NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Unsubscribing Will Only Get Harder in the Age of AI. Don’t Let Your Company Be Part of the Problem.

The price doesn’t matter when you’re the product.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

JAN 12, 2026

Illustration: Inc; Photo: Getty Images

With the arrival of the New Year has come the inevitable onslaught of renewal requests, demands, entreaties and, of course, the slippery automated extensions designed to slip under the radar and convert low-ball promotional offers into full-bore subscriptions. Along with these ploys, and arguably as a product of them, come the seductive ads from subscription clean-up companies like Rocket Money which promise to quickly display on a single screen all your subscriptions—many of which they suggest with good reason that you didn’t even know you still had—and which their system will magically cancel at your direction and thereby save you grief, effort and hundreds of dollars as well.

You can decide for yourself how valuable and effective services like these are (Rocket claims to have saved its members over $2.5 billion) and do the cost-benefit calculation for yourself as well, but to be clear, they’ve clearly identified a serious problem which afflicts millions of us every year. And, needless to say, the magazine and service vendors themselves are the last businesses likely to or interested in informing you about your wastes of money.

Aside from the dollars saved, the real benefit (if these services work as represented) is that you avoid the pain, wasted time, and harrowing hurdles of trying to wend your way through the chutes and ladders, hoops and mazes, chatbots, and flat-out dead-ends in order to attempt to cancel these things on your own. And even if and when your journey finally delivers you to a human being or a chat window manned by a real person on the other end, you discover that you’re actually far from home free, unless you have a very thick skin and the ability to be unbelievably rude to some poor fool tasked with making you a series of increasingly desperate financial offers to retain or extend your subscription.

It’s pretty clear that these sad people who are actually paid to not take “No” for an answer have an entire set of scripts that they employ, and the tactics they use rarely vary much between companies. The standard ploys include guilt-tripping or otherwise shaming the subscriber, intentionally misunderstanding or misinterpreting the customer’s statements and desire; understating or concealing costs or terms, and dishonestly explaining the associated consequences and difficulties which may arise from a cancellation.

The only good news is that the Federal Trade Commission (largely pre-Trump II) has cracked down on many of these actions and operations in the traditional paid subscription and boiler room world, which has always been largely an analog operation and remains so today. The bad news is that there’s been a substantial gap in terms of acknowledgment of the similar concerns and in any enforcement in the new digital world of social networks (which are frankly far more addictive than any print magazine) where even the idea of “subscriptions” isn’t exactly applicable. And the matter is made even worse when there’s no payment involved. Regulators and legislators have had difficulty understanding the nature of the harms associated with the intended and manufactured difficulty that exists in cancelling “free” memberships or voluntary participation in social networks and in other especially addictive services like TikTok.

Of course, we’ve all learned by now that the reason you’re not asked to pay for your Facebook or Instagram or Messenger memberships or services like TikTok is that it’s your attention and mindshare that’s being sold by the tech companies to marketers, advertisers and politicians. The price doesn’t matter when you’re the product. This is the reason why it’s not simply been in the economic interests of Facebook and the other social networks to make it hard to quit; it’s a conscious, intentional and pernicious part of the underlying design and economic model of these businesses. And frankly, it’s far harder to drop these services or cancel your memberships than anyone would imagine until you’ve tried.

It can take as many as eight or more discrete steps (and the ability to ignore suggestions, blandishments, warnings about losing friends and other functionality and services) to finally reach the final stage where you can actually cancel your Facebook profile. The government has begun to work with some of the states to get a handle on this situation, but it’s slow going and nothing regulatory is likely to move rapidly over the next three years of Trump’s rule.

This may all seem like a relatively minor concern apart from the continuing damage all these services are doing to our kids, but that’s not the main reason I’m raising the issue. No matter how many times new technologies bite us in the collective ass because we launch and implement them before we fully understand their impact or consequences, we never seem to learn the lessons. Indeed, humans can ruin the spirit of just about anything if given the time and technology.

Right now, when nothing in our lives is more omnipresent and potentially threatening than AI, we’re learning that the tech guys have done it to us again. Facebook has built its AI chatbot into Instagram and WhatsApp, and there is no option to turn it off. Google searches result initially in an A.I.-generated result, and the stats already make it clear that the vast majority of all searchers never go beyond that first level quasi-generic answer to their queries. Even more problematic, Google has massively updated Gmail (3 billion users worldwide) and embedded its Gemini AI across the entire platform so the AI system will be reading all your emails whether you like it or not or, more importantly, whether you even know that it’s happening. Of course, if you are aware of this change and a complete gearhead, there’s an onerous multi-step process to shut the service off but, here again, you’ve got to know about it, find and implement it, and recognize that in doing so you will lose some other desirable and longstanding Gmail functionality.

