I worked for a SoftBank backed real estate "unicorn" and I can tell you that 'counterfeit capitalism' is rampant and many employees have internalized that model.
Our CEO was basically untested but charismatic and could sell you the Koolaid without a challenge (I was sold for my first few months). He also told me to my face that he wanted his company to become the 'only place to buy real estate' just like there was one place to search (Google) and one place to buy things (Amazon) and he marveled at Amazon's strategy of paying no income taxes by operating at a loss. This guy was very intelligent, IVY league grad and formerly of Goldman Sachs, but he could not hide the wannabe monopolist in him. Softbank was 100% intent on building multiple monopolies and consolidating power as their financial backer.
We had parties and one year a full summer camp where we flew in all employees around the country, yet at the same time we weren't profitable, sometimes not paying our vendors, and hiring massive consulting companies (like the one I was working for before I got hired there, I was a consultant for them and then joined their team) for millions of dollars for projects that barely improved the company. And of course, our primary strategy was buying up successful local brokerages across the country to get a high majority share in high-volume cities like SF and NYC. They stacked managers/VPs that had good resumes and assumed they would be able to support a failing business model and a culture based almost entirely on a delusion of grandeur.
WeWork was a bit of a wake-up call for those on the floor who didn't previously see through the propaganda they would put out during all-team meetings (they used to compare our company/growth to Uber and Lyft as if they had anything to do with real estate).
I saw barely competent leadership and hundreds of thousands of dollars go right down the drain, and I cracked last fall and quit to start writing and podcasting (thanks Spotify for using monopoly tactics as I'm breaking into the market) and now I am proud to be focusing on/learning about monopoly power with your book and newsletter; these aspiring monopolists are just as dangerous as the existing ones and I hope I can continue working to expose these things with people like you.
See if anyone at the Electronic Frontier Foundation wants to talk about all the privacy implications of making it too easy to add proximity features to apps. Off the top of my head, imagine Spotify puts proximity scanning into their app, ostensibly as a means of music sharing, but also happens to sell the database of who has been near who (whether or not they were running Spotify) to interested third parties, insurance companies buy it, and jack up your rates based on your interactions with high-risk individuals...
Hi Matt. Thanks for doing this work and for fighting the urgent fight against monopoly.
I'm not sure I agree with this:
"This is a tying or bundling strategy. Once Spotify has a gatekeeping power over distribution, it can eliminate the open standard rival RSS, and control which podcasts get access to listeners."
Where is the analogy of anyone who has done this before?
Netflix doesn't hurt the market for independent makers of digital video. They simply reward outliers with piles of money some of which is funded by the equity market. YouTube creators aren't hurt by a Netflix series.
In particular, how would Spotify eliminate RSS as a podcast delivery tool? Google definitely hurt the blogs, badly, but that's because they controlled free search, not paid consumption.
I think what their posture would do is handsomely reward the very top podcasters with cash and a distribution deal, but they can't organize all the advertisers and they can't eliminate the free channels, just as HBO and Netflix and others couldn't either.
My podcast is in the top 1%, and having Joe go to a private network probably increases my audience, it doesn't decrease it.
Count me in on any committee to fight monopoly, but if that's Spotify's goal, they're going to need a bigger boat.
"if this middleware did actually manage the system well" -- I'm a technologist and this gave me a damn hearty laugh. Even the analogy you've constructed, "browser", should be a clue. To make such middleware layers that are both functional and secure requires engineering on a level that we literally have not been able to accomplish to this point in human history (and that is without considering side-channel attacks on these systems).
(1) Part of the story for manufacturing (particularly chemical) moving from the U.S. to China was the U.S. cracking down on dangerous chemicals. Around 1990 you didn't hear about it so much, but trichloroethylene contanimation was involved in many factories turning into superfund sites. Search for "trichloroethylene united states" and you will see that marines who served at Camp Jejune in a certain time period are at the head of the line for VA healthcare because of their exposure. Search for "trichloroethylene china" and you see a truck filled up with barrels that they'd like to sell to you.
Manufacturers have always needed ways to make unwanted substances "disappear" and it is easier to do that in the South in the U.S. than the North, and even easier in China. (In my mind the contamination is the only thing wrong with Texas and the other oil patch states)
(2) Son is in big trouble. A few years back he was travelling the world, being lauded as a hero investor, there was an article in Bloomberg that suggested he was competing with Silicon Valley VC firms but if you read the article you'd see he was buying what they were selling, and that his money losing "bridge" investment in Uber to string it along for it to go public helped the original investors look as if they were successful.
