Tingle Tech

If you’re a cannabis investor or a founder working on a cannabis-related startup, you’ve probably heard of Poseidon Asset Management.

The San Francisco-based investment firm is one of very few that is focused narrowly on the industry, which remains fairly insular for now. Poseidon has also been at it longer than most outfits, having begun making bets on cannabis-related companies six years ago. More, Poseidon has managed to stuff checks into some of the fastest-growing companies in the sector, including the cannabis vaporizer company Pax Labs and the e-cigarette company Juul, whose founders created the Pax vaporizer before peeling off to win over smokers. Indeed, because Poseidon has largely invested the money of high-net-worth individuals and family offices, it hasn’t been constrained by the same vice clauses — or restrictions by backers like pension funds and other institutions — that can impact where venture capitalists invest.

Poseidon is notable for yet another reason, too. It was founded by siblings Emily and Morgan Paxhia, whose parents both died of different cancers at the ages of 46 and 52, respectively. In fact, despite — or because of — being a young teenager at the time, Emily Paxhia says she can still very much remember the hospice nurse who recommended to her father that he smoke pot to ease his pain. Little did Paxhia know then that cannabis — then a surprising and exotic concept — would later inform the career she now enjoys.

We talked about it earlier this week, as well as how Paxhia and her brother decided back in 2013 that cannabis was going to be the next big thing. If you’re curious about their path, and where they’re shopping now, read on.

TC: You grew up in Buffalo and you say your parents were entrepreneurial.

EP: Our dad restored homes in an economically depressed part of Buffalo, and our mom worked for a real estate agency. When she began running his books, voilà, we had a family business.

TC: Then he became sick when you and your siblings were young. How did that impact you?

EP: He was a dyed-in-the-wool hippy. We had Woodstock tickets in our home. He never really accepted the status quo, which I think informs the way we view the world. But yes, he became aggressively sick with cancer in 1994 and passed away in 1996, and it was this non-virtuous cycle, where they would put him on this or that medication and each had its own terrible side effects. Finally, a hospice nurse who came to our home said, “John, maybe you should smoke some pot.” She told us it would help with his appetite and reduce his anxiety and help him sleep. It was this palliative care thing that had been stigmatized but she believed was useful. I don’t know if he tried it or not, but then he passed away, and five years later, our mother, who was very healthy and ran and took care of herself, also died of cancer.

I’ve often looked back and thought that if my parents had [used cannabis at the end of their lives], they would not have suffered so greatly.

TC: How did you get from Buffalo to starting a fund in San Francisco, seemingly out of the blue?

EP: After college, I was spending time in New York and in San Francisco, working in market research, including on behalf of Amex and Viacom and Comedy Central — all companies competing in markets that were very saturated. It was hard to find white space. When I moved to California, I started to see people lining up outside the doors of dispensaries and I thought, Here are people who ordinarily wouldn’t break a law, but they’re doing something that’s federally illegal because they want cannabis. Brick-and-mortar is dying elsewhere and it’s thriving here. This is what product-market fit looks like.

TC: At what point did you decide to partner with your brother and why?

EP: He worked for UBS during the downturn [of 2008] and then he landed in Rhode Island, working for a private registered investment advisor. And I called him, and I said, “Dude, I think the ‘thing’ of our generation is cannabis.” I actually remember where I was standing in San Francisco. We’d always thought we’d be in business together, and he took me 100% seriously, and then we couldn’t turn it off. From that point on we were figuring out how do we participate in this?

It was Morgan who identified that a fund made the most sense, that the industry was happening and it was very underserved from a tech and investor perspective. He knew the industry was going to need funding and that investors would need an actively managed strategy.

TC: How did you get started?

EP: It was hard. It was very hard to find attorneys to work with us, but we did. The same was true of auditors and back-office administration. Everything that’s normally a check-the-box type of process was hard.

TC: What about investors? How did you begin lining these up without a track record?

EP: I had that qualitative consulting experience, working with brands and helping them scale; Morgan had traditional investment experience. But there were no data sets at the time. All we could do was be “in market” all the time. We traveled to be with companies. We traveled to different geographies because each has such complicated regulatory nuances to it.

Raising money was really difficult. We got laughed at quite a bit. It’s funny, many of our earliest investors were lawyers because I think they understood the real, versus the perceived, risk involved in what we were doing.