The bottom line is that more and more of these new technologies are not being offered to new business builders as choices or options but instead are imposed on them whether they like it or not.  Only two industries call their customers “users” – tech software vendors and drug dealers.

New INC. Magazine Column by Howard Tullman

 

The FTC Declares War on Entrepreneurs

By attacking Meta's offer to acquire Within Unlimited, the bureaucrats are eliminating the driving force behind most startups--that somebody much bigger will someday rain cash on them.

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN

In a midterm election year, could there be a more obvious target for politicians and their ambitious regulatory flunkies than Facebook/Meta? Talk about low hanging fruit -- picking on the techies is always good for a cheap shot by the know-nothings in D.C.  Meta (formerly Facebook) is quite a tasty morsel, especially since everyone already hates co-founder/CEO Mark Zuckerberg as well as the other billionaire bros, and for a million good reasons. Zuck, of course, seems to go out of his anhedonic way to make himself as insufferable and unpalatable as possible. What a morale booster to tell everyone in your company (and the world) at all-hands meetings that "there are probably a bunch of people at the company who shouldn't be here." And to advise them further that his feelings, if he had any, wouldn't be hurt if they left.

So, as much as Mark and his minions sorely deserve their comeuppances, it's still sad and disappointing, but not surprising, to see the Federal Trade Commission sue to prevent Meta's latest minor acquisition. Meta is trying to buy a tiny company and its video fitness app, which is built to work with Meta's own products. This bogus action relates to a miniscule segment of two broad markets -- fitness and training-; with hundreds of competitors already producing similar video-augmented and enabled fitness apps.

Lina Khan, the new wunderkind and chair at the FTC, has invented and defined this imaginary and hyper-narrow market while carefully and stupidly ignoring the presence of any number of other major players in these spaces. Do the names Sony, Microsoft and Nintendo ring any bells at all for these bozos who apparently believe that no one in the real world will notice their curious omissions. Saying something's a market doesn't make it so unless you're doing it for self-serving reasons, which pretty much defines this FTC. 

Meta's plan is to acquire Within Unlimited, a small virtual reality company that produces a fitness app called Supernatural, which is specifically designed to work with Meta's own Oculus Quest headset. The FTC objects. Or, perhaps more accurately, as Bloomberg has reported, Ms. Khan alone objects and has ignored her own staff's recommendations against pursuing such a fatally flawed and publicity-motivated action.

I guess in a do-nothing DC enforcement world, we should in theory be grateful for anyone willing to act on behalf of the citizenry, but this action is rank stupidity. With the Supreme Court blowtorching regulatory overreach, now seems like a terrible moment to be trying to make new law, invent bizarre market definitions and limitations, and expand the reach of any government agency. But there's nothing better or easier for an "aggressive" regulator to do to generate noise and headlines than to launch a useless and time-wasting lawsuit against a giant tech company.

This action is wrongheaded for so many reasons. It actively encourages re-inventing the wheel rather than building off existing tech. It ignores the tremendous boost in distribution, exposure, and access the deal will provide for the current and future offerings of Within, which would take years for any startup to build on its own. And, most of all, the FTC ignores the best interests of Within itself, which built a product expressly for Meta's new VR universe.

This whole process couldn't be worse news for entrepreneurs and startups. No self-respecting entrepreneur wants anything to do with helpful government regulators inserting themselves into the complex and rapidly changing marketplaces for new technologies. Thanks, but no thanks --you've never run anything or worried about making a payroll as funds disappear.

The real problem and the underlying truth come from an earlier tech era when an aggressive startup never knew whether Microsoft was going to buy them or bury them. That is exactly the sweepstakes and the lottery ticket life that every entrepreneur signs up for and dreams about. The odds are long, the journey is even longer, but the rainbow at the end in the rarest of cases is real and unbelievably rewarding. Going it alone rather than going for the gold is a bad bet in 99% of the cases and everyone out there in the real startup world knows that.

