Massive Chinese Investment, Amazon’s New Planes, and a Guide to SXSW

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Got $338 Billion Burning a Hole in Your Pocket?
China does. According to ZeroIPO Group (Bloomberg), investment in Chinese government-backed venture funds tripled to $338 billion last year, which is five times the sum raised by all other venture firms on the planet in 2015. It’s an amazing experiment, one that also includes 1,600 high-tech incubators for startups. One of the reasons for all this: “The government wants to attract money to riskier startups shunned by private investors who chase quicker and surer returns in late-stage bets.” This loosening is happening at such a scale that one (private) VC in China predicts inexperienced or corrupt managers will shepherd “catastrophic losses.” In the end, it’s an experiment about how innovation scales in a country that limits the open sharing of information. Are deep pockets enough? Perhaps China should study the climate in San Francisco circa 1999 to find out.

Amazon Flies Away From Its Partners
We buy everything on Amazon. We store everything on Amazon. Maybe not too long from now we’ll ship everything via Amazon. And not just via the company’s fanciful fleet of drones. Amazon has purchased 20 Boeing 767s, creating a shipping business that strengthens and extends the value chain it’s been building for more than two decades. This should worry UPS, which has benefited tremendously from Amazon’s rise. Yet what Amazon appears to be doing to UPS is nothing new. It’s what Microsoft did to independent software developers during the height of its Windows hegemony; it’s what we suspect Uber will do to its drivers once self-driving vehicles reach maturity.

Keep SouthBy Weird
It’s time for SXSW Interactive. Come to our session and use our guides for picking other events: SXSW Sessions With a NewCo Vibe and Dozens of NewCos Will Be at SXSW in Austin. Here Are 10 of Them.

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Embrace’s Simple Solution Has Saved 150,000 Lives … So Far

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At TEDIndia in 2009 Jane Chen, cofounder and CEO of Embrace Innovations, asked the audience to close their eyes and imagine what might fit in their hands — an apple, a wallet, something small. Next came an image of a premature baby, not much larger than the hands holding it. According to the World Health Organization, 15 million babies are born premature each year. Embrace notes that more than one million die within the first month. For those who survive, some will suffer severe long-term health problems — diabetes, heart disease, low IQ. Chen said, “many of these problems could be prevented if these babies were just kept warm.” To date, Embrace Innovations has helped 150,000 babies across 10 countries with its simple, cost-effective infant warmers and an interesting business model — it’s both a nonprofit and a for-profit social enterprise.

Embrace’s first infant warmer — it looks like a tiny sleeping bag — started as a class project at Stanford University in 2007. The course, Design for Extreme Affordability, challenges teams of MBAs and engineers to develop affordable technologies for people living on less than a dollar a day. That year, Stanford asked students to design an intervention for neonatal hypothermia. It needed to cost one percent of what a traditional incubator cost (in the U.S., that’s about $20,000). Chen, along with Linus Liang, Naganand Murty, and Rahul Panicker, designed the Embrace Infant Warmer to help premature and underweight babies in the developing world. Together they founded Embrace and registered as a 501(c)(3) non-profit in 2008. Then they moved to India.

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Politicians Wearing Company Logos May Change the Politics-Business Relationship

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There’s an amazing petition circulating in California. Created by John Cox, a businessman who’s run for Congress, the Name All Sponsors California Accountability Reform (that’s NASCAR!) would require politicians to wear the logos of their top 10 donor companies and organizations.

There are also petitions floating around the Internet to do things like have the comic-book character Deadpool host Saturday Night Live or deport Donald Trump to Mexico but those petitions aren’t binding. In California, where there are ballot propositions, this could become law. So far, 40,000 signatures have been collected. 365,880 are needed by June 28 to get the petition onto the ballot this fall.

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Are Apple’s Privacy Policies Insanely Great?

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The wealthiest corporation in the world and the most powerful government in the world are fighting over a single smartphone. And the future of our social compact with both corporations and government may hang in the balance.

While the U.S. government says it cares about just one phone — an iPhone 5c used by one of the San Bernardino terrorists that it wants decrypted — Apple says a judicial order to create a special operating system for the government creates a backdoor that threatens all of its customers’ privacy. It maintains it’s challenging an order from a federal judge to protect “tens of millions of American citizens.”

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Night Mayors and the Serious Business of Having Fun

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A new job title has emerged in cities around the world to advocate for night owls and young creatives. Night mayors encourages drunk people to keep it down, nurture the arts, and instigate neighborhood revitalization. Some appointed, some elected, night mayors act as an intermediary between nightlife industries and government.