TC: Eventually, you began to assemble this evergreen-type fund and you began investing while fundraising. Where were you shopping at the outset?

EP: We focused initially on the tech aspect of the industry. To us, that was where we saw the biggest gap and the biggest opportunity to potentially scale quickly. Also, those companies tended to be started by tech founders who were [secondarily] interested in cannabis.

TC: How were you drumming up deal flow?

EP: It was going into stores, seeing what they were using in terms of tech, talking with retail associates about what people were buying, going to industry events and to cannabis job fairs to see who was hiring, then starting to build relationships with those companies. We knew as entrepreneurs ourselves that being as founder-friendly as possible would be the key to our deal flow. And we started having founders bringing us other founders. We’ve now led 20 rounds at this point, and our best deal flow has come from the founders themselves.

But it’s also been a matter of getting out there and walking up to people and saying, “Have you thought about raising capital? If so, let’s keep talking.”

TC: Do you feel like you now recognize founders you shouldn’t back?

EP: What 100% does not work in this industry is hubris. In other areas of business, a certain level of confidence bodes well for founders. But this is not a move-fast-and-break-things industry. There are so many regulatory challenges that you really need to know the lay of the land. I’ve seen people come in and bounce right out again because of their attitude.

Founders also need to understand the extra costs in time and money that come with running these businesses and to model accordingly; otherwise, projections are off and valuations are off and you’re potentially facing a down round later in time.

TC: You were able to return money to investors in January, after Juul distributed a special dividend. Is that your biggest exit to date?

EP: That was a big one, but we’ve had other big exits out of [an earlier] pair of funds through [several investments in Canadian companies], including [medical marijuana company] Aphria [which went public last October] and Canopy Growth [which went public in 2014, is Canada’s second-largest grower and is currently valued at roughly $15 billion]. Canada is a very different market. You can order cannabis from the government and it will arrive in the postal mail. It’s very top-down unlike in the U.S., where the market is very bottom-up and state by state.

There’s a lot of investment going on [across U.S. and Canada]. It’s very permeable at this point. I was in Toronto last week, and licensed producers there want to invest more in California. We’re meanwhile looking at Latin America and Europe.

TC: That’s interesting. Where in Latin America and why?

EP: The cost to produce cannabis in Colombia is extremely low. Cannabis grows on a 12-hour cycle very well and the equator runs through the country’s southern sector [making its warm climate conducive to the plant’s growth]. Local companies can export the products at a lower cost than in Canada and Europe. [Operators there] also have distribution relationships with European markets [that are buying medical marijuana].

Mexico is also expected to roll out its medical program in the fourth quarter of this year, which is exciting.

TC: Obviously these places have been home to drug cartels for years. Do you worry that these same organizations will take an interest in what’s being built legally in their backyards?

EP: We’ve gotten comfortable with both places. I think the cartels have begun to pivot to other places like meth. I also don’t think it’s worth it to the cartels to get involved with legal government channels. And the groups that we focus on are themselves focused on medical cannabis and distribution to other medical touch points globally [and not the same places into which cartels are trying to move goods].

TC: I’ve read that Poseidon is trying to raise a new, $75 million fund. How far along are you?

EP: We have capital commitments for half the fund and hope to close it this summer. We want to be able to deploy [more capital] before legalization is [more widespread] and we have to compete with bigger funds.

TC: What is your pacing like? Relatedly, how fast do you have to move on these investments, or do you have all the time in the world right now?

EP: We expect to invest this new fund in 15 companies over two years. We’ve funded five startups with it since November, but we were in diligence on one of those for months. I’d say the average deal takes 60 to 90 days to pull together right now. We start our own diligence before the company is considering a Series A, which is where we invest. We want to help structure the round, to lead it, to have a board seat — to demonstrate our value add.

TC: Are you seeing many, or any, particularly frothy deals?

EP: Valuations are not going crazy, but the more popular a deal gets, the harder it becomes, as with any investment. We’re wrestling over a term sheet right now because other groups got a look at it and want us to lead it, but we’re also getting negotiated against a little bit.

TC: Any parting words for investors who want to jump into the industry? Any advice?

EP: I’d say to go to events and walk the floor to see who and what stands out.

I went to MJBizCon [the Marijuana Business Conference and Expo] that happens annually every winter. The first few years that we went, there were a few hundred schlubby guys walking the floor. The year before last, there were 3,000 people in attendance, looking a lot less schlubby. Last year, I think there were 27,000 people, which I took as an indicator that there’s some interest in this space. [Laughs.]

