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One Medical Acquires Rise, A Nutrition Coaching App
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Matthew Lynley
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Much of Rise CEO Suneel Gupta and One Medical CEO Tom Lee’s first interactions happened in front of a whiteboard at the One Medical offices after the pair were introduced by mutual investor Google Ventures. “I was very much interested in what the patient experience was happening behind the scenes,” Gupta said. “They were interested in what was happening behind the scenes for our member experience. It was a lot of sharing ideas, using a whiteboard, sharing it at the One Medical office. That evolved into, let’s continue talking, see if there’s something we can work on together.” And it did. One Medical today said it was acquiring Rise, a service that connects users with diet coaches. According to the Wall Street Journal, . Rise had raised $4 million in venture financing prior to being acquired by One Medical from investors like Google Ventures, Greylock Partners and Cowboy Ventures. Rise’s goal is to lower the cost of a personal nutritionist and trainer using technology. The company offers a range of diet-coaching services, from a $9 per month messaging product for diet maintenance to a one-on-one coaching experience for $50 per month. The company has certainly been busy. In August, Rise said it had hit $1 million in revenue run-rate in its first year of operation. It also acquired HealthyOut, which uses machine learning to browse menus of nearby restaurants to give recommendations on the best healthy food options for different kinds of diets. Rise will continue to operate as-is, Gupta said, saying there was “a lot of exciting potential for us to work together to reach more people.” Gupta wouldn’t dig into any details, but said that both Rise and One Medical have fast-moving cultures — implying that anything new integrating between the two would likely come sooner, rather than later. “I think it could expose us to new users, Rise has been growing quickly, we’ve tripled our member base over the past year, but One Medical is also growing quickly,” Gupta said. “They had their biggest growth year in 2015, they added 80,000 new patients. You have two companies with strong growth trajectories. It’s exciting to us how we continue growing both road maps and both growth curves.” With the nutrition space becoming crowded, Gupta said this also offered an opportunity to differentiate itself from other services on the market. There are other nutrition-tracking apps like MyFitnessPal, but Rise’s goal is to be more personalized — something that it hopes to continue pressing while part of One Medical. Getting acquired also gives the company more resources and an opportunity to focus, Gupta said. “I think it’s actually a big step forward for our ability to compete in the market and offer the best possible service,” he said. “For us we see One Medical as a leader in primary care, with a total focus on user experience and a healthy amount of funding to really invest in making peoples’ lives better. For us, we are predominantly a product development team, and now we get to focus on what we do best, which is product development.” Rise co-founders Gupta and Stuart Parmenter will still be running Rise within One Medical, Gupta said.
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Augmented Reality Helmet Startup Daqri Nabs Former SpaceX, Qualcomm And Virgin Group Execs
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Lucas Matney
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The augmented reality space is hot and getting hotter, especially among enterprise companies looking to redesign the experience of the onsite employee of the future. Mike Lynch Patrick Alo Roy Ashok , an AR smart helmet startup, is growing its leadership board significantly today while it continues testing its device. The company is adding three new executive positions today: Mike Lynch, who most recently tackled talent acquisition and human resources at SpaceX, will be joining Daqri as chief human potential officer; Roy Ashok, a former product management leader at Qualcomm, will be coming aboard as chief product officer; and Patrick Alo, a marketing leader from Virgin Group, will be appointed as chief marketing officer. These latest hires will give Daqri improved flexibility as it looks to aggressively hire top talent and expand the company’s brand presence in the enterprise community. The device itself doubles as a safety helmet and set of safety glasses in addition to providing “mixed reality work instructions, safety information, mapping and more” for industrial workers. The helmet is already being tested with some major corporations, including Autodesk, GE, Topcon, Hyperloop and KSP Steel. The LA-based startup gathered headlines at CES 2016 when it unveiled its enterprise-focused augmented reality helmet. Our own to discuss potential use cases for the device and the future of AR tech in the workplace. “Roy, Patrick and Mike are experts in their respective fields and come from some of the world’s most innovative companies,” said Brian Mullins, founder and CEO of Daqri, in a statement. “They are joining at a crucial time as we are making huge advancements in AR technology and holography that will have a game-changing impact on the industry. We are laser focused on our mission of changing the face of work with the deployment of the Daqri Smart Helmet and have the team in place to do just that.”