Having the FTC trying to prevent selected market-driven transactions and "level the playing field" in emerging spaces that their own technical personnel barely understand is every developer's worst nightmare. Sure, the odds are harsh and the risks of being rolled over or left behind are high, but they're no worse or more imposing than the everyday ups and downs and challenges of building any successful business.

Bureaucrats barging in to block deals and whisk away the brass ring at the last minute for the few young companies on the cusp of actually winning the brutal battle to build something better than the big guys -- something so attractive that Meta would rather buy it than try to build it themselves -- is exactly what we want to encourage, not preclude. That's what creates the external pressures on the bigger and more complacent companies and ultimately drives the growth and continued innovations we see all around us.

Protecting startups from themselves and the big bad tech companies and removing the pot of gold that an acquisition represents after years of risk, pain, and hard work is a foolish and uninformed approach that is far more likely to discourage and diminish competition and innovation than promote it. The smartest and best thing the FTC can do these days is to look the other way and not try to make up for past oversights and inaction by initiating ill-considered and damaging enforcements that will ultimately come to nothing.

New INC. Magazine Blog Post by Howard Tullman

Which of the FAANG's Will Get Broken Up?

Not all of them. And not Amazon. And don't forget to include Microsoft in this bunch of dominant, powerful tech companies. But the idea that they're all going to get trustbusted is silly.

By Howard Tullman

General managing partner, G2T3V and Chicago High Tech Investors

@tullman

I'm surprised at how many smart people don't understand the very different long-term prospects of the members of the FAANG 5. As things begin to heat up and the FTC starts specifically looking at this cast of characters , it's too simplistic to paint them all with the same brush.  Because, while their predatory behaviors may be similar on the surface, there are substantive differences in their businesses and business models. This suggests that the government's likelihood of success in attacking their alleged anti-competitive actions will vary widely.

I spoke last week at a financial conference and one of the other presenters cautioned the audience about how quickly tech-centric businesses can vanish. He noted that only Intel remained today as a major player from a select group of the early semiconductor pioneers.  And he suggested that we'd see a similar turnover among some former tech leaders in the next few years. While he didn't name names, it was clear that his short list included IBM, GE, HP, Xerox, etc. That's astonishing, when you think about it. These companies were once the bluest of blue chips.

I'd say that he will be about half right (two out of five) regarding the FAANG 5.  But to even understand the proper landscape, we probably need to start by changing FAANG to FAAMG. That's because Microsoft will be a major player for a lot longer than Netflix, which is looking more and more like a first-moving, one-trick pony and under tremendous competitive cost, price and content pressures. Meanwhile, unfashionable Microsoft, which still owns the desktop, is just hitting its stride in multiple adjacent verticals, like the Azure cloud. In the end, highly diversified lines of business and multiple material revenue streams will actually aid Apple, Amazon and Microsoft in making their antitrust arguments.

Say what you will about the FTC's light and late responses, at least the agency figured out that taking another look at Microsoft is a lot more relevant than worrying about Netflix. That's especially true if the primary investigative focus is going to be around systemic acquisition patterns that target young, innovative startups before they get big enough to disrupt the industry status quo. Netflix is certainly acquiring and creating content as fast as humanly possible, but so are half a dozen other major media and entertainment players with equally deep pockets and other advantages.  In addition, I'd say that Microsoft's past antitrust traumas along with its new, hyper-low-key leadership, is going to be a pretty effective deterrent and largely inoculate it from much of the saber-rattling.

But unlike Apple and Amazon, you can bet that Facebook and Google are both going to come under repeated fire not simply from federal regulators, but also from every greedy and cash-poor states attorney general, every class action lawyer, and every country in Europe as well. Facebook's $500 million settlement in Illinois for misusing bio-metric data is just an early indicator of the flood of claims and litigation that are coming. These are rich firms, easy targets who haven't handled repeated PR blowups in any effective fashion, and are especially vulnerable around privacy, targeting and data security issues-- which are, of course, at the very heart of their business models.

On the other hand, Apple and Amazon have a much easier path to avoid prosecution and Microsoft also seems to have skirted the whole set of issues in these two areas. In the last year at least, no one I know has Binged anything. And it seems to me that no one ever fretted for a moment about Microsoft's super-sized acquisitions of Skype, LinkedIn and GitHub in terms of stifling young competitors. If anything, given how poor a job Microsoft has done in terms of integrating Skype into its product suite, the concern is almost the complete opposite - that Microsoft will end up ruining Skype and LinkedIn rather than building successfully on them. On the other hand, it's interesting to watch the Teams team from Redmond attack Slack, which feels a lot like Internet Explorer crushing Netscape in the old days. We'll have to see how that plays out; it's unlikely to end in an anti-competitive acquisition anyway.