Amazon’s behavior toward open source combined with lack of leadership from industry associations such as the Open Source Initiative (OSI) will stifle open-source innovation and make commercial open source less viable.

The result will be more software becoming proprietary and closed-source to protect itself against AWS, widespread license proliferation (a dozen companies changed their licenses in 2018) and open-source licenses giving way to a new category of licenses, called source-available licenses.

Don’t get me wrong — there will still be open source, lots and lots of it. But authors of open-source infrastructure software will put their interesting features in their “enterprise” versions if we as an industry cannot solve the Amazon problem.

Unfortunately, the dark cloud on the horizon I wrote about back in November has drifted closer. Amazon has exhibited three particularly offensive and aggressive behaviors toward open source:

• It takes open-source code produced by others, runs it as a commercial service and gives nothing back to the commercial entity that produces and maintains the open source, thereby intercepting the monetization of the open source.
• It forks projects and forcibly wrestles control away from the commercial entity that produces and maintains the open-source projects, as it did in the case of Elasticsearch.
• It hijacks open-source APIs and places them on top of its own proprietary solutions, thereby siphoning off customers from the open-source project to its own proprietary solution, as it did with the MongoDB APIs.

Amazon’s behavior toward open source is self-interested and rational. Amazon is playing by the rules of what software licenses allow. But these behaviors and their undesirable results could be curbed if industry associations created standard open-source licenses that allowed authors of open-source software to express a simple concept:

“I do not want my open-source code run as a commercial service.”

But the OSI, an organization that opines on the open-sourceness of licenses, is an ineffective wonk tank that refuses to acknowledge the problem and insists that unless Amazon has the “freedom” to take your code, run it as a commercial service and give nothing back to you, your code is not “open source.” The OSI believes it owns the definition of open source and refuses to update the definition of open source, which is short-sighted and dangerous.

To illustrate: The Server Side Public License (SSPL) — the license proposal spearheaded by MongoDB — was patterned exactly after the Gnu General Public License (GPL) and the Affero General Public License (AGPL). SSPL is a perfectly serviceable open-source license, and like GPL and AGPL, rather than prohibit software from being run as a service, SSPL requires that you open-source all programs that you use to make the software available as a service.

A months-long comical debate ensued after SSPL was proposed as an open-source license candidate to OSI, after which OSI made its premeditated opinion official, that SSPL is not an open-source license, even though GPL and AGPL are open source. In its myopia, the OSI forgot to be consistent: If SSPL is not open source, then GPL and AGPL should not be either. MongoDB will continue to use SSPL anyway, but it just won’t be called “open source” because OSI says that it owns the definition of “open source” and it can’t be called that. Great.

Source-available licenses

Is it inevitable that the combination of Amazon’s behavior and this lack of industry leadership will stifle open-source innovation and make commercial open source less viable? Should we just live with either more software becoming proprietary and closed-source to protect itself against AWS, or with widespread license proliferation?

We’ve already seen plenty of license proliferation. MongoDB SSPL, Confluent Community License (CCL), Timescale License (TSL), Redis Source Available License (RSAL), Neo4J Commons Clause, Cockroach Community License (CCL), Dgraph (now using Cockroach Community License), Elastic License, Sourcegraph Fair SourceLicense, MariaDB Business Source License (BSL)… and many more.

The trend is toward “source-available” licensing rather than “open-source” licensing because source-available licenses, uncontaminated by the myopia of open source industry associations, do not require that Amazon have the “freedom” to take your code, run it as a commercial service and give nothing back to you.

To that end, a group of open-source lawyers led by Heather Meeker, a respected and undisputed leader on technology and open-source law who worked on both Commons Clause and SSPL, will soon open a suite of “source-available” licenses for community comment.

The suite of source-available licenses is expected to provide authors of open-source software with a number of methods to address the growing threat from cloud infrastructure providers. The suite will provide short plain-language source-available licenses; standardize patterns in recently adopted source-available licenses; and allow users and companies to mix and match limitations you want to impose (e.g. non-commercial use only, or value add only, or no SaaS use, or whatever else). I believe these frameworks will be a smart alternative to open source, as the OSI refuses to provide leadership in solving the Amazon problem.

