👁️ A startup curating DTC brands


February 11, 2021

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The Hustle
TOGETHER WITH
Cytonics

“What if Facebook copies us?” has struck again. This time, Zucky McCopyCat is cloning the scorching-hot social audio app Clubhouse.

In related news, we’re tempted to roll out a competing product called HustleHouse that’s just our founder, Sam, talking to himself about the ROI on hot dog stands.

The Big Idea
facial recognition

Facial recognition has come a long way. Its problems have a long way to go.

Is the search-by-face function on photo apps the most useful tool of the last 1k years? Probably not. If anything, it shows us that computers are great at doing some things we aren’t.

Like identifying individual faces among many, which 80 years of technological developments have made relatively easy.

But a new study from Mozilla fellow Deborah Raji and Genevieve Fried — a congressional advisor on algorithmic accountability — shows these developments have come at a cost:

Researchers have ‘gradually abandoned asking for people’s consent’

Raji and Fried examined 130 facial recognition datasets across 4 eras and found that consent has been gradually pushed out the window:

  • 1960s-1990s: Manual data gathering involved measuring distances between facial features in consented photographs.
  • 1990s-2007: The DOD spent $6.5m building the first large face dataset, capturing 14k consented images and sparking academic and commercial interest.
  • 2007-2014: Researchers began scraping images from the web without consent.
  • 2014-present: In 2014, Facebook used 4m images from 4k profiles to train its DeepFace model, making web-based deep learning the industry standard.

In the first era, consented photo shoots made up 100% of facial recognition data sources. Today, they make up just 8.7%, with web search comprising the rest.

Which is great for the technology, but bad for consent

Training models on millions of images improves the tech through scale, but it also raises serious concerns regarding wide-scale bias and privacy issues.

Studies have shown that white males are falsely matched with mug shots less often than other groups, and a test of Amazon’s Rekognition software showed it misidentified 28 NFL players as criminals.

Microsoft and Stanford released facial datasets without consent…

… that startups and a Chinese military academy obtained before they were removed.

Facial recognition is moving a bit too fast for some: Boston, San Francisco, Oakland, and Portland have outlawed “city use of the surveillance technology,” per CNN.

This seems to be a reasonable measure; at a minimum, it’ll give people less of a reason to put on (and this is actually a thing) anti-facial-recognition makeup:

New year, new look (Source: SCMP)

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Snippets
  • AT&T feels the heat… from a 90-year-old California man who launched a $10k WSJ ad campaign explaining that using AT&T’s internet service to watch TV was like watching “slideshows.”
  • Biden pressed pause on Cardi B’s WAP Oracle and Walmart’s plan to buy TikTok’s US operations while his administration reviews former president Donald Trump’s efforts to deal with security risks from Chinese companies.
  • Ant can’t wait: Investors were on track to make billions before Ant’s halted IPO. Now they have to wait until Ant abides by new regulations and IPOs again to sell off shares.
  • Looking forwARd: Apple supplier TSMC is reportedly putting together some sweet AR hardware for Apple’s rumored “Apple Glass” headset.
  • Archer hits the bullseye: The electric aircraft startup is going public via a SPAC deal. Archer will have United Airlines as an investor and customer, as the airline has placed a $1B order for Archer aircraft.
 
The Fascination

A sampling of The Fascination’s product coverage

The Fascination helps consumers and brands make sense of the crowded DTC world

In a world of seemingly infinite options, tech analyst Ben Thomspon says that value accrues to those who provide discovery and curation.

For those looking for curation of direct-to-consumer (DTC) brands, a new venture is just for you: The Fascination, which marries curation (à la Wirecutter) along with a soon-to-come marketplace (à la Amazon).

The Fascination was officially launched in December 2020

It was co-founded by David Wolfe and Matt Hayes, 2 founding members of DTC mattress brand Leesa Sleep (which reached $120m+ in annual sales).

As veterans of the industry, the pair launched The Fascination to address key issues faced by:

  • Customers: Way too much choice.
  • Brands: Standing out in the crowded market is too pricey (ads on Facebook, Google Ads) or difficult to do (commoditized on Amazon).

How The Fascination works

The Fascination has partnered with 100+ purpose-driven DTC brands (e.g, Allbirds, Haus) across a number of categories including fashion, home, health, beauty, and accessories.