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Frederic Lardinois
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NextGenVest CEO On What Fintech Startups Can Learn From Uber
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Harry Stebbings
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Last week, following and his company NextGenVest, I caught up with Peeler, whose company is using Snapchat to send money tips to millennial students. In what turned out to be a entertaining and insightful interview we discussed a range of topics including why traditional financial institutions have lost all brand loyalty with millennials, what millenials look for in emerging brands today and what the current customer acquisition methods are to attain this sector of the market. Peeler also explored why we are moving from a trend of financial organization to financial efficiency, and how this impacts the blossoming Fintech economy. He also discussed what Fintech startups can learn from the strategies of consumer facing startups, like Uber.
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Meet The Finalists For The NFL’s 1st And Future
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Samantha O'Keefe
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and Future, the startup pitch hosted jointly by the NFL, Stanford and your favorite tech blog, TechCrunch, is tomorrow! We’ve scoured fields, courts, arenas and stadiums around the world to find the most promising startups bringing technology to sports. These companies help athletes move faster, stay safer and ultimately perform better. But what about those of you who are cheering the stands or watching from home? Not to worry, these startups will help you get your tickets or gear faster, navigate the stadium and connect with your team. They’ll show you a whole new way to watch and bring the magic of the live event to wherever you call home. Each team has just 5 minutes to convince that they are the most likely to succeed in their category. One winner from each category will receive $50,000, a meeting with NFL executives and two tickets to Sunday’s Super Bowl. 1st and Future kicks off (see what we did there) at 8:30 am PT on Saturday, February 6th from the Standard CEMEX auditorium. The event is closed to the public, but you can follow all the action via the live stream on TechCrunch or on Twitter with the hashtag #TCNFL. Without further ado, TechCrunch is pleased to announce the participants in 1st and Future (in order of appearance):
Maestro provides engaging video experiences that drive user action, sponsor & transactional revenue, and robust data collection for business-minded broadcasters.
LiveLike uses Virtual Reality to bring you and your friends together in a sports viewing experience that’s as easy as turning on your TV and as thrilling as going to the stadium.
Fanmode is making the world a stadium for fans. With its proprietary communications platform and smart device applications, Fanmode solves this problem and makes global real-time fan participation possible.
FirstV1sion’s JerseyCam enables broadcasters to offer the best action from the player’s angle in real time, making them feel the action closer than ever.
DimeTime is an advanced, virtual reality-based football training system featuring real NFL formations, route concepts, and real NFL player speeds and movements.
Kenzen delivers real-time health insights using patented biosensors, sweat analysis and predictive analytics. Our mission is to predict and preempt injury and health complications.
Using machine learning and other analytical methods, the Telemetry Sports platform will change the way organizations develop their game day strategy, scout every team, and evaluate every player in the NFL.
Heddoko’s e-garments transmit live data to their users by capturing the full body movements and modeling it in 3D, allowing them to improve their performances and alleviate the risk of injury.
ReplyBuy turns conversations into transactions by enabling professional teams, universities and venues to connect in real-time with their fans via mobile, who can then execute a purchase with a quick “reply” text message.
Paranoid Fan is a social mapping app where fans can pin, share, and discover the best kept secrets on GameDay – like where to park, find tickets, food, beer, or even your friends in a crowd of people.
Sidestep is a mobile platform that allows fans to browse and buy live event merchandise before, during and after a show for both pickup and delivery.
HYP3R makes it easy for businesses to engage influential customers at specific locations on a personal level in real-time.