AWS and anti-competitive behavior

More broadly, it is clear to most industry observers that AWS is using its market power to be anti-competitive. Unless something changes, calls for anti-trust action against both Amazon and AWS are inevitable, even if AWS is divested from Amazon. That issue is broader than just open source.

Within open source, if Amazon isn’t breaking any laws today, then licenses to prevent or curb their behavior are critical. And lack of leadership from the open-source industry associations that squat on the term “open source” means that source-available licenses are the most viable solution to curb such behavior. It doesn’t have to be this way.

Leadership often comes from unexpected sources. There are promising signs that other cloud infrastructure providers are becoming true allies to the open-source community. Take Google, for example. The major announcements at Google Cloud Next in April 2019 were dramatic and encouraging. The company announced partnerships with Confluent, DataStax, Elastic, InfluxData, MongoDB, Neo4j and Redis Labs — companies most affected by Amazon’s behavior.

Google Cloud’s new CEO Thomas Kurian’s remarks echoed what I had been saying for the last year.

Frederic Lardinois of TechCrunch wrote:

Google is taking a very different approach to open source than some of its competitors, and especially AWS. … “The most important thing is that we believe that the platforms that win in the end are those that enable rather than destroy ecosystems. We really fundamentally believe that,” [Kurian] told me. “Any platform that wins in the end is always about fostering rather than shutting down an ecosystem. If you look at open-source companies, we think they work hard to build technology and enable developers to use it.”

It’s smart for Google to align with these commercial open-source players — AWS is beating Google in the cloud wars and giving best-of-breed commercial open-source products first-class status on Google’s cloud will help Google win more enterprise customers.

Perhaps more importantly, the stance and language on how ecosystems thrive is incredibly encouraging.

Disclosures: The author has invested in numerous open companies affected by the behavior of cloud infrastructure providers, indirectly owns shares of Amazon and, apart from any abuse of open source or anti-competitive behavior, is a big fan of Amazon.

Uber’s ride-hailing business is growing more slowly than its newer bets. In Uber’s Q1 2019 earnings, the company reported gross bookings growth of 230% for its other bets, while ridesharing grew just 22% compared to the same quarter last year.

Gross bookings are the revenue earned minus things like taxes, tolls, fees, wages paid to drivers, restaurants and so forth.

Other bets, with gross bookings of $132 million for Q1 2019, includes freight and new mobility, which entails bikes and scooters. Uber did not break out specifics for new mobility, but Uber CEO Dara Khosrowshahi said on an investor conference call that gross bookings for new mobility “grew strong quarter over quarter.”

Meanwhile, Eats continues to be a revenue driver for Uber, with gross bookings growth of 108% to $3.07 billion.

Slowing growth of Uber’s core business is to be expected. At TC Disrupt last year, Khosrowshahi said ride-hailing will make up less than 50% of Uber’s business transactions.

Good news!

Maine lawmakers have passed a bill that will prevent internet providers from selling consumers’ private internet data to advertisers.

The state’s senate unanimously passed the bill 35-0 on Thursday following an earlier vote by state representatives 96-45 in favor of the bill.

The bill, if signed into law by state governor Janet Mills, will force the national and smaller regional internet providers operating in the state to first obtain permission from residents before their data can be sold or passed on to advertisers or other third parties.

Maine has about 1.3 million residents.

The Republican-controlled Federal Communications Commission voted in 2017 to allow internet providers to sell customers’ private and personal internet data and browsing histories — including which websites a user visits and for how long — to advertisers for the biggest buck. Congress later passed the measure into law.

At the time, the ACLU explained how this rule change affected ordinary Americans:

Your internet provider sees everything you do online. Even if the website you’re visiting is encrypted, your ISP can still see the website name, how frequently you visit the website, and how long you’re there for. And, because you are a paying customer, your ISP knows your social security number, full legal name, address, and bank account information. Linking all that information can reveal a lot about you – for example, if you are visiting a religious website or a support site for people with a particular illness.

In its latest remarks, the ACLU — which along with the Open Technology Institute and New America helped to draft the legislation — praised lawmakers for passing the bill, calling it the “strongest” internet privacy bill of any state.

“Today, the Maine legislature did what the U.S. Congress has thus far failed to do and voted to put consumer privacy before corporate profits,” said Oamshri Amarasingham, advocacy director at the ACLU of Maine, in  a statement.

