THE CALIFORNIA INVASION OF PRIVACY ACT
..And Other Things and Happenings
This past weekend I went to the gun range with some of my boys. It was a good time. As you can see, I’m a pretty good shot. But when I looked at my target later, I realized something..
If I were playing the gun range’s game I would have lost.
Their target provides points for hitting certain areas. Me, I wasn’t focused on that, I was focused on taking Ice-Q’s head off.. and I succeeded.. at my game.
But life is like that. It’s about understanding what game you’re playing. Bill Gates said it like this, “an old business joke says that if the railroads had understood they were in the transportation business instead of the steel-rail business, we’d all be flying on Union Pacific Airlines.”
I think every once in a while it’s good to review your goals, targets, vision and determine whether you’re on track. As Yogi Berra, the professional baseball player, said - “if you don’t know where you’re headed, you’ll end up someplace else”.
Let’s get into it.
INTERNET LAW
This may not be applicable to everyone, and you can skip this section if you don’t have a business website; but there’s been a recent uptick in claims under California Penal Code: Part 1, Title 15, Chapter 1.5 ("Invasion of Privacy") Cal. Penal Code §§ 630–638.
In plain English, it’s called the California Invasion of Privacy Act.
The Act makes it unlawful for any person to intercept any contents or meaning of any communications over any wire, line, or cable without the consent of all parties; but claimants and class-action suits have sought to take advantage of recent court rulings that have expanded the scope of CIPA to apply to third-party digital software and data tracking service providers (such as Meta’s pixels); and that by allowing these third-party service providers to collect data through a variety of means, companies are aiding or abetting the interception of the contents or communications - thus, arguably violating the Act.
If you’re a legal nerd, you can read about an important CIPA case here; but basically what’s happening is that there is a degree of uncertainty in the courts about this law and how companies can collect site usage data in a compliant manner. Because of that, people (and lawyers) are suing; primarily in the hopes of cashing out from companies who may not want, or have the means, to fight these cases. That’s often how these things go.
I expect things will be resolved over time; and this may not be an issue for you (some lawyers like to exaggerate the risk) meaning you may not be a target; but, in the meantime, and if you wish, there are a few risk mitigation tactics that companies in this space can take; such as:
Obtaining clear consent (e.g. through a click-wrap notice/banner) prior to obtaining, tracking or allowing any third-party to track or acquire site visitor data.
Auditing data collection practices to understand how and where data is collected by your company, and/or any third parties, vendors or data sub-processors, in order to make further risk assessments.
Ensuring that all implemented cookies are included in your cookie banner and user preferences; and that user cookie preferences are being followed.
Of course this is general guidance, and not legal advice (I have to say that); but if this is an issue that affects you directly and you would like to consult with a law firm which specializes in this area. Feel free to reach out to us at First Gen Law.
Ok enough with the content marketing; let’s get into some stories that stuck out to me over the last couple of weeks.
ARTIFICIAL INTELLIGENCE
Tech Spark AI Raises $1.4 Million to Create ChatGPT Alternative
“Tech Spark AI is based in Toronto and was founded by Tamar Huggins eight years ago to develop school curricula for Black and brown students across North America; ‘oftentimes, technology is designed without the lens of Blackness, and therefore, the impact on Black communities can be quite negative, especially when it comes to AI in general,’ Huggins told TechCrunch.” “‘It’s really about how we can identify the problems that exist within our own communities using technology to create meaningful, safe-tailored solutions that generate impact.’”
The round was led by TD Bank, with participation from Salesforce, Canada’s government and NBA Canada. I believe we’ll see more of this; not because people need to fill a quota under pseudo-theories of diversity and inclusion; but because there’s a lot of white space to be filled and entrepreneurs are best positioned to meet the needs of their own communities and constituents; and, personally, I don’t see any reason why we can’t. That’s just how I think.
These are free AI courses and skills training launched by Amazon.
YouTube Cracking Down on AI Voice Cloning and 'Synthetic' Videos
Some more AI and music stuff..
The Future of Music: How Generative AI Is Transforming the Music Industry | Andreessen Horowitz
This is an overview of Generative AI, and Generative AI companies, in the music space.
It looks pretty interesting. But one question I have is: “what problems are many companies in this space solving; and whose problems?”
In my seminar last week, I compared the startup and venture capital space to the music business (as I often do). The specific comparison is that, in the music business, whenever a specific type of artist or music blows up, everybody tries to copy it (this is why you have artists in Kansas now making afrobeats). All jokes aside, the same thing happens in venture capital and with startups.
“Life is pretty simple: You do some stuff. Most fails. Some works. You do more of what works. If it works big, others quickly copy it. Then you do something else. The trick is the doing something else”
- Leonardo da Vinci
MUSIC AND MEDIA
New Mountain Capital Acquires a Stake in BMI
In my last article, I referenced a private equity firm that acquired a stake in Jerry Jones’ company, Legends Hospitality. Well, New Mountain Capital is that firm; and they’ve acquired a stake in the U.S. music performance rights organization, BMI. An interesting note is that CapitalG, Google/Alphabet’s growth fund, is participating in this acquisition. If you’ve been paying attention, Google and Youtube are already heavily involved in music.