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BlackBerry Confirms Job Cuts At Waterloo HQ And Florida Manufacturing Facility
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Matt Burns
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It looks like John Chen is swinging the axe at BlackBerry. The company confirmed to TechCrunch that it let go “a small number of employees… in Waterloo and Sunrise, FL”. Update: BlackBerry updated its statement and now says 200 people were laid off. This comes after a by the Global And Mail that the befallen smartphone maker cut 75 jobs at its Florida manufacturing facility. Then, separately, MobileSyrup BlackBerry is cutting 35% of its workforce in its Waterloo headquarters. Official statement: This cut shouldn’t come as a surprise. The company is still trying to find its footing. CEO John Chen stated in late 2015 that the company could stop manufacturing handsets. It previously stopped using its custom BlackBerry OS and instead adopted Android to power its latest phone, the BlackBerry Priv. BlackBerry ( ) stock is currently trading at $7.11, down 4% on the day, though it opened on the news that TD Securities gave the stock a C$9.00 price objective.
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Glu Mobile Pins Its Hopes On New Taylor Swift Game
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Sarah Perez
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Glu Mobile, the mobile gaming company behind recent app store hits like the ” and who recently , is hoping it has another potential breakout title on its hands thanks to a newly announced deal with pop star, Taylor Swift. According to news this week, Taylor and Glu will work together over the course of a multi-year partnership to deliver what the company describes as a “new and highly differentiated gaming experience.” What that “gaming experience” will include, Glu isn’t yet saying, noting that specific game details won’t be revealed until later this year. The game itself is expected to launch in late 2016, the company said. Glu also noted that this would be the Grammy award-winning artist’s first foray into mobile gaming. But it’s not Swift’s first time developing a mobile property. The star for best “Original Interactive Program” for her “AMEX Unstaged: Taylor Swift Experience.” That app, available for both iOS and Android, let viewers go inside Swift’s “Blank Space” music video and explore the storyline in a 360-degree format. While not a game, that app could help predict how successful the forthcoming Swift property may become, and how well the star is able to convert her 227 million+ social followers into app downloads. Based on figures provided by App Annie, the “Taylor Swift Experience” app debuted as a top 10 app in the “Music” section on the iTunes App Store, and briefly flirted with a top 100 “Overall” ranking, but thereafter, quickly dropped. The app fell into the 100’s, then 200’s, then further, in the “Music” category and was last spotted at #399 in “Music” apps section on iTunes. The Android version followed a similar trajectory in Google Play’s “Music & Audio” section. Swift also has her “official” app on iOS and Android, published by Mroadie, which has been around for years. But it barely ranks these days, having dropped to #540 in “Music” on iOS, and is currently unranked on Android. That doesn’t mean that Swift’s new game from Glu won’t do well – after all, the official app is more like a mobile version of a website, while the music video is something that you’ll get enough of after a couple of viewings max. A mobile game, meanwhile, can be more engaging and played for longer periods of time. A mobile game, meanwhile, can be more engaging and played for longer periods of time. Plus, Glu has proven it can build out a game that has viral effects, as it did with the Kardashian title. Even if the game’s doesn’t last forever, it can pull into big dollars while it’s hot. Case in point: some estimated that in annual revenue. as its ranking slid, but or 24% of Glu’s revenue in Q4 2015. For Glu, the Swift partnership is a big win for the struggling gaming company which has been facing deteriorating net income, weak operating cash flow, and disappointing stock performance, as noted by . The company said that for the fiscal first quarter 2016, it’s anticipating a loss between 5 and 6 cents per share on revenue between $46 million and $48 million. Despite this, the stock popped 23% on Thursday morning, and then was seen trading some The boost was due to the news of the Swift deal, which investors clearly seemed enthused about despite the hit-or-miss world of mobile gaming. Perhaps they have short-term memories? Sure, Swift is a big catch but so was Katy Perry. And Glu’s recent bet to repeat its Kardashian success with Perry, whose game followed a similar formula to the earlier celeb title, pretty much . Hopefully for Glu Mobile, Swift’s game will fare better.
