A History of Silicon Valley

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These are excerpts from Piero Scaruffi's book
"A History of Silicon Valley"

(Copyright © 2016 Piero Scaruffi)

The Selfies (2011-16)

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The world of online shopping had not changed much in the early 2010s after Amazon, eBay and PayPal had introduced the de-facto standards, and after Google and Yahoo had invented modern advertising. However, startups tried to find the weakest link in the chain.

Magic, an SMS-based assistant launched in 2015 by Mike Chen in Mountain View, delivered goods to people, thanks to an army of operators available 24 hours a day, seven days a week. This was the kind of "online-to-offline" (O2O) that was big in China. A similar product came out of Germany: GoButler, launched in 2015 by ex-Rocket Internet executives including Navid Hadzaad (Rocket Internet being a startup incubator founded in 2007 in Germany by Marc, Oliver and Alexander Samwer specializing in clones of US-based e-commerce success stories).

Instacart, founded in 2012 in San Francisico by Apoorva Mehta, Brandon Leonardo and Max Mullen, aimed for same-day grocery delivery.

Mobile payment still had not found its king. The region where it had spread first was actually Africa, where Kenya's Safaricom had introduced M-Pesa in 2007. The country were mobile payment was rapidly becoming commonplace was China, thanks to Alipay, launched by Alibaba in 2004 to allow purchases from its own Taobao marketplace, that boomed in 2009, and then expanded to allow any purchase from any online or brick-and-mortar business. In 2007 Kevin Hartz and Alan Braverman launched Xoom in San Francisco to provide an online platform for money transfers that, unlike the traditional bank services, could make funds available immediately at the other end, anywhere in the world (initially Latin America). PayPal acquired it in 2015 (when Hartz had already left in order to found the ticket-management service Eventbrite in 2006 with his wife Julia). At the time of the acquisition Xoom was really just a replacement for the services traditionally offered by the likes of Western Union and MoneyGram (typically for remittances to developing countries such as India and Mexico). Flint, founded by Greg Goldfarb and Andrew Laszlo in 2011 in Redwood City, competed directly with Square, offering a similar credit-card payment for merchants but requiring no additional hardware because it used the mobile device's camera to scan credit cards. Paypal's mobile payment platform was Beacon, introduced in 2013, a Bluetooth-based technology that detected Beacon-enabled smartphones when customers entered a Beacon-enabled store and then automated the purchase of merchandise. Credit card giants Visa and American Express, however, sided with Stripe, founded as Slashdevslashpayments in 2010 in San Francisco by Patrick and John Collison to provide a similar platform for online and mobile payments. Apple's iBeacon (2013) was similar to Paypal's Beacon in that it used Bluetooth technology to alert devices of the presence of fellow iBeacon devices. The company then introduced Apple Pay (2014), claiming to make online payments as secure as in-store payments. The digital wallet was incorporated directly into the operating system and the smartphone included a SIM-independent secure memory chip, an NFC radio, and a fingerprint reader (the digital wallet was "physical" again). Clinkle, founded by Stanford student Lucas Duplan, launched in 2014, promising compatibility with every merchant and phone-to-phone payments.

Clinkle failed and noone tried again. By 2018 none of the big platforms (Apple Pay, Android Pay and Samsung Pay) had made a dent into retail. Altogether they didn't even account for 10% of all purchases. In fact, the only success story was Walmart Pay, the payments app from Wal-Mart, that soon boasted more active users in the USA than Apple Pay.

With the proliferation of online merchants, there arose a need for simplifying the online shopping experience. For example, Wish.com launched in San Francisco by ContextLogic, a company founded in 2010 by former Google engineer Peter Szulczewski and by former Yahoo engineer Danny Zhang, was a mobile commerce platform that aimed at replicating online the shopping experience of the shopping mall.

In 2017 Tina Sharkey and Ido Leffler founded Brandless to sell online products with no brand name, all sold at the same price (originally $3); and all sorts of home products. The products came with a description but not with a brand name (which usually exerts an influence on the consumer).

In 2018 Adobe acquired eCommerce platform Magento (based on the open-source software Magento first released in 2007 by Roy Rubin) as well as marketing platform Marketo (founded in 2006 in San Mateo by Phil Fernandez and other former employees of Epiphany, a CRM company founded in 1997 in Mountain View by CRM guru Steve Blank), thus positioning Adobe as a competitor of Salesforce and Oracle.

click here for the other sections of the chapter "The Selfies (2011-16)"
(Copyright © 2016 Piero Scaruffi)

Table of Contents | Timeline of Silicon Valley | A photographic tour | History pages | Editor | Correspondence