Are we going to have 5G in the US soon?

First of all, what is 5G? 5G is generally seen as the fifth generation cellular network technology that provides broadband access (Wikipedia). The technology, in theory, allows for support for many more devices in the same area and much faster speed than the current 4G technology. It has been touted as one of the core components in our future society and received a lot of hype in the past few years. Here is what Loup Ventures has to say about when 5G is going to be commonly available:

On June 28th, T-Mobile will be the 4th US carrier to “launch” 5G in the US with 6 initial cities. While encouraging, we’re still in the buildup phase, likely two years away from the average consumer using 5G. To put this into perspective, we believe, by the end of 2022, about 75% of the US population will have access to 5G, essentially 2 years behind AT&T’s recent estimate of roughly 66% by the end of 2020. 

Loup Ventures Newsletter 29th June 2019 Issue

But are we though?

Wired has a great article on the different approach the US chose for 5G adoption, compared to other countries. Here is a quote that summarizes well such a difference (a bit long)

“…The traditional sweet spot for wireless service has been in what we call low-band or mid-band spectrum. This is between 600 MHz and 3 GHz. For a long time, these airwaves were considered beachfront property because they send signals far. In other words, they cover wide areas but require little power to do so. This makes them especially attractive for service in rural areas, where technology that can reach more people with less infrastructure makes greater economic sense.

For 5G, however, the United States has focused on making high-band spectrum the core of its early 5G approach. These airwaves, known as “millimeter wave,” are way, way up there—above 24 GHz. They have never been used in cellular networks before, and for good reason—they don’t send signals very far and are easily blocked by walls. That means they are very expensive to build out. On the flip side, these airwaves offer a lot more capacity, which translates into ultrafast speeds.

The United States is alone in this mission to make millimeter wave the core of its domestic 5G networks. The rest of the world is taking a different approach. Other nations vying for wireless leadership are not putting high-band airwaves front and center now. Instead, they are focusing on building 5G networks with mid-band spectrum, because it will support faster, cheaper, and more ubiquitous 5G deployment. Take China, which allocated large swaths of mid-band spectrum for its carriers last year, clearing the way for deployment in a country that is also home to Huawei, the largest telecommunications equipment supplier worldwide. South Korea and Australia wrapped up an auction of key mid-band spectrum last year. At roughly the same time, Spain and Italy held their own auctions for mid-band airwaves. Austria did the same earlier this year. Switzerland, Germany, and Japan also auctioned a range of mid-band spectrum just a few months ago. The United States, however, has made zero mid-band spectrum available at auction for the 5G economy. Moreover, it has zero mid-band auctions scheduled.” –

Wired – Choosing the wrong lane to race to 5G

In short, to access the very high-speed 5G in the US, you need to live close to the towers. The farther you live from them, the worse the connection will be. All would be OK if it were easy and cheap to build those towers everywhere. But it’s not.

Per Wall Streets Journal:

This is the paradox of 5G, the collection of technologies behind next-generation wireless networks: They require a gargantuan quantity of wires. This is because 5G requires many more small towers, all of which must be wired to the internet. The consequences of this unavoidable reality are myriad. The 5G build-out, which could take more than a decade, could disrupt our commutes, festoon nearly every city block with antennas, limit what cities can charge for renting spots on their infrastructure to carriers on which to place their antennas, and result in an unequal distribution of access to high-speed wireless, at least at first.

In a 2017 report, Deloitte Consulting LLP principal Dan Littmann estimated that it will take combined carrier spending of between $130 billion and $150 billion in order for most Americans—including those in rural areas—to have a choice of providers of high-speed broadband and 5G wireless. Marachel Knight, the senior vice president in charge of rolling out 5G at AT&T, says her company estimates it will take a decade to completely build out its 5G network.

The driving force behind this enormous build-out is that 5G networks don’t work like previous wireless cellular networks. Where 2G, 3G and even 4G rely on large towers with powerful antennas that can cover many square miles, the shorter-range, higher-frequency radio waves used by 5G networks—essential to their ability to deliver the 10- to 100-times faster speeds they promise—mean that 5G networks must have small cells placed much closer together.