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How To Stream Super Bowl 50 This Sunday
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Fitz Tepper
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So you decided to finally ditch your cable package this year. Great! But now the Super Bowl is rolling around and you’re wondering how you’re going to watch Cam Newton dab all afternoon? Luckily, we’ve put together a guide of all the ways you can stream the big game. , the network that is broadcasting Super Bowl 50 this year, is streaming the game for free across a bevy of set-top devices. Viewers can download either the CBS Sports App or NFL App on an Apple TV, Xbox One, Fire TV, Roku, or Chromecast and stream the game for free, even if you don’t have a cable subscription. Sweet! Interestingly, ESPN will also be airing the game, but only in Spanish, and only on its channel. If you decide to watch from your laptop, you can also head to to stream the game. Now it gets a little trickier if you want to watch from a mobile device. Verizon has bought exclusive mobile rights to the big game, and will be limiting the game to only phones on a Verizon service plan. So if you’re lucky enough to have big red as your service provider you can stream the game via the or the on your phone. But what about if you’re outside of the U.S? The game will still be available internationally, but , which costs $99 a year. And most importantly, don’t worry about missing any ads, because CBS has confirmed that for the first time they will be including advertisements in all of their streams.
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Amazon Alexa Can Now Order An Uber From Your Echo Speaker Or Fire TV
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Sarah Perez
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It’s been a big week for Amazon’s connected speaker Echo. First the company rolled out a way to just by asking Echo’s virtual assistant to place an order for you. It then added to the list of supported streaming music services. And today, Amazon has integration with on-demand car service, Uber. The feature is being made available by way of a third-party app, which you can add to your Echo speaker from the “Skills” section in the Alexa companion app. After you enable the Uber skill and link it to your Uber account, you’ll be able to ask Alexa to order you a ride just by making a voice request. The option allows you to speak your request more generally, by saying something like “Alexa, ask Uber to request a ride,” for example, or “Alexa, ask Uber to get me a car,” or even, “Alexa, order me an Uber.” Or you can direct Alexa to order you a specific ride option, like the low-cost Uber X. In that case, you would say “Alexa, ask Uber to request an Uber X.” And you can ask “Alexa, how far away is my Uber?” Amazon also notes that this feature will be available via Alexa on Fire TV as well as Echo, which is not the case with all of Alexa’s “Skills.” The company has been making great strides when it comes to the type of apps rolling out to its Alexa “app store” (the Skills section), having rapidly . While the initial lineup included goofy and low-quality apps like trivia games or joke apps, later additions proved more promising. Today, Alexa supports apps like 7-Minute Workout app; news and weather apps from bigger names like AccuWeather, AOL, HuffPost, and others; an app that reminds you where you’ve parked your car and how much gas you have left from Automatic; various apps to check local transit schedules; event guides from Bandsintown.com and StubHub; stock quotes from Fidelity; a family locator from Glympse; a universal translator app; and, as of this week, a pizza ordering app from Domino’s. To name a few! The problem the company has not yet addressed – and one that makes it difficult for users to actually take advantage of all these integrations – is that, often, Alexa still requires users to speak their requests using very specific phrases. For example, instead of being able to say, “Alexa, order pizza” you have to .” That’s not…well…easy. At least with the new Uber integration, it appears there are far more options in terms of the various request phrases you can use to order your car. The Uber integration is live now in the Alexa Skills section, says Amazon. Below is the feature in action: [youtube https://www.youtube.com/watch?v=o26xCTP6n2Q]
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India’s Housejoy Makes First Acquisition Following $23M Round Led By Amazon
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Jon Russell
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, the India-based home services on-demand company backed by Amazon, has made its first acquisition after it snapped up on-demand laundry and cleaning company . The undisclosed deal comes a little over a month after Housejoy closed . Speaking to TechCrunch at the time of the funding, Housejoy CEO Saran Chatterjee said that the company had set aside $2 million for strategic acquisitions to “give us a position of strength in a city or category, or [add to the] team and talent.” While we don’t know the size of this deal, it is almost certainly the first of many. Echoing his previous statement, Chatterjee said today that acquisition gives Housejoy “the possibility to accelerate the growth in laundry beyond the current growth rate.” Housejoy added that the full MyWash team would move in and operate from its office in Bangalore. Its target is to grow its laundry business to 10,000 services per day over the next 12 months.