I think that's an untold story in M&A. One case of counterfeit capitalism I remember was the son of an investment banker who licensed some patents from SRI for an ineffective text analysis technology, sold the company quickly to yahoo, and then was transformed into a successful startup founder overnight. I don't know it, but I suspect there was a quo quid pro going on -- somebody at Yahoo owed his dad a favor.
I’m happy to have just discovered you. I subscribed because when I was a kid in elementary school I learned that our gov was against monopolies as an adult I am experiencing that the gov has been taken over by promonopolizers I think starting in the Reagan presidency-I’m a layperson in this regard so I may be wrong. However, I see that monopolization has destroyed the American entrepreneurial spirit and is the cause of the greatest income inequality in our history. I’m looking forward to more reading from you. Thanks
"Venture Capital and Softbank Collapse: Softbank, which has served the key end point for venture capital, is basically gone, having basically declared its $100 billion Vision fund a failure."
As much as I normally enjoy your work this is a gross misrepresentation of the article you cited. SoftBank isn't "basically gone" nor has it "basically declared" that its Vision Fund is a failure.
From the Bloomberg article you cited: "The $75 billion the Vision Fund has spent to invest in 88 companies as of March 31 is now worth $69.6 billion." That means they still have $25B in cash + $69.6B of holdings. How is this anything like total collapse or failure?
This isn't going to change anything in VC or the strategy of investing huge amounts of capital to undercut prices and become a monopoly.
One problem with opening up beacon broadcasting to any app is that each app would want to broadcast its own IDs, and so the phone would be spending a lot of time and energy constantly broadcasting. This would make the device hotter, and would severely shorten the battery life.
The contact tracing app was carefully designed to ensure the user's privacy. There is much misinformation about this, but the official standard is fairly clear on how Apple/Google has made this a priority.
- Spotify is clearly trying the monopoly play, but it is not clear hiring Rogan is a game changer. Look at Stern as a counterexample. That was more about buying an audience. So far, no one has been able to enclose podcasting if only because it has such low entry costs and there are so many podcasters, each with a slightly different appeal. Right now, Spotify needs Rogan more than Rogan needs Spotify. (He's in his 50s, a common age to cash out for a steady income flow. Does he have kids?)
- BLE scanning is a serious privacy risk. Apple and Google are rightfully timid about opening that can of worms. I remember when ethernet came out in the 1970s and a friend of mine turned on the "promiscuous" bit on his hand wired interface board while testing. The school communications people came down on him like a ton of bricks. Now, we assume all traffic is public and encrypt accordingly. It was only COVID-19 that led anyone to seriously enabling this technology.
I agree with you that the Google and Apple app doesn't make sense. If you think about the type of person who would be conscientious enough to put into their phone that they are infected, this person would likely go home and quarantine so they wouldn't be in public to ping anyone else's phone. The type of person who would find out they were infected and go into a public place wouldn't add their status to their phone and most people who are spreading the virus are asymptomatic so they didn't know they were contagious and neither does the app. Not to mention a person who knows their phone is alerting people could just leave it at home when they go out. I don't see how having the app would do anyone any good. Finally, I just want someone to tell me what good it would do me to know that I had been in the vicinity of an infected person. It doesn't mean I was infected. What is a person supposed to do when they get that information other than panic? This seems like it would either lead to a massive line of paranoid people with no symptoms at testing centers or draconian demands that people who are not sick quarantine at home because their phone app thinks they were exposed. I don't see how it makes anyone safer, you still don't know if you were exposed to a person who either didn't use the app or didn't have symptoms. I also worry it will make people less careful because they assume that since their app didn't alert them that there is no one in their area with the virus.
I'm not sure how I feel about the bluetooth proximity service. Your description makes perfect sense. I see the need for regulation if the system were allowed to run in the background as well as the need for the user to be able to turn the feature off if they wanted to. I think that is a great case for an anti-trust suit. Apple and Google shouldn't be able to hide behind user privacy to tell Daigle they can't offer their app to consumers. Many apps you can get at the Apple store send your data back to company who then sells it. It should be up to the consumer to read the privacy statement that comes with the app and decide if they want it. I could envision the cool applications and the privacy concerns of putting something that alerts others you are nearby on your phone. I think it should be up to each person to decide if the cool features are worth the risk.