For each brand, The Fascination provides:

  • Badges: Which designate what values the brands stand for (e.g., “organic”, “ethically sourced”)
  • Brand alerts: Customers can subscribe to brands to receive the latest product updates and news
  • Editorial: The Fascination digs into the science (e.g., how a fabric is made) and soul (e.g., the brand’s story) of each brand

The Fascination currently monetizes via affiliate ads

Moving forward, The Fascination is building a robust ecommerce bank-end where you can shop all products in one place (with one simplified checkout cart) while brands get access to the audience (and potential for cross-sells).

In exchange for all this curation, The Fascination gets to own the customer data and relationship.

It’s not the first review site of its kind, but The Fascination’s vision has something everyone can like.

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SPONSORED

How Cytonics is disrupting the $180B market for osteoarthritis treatment

Invest in Cytonics here.

Just how big of a pain is osteoarthritis? 

(Statistically speaking, not “how bad my fingers feel after a full day of typing” speaking.)

  • Over 27M are treated for arthritis-related pain in the US alone
  • By 2030, 25% of the adult population is expected to be impacted

Until now, treatments have only focused on easing symptoms. That’s where Cytonics comes in with its revolutionary first-in-class treatment that successfully addresses the root cause of osteoarthritis:

Alpha-2-Macroglobulin protein injections.

This cutting-edge approach attacks osteoarthritis at the molecular level and has the potential to change lives and impact a massive industry, making Cytonics what some copywriters might call “a veeeeery interesting investment opportunity.”

Interested in learning more and investing in Cytonics? Check out their invest page here for the full details:

More on Cytonics →
China Tech
RED app

A hot Chinese social app is a new entry point for foreign brands

If you’ve ever thought to yourself, “Wow, I’d love an app that combines YouTube, Pinterest, Wirecutter, TripAdvisor, and influencers telling me what to buy,” a Chinese app called RED has you covered.

Propelled by 300m+ users, RED is valued at $5B and has become an option for foreign brands trying to enter China, per Protocol.

RED has become China’s go-to place…

… for trusted product information and reviews.

Here are some stats:

  • User ‘stickiness’: The platform has 8B views daily. The average user opens the app 4x/day and spends 40m a day on it. (That’s 3x longer than Pinterest users spend there.)
  • Coveted users: 90% are affluent, urban women. Most are between 18 and 35.
  • High conversion rates: The app sees conversion rates up to 20%, which is 10x traditional ecommerce rates of ~2%.

A beacon for international brands

China is the most lucrative place for foreign brands — there’s a growing middle class, rising disposable income, and penchant for luxury.

Instead of launching physical stores or their own online store, foreign brands often partner with existing 3rd-party ecommerce platforms.

RED is currently China’s 3rd-largest ecommerce platform, and foreign brands are flocking to it to expedite their expansion into China.

With luxury sales projected to fall by 23% (to $258B) in 2020, RED is one way to help brands get back in the black.

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EV Wars
Rivian

Rivian says it makes “electric adventure vehicles”… story checks out. (Source: Rivian)

Amazon-backed Rivian is looking at a $50B IPO

The “whatever you can do, I can do better” battle between Elon Musk and Jeff Bezos is getting absurd:

  • Forbes list: Musk and Bezos have been swapping the “richest person in the world” title over the past few months.
  • Space: Blue Origin (Bezos) vs. SpaceX (Musk) is the new age space race.

Now, Rivian — a maker of EV pickups and SUVs — is planning for a $50B IPO by the fall. Backed by Amazon and Ford, the firm was valued at $27.6B in a January funding round. 

The car maker expects to have 10k trucks on the road by the end of 2022. For his part, Bezos is really trying to tip the scale here: Amazon has ordered 100k EV delivery vans by 2030.

Prep the 🍿.

SPONSORED
Reserve your spot →
Software of the day
Queen Elizabeth II

To facial recognition AI, only the image on the left is Queen Elizabeth II. Who’s smart now?

Fawkes is a privacy tool for PCs and Macs. The software makes very subtle changes to any face photos in an effort to trick facial recognition systems.

Named after the Guy Fawkes mask from the movie V for Vendetta, Fawkes was created by researchers at the University of Chicago, per The Verge.

The tech is a bit complicated but essentially makes AI tools think you’re a different person through slight image alterations.

To really make a difference, Fawkes’ team says platforms like Facebook would have to adopt the tech to thwart 3rd-party facial recognition scrapers like Clearview AI (which the good ol’ Canadians have completely outlawed in the Frozen Tundra).

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