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Men’s Personal Shopper Modomoto Acquires The Cloakroom In Roll-Up
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Mike Butcher
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Eventually the whole Shoedazzle / Birchbox etc. business model (get outfits, try them out, keep what you like, return the rest) would make it to the men’s market and we’ve seen many such models launch. The twist is that this time is personal, with (I never really believe this, but let’s go with it) an online personal shopper picking out a style for you every time. But I digress. In the UK the front-runner in this game is . But in continental Europe, each tiny country (we have a lot) has their own version. So a roll-up is always in order in these instances. Thus, German-player is making its first acquisition of Dutch-Danish The Cloakroom. Terms were not disclosed, but no doubt the investors were keen to get in on a bigger player. The roll-up mirrors what happened in the US, such as the . The Cloakroom was launched in 2013 and with their team of 50 in Amsterdam, it is the local champion in Benelux and Scandinavia. The company will continue to run The Cloakroom brand in their markets and cofounders Asbjørn Jørgensen and Kasper Brandi Petersen will join the management board of Curated Shopping Group. At the same time Modomoto has raised some cash from Kees Koolen (an advisor and investor in Uber, and former CEO of Booking.com). The move is being spun as the creation of the “Curated Shopping Group”. In reality it’s an acquisition which is probably the start of a roll-up across Europe as investors call time on going it alone in one market. This new group will have under its wing some 250 employees, 300,000 customers in 7 markets and what it claims is “tens of millions” in annual net-revenue in 2015. Early player Modomoto has benefitted from its timing four years ago to build a solid base in Germany, Austrian and Switzerland. “Curated shopping represents a multi-billion dollar opportunity and our aim is to be the dominant player. This space is all about customer loyalty,” says Andreas Fischer, CEO of Modomoto and now Curated Shopping Group, who says running the full stack from styling to distribution is part of its special sauce. Modomoto was founded in 2011 and has tended to eschew big venture capital investment, although it has taken some from Connect Ventures. Their main competitor in the curated shopping space is which has raised $37.81M in four rounds from nine Investors.
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Microsoft Is Acquiring London’s AI-Driven SwiftKey For $250M
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Mike Butcher
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Microsoft is understood to be acquiring London-based , the startup which employed artificial intelligence to create a ground-breaking predictive smartphone keyboard, according to sources. The Financial Times is that the deal is “around $250m”. TechCrunch understands the figure is just under that amount. Investor sources say the deal, which is all-cash, is definitely going through and will be announced imminently. . The companies are understood to have been in talks for a number of months. Staff were told earlier today about the deal. SwiftKey declined to comment. SwiftKey a total of $21.59 million from Octopus Ventures and Index Ventures, while UK celebrity Stephen Fry was an early angel investor. SwiftKey’s keyboard and SDK is now on more than 300 million Android and iOS smartphones. And while its technology is hugely time-saving for users, the AI-powered platform could have far more uses for Microsoft than just keyboards. The predictive engine behind that keyboard could be put to many more uses. Furthermore, by acquiring SwiftKey’s staf, and founders Dr. Ben Medlock (CTO) and Jon Reynolds (CEO), they are getting a kick-ass team which is so at the forefront of AI that even Professor Stephen Hawking has their work after they worked on a project to enhance the communication system used by the world-renowned scientist. Here’s how SwiftKey works:
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Marc Benioff Offers Some Insight Into Thinking Behind SteelBrick Purchase
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Ron Miller