1. It was interesting that one outcome of Rogan going to Spotify is that his youtube comment audience has no more avenue to riff. Perhaps spotify will roll out commenting and back their way into a social situation for video? TBF they just started video so I don't know the interface. However, I think a big part of rogan's fanbase liked to banter in the comments. Alex jones returns has 20M views and 150K comments!
2. Is there any parallel to be drawn to the Sirius Howard Stern deal back in the day, to inform how these industries have changed? It's not the same but you have to say sirius was attempting restraint of trade. Although my understanding of the rogan announcement was that he will still be on 'free' spotify, for now. I could be wrong, whereas Howard went straight to a paywall.
3. Do you have any social media presence for these articles? It's hard to link to these for 'stories' lets say so people I know can stumble onto this, as it's kind of the way links are consumed now. Just a thought!
While I'm not fully versed in what Google or Apple are doing, I'm pretty versed in mobile technology. I will also throw out off the bat that "trusting" in any technology you didn't manufacture yourself is pretty much a bust, see https://www.bunniestudios.com/blog/?p=5706.
With this misconception out of the way, here are some key considerations:
1) The technology described by Daigle is probably optional; that is, a user has the option to disable the network currently opting them into the proximity experience. This means a user has a choice to exist privately when around others. In the new paradigm either people can digitally hide their presence (and virus status) or an RF scanner becomes a new essential for PIs, kidnappers, etc.
2) This whole business reminds me of the clipper chipset fiasco from the 90s (https://www.mattblaze.org/papers/eesproto.pdf). In short, what I will say is that abstraction levels exist to make programming simpler, but each layer of abstraction adds serious complications to security. The crack that broke modern wifi (https://www.krackattacks.com/) is a great example of how even the best cryptographic implementations, build on years of solid research, can be compromised.
3) A web browser's unique identifiers exist at what's called Layer 5 of the OSI model (Session). Session is why we can have tabs that use the same connection. Bluetooth and Wifi exist at Layer 2, the Data Link Layer. Abstraction layers are where both of these technologies break down: If my phone is receiving data from other people's phones, that is an open channel. In addition to open channels, by having an open door all kinds of side channel attacks become possibilities (https://www.wired.com/2015/10/this-radio-trick-silently-hacks-siri-from-16-feet-away/).
The last thing I would throw in for the sake of it is that there is research showing our testing methologies are only so accurate anyways, particularly if this virus is neuroinfective as some research suggests. If one infected person who hasn't been tested is still roaming out and about, the whole system is bunk.
For what it's worth, the level of granularity (in terms of recommendations) Daigle is proposing can be extrapolated from internet cookies (https://qz.com/1609356/your-phone-is-not-recording-your-conversations/) and Peer to Peer connection via internet enabled apps have had popularity from time to time, such as Firechat. Whisper is a great example of how this kind of idea can go wrong.
My understanding regarding Apple/Microsoft's contact tracing system is that:
1) It's loosely based on a Singapore approach, but parts had to be moved into the OS for the apps to be in any way effective or energy efficient. But as far as any users are concerned we can ignore that these apps are partially in the OS.
2) Without further OS updates Apple & Google do not have access to this data.
3) Even without trying to protect privacy there are concerns about the accuracy of these apps. To me it sounds like leaders & (fellow) technologists chasing technological solutions where we should instead be helping the epidimeologists manage & combine the data they are gathering.
4) While I don't approve in the slightest of Apple & Google having so much power over all our phones, they appear to be doing everything by the book in this case.
The Nintendo 3DS had a "proximity service" called StreetPass. If two people had the feature enabled and they passed by each other, their systems would exchange some information - even if the systems were in sleep mode. What happened and what info was exchanged depended on the specific game you were playing.
It's basically what Daigle was describing, but with a portable gaming console instead of your phone.
I worked for a SoftBank backed real estate "unicorn" and I can tell you that 'counterfeit capitalism' is rampant and many employees have internalized that model.
