the team to add alerts when prices change and Kumar tells me that this is on the roadmap, together with several other features the team wasn’t ready to discuss yet.

Microsoft says it does not get affiliate fees when you buy through one of the links in Collections.

Talking about shopping, the team is also launching its Bing Rebates cashback program out of beta now (after shutting down a somewhat similar program a while back). The company signed up the likes for Walmart, Expedia, Walgreens and Nvidia for this program (though Nvidia only gives you a whopping 0.5% cashback). Still, it may just get some people to use Bing, though you have to sign up as a Microsoft Rewards member to participate.

“Rebates is a great part of the shopping story that we’re trying to land in terms of enabling smarter shopping experiences in the browser,” said Kumar.

In addition, through its Give with Bing program, you can now use your Microsoft Rewards points to donate to charitable organizations and until the end of the year, Microsoft will match your gift. This is live in the including: U.S., UK, Canada, Australia, France, Italy, Germany and Spain.

As somebody who works on the web and takes screenshots all day, the updated screenshotting tool is also worth a look. Edge could already help you take screenshots, but until now, all you could do was copy what was on your screen. Now, you can also grab content from further down the page and then save it or share it directly from Edge.

Image Credits: Microsoft

If you’re an iOS user and have switched to Edge there — or thought about it — the news here is that you can now select Edge as your default browser there, a feature Apple finally enabled with the launch of iOS 14.