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When announced for $360 million at the end of last year, it came as a surprise. CEO Marc Benioff offered some insight into why he made the purchase at . The move has to be seen in the context of comments made at a Dreamforce press event last fall with Keith Block, . Block was specifically asked at the press event about Salesforce’s interest in quote-to-cash vendors like SteelBrick and Apttus, and he said that these types of companies, which serviced the back office part of a sale weren’t part of the company’s overall vision to build (or buy) products that service the customer. It’s worth noting that both companies were built on the Salesforce platform, and the company contributed funding to both through its Salesforce Ventures arm. Today, Benioff shed some light on why he bought SteelBrick in spite of that line of thinking. He said the company approached him and offered to give a presentation. Now, there are lots of companies built on the Salesforce platform, and I have to think that many of them would like an audience with Benioff. For some reason, SteelBrick was granted one and he said at the event today when asked about the purchase that he was impressed and he had to buy the company. “I thought it was the best example of an ISV had of building [this type of] application on this platform,” Benioff said today. But making a statement like that had to be a blow to other vendors, who built similar applications on the Salesforce platform and are competing in the same market. He tried to soften that a bit by adding that it was a big market and he felt there was plenty of room for other vendors in the Salesforce ecosystem. It’s worth noting that Apttus got in touch with us shortly after the SteelBrick deal was announced and in the quote-to-cash market. While Apttus sells in the same market, it’s focused on the enterprise, and SteelBrick aimed more at the small to medium market. Still, the move clearly had him thinking about how his company would exit: We will be IPOing this year. That may be a function to figure what Salesforce wants to do and they may think about that [after purchasing SteelBrick at the end of last year]. There’s no reason they can’t buy us too. For me, I have to run the business, and we’re growing 100 percent year on year. If Salesforce came to the table, that would be great if the numbers work. If not, we have an amazingly strong business,” Krappe said. Regardless, Salesforce bought SteelBrick and announced today that it had already incorporated the SteelBrick technology into the Salesforce Lightning CRM platform. It had been able to achieve this in a remarkably short time between the announcement at the end of December and today’s launch because of the fact it had been built on the Salesforce platform. That made integration fairly trivial for the cloud software giant, and that would likely be the case with any company it chooses to buy that has been built on its platform.
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GV’s Approach To Healthcare Investing: An Interview With Dr. Krishna Yeshwant
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Kirti Patel
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Healthcare investments — in particular, investments in digital health — are booming, and don’t seem to be slowing down. According to , digital health funding hit nearly $5.8 billion in venture funding last year, surpassing the previous record of $4.3 billion in 2014. One of the top venture firms, (previously known as Google Ventures), recently came out with their year in review, revealing that more than one-third of their investments are in the life sciences and healthcare. (They currently have $2.4 billion under management.) “I can think of no more important mission than to improve human health and global quality of life,” CEO Bill Maris said in a recent announcement. One of the strengths of the GV life science and health investment team is having a diverse mix of PhDs and MDs as investors, including general partner . Yeshwant continues to practice internal medicine part-time at Brigham and Women’s Hospital in Boston, and credits that with helping to keep him in touch with the challenges facing healthcare. I recently sat down with Yeshwant to talk about GV’s investment strategy. Yeshwant started his career, interestingly, studying computer science at Stanford. From there, he helped found two tech companies, which were eventually acquired by Hewlett-Packard and Symantec. He could have successfully continued on his path in tech, but decided instead to go to medical school after his father became ill and needed a cardiac bypass. “I remember just being in the hospital thinking this is just messed up. Thus far, one of GV’s largest investments has been with Flatiron Health, an oncology-focused technology company based in New York City. According to Yeshwant, the concept was developed by two former Google employees who received support from GV. “Flatiron is basically integrating EMR’s (electronic medical records) in the outpatient and hospital setting,“ said Yeshwant, “and it provides data back to physicians as well as aggregating data to aid with discovery and help with regulatory processes.” Others have also recognized Flatiron’s enormous potential. Flatiron recently announced they received $175 million in Series C funding from Roche Pharmaceuticals. In addition to the funding, Roche plans to be a subscriber to Flatiron’s software platform. Their hope is to use the platform to identify and bring innovative treatments to market faster. Yeshwant strongly believes in the need for more tech solutions