Our CEO was basically untested but charismatic and could sell you the Koolaid without a challenge (I was sold for my first few months). He also told me to my face that he wanted his company to become the 'only place to buy real estate' just like there was one place to search (Google) and one place to buy things (Amazon) and he marveled at Amazon's strategy of paying no income taxes by operating at a loss. This guy was very intelligent, IVY league grad and formerly of Goldman Sachs, but he could not hide the wannabe monopolist in him. Softbank was 100% intent on building multiple monopolies and consolidating power as their financial backer.
We had parties and one year a full summer camp where we flew in all employees around the country, yet at the same time we weren't profitable, sometimes not paying our vendors, and hiring massive consulting companies (like the one I was working for before I got hired there, I was a consultant for them and then joined their team) for millions of dollars for projects that barely improved the company. And of course, our primary strategy was buying up successful local brokerages across the country to get a high majority share in high-volume cities like SF and NYC. They stacked managers/VPs that had good resumes and assumed they would be able to support a failing business model and a culture based almost entirely on a delusion of grandeur.
WeWork was a bit of a wake-up call for those on the floor who didn't previously see through the propaganda they would put out during all-team meetings (they used to compare our company/growth to Uber and Lyft as if they had anything to do with real estate).
I saw barely competent leadership and hundreds of thousands of dollars go right down the drain, and I cracked last fall and quit to start writing and podcasting (thanks Spotify for using monopoly tactics as I'm breaking into the market) and now I am proud to be focusing on/learning about monopoly power with your book and newsletter; these aspiring monopolists are just as dangerous as the existing ones and I hope I can continue working to expose these things with people like you.
Thank you for your work.
See if anyone at the Electronic Frontier Foundation wants to talk about all the privacy implications of making it too easy to add proximity features to apps. Off the top of my head, imagine Spotify puts proximity scanning into their app, ostensibly as a means of music sharing, but also happens to sell the database of who has been near who (whether or not they were running Spotify) to interested third parties, insurance companies buy it, and jack up your rates based on your interactions with high-risk individuals...
Hi Matt. Thanks for doing this work and for fighting the urgent fight against monopoly.
I'm not sure I agree with this:
"This is a tying or bundling strategy. Once Spotify has a gatekeeping power over distribution, it can eliminate the open standard rival RSS, and control which podcasts get access to listeners."
Where is the analogy of anyone who has done this before?
Netflix doesn't hurt the market for independent makers of digital video. They simply reward outliers with piles of money some of which is funded by the equity market. YouTube creators aren't hurt by a Netflix series.
In particular, how would Spotify eliminate RSS as a podcast delivery tool? Google definitely hurt the blogs, badly, but that's because they controlled free search, not paid consumption.
I think what their posture would do is handsomely reward the very top podcasters with cash and a distribution deal, but they can't organize all the advertisers and they can't eliminate the free channels, just as HBO and Netflix and others couldn't either.
My podcast is in the top 1%, and having Joe go to a private network probably increases my audience, it doesn't decrease it.
Count me in on any committee to fight monopoly, but if that's Spotify's goal, they're going to need a bigger boat.
"if this middleware did actually manage the system well" -- I'm a technologist and this gave me a damn hearty laugh. Even the analogy you've constructed, "browser", should be a clue. To make such middleware layers that are both functional and secure requires engineering on a level that we literally have not been able to accomplish to this point in human history (and that is without considering side-channel attacks on these systems).
(1) Part of the story for manufacturing (particularly chemical) moving from the U.S. to China was the U.S. cracking down on dangerous chemicals. Around 1990 you didn't hear about it so much, but trichloroethylene contanimation was involved in many factories turning into superfund sites. Search for "trichloroethylene united states" and you will see that marines who served at Camp Jejune in a certain time period are at the head of the line for VA healthcare because of their exposure. Search for "trichloroethylene china" and you see a truck filled up with barrels that they'd like to sell to you.
Manufacturers have always needed ways to make unwanted substances "disappear" and it is easier to do that in the South in the U.S. than the North, and even easier in China. (In my mind the contamination is the only thing wrong with Texas and the other oil patch states)
(2) Son is in big trouble. A few years back he was travelling the world, being lauded as a hero investor, there was an article in Bloomberg that suggested he was competing with Silicon Valley VC firms but if you read the article you'd see he was buying what they were selling, and that his money losing "bridge" investment in Uber to string it along for it to go public helped the original investors look as if they were successful.