“Nobody should have to choose between using the internet and protecting their own data,” she said.

Last year’s WWDC was a rare step away from hardware for the company, without a single device announcement. In fact, Apple’s gadget lines have largely been the subject of quiet releases over the past year. Ahead of the big Apple TV unveil, the company issued several press releases highlighting minor updates to flagship lines.

Just last week, it did the same for the MacBook, with a quiet announcement around the latest attempt to resolve longstanding issues with the malfunctioning keyboards. Next week’s developer show, on the other hand, is shaping up to be something altogether different. All signs point to a load of big announcements, including, potentially, some Pro hardware.

After a fairly slow I/O and Build, Apple could really make a splash here. The company’s not immune from larger industry trends, and is at a kind of crossroads at the moment. Its last financial call highlighted a shifting focus away from hardware, toward services and content. It makes sense — after all, smartphone sales have slowed across the board, just as the company started making massive investments in content through Apple TV+.

Of course, WWDC is, at its heart, a developer show. And while Monday’s kick-off keynote is very much for the public at large, the true nature of the show is highlighting what’s new with Apple’s various operating systems. Let’s start with the biggie.

iOS 13

The leaks have already started, and the big news so far is system-wide Dark Mode, following in the footsteps of MacOS. Easier on the eyes and battery, expect the update to take much the same form as it did on desktop, starting with Apple’s own apps, with more third-party partners arriving in the following months. Given how much more aggressive and engaged the iOS development community tends to be, however, I’d anticipate them falling in line a lot quicker this time out.

Bloomberg’s got a bunch of additional features for iOS 13, which has reportedly been operating under the codename “Yukon” (apparently Apple’s already at work on iOS 14, Azul, as well, which will have a 5G and AR focus).

Unsurprisingly, the Health app is getting a makeover. In fact, expect health to be a big focus for the company yet again at the event (see also: Apple Watch). Native support for Duet Display, like second screen iPad functionality, has been rumored to be in the works for a while. On a personal note, I can say it’s been a game changer for me, and native support will only make things better.

Mail, Maps and Home are said to be receiving updates as well. There will be bug fixes throughout, as well, said to make the system operate better on new and old systems alike. It’s a nice upgrade and, perhaps, tacit acknowledgment of the fact that consumers are simply holding onto their devices for longer these days.

MacOS 10.15Much like the smartphone, the PC is very much in a transitional space — though its identity crisis has been ongoing since it was completely overshadowed by the smartphone. For many Windows PC makers, that’s meant novel approaches like second screens, which were all the rage at Computex in Taipei this week.

For Apple, however, that means definitively reclaiming the throne of king of the creative professionals, after an influx of competition from the likes of Microsoft and Samsung. But to start things off, the company’s going to once again borrow liberally from iOS.

Last year the company showed off a trio of apps — News, Stocks and Voice Memos — as a preview of the upcoming ability to port iOS apps to the desktop. That attempt to foster Mac app development, codenamed Marzipan (Apple’s all in on the fun codenames this year) will take center stage. Other iOS cribbed features include Screen Time, iMessage effects and Siri shortcuts, along with updates to a handful of existing Mac apps.

Mac hardware

What’s really exciting here, however, is the long-awaited arrival of Mac Pro. I’m going to tell you to take this one with a grain of salt, just because, well, we’ve all been burned before. As previously noted, Apple hit pause on the category, which plans to completely revamp the high-end desktop. The iMac Pro has addressed the need for some, but for many pros with demanding workflows, there’s been a trash can-shaped hole in their heart.

Just about all signs appear to point to the the long-awaited refresh arriving next week. Ditto for a recently rumored 31.6-inch, 6K pro display, which would fit nicely alongside the Pro and the smoldering ashes of your checkbook.

Also

Apple’s most recent event was all about Apple TV. The company had a LOT to show off on that front, and while the redesigned app has already arrived, expect the company to continue talking up Apple TV+, the forthcoming billion-dollar, cable-killing, premium-content offering from the company.

Last time Apple talked up the Apple Watch, it had some transit news to discuss. That goes live in New York tomorrow, by the way. This time out, expect a lot on the health front. That’s been the company’s focus for a while now, both as a way to distinguish the product from a flood of fellow wearables and to get it taken more seriously by the FDA and, by extension, healthcare providers. Menstrual tracking and a feature for keeping track of medications appear to be in the works.