It’s also expected that BMI will allocate $100m of the proceeds of this acquisition to artists “in keeping with [BMI’s] distribution methodologies, which are based on performance levels over a set period of time”.
What is that methodology? I have no idea.
According to BMI’s press release, “New Mountain’s growth investment in BMI will accelerate the company’s ambitious value creation plan, which has three core tenets:
to continue to grow cash distributions for its affiliates.
to invest in next generation technology platforms and new service offerings that will improve royalty collections, enhance BMI’s customer service, and deliver the best possible experience for its affiliates.
to add new revenue streams driven by organic growth investments and M&A opportunities, with an initial focus on improving general licensing royalty collections, international partnerships and new service offerings. New growth investments will create additional opportunities for distribution income for its affiliates.”
TikTok Launches A New Creator Fund, I Mean, “Creativity Program”
Tik Tok shut down their recently launched billion dollar creator fund. “The new creativity program is open to users from selected countries who have at least 10,000 followers and at least 100,000 views within 30 days”
Being a social media creator is a full time job.. and being in the business of creators is hard. You either have to serve the minority of creators that become superstars, serve a sizable portion of the creator market (the fancy term is total addressable market), or find a way to do both.. profitably.
FINANCE
Binance Founder Changpeng Zhao Steps Down, Pleads Guilty
“The chief executive of Binance, the largest global cryptocurrency exchange, stepped down and pleaded guilty to violating criminal U.S. anti-money-laundering requirements, in a deal that might preserve the company’s ability to continue operating, according to court documents.”
Notable quote: “Using new technology to break the law does not make you a disrupter. It makes you a criminal” - Attorney General Merrick Garland.
“Damn, Daniel.. FBI keep bringing them all white vans through”
- Jay Z, ‘Drug Dealers Anonymous’
SKKY Partners Announces Investment in Premium Sauce and Condiments Brand TRUFF
I’ve written about SKKY Partners before; but SKKY Partners is a private equity firm founded by Kim Kardashian and Jay Sammons, a former private equity executive at Carlyle.
This transaction is interesting to me because I’m sure many expected Kim to only invest in lipstick, makeup and things like that.. and probably didn’t take the founding of her firm very seriously. And while the end results remain to be seen, TRUFF is a significant player in the condiment space. I only found out about them a couple months ago when I saw a bottle of their hot sauce in my brothers’ fridge. He’s boujee, so if he likes them then they must be good.
Apart from that, TRUFF is “sold online and in more than 20,000 stores, including Whole Foods, Kroger, Publix, Target and more; and their partnerships include launches with Popeyes Louisiana Kitchen, Hidden Valley Ranch, Taco Bell and The Super Mario Brothers Movie. Most recently, TRUFF was named to Oprah’s Favorite Things 2023, marking the company’s fifth time on the list”.
This is another example of the opportunity I’ve been talking about for artists, athletes, creators, and “influencers” in general. Part of the attraction for TRUFF to partner with SKKY isn’t just the money. They could have gotten that from a number of places. The attraction is to partner with an influential figure who can, not only elevate their brand, but who can also use their platform to drive customer acquisition. Also, the thing here is that this model can be applied to businesses of all size and scale. There are thousands of small businesses looking for exposure; partnering with the right “influencer(s)” can be a solution to that problem.. alright, that’s enough sauce.
2024 TINGS
There’s been much public conversation about the music business, lately; but I’ve been talking and writing about the bad stuff for years. I even shut down my music practice for some time and went into tech, partly, because I couldn’t stomach some of the stuff I saw in the music business. But I’m back now =)
And, in hindsight, I’m grateful for the doors that closed and the doors I refused to enter. It makes me think about the OpenAI drama. I won’t get into it much, because I don’t really care to be honest; but if it shows anything, it’s the power of fundamentals. Sam Altman was brought back (barring any other changes) largely because of his fundamental relationships. I think that’s instructive.
Warren Buffett once said, “You never know who's swimming naked until the tide goes out.” This is similar to what I wrote about in Current View #2: The Rebranding and the story about The Emperor’s New Clothes. Certain things don’t reveal themselves immediately. It doesn’t mean they’re right or wrong.. you often won’t find that out until much later. So what’s important is doing the right thing(s) and making decisions for the right reason(s). During his lifetime, Martin Luther King was one of the most hated men on the planet and the FBI constantly harassed him; but you wouldn’t know that if you just looked at public sentiment today.
That’s why it’s important to play the long game.
I think 2024, for me at least, is going to be about drilling down into the fundamentals; and ignoring the shiny things. When things are exposed, it’s often because of ignorance of the fundamentals.. and an attachment to shiny things.
Don’t try to game the truth, be the truth.
Proverbs 24:3-4 says, “By wisdom a house is built, and through understanding it is established; through knowledge its rooms are filled with rare and beautiful treasures”
Another translation says, “Any enterprise (life, family, business, etc.) is built by wise planning, becomes strong through common sense, and profits wonderfully by keeping abreast of the facts”
Face facts. Plan. And move accordingly.
I’ll be taking December off to practice what I preach and review. Stay safe, celebrate life, and spend time with your loved ones.
I’ll catch you in 2024.