in healthcare like Flatiron Health. “There’s a fundamental need for infrastructure. A single disease type of lung cancer is actually lots of diseases. Other more complex diseases are going to need more data sets, multisite trials, and we need to create infrastructure for that,” he said. It’s hard to argue with him on that point. Massive amounts of biometric data are being collected in healthcare right now, but there aren’t nearly enough tools for storage, communication and analysis of that data. There’s a great deal of opportunity for healthcare startups that can specialize in data management and analysis. Three such companies in which GV has invested in this space are Metabiota, which provides risk analytics to prevent and reduce epidemics; Zephyr Health, which uses global health data and machine learning to provide treatment insights to pharma and medical device companies; and DNAnexus, a company that helps companies store their genetic information. “Once you’re in a world where you can scale up and down your computational analysis, you can ask lots of simultaneous questions of your aggregated data sets and that’s well suited to the cloud environment,” said Yeshwant. “We invest heavily in those spaces.” Besides software-based companies, GV is investing in a diverse range of other types of companies in healthcare and the life sciences. One such area is the genomics space. Thus far, GV has made major investments in Editas, a CRISPR gene-editing company; 23andMe, which offers chromosomal analysis to consumers; and Foundation Medicine, a company that offers genomic analysis of various cancers. Yeshwant also feels one of the biggest challenges (and opportunities) in healthcare is helping healthcare organizations shift from fee-for-service to fee-for-value. “That’s the direction we’re going,” he said. “How do we migrate big systems in that direction? That’s the fundamental question.” GV therefore has made some significant investments in companies that are shaking up the traditional provider model, including the telemedicine company Doctor on Demand and the innovative primary care provider, One Medical Group. “Anything you can do to move healthcare from a high cost setting to a low cost setting is generally going to be successful in that model,” said Yeshwant. “Telemedicine is a good example of that. We have a company called Spruce Health which is essentially asynchronous care. Value based care is a big area for us.” (Spruce Health is a platform for dermatologic care.) Yeshwant hinted that future projects may be in the areas of population health and chronic disease management, investment in companies that engage consumers directly and possibly even some work in women’s health. One thing’s for sure: We can expect more exciting things to come in 2016 and beyond for GV.
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Legacy Republic Unveils Studio, A Portable Scanner For Family Photo Albums
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Anthony Ha
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is removing a big hurdle in its photo digitizing process — putting albums in the mail. YesVideo back in 2014. The idea is to recruit a freelance workforce of so-called Legacy Makers who help families digitize their photos. Through digitization, the company says it can preserve memories and make it easier to share those pictures between family members, particularly when you’re living in different cities or countries. However, YesVideo CEO Michael Chang said customers are “often hesitant” to go through the process, since it means sending the photo albums to Legacy Republic’s lab — not something you necessarily want to do with photos that have tremendous emotional significance. Enter , which allows Legacy Makers to do the scanning on their own, either in their own home or the customer’s. Why not use a regular scanner or camera? Chang said that many photos cannot be removed from their albums without damaging them, and the albums create glare that obscures the photo that you’re trying to capture. Legacy Republic’s solution is to create a rig with eight LED lights. (The rig connects to an iPhone 6s, which serves as the actual camera.) After you set up a curtain to block any external light, Studio takes eight different pictures, with a different light illuminating each one, then it puts them together to create a single, 20-megapixel image without glare. There’s also a 3D laser scanner that flattens the image to remove any warping. Chang demonstrated Studio for me last week. Within a few minutes, he’d set up the Studio, taken pictures of each page in a photo album and presented me with a beautiful digital replica. And while Chang said Studio costs hundreds of dollars to manufacture, the company will be providing it to active Legacy Makers at no charge. (They’ll need their own iPhone, though.) “The key for Legacy Makers is to empower them to give cool experiences to their customers,” added Brian Knapp, head of Legacy republic.