Product-first businesses like Apple connect to consumers in far different and more personal/emotional ways. Moreover, Tim Cook has gone way out of his way to make privacy a very clear crusade for Apple as well as a sharp stick in the eyes of Apple's big tech competitors. We'll need to watch closely (no pun intended) as the Apple watch becomes more and more of a wearable medical device - although I'd have to say that's not much of a risk yet as the stupid thing keeps telling me I've fallen down and tries to call 911. Note to Apple: I'm still vertical.  

But, all kidding aside, this is another important and differentiating factor.  The Apple watch arguably--and with my express consent-- uses data to improve my life, my training and physical activities, and my health in relatively non-invasive and additive ways. This is miles away from Facebook and Google selling small slices of my mind-share and attention to every advertiser and marketer extant to serve up an unending flood of ads--product and political-- that do next to nothing except enrage me and waste what little time I have left in my life. It's hard to argue that the ad business has ever been a worthwhile enterprise --JUUL for kids, anyone? Every consumer and regulator knows that any claims by advertisers and marketers of doing any good for society are bogus. They are in it to make billions on their ad sales.

An interesting aside is Google's recent earnings report, which makes it very clear that search--the core and largely worthwhile business until corrupted by Google's strategy of selling the top search result spots to the highest bidders-- was slowing.  Only ad sales associated with YouTube are growing and keeping the ship moving forward. Just to show you how difficult it is to compete with the Big 4, remember that even Google couldn't make a successful social network out of Google+ and had to shut the thing down. Here again, you could argue that it would be a piece of cake for the government to simply slice off YouTube from the Googleplex and turn the video service into a free-standing and viable enterprise. Easy peasy.

If you do the same separation math and pull Instagram out of Facebook, you see a pretty clear indication that the Facebook core is stagnant while Instagram (and especially ad and commerce sales connected with it) continues to grow rapidly. Much like Microsoft needs to be careful around Slack, it's going to be fun to watch the claims and the ultimate litigation when Snap finally shuts the doors and points a nasty finger at Facebook for stealing every single thing that Snap ever did. Of course, the guys at Snap probably deserve every bit of bad news they get.

Amazon is equally well insulated for a couple of important reasons as long as Jeff B can control himself in terms of his private life, his politics, and doesn't get lost in space. First and foremost, a "forced" spin-off of Amazon Web Services (AWS) would be accretive to all the current shareholders and probably quickly add to their respective portfolio values once people learned just how lucrative the cloud business really is and how broadly distributed and entrenched Amazon's customer base is. This may end up resembling the old Uncle Remus story where Br'er Rabbit begged Br'er Fox not to fling him in the briar patch where he could promptly escape the fox's clutches. Let's just say that helping Amazon create a trillion-dollar AWS business wouldn't be the worst thing the government could do to them.

But even more to the point, Amazon actually does use our data to make products and services more relevant and attractive to us. One simple example is that, while Facebook and Google re-target the crap out of us based on our search and traffic activities, Amazon knows what we have actually bought and doesn't waste our time or advertisers' money offering us the same pair of shoes we just bought yesterday.

Another powerful and locked-in incentive - especially for seniors - is automated replenishment, in which refills and new supplies magically appear on time on your doorstep. More than 70% of what we buy every week at the supermarket is the same stuff. Why bother to make that trip and do all that heavy lifting if Amazon will deliver it free to your door?  Amazon Prime with more than 150 million members worldwide and growing is an unstoppable force and so attractive and compelling to people that any politician with a brain is going to steer as far away as possible from interfering with that love affair. And, whether President Trump knows this or not, AWS runs a huge amount of the government's own web services and that area of involvement is also rapidly expanding. Finally, there's no question that we all love a good deal and we're all convinced that Amazon really does offer us the best pricing, service, support and delivery system in the country. Hard to look a gift horse in the mouth.

If you thought the old "I want my MTV campaign" was effective, just imagine the heat and screaming that our super-sensitive politicians and regulators would face from an enraged public if they got in Amazon's way.

PUBLISHED ON: FEB 18, 2020