Typically these small cells must be placed about 800 to 1,000 feet apart, says AT&T’s Ms. Knight. Small-cell antennas are typically the size of a pizza box, but can be much larger, and require both a fiber-optic connection to the internet and access to power. They go wherever there’s space: on buildings, new 5G-ready telephone poles and, often, retrofitted lampposts. In 2018, the U.S. had 349,344 cell sites, according to CTIA, a wireless industry trade organization. The organization estimates that—to achieve full 5G coverage—carriers will have to roll out an additional 769,000 small cells by 2026.

In a nutshell, I don’t think we are going to have 5G for the majority of Americans soon. There may be a portion of the population who fortunately will have access to the technology. The rest will have to wait till the infrastructure is amply built.

When it comes to hyped technology, I think it’s always a good idea to be vigilant, avoid the hype, go into more details and take a more conservative stance. We don’t lack examples of techs that have been hyped for years but are nowhere near to being common: AI, autonomous vehicles, 5G…

Heck, a lot of Americans don’t have access to Internet

I’ll take Heartland B-Cycle over E-Scooters

E-scooters have been taking over for the past couple of years. Brands such as Lime or Bird have received millions of dollars in funding and expanded to countries all over the world. Names like Lyft also ventured into this area. In big cities and even smaller ones such as Omaha, folks, mostly younger ones, can be seen riding scooters pleasurably.

Personally, I; however, prefer riding the rentable bikes from Heartland B-cycle. They are bikes available for rent for $10/month or $80/year at stations throughout an area of Omaha. Riders can use the bikes for one hour before having to return them to a station to avoid additional charges. There are a few reasons that can explain my preference for the rentable bikes.

Cost

My last ride with Lime was 0.7 mile long and it cost me $2.45. With $10/month, I can have unlimited rides with B-Cycle

Health issues

There is virtually no health benefit that can be gained from e-scooter. You hop on the scooter, turn it on and go. With B-Cycle, at least it’s going to be a nice cardio workout.

Maintenance

Already in Omaha have I seen many e-scooters left carelessly everywhere downtown. Folks have no regard in where they should leave the devices after use. On the other hand, you have to return B-cycle to its stations, unless you want to pay a significant fee afterwards.

According to Quartz, an e-scooter’s lifespan is 28 days. The Information reported that two of Lime’s models can last a bit longer, up to 17 weeks. In addition to expensive marketing and promotions, e-scooter companies burn a lot of cash in maintenance their fleet. Each Bird scooter costs $550. Imagine having to replace hundreds of them every 3 months. Bird has raised $415 million to date with the latest round announced just 5 months ago, but it is said to have around $100 million left in the bank and to have reduced its fleet.

The unit economics for e-scooters doesn’t look very appealing and there is no clear path to profitability. I do think more good would be done from having all that money invested in public transportation or alternative such as B-Cycle.

Some may argue that e-scooters are more flexible and can get riders to more places. Nonetheless, within 2-3 miles, a well-planned network of B-Cycle can get us into walking distance to anywhere. For a reasonably long distance, it would be much more expensive to ride e-scooters. And for a long distance, it’d be best to use other alternatives such as buses, cars or services like Uber of Lyft.

For your imagination, take a look at what Germany has for bikers

Japanology – Small factories

I am so humbled to watch a short documentary on the magnificent talent of Japanese artists. At times, the tasks at hand require a level of precision that can only be achieved by feels and instinct of humans. For instance, a stainless steel bar needs to have its diameter reduced from 52.01 millimeter to 50 millimeter. Exactly 2.01 millimeter must be removed. No more, no less.

The talent of these skilled workers is remarkable, only bettered by their off-the-chart regard for what they do. All the interviewees have years and years of honing their craft and pride beams out of their face whenever they talk about the work they do. The products of their labor don’t often get mentioned or recognized by end users, yet as the video shows, the parts play a pivotal role in high speed trains or rockets or healthcare.

This type of craftsmanship, dedication and pride in their work seems like a lost art. I have nothing but deep deep respect for Japan, its culture and the example they show the rest of the world.

