Happy Friday. Welcome to The Chaos Coordinator! We are Brain Candy's snarky little sister, delivering carefully curated news happening across the industry (that you should probably care about) right to your inbox, with a hefty dose of irreverence.
In this issue, we dive into:
Q2 US VC Valuations
Womenomics
FedNow
AI Drift
Unhinged Social Media
What's happening in.....
PE/VC
The VC Glass Is Not Quite Full, But Not Quite Empty
At least it has something in it. Hopefully it's strong and fruity.
Despite being considerably below the peaks of 2021 and early 2022, US VC valuations started to stabilize in Q2. According to Pitchbook's Q2 2023 US VC Valuations Report, although prices are no longer plummeting, in the face of the near-frozen IPO market, reduced risk appetite from VCs, and a continued pullback from nontraditional investors, VC has a long way to go.
Womenomics, revenge spending, fun-flation - whatever you want to call it, it's working.
Taylor Swift, Beyoncé and Barbie are not just figuratively taking the world by storm; they're financially doing so. Swift is set to etch her name in music history as her "Eras" tour is projected to top $1 billion in sales. Beyoncé’s "Renaissance" tour is not that far behind. And in case you missed it, Greta Gerwig's “Barbie,” topped $1 billion in box-office revenue last week. These trailblazing statistics are continuously contributing to the narrative that this summer's wave of "revenge spending" is spearheaded by women, quickly evolving Swift, Beyonce and Barbie into economic powerhouses, directly boosting the economy. Fans are not simply purchasing tickets worth billions, but are indulging in expenses such as wardrobe, nails, and for the seriously dedicated, air travel and accommodations. To put it in perspective, Beyoncé’s "Renaissance"was blamed for boosting inflation in Stockholm during her European leg. The final six nights of Taylor Swift’s Eras tour in Los Angeles were expected to bring $320 million to the city, according to the California Center for Jobs and the Economy. The NYT’s Jeanna Smialek and Jordyn Homan reveal another unbelievable stat: the "Eras' tour could generate $4.6 billion in economic activity, surpassing the 2008 Beijing Olympic Games.
The Fed is moving right along and has no issue leaving fintechs and crypto behind.
In July, the Federal Reserve launched FedNow, its first new payments system in 50 years. According to Forbes, this promising new platform could eventually give businesses and consumers near instant access to payments (including paychecks) and money moved between financial accounts, while spurring innovation in the sector, but under one condition. To get direct access to FedNow and other Fed services, an institution has to be approved for a “master account” by one of the 12 regional Federal Reserve Banks and it appears a certain crew might be blacklisted from joining the party. Fintechs, crypto firms and other novel financial startups have encountered delays and straight-up rejection as they seek approval to gain access. Now, what does this mean and why does it matter? Should these firms fail to secure access, it might impede their capacity for innovation—or, at the very least, force them to go through bank partners, which means giving back some of their transaction fees to traditional banks, reports Forbes.
Just like me after four uninterrupted hours of Love Island, ChatGPT is getting dumber.
It might be time to start double checking ChatGPT. Why, you might ask? According to ZDNet, the answer may lie in a concept called "drift." AI drift is the decline of an AI model's capabilities over time, due to changes in the data it's exposed to. As ChatGPT's popularity continues to spread and the bot interacts with a wider variety of users daily, its responses have become less accurate and sometimes borderline offensive. This drift is largely attributed to the evolving nature of the internet and user behavior, which exposes the model to biased or unreliable information, straying away from the original parameters. Regarding the drifts, researcher, James Zou told the Wall Street Journal, "We had the suspicion it could happen here, but we were very surprised at how fast the drift is happening."
“Unhinged” has become a catch-all term that we've seen floating around in all types of contexts and scenarios lately - today we're taking a look at unhinged social media. Hubspot defines it as when brands “embrace more chaotic conversational moments.” Digiday described it as “leaning into the language of the internet to appear relatable and human-like” and “using shock value to drum up engagement and go viral.” If your mind is going to a little green owl who runs around on TikTok doing everything but promote the actual services of its employer (Duolingo), then you are on the right track. Future Social's Jack Appleby shares his take on this new wave of brand based social media and the very thin line between trendy and fun and unhinged.