I think that's an untold story in M&A. One case of counterfeit capitalism I remember was the son of an investment banker who licensed some patents from SRI for an ineffective text analysis technology, sold the company quickly to yahoo, and then was transformed into a successful startup founder overnight. I don't know it, but I suspect there was a quo quid pro going on -- somebody at Yahoo owed his dad a favor.
I’m happy to have just discovered you. I subscribed because when I was a kid in elementary school I learned that our gov was against monopolies as an adult I am experiencing that the gov has been taken over by promonopolizers I think starting in the Reagan presidency-I’m a layperson in this regard so I may be wrong. However, I see that monopolization has destroyed the American entrepreneurial spirit and is the cause of the greatest income inequality in our history. I’m looking forward to more reading from you. Thanks
"Venture Capital and Softbank Collapse: Softbank, which has served the key end point for venture capital, is basically gone, having basically declared its $100 billion Vision fund a failure."
As much as I normally enjoy your work this is a gross misrepresentation of the article you cited. SoftBank isn't "basically gone" nor has it "basically declared" that its Vision Fund is a failure.
From the Bloomberg article you cited: "The $75 billion the Vision Fund has spent to invest in 88 companies as of March 31 is now worth $69.6 billion." That means they still have $25B in cash + $69.6B of holdings. How is this anything like total collapse or failure?
This isn't going to change anything in VC or the strategy of investing huge amounts of capital to undercut prices and become a monopoly.
One problem with opening up beacon broadcasting to any app is that each app would want to broadcast its own IDs, and so the phone would be spending a lot of time and energy constantly broadcasting. This would make the device hotter, and would severely shorten the battery life.
The contact tracing app was carefully designed to ensure the user's privacy. There is much misinformation about this, but the official standard is fairly clear on how Apple/Google has made this a priority.
https://covid19-static.cdn-apple.com/applications/covid19/current/static/contact-tracing/pdf/ExposureNotification-FAQv1.1.pdf
- Spotify is clearly trying the monopoly play, but it is not clear hiring Rogan is a game changer. Look at Stern as a counterexample. That was more about buying an audience. So far, no one has been able to enclose podcasting if only because it has such low entry costs and there are so many podcasters, each with a slightly different appeal. Right now, Spotify needs Rogan more than Rogan needs Spotify. (He's in his 50s, a common age to cash out for a steady income flow. Does he have kids?)
- BLE scanning is a serious privacy risk. Apple and Google are rightfully timid about opening that can of worms. I remember when ethernet came out in the 1970s and a friend of mine turned on the "promiscuous" bit on his hand wired interface board while testing. The school communications people came down on him like a ton of bricks. Now, we assume all traffic is public and encrypt accordingly. It was only COVID-19 that led anyone to seriously enabling this technology.
What Daigle suggests seems like it's already supported via mobile platforms, Apple's iBeacon, for example, https://developer.apple.com/ibeacon/
Using Wi-Fi for proximity and positioning is an old idea that both Apple and Google use to improve their positioning/geolocation accuracy. I think Skyhook was the pioneer in that space (https://www.skyhook.com/). Wikipedia has more: https://en.wikipedia.org/wiki/Wi-Fi_positioning_system
Contact Tracing:
I agree with you that the Google and Apple app doesn't make sense. If you think about the type of person who would be conscientious enough to put into their phone that they are infected, this person would likely go home and quarantine so they wouldn't be in public to ping anyone else's phone. The type of person who would find out they were infected and go into a public place wouldn't add their status to their phone and most people who are spreading the virus are asymptomatic so they didn't know they were contagious and neither does the app. Not to mention a person who knows their phone is alerting people could just leave it at home when they go out. I don't see how having the app would do anyone any good. Finally, I just want someone to tell me what good it would do me to know that I had been in the vicinity of an infected person. It doesn't mean I was infected. What is a person supposed to do when they get that information other than panic? This seems like it would either lead to a massive line of paranoid people with no symptoms at testing centers or draconian demands that people who are not sick quarantine at home because their phone app thinks they were exposed. I don't see how it makes anyone safer, you still don't know if you were exposed to a person who either didn't use the app or didn't have symptoms. I also worry it will make people less careful because they assume that since their app didn't alert them that there is no one in their area with the virus.