How Apple’s Find My feature works

Wired published details on how Find My feature on Apple devices will work. the feature allows Apple users to find lost or stolen devices even when the devices are offline. Below are my understanding of the process and attempt to illustrate how it works with visuals for easier interpretation

Here’s how the new system works, as Apple describes it, step by step:

When you first set up Find My on your Apple devices—and Apple confirmed you do need at least two devices for this feature to work—it generates an unguessable private key that’s shared on all those devices via end-to-end encrypted communication, so that only those machines possess the key.

Each device also generates a public key. As in other public key encryption setups, this public key can be used to encrypt data such that no one can decrypt it without the corresponding private key, in this case the one stored on all your Apple devices. This is the “beacon” that your devices will broadcast out via Bluetooth to nearby devices.

That public key frequently changes, “rotating” periodically to a new number. Thanks to some mathematical magic, that new number doesn’t correlate with previous versions of the public key, but it still retains its ability to encrypt data such that only your devices can decrypt it. Apple refused to say just how often the key rotates. But every time it does, the change makes it that much harder for anyone to use your Bluetooth beacons to track your movements.

Say someone steals your MacBook. Even if the thief carries it around closed and disconnected from the internet, your laptop will emit its rotating public key via Bluetooth. A nearby stranger’s iPhone, with no interaction from its owner, will pick up the signal, check its own location, and encrypt that location data using the public key it picked up from the laptop. The public key doesn’t contain any identifying information, and since it frequently rotates, the stranger’s iPhone can’t link the laptop to its prior locations either.

The stranger’s iPhone then uploads two things to Apple’s server: The encrypted location, and a hash of the laptop’s public key, which will serve as an identifier. Since Apple doesn’t have the private key, it can’t decrypt the location.

When you want to find your stolen laptop, you turn to your second Apple device—let’s say an iPad—which contains both the same private key as the laptop and has generated the same series of rotating public keys. When you tap a button to find your laptop, the iPad uploads the same hash of the public key to Apple as an identifier, so that Apple can search through its millions upon millions of stored encrypted locations, and find the matching hash. One complicating factor is that iPad’s hash of the public key won’t be the same as the one from your stolen laptop, since the public key has likely rotated many times since the stranger’s iPhone picked it up. Apple didn’t quite explain how this works. But Johns Hopkins’ Green points out that the iPad could upload a series of hashes of all its previous public keys, so that Apple could sort through them to pull out the previous location where the laptop was spotted.

Apple returns the encrypted location of the laptop to your iPad, which can use its private key to decrypt it and tell you the laptop’s last known location. Meanwhile, Apple has never seen the decrypted location, and since hashing functions are designed to be irreversible, it can’t even use the hashed public keys to collect any information about where the device has been.

THE CLEVER CRYPTOGRAPHY BEHIND APPLE’S ‘FIND MY’ FEATURE
Exhibit 1 – Two devices have its own public key and a shared private key
Exhibit 2 – A step-by-step illustration of the process, from top to bottom

If you think there are any errors in my understanding of the how this works, please leave me a comment and share your thoughts.

Automated farming in China

I came across a video clip showing how farming is automated in China. It’s not widely adopted yet, but I don’t think the day when that happens is too far away from now.

This is how farming is done in Vietnam

Source: Wharton University

Admittedly, even though there must be innovation in agriculture in Vietnam and technology is used to some extent, the photo above illustrates the current inferior technique adopted in my hometown.

Imagine the difference in efficiency and value created between the automated method and the manual laborious one.

If you are one of the workers who don’t own land and who is hired to work others’ land, automation isn’t good news for you. Your job is threatened. Nonetheless, if you are in the agriculture business, automation is a boon improving efficiency and lowering costs. If you are an end user consuming agricultural goods, automation can bring the prices down.

If we look at it from a collective standpoint, technology or automation in particular, in the majority of cases, should bring net benefits to the society. Innovation and advancements come from standards continuously being raised, I believe.