So, too, are new Voice Memos, Calculator and Apple Books apps.

The party gets started Monday at 10AM PT / 1PM ET. We’ll be there with a live blog, breaking news and unicorn skull shards in tow.

Uber posted losses of $1 billion on revenue of $3.1 billion for the first quarter of 2019 in what was the company’s first earnings report as a public company. Gross bookings rose 34% to $14.6 billion in the same time period, as Uber Eats continued to show notable growth.

Amid both positive and negative stock predictions, NYSE: UBER fluctuated ahead of the news, ultimately closing down .25% at $39.90 per share.

Analysts anticipated an adjusted net loss per share of 76 cents on earnings of about $3.1 billion, according to FactSet. Uber, in its IPO paperwork, said it expected first-quarter losses to fall between $1 billion and $1.1 billion.

“Earlier this month we took the important step of becoming a public company, and we are now focused on executing our strategy to become a one-stop shop for local transportation and commerce,” Uber chief Dara Khosrowshahi said in a statement. “In the first quarter, engagement across our platform was higher than ever, with an average of 17 million trips per day and an annualized gross bookings run-rate of $59 billion.”

Uber has traded below its IPO price in the three weeks since its rocky debut on The New York Stock Exchange. The company priced its IPO at $45 per share in early May, raising $8.1 billion in the process. The following morning, the business opened at a disappointing $42 a share, sending shockwaves through the tech ecosystem, which had predicted an IPO pop on par with Lyft’s, at least.

Uber’s performance on the public market has been a letdown. Investors, even Wall Street experts, had anticipated an initial market cap in the ballpark of $100 billion. Instead, Uber currently sits at a valuation of about $67 billion, or $5 billion lower than the $72 billion valuation it earned with its last private financing.

Uber’s core business, ride-hailing, is growing much slower than other segments of the massive business. While overall revenues grew 20% from the same period last year, revenues in the company’s ride-hail department grew only 9%. Uber Eats revenue shot up 89% while its gross bookings grew 108%.

Uber’s competitor Lyft, for its part, is trading well below its IPO price of $72 per share, closing down 2.5% Thursday at $56 apiece. Its market cap today is approximately $16 billion, or just above its $15.1 billion Series I valuation. Lyft posted its first earnings report just days before Uber completed its historic IPO earlier this month.

Lyft posted first-quarter revenues of $776 million on losses of $1.14 billion, including $894 million in IPO-related expenses. The company’s revenues surpassed Wall Street estimates of $740 million while losses came in much higher than expected.

“The first quarter was a strong start to an important year, our first as a public company,” Lyft co-founder and chief executive officer Logan Green said in a statement. “Our performance was driven by the increased demand for our network and multi-modal platform, as Active Riders grew 46 percent and revenue grew 95 percent year-over-year. Transportation is one of the largest segments of our economy and we are still in the very early stages of an enormous secular shift from personal car ownership to Transportation-as-a-Service.”

Lyft said adjusted net losses came in at $211.5 million compared to $228.4 million in the first quarter of 2018. It expects revenue of more than $800 million on adjusted EBITDA losses of between $270 million and $280 million for the second quarter of 2019. For the entire year, Lyft projects roughly $3.3 billion in total revenue on adjusted EBITDA losses of about $1.2 billion.

Pinterest, another well-known unicorn to recently IPO, shared tepid financials in what was also its first earnings report as a public company. The visual search engine posted revenues of $202 million on losses of $41.4 million for the three months ending March 31, 2019. The numbers surpassed Wall Street’s revenue estimates of about $200 million and represented significant growth from last year’s Q1 revenues of $131 million. Losses, however, came in roughly three times higher than estimates of 32 cents per share.

Pinterest went public in April, rising 25% during its first day trading on the NYSE. The company is now trading well below its $45 IPO price, however, closing Thursday at $25.5 per share with a market cap of about $14 billion.

Uber and Lyft’s lukewarm IPOs have shed light on Wall Street’s uncertainty toward highly priced unicorns. Many are now questioning how future venture-backed companies, particularly those in unproven industries like ride-hailing or autonomous vehicles, will fare as public companies.

This post is updating.

Drawing inspiration from games of yore but with dog and cat protagonists that signal light adventures rather than grim, dark ones, Gato Roboto and Dig Dog are easy to recommend to anyone looking to waste a couple hours this weekend. Not only that, but the latter was developed in a fascinating and inspiring way.