I'm not sure how I feel about the bluetooth proximity service. Your description makes perfect sense. I see the need for regulation if the system were allowed to run in the background as well as the need for the user to be able to turn the feature off if they wanted to. I think that is a great case for an anti-trust suit. Apple and Google shouldn't be able to hide behind user privacy to tell Daigle they can't offer their app to consumers. Many apps you can get at the Apple store send your data back to company who then sells it. It should be up to the consumer to read the privacy statement that comes with the app and decide if they want it. I could envision the cool applications and the privacy concerns of putting something that alerts others you are nearby on your phone. I think it should be up to each person to decide if the cool features are worth the risk.
A few items!
1. It was interesting that one outcome of Rogan going to Spotify is that his youtube comment audience has no more avenue to riff. Perhaps spotify will roll out commenting and back their way into a social situation for video? TBF they just started video so I don't know the interface. However, I think a big part of rogan's fanbase liked to banter in the comments. Alex jones returns has 20M views and 150K comments!
2. Is there any parallel to be drawn to the Sirius Howard Stern deal back in the day, to inform how these industries have changed? It's not the same but you have to say sirius was attempting restraint of trade. Although my understanding of the rogan announcement was that he will still be on 'free' spotify, for now. I could be wrong, whereas Howard went straight to a paywall.
3. Do you have any social media presence for these articles? It's hard to link to these for 'stories' lets say so people I know can stumble onto this, as it's kind of the way links are consumed now. Just a thought!
While I'm not fully versed in what Google or Apple are doing, I'm pretty versed in mobile technology. I will also throw out off the bat that "trusting" in any technology you didn't manufacture yourself is pretty much a bust, see https://www.bunniestudios.com/blog/?p=5706.
With this misconception out of the way, here are some key considerations:
1) The technology described by Daigle is probably optional; that is, a user has the option to disable the network currently opting them into the proximity experience. This means a user has a choice to exist privately when around others. In the new paradigm either people can digitally hide their presence (and virus status) or an RF scanner becomes a new essential for PIs, kidnappers, etc.
2) This whole business reminds me of the clipper chipset fiasco from the 90s (https://www.mattblaze.org/papers/eesproto.pdf). In short, what I will say is that abstraction levels exist to make programming simpler, but each layer of abstraction adds serious complications to security. The crack that broke modern wifi (https://www.krackattacks.com/) is a great example of how even the best cryptographic implementations, build on years of solid research, can be compromised.
3) A web browser's unique identifiers exist at what's called Layer 5 of the OSI model (Session). Session is why we can have tabs that use the same connection. Bluetooth and Wifi exist at Layer 2, the Data Link Layer. Abstraction layers are where both of these technologies break down: If my phone is receiving data from other people's phones, that is an open channel. In addition to open channels, by having an open door all kinds of side channel attacks become possibilities (https://www.wired.com/2015/10/this-radio-trick-silently-hacks-siri-from-16-feet-away/).
The last thing I would throw in for the sake of it is that there is research showing our testing methologies are only so accurate anyways, particularly if this virus is neuroinfective as some research suggests. If one infected person who hasn't been tested is still roaming out and about, the whole system is bunk.
For what it's worth, the level of granularity (in terms of recommendations) Daigle is proposing can be extrapolated from internet cookies (https://qz.com/1609356/your-phone-is-not-recording-your-conversations/) and Peer to Peer connection via internet enabled apps have had popularity from time to time, such as Firechat. Whisper is a great example of how this kind of idea can go wrong.
My understanding regarding Apple/Microsoft's contact tracing system is that:
1) It's loosely based on a Singapore approach, but parts had to be moved into the OS for the apps to be in any way effective or energy efficient. But as far as any users are concerned we can ignore that these apps are partially in the OS.
2) Without further OS updates Apple & Google do not have access to this data.
3) Even without trying to protect privacy there are concerns about the accuracy of these apps. To me it sounds like leaders & (fellow) technologists chasing technological solutions where we should instead be helping the epidimeologists manage & combine the data they are gathering.
4) While I don't approve in the slightest of Apple & Google having so much power over all our phones, they appear to be doing everything by the book in this case.
The Nintendo 3DS had a "proximity service" called StreetPass. If two people had the feature enabled and they passed by each other, their systems would exchange some information - even if the systems were in sleep mode. What happened and what info was exchanged depended on the specific game you were playing.
It's basically what Daigle was describing, but with a portable gaming console instead of your phone.
https://www.nintendo.com/3ds/built-in-software/streetpass/how-it-works/