In many cities, the solutions to noisy, disruptive bars have been curfews, raids, or closing businesses outright. Yet nightlife in the U.S. generates tens of billions of dollars a year. And as more people move to cities, nightlife can be directly tied to the larger economy. A robust nightlife attracts “a lot of young creative people and they are followed by the creative industries.”

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Patrolling the Skies with Drone-Attacking Eagles and GoPro Vultures

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Typically, when people in cities talk about carcass-eating vultures, it’s a joke about lawyers or developers or something, not flying scavengers.

In Lima, Peru, a team of actual vultures equipped with GoPros and GPSs are locating illegally dumped trash. The birds don’t just help spot areas where trash needs to be removed. Their work can help reduce disease or keep poisonous chemicals from contaminating local water, particularly in poor neighborhoods. A similar approach may be helpful in other cities with trash dumping problems, like Beirut and Bangalore. This idea came from U.N.-backed climate talks that focus on what cities can do to reduce climate change. Those talks, which started last year in Lima, continue this fall.

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Basic Income Goes Mainstream

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Rarely does a plan to do research gain much attention beyond those directly affected. But when Sam Altman of incubator Y Combinator announced last week his firm’s plan to fund a five-year study on basic income, it felt like every business thinker wanted a piece of it. This is happening for two reasons.

First, we’re at a moment when inequality has brought people as unlikely as Thomas Piketty and Bernie Sanders to the forefront, when people are reaching a consensus that things aren’t fair even if there’s no consensus as to why. We’re also at a moment when experiments trying to ameliorate the problem are getting attention and sometimes even funding. Switzerland is set to vote on a proposal to make it “the first country in the world to provide a basic unconditional monthly income.” Swiss pundits say the bill is unlikely to pass, but this is one of the most high-profile attempts so far to see whether there’s good in guaranteeing people income regardless of whether they are employed.

Second, it’s fascinating that this work is being funded by Y Combinator. Those whose memories go back to January will recall that Paul Graham, a Y Combinator founder, wrote an essay more or less defending inequality, saying that poverty itself is the primary problem, not inequality. The essay quickly turned into a pinata, although with few exceptions responders were more interested in attacking Graham’s argument than inequality itself. (Perhaps the most pungent and comprehensive response came from Tim O’Reilly.)

Regardless of how you respond to Graham’s essay (it’s easy to both nod your head and get furious in the same sentence) or whether you think his firm’s plan to fund basic income research is sensible, what’s more important right now is that people with platforms are talking about the issue and backing up their talk with action. If a key purpose of a NewCo is to create positive change, Y Combinator’s research can be a step toward discovering whether basic income might be a way to make some positive change. And, if this is research work that appeals to you, you have until February 15 to apply.

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When On-Demand Does Good

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Women, the only segment of our species tough enough to show up for work at the U.S. Congress during a snowstorm, have been unable to get contraceptive delivery until just recently.

The startup Nurx is doing away with the need for a doctor’s visit and last month started making next-day birth control deliveries. Residents of California and New York can get a three-month supply for free with insurance, $15 without.

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How To Save Capitalism From Itself

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Robert Reich’s Saving Capitalism: For the Many, Not the Few is a readable rant that — should you disagree with Reich’s central premise — will elicit eye-rolls and summary dismissal. But while his well-known political ideology (he served as Secretary of Labor under Clinton) is on constant display, I found Reich’s book both timely and important.

I am drawn to any work that posits a better way forward, and as you might expect, I agree with Reich far more often than not. You have to be willfully ignorant to pretend our current economic system is equitable (Reich argues we’re in the “second Gilded Age”) or capable of creating long-term increasing returns. And while many in our industry cling to libertarian fantasies in which technologic silver bullets solve our every social need, back here on earth we need to do better than pine for the singularity. Fixing income inequality and the loss of the middle class requires hard policy choices and a re-framing of the problems at hand.

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Climate Change Needs An Ozone Hole

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Way back in 1985 an unlikely coalition of world governments, business, and enlightened citizens did something extraordinary: Responding to the findings of leading scientists, they united in decisive action to address a looming and existential global climate threat.

That threat was a dangerous thinning of the Earth’s ozone layer due to society’s use of man-made chlorofluorocarbons (CFCs). Ozone, it turns out, protects the Earth’s surface from dangerous UVB radiation — which causes skin cancer, cataracts, and all manner of unpleasant ecological chaos.

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