Both games share a 1-bit aesthetic that goes back many years but most recently was popularized by the inimitable Downwell and recently used to wonderful effect in both Return of the Obra Dinn and Minit. This is a limitation that frees the developer from certain concerns while also challenging them to present the player with all the information they need with only two colors, or in Dig Dog’s case a couple more (but not a lot).

In the latter game, you play as a dog, digging for bones among a series of procedurally generated landscapes populated by enemies and hazards. Dig Dug is the obvious callback in the name, but gameplay is more bouncy and spontaneous rather than the slower, strategic digging of the arcade classic.

On every stage you’re tasked with collecting a bone that’s somewhere near the bottom, while avoiding various types of enemies and traps or, if you so choose, destroying them and occasionally yielding coins. These coins can be traded with a merchant who appears on some stages, offering various gameplay perks like a longer dash or higher jump.

Get it! Get the bone!

The simple controls let you jump, dig, and do a midair dash that kills enemies — that’s pretty much it. The rest is down to moment-to-moment choices: dig around that enemy or go through them? If I go this way will I trap myself in this hole? Is it worth attacking that bat nest for a coin or will it be too hard to get out alive?

Collected bones contribute towards unlocking new stages with different, more dangerous enemies and devious traps. It gives a sense of progression even when you only get a bone or two, as does your dog rocketing back upwards in a brief but satisfying zoomies celebration every time. So even when you die, and you will die a lot, you feel like you’re working towards something.

It’s a great time-waster and you won’t exhaust its challenges for hours of gameplay; it’s also very easy to pick up and play a few stages of, since a whole life might last less than a minute. At $4 it’s an easy one to recommend.

Interestingly, Dig Dog was developed by its creator with only minimal use of his hands. A repetitive stress condition made it painful and inadvisable for him to code using the keyboard, so he uses a voice-based coding system instead. If I had been told I couldn’t type any more, I’d probably just take up a new career, so I admire Rusty Moyher for his tenacity. He made a video about the process here, if you’re curious:

Gato Roboto, for Switch and PC, is a much more complicated game, though not nearly so much as its inspirations, the NES classics Metroid and Blaster Master. In Gato Roboto, as in those games, you explore a large world filled with monsters and tunnels, fighting bosses and outfitting yourself with new abilities, which in turn let you explore the world further.

This one isn’t as big and open as recent popular “metroidvanias” like Hollow Knight or Ori and the Blind Forest — it’s really much more like a linear action-adventure game in the style of metroidvanias.

The idea is that you’ve crash-landed on a planet after tracking a mysterious signal, but the spaceman aboard the ship is trapped — you play his cat, Kiki, who must explore the planet in his stead.

At first (or shall I say fur-st) you really are just a cat, but you’re soon equipped with a power suit that lets you jump and shoot like any other action game. However, you frequently have to jump out of it to get into a smaller tunnel or enter water, in which the suit can’t operate (and the cat only barely). In this respect it’s a bit like Blaster Master, in which your pilot could dismount and explore caves in top-down fashion — an innovation that made the game one of my favorites for the system. (If you haven’t played the Switch remake, Blaster Master Zero, I implore you to.)

Gato Roboto isn’t as taxing or complex as its predecessors, but it’s not really meant to be. It’s a non-stop romp where you always have a goal or an obstacle to overcome. The 1-bit graphics are so well executed that I stopped noticing them after a minute or two — the pixel art is very clear and only rarely does the lack of color cause any confusion whatever.

Like Dig Dog and Downwell before it, you can pick up color schemes to change the palette, a purely aesthetic choice but a fun collectible (some are quite horrid). The occasional secret and branching path keeps your brain working a little bit, but not too much.

The game is friendly and forgiving, but I will say that the bosses present rather serious difficulty spikes, and you may, as I did, find yourself dying over and over to them because they’re a hundred times more dangerous than ordinary enemies or environmental hazards. Fortunately the game is (kitty) littered with save points and, for the most part, the bosses are not overlong encounters. I still raged pretty hard on a couple of them.

It’s twice the price of Dig Dog, a whopping $8. I can safely say it’s worth the price of two coffees. Don’t hesitate.

These pleasant distractions should while away a few hours, and to me they represent a healthy gaming culture that can look back on its past and find inspiration, then choose to make something new and old at the same time.