Product: Simplify Chrome Extension

I came across Simplify a few days ago upon reading an article on Fast Company. It is a Chrome extension that helps clean up your Gmail interface. Instead of looking at unnecessary features, buttons and logos, Simplify helps clean up the interface to make it look better. Here is what Gmail normally looks

Source: TheNextWeb

Here is how it looks on mine

If you click on the icon on the top left, the interface will be even more minimalist

My experience with the extension has been very pleasant so far. The mailbox looks a lot less busy with the removal of features that I haven’t used much or at all. Plus, whenever you have inbound emails, the layout won’t look to command attention as much as the original ordinary Gmail outlook, as you can see below

Source: Fast Company

Another nice thing about Simplify is that it is not serving ads or collecting any analytics, in addition to being free.

If you like a minimalist design and a cool free product, give it a try and show the creator some appreciation by endorsing him like I am doing now.

Take-aways from Slack IPO Filing

Yesterday, Slack filed to go public. In this post, I am laying out what I learned from reading the document

  • In the three months ending 31st January, 2019, there are more than 10 million Daily Active Users; 500,000 register developers; 450,000 third-party applications; 50 million collective usage hours; 1 billion messages sent
  • There are more than 500,000 organizations on free subscription and 88,000 paid customers, including 65 companies of the Fortune 100. Slack’s competitors include Facebook (Hangouts), Google (Workplace) and Microsoft (Teams). Even though Microsoft announced that there are 500,000 organizations using the service, including 91 of the Fortune 100, it’s tricky to form an apple-to-apple comparison. Teams can be used either free-of-charge or part of a paid Office 365 plan. There is no detail yet on what makes up the 500,000 figure.
  • Annual revenue was recorded at $105.2 million, $220.5 million, and $400.6 million in fiscal years 2017, 2018, and 2019 respectively
  • Out of the total revenue, international revenue represents 34%, 34% and 36% in 2017, 2018 and 2019 respectively
  • In fiscal years 2017, 2018, and 2019, approximately 22%, 32%, and 40%, respectively, of the annual revenue was generated from Paid Customers >$100,000.
  • In the fiscal year ended 31st January, 2019, 8% of the annual revenue came from customers who used the free plan prior, down from 10% a year before
  • “More than 90% of Paid Customers used a third-party application or custom integration in the week ended January 31, 2019”

Impressive Growth of Paid Customers >$100,000

The CAGR of Paid Customers whose ARR is bigger than $100,000 is impressive. So is the CAGR of the revenue, gross profit and calculated billings. Though Slack hasn’t made money from its operations, the loss has contracted through the quarters at the rate of 7.50%. Net Dollar Retention Rate has slowed down.

When looked at from an annual basis, the growth of the Paid Customer > $100,000 is even more impressive.

YearRevenueCost of RevenueGross ProfitR&DS&MSG&AOperating Income (Loss)
2017100%14%86%92%99%36%-141%
2018100%12%88%64%64%26%-65%
2019100%13%87%39%58%28%-38%

From the Annual CAGR chart, the scale of economies seems a bit clearer as expenses don’t grow at the same clip as revenue and gross profit. In terms of breakdown of revenue, Operating Loss as % of Revenue has been decreasing quite rapidly, along with R&D and Sales & Marketing. For the last two years, most of the improvement in Operating Loss came from R&D spending as % of Revenue. There is not much more that can be said about it definitely. Perhaps, Slack feels that there is enough investment and sufficient talent in R&D, meaning that it is not necessary to waste valuable dollars.

As % of Revenue

Reliance on AWS and Ramifications

For instance, Slack currently only utilizes AWS data centers located in the United States but certain organizations, or categories of organizations, may limit their adoption or use of Slack unless we also utilize local AWS data centers, such as data centers in Europe, Asia, and Latin America.

For example, Russia and China are among a number of countries that have recently blocked certain online services, including AWS, which hosts Slack, making it very difficult for such services to access those markets. 

From 2018 to 2023, Slack commits to spend $50 million each year on AWS

It’s going to be a direct listing

It means a less expensive process for Slack. The current stockholders are not under a contractual lock-up agreement. If enough stocks are sold when or shortly after Slack goes public, it may cause the price to contract.

They have negative free cash flow in all, but one quarter