Today’s newsletter is 932 words - a 3-minute read (5-minute if you’re…🐌)

Welcome everyone,

Who we are: We’re Chris & Nolan (@chrisnolansf), two former colleagues who met via investment banking in San Francisco and bonded over the f***ing horrible incredible learning opportunities. We’re now working on a couple ventures together and thought, why not add a newsletter to the ever-growing list. So here we are. What we’ll be writing about → the latest business and cool local news in San Francisco.

Why the name: SF Whisper? Because… at the end of each newsletter 👇, we’re going to have a whisper. This could be a secret, or a fun prize like:

• dinner & drinks with us at Quince Taco Bell Cantina

• trending spots in the City for entertainment & nightlife

• new hot restaurants and bites

• our feet pics 🦶 👀

Reddit’s 1st Q post-IPO sends stock soaring

Reddit's inaugural quarterly earnings report as a publicly-traded entity unveiled impressive growth figures, with a 48% surge in revenue compared to the previous year and a notable 37% increase in daily active users, reaching a record high of 82.7 million visitors per day. This positive performance propelled its stock value up by 11% in after-hours trading, settling around $55, significantly higher than its initial public offering price of $34 per share earlier in the year.

The bulk of Reddit's revenue, mirroring its competitors like Meta Platforms and Pinterest, is derived from advertising sales, which accounted for nearly 92% of its $243 million revenue for the quarter. Despite the company's emphasis on leveraging user-generated content for AI training purposes, these initiatives are still in their early stages, as highlighted by CEO Huffman in a shareholder letter. Nonetheless, the substantial revenue growth managed to offset increased operating costs, resulting in $10 million in adjusted earnings before interest, taxes, depreciation, and amortization, a marked improvement from the previous year's $50.2 million loss during the same period.

Google vacating massive 300,000 sq ft space

Google's impending departure from a substantial portion of its office space at One Market Plaza marks a significant shift in San Francisco's real estate scene. Following Visa's recent exit, this move underscores the evolving nature of work dynamics, with many employees embracing flexible attendance models. While Google will retain occupancy of the Landmark building, it plans to vacate this 300,000 sq ft space next April.

Speculation surrounds Google's potential consolidation of operations to nearby 345 Spear St., with lease renewal inquiries yielding no comment from the tech giant. Despite these developments, ongoing negotiations to extend a significant loan for One Market Plaza signal investor confidence, albeit amidst soaring office vacancy rates in the city. This departure underscores the need for adaptive strategies amid evolving work trends, leaving a notable impact on San Francisco's commercial property landscape.

San Francisco Business Tax Overhaul Proposal

San Francisco is poised to vote on a significant business tax overhaul this November, with potential far-reaching implications. The proposal, crafted by business leaders, seeks to inject vitality into the city's commercial landscape post-pandemic. Central to the plan is a shift in the tax structure, pivoting from taxing payroll to focusing on sales.

For small businesses, this could translate into tangible savings. Currently, companies with annual revenues of $5 million or less would be exempt from business taxes, a notable increase from the current limit of $2 million. As an illustration, it's estimated that 88% of restaurants and half of retailers could qualify for this exemption, providing crucial financial relief during these challenging times.

While the proposal aims to provide immediate relief for small enterprises, larger corporations may face adjustments. Sectors like retailers and biotech could potentially see tax increases, as the burden shifts to sales-based calculations. Despite varying opinions on the impact of these changes, there's a shared acknowledgment among stakeholders of the necessity for action to bolster San Francisco's economic resurgence in the wake of the pandemic's upheaval.

AI Devices mostly disappointing

Recently, AI-powered devices have faced harsh criticism, with products like the Humane Ai Pin and the rabbit r1 receiving scathing reviews from tech influencers. Concerns have been raised about the accuracy of AI claims, with accusations of crypto grifting and exaggerated AI capabilities surfacing. Additionally, companies like Rewind, originally focused on consumer wearables, have shifted to enterprise applications due to limitations in current AI technology and privacy concerns surrounding constant data collection.

The challenges AI wearables face include technical limitations, such as reliance on internet connections and slow processing speeds, along with privacy issues associated with constant data monitoring. Pricing models also pose hurdles, with upfront costs conflicting with the flexibility of subscription-based AI agent software. Despite these setbacks, anticipation remains high for advancements in AI wearables, with industry giants like Meta Platforms and Microsoft joining the race to develop consumer-friendly AI-powered devices.

Catch up on the latest:

• The # of tents in SF (correlated to homelessness) at 5-year low (Link)

• Legion raises $50M from Riverwood, Norwest, and others (Link)

• ICONIQ Growth raises $5.75B for its 7^th flagship fund (Link)

• SF-based Francisco Partners & Clearlake to acquire Synopsys’ software integrity business unit for $2.1B (Link)

• OpenAI developing creator tool “Media Manager” for 2025 (Link)

Today’s whisper:

There’s a night market this Friday, May 10th in Chinatown where attendees can enjoy a vibrant atmosphere, sample some delicious food, and watch a beautiful Lion Dance. This is a recurring event on the 2nd Friday of every month that starts at 5:30pm on Grant Ave. Go check it out!