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Here’s What Watching The Super Bowl With Microsoft’s HoloLens Could Look Like
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Frederic Lardinois
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Watching sports could soon be a very different experience — at least if it’s . Before you know it, a holographic player could be charging through your walls and replays could play in 3D on your coffee table. Microsoft today released a new concept for its that shows off its vision for what the combination of sports and HoloLens . It’s worth watching, even if you don’t like football. Not to rain on the parade, but as anybody who has tried the HoloLens prototype will tell you, this is still very much science fiction — not because HoloLens doesn’t work (I’ve tried it, and it sure does), but because the field of vision you get from the simply doesn’t give you the kind of immersive experience Microsoft shows in its video. Microsoft is soliciting applications from developers right now and expects to ship its $3,000 HoloLens developer edition to a select group of them in the first quarter of this year (likely around the time of its , which conveniently starts on March 30). https://youtu.be/oKqzeoMCU0c
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Treat Takes On DryBar With Unlimited Blowouts At Partner Salons
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Sarah Buhr
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“No cuts. No color. Just blowouts.” It’s the DryBar promise and has made the beauty chain one of the largest blowout bars in the U.S. But an L.A.-based startup called Treat hopes to tackle DryBar where it believes it is weakest – more blowouts for the same price. Think of it as a sort of ClassPass for getting your hair done. Treat hooks customers up with an unlimited amount of blowout appointments at various partner salons in the city for $125/month (or the cost of three DryBar blowouts). It’s a “Tom Sawyer” sort of business structure – getting other people to do the work for you while you make a profit – and it’s often a smart one for startups to use (see Airbnb, Uber, etc.). In this instance, it allows Treat to cut the cost of overhead by using other salons instead of renting or buying a brick and mortar business, staffing and running its own salon. It also brings added revenue to hairstylists (and possibly new customers). The startup says it’s testing out the idea in L.A. with some success and just opened up a beta program in San Francisco. But it has a long way to go before truly competing with DryBar or the many other blowout competitors. Women really seemed to love the idea of getting their hair done (sans the salon upsell) when DryBar first opened in 2010. The blowout business grew from four to 48 locations by 2015 and inspired many copycats along the way. I’ve been to a couple of blowout bars myself and have enjoyed the experience. It’s a fun way to relax and get someone else to make my hair look much better than any attempt on my part at home, so the Treat proposal seemed intriguing. I also asked a few lady friends in a very non-scientific poll if they’d be interested in this sort of service. All of them enthusiastically agreed and asked when they could start. So that also seemed promising for the new startup. However, this isn’t the first time this sort of service has popped up. In New York, there’s , a comprehensive salon and manicure concierge offering a $60 “beauty pass” for two blowouts a month, and , which offers unlimited blowouts for $175 a month. It’s also an idea that would be fairly easy to replicate. Styleseat could build out a similar service, for example. DryBar is still by far the most popular blowout bar, with customers in the millions and $53 million in funding. Treat is bootstrapped and hopes to raise funding for the idea in the near future. For now, the startup is working on building a list of partner salons to offer the service in SF and will soon launch an additional nail salon service for $49 a month. Those interested in signing up in L.A. can go to . Treat is working on an SF launch soon, but you can sign up on the waitlist for now.
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Zagg Acquires Mophie For $100M+
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Greg Kumparak
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Here’s a bit of breaking news for your Tuesday afternoon: ZAGG, best known for its line of Invisible Shield screen protectors, is acquiring Mophie, makers of the popular JuicePack line of smartphone battery cases. Zagg will pay $100M for Mophie up front, plus a flexible 12-month earn-out based on Mophie’s performance over the next year. ZAGG says they expect the deal to close within the quarter. In a world of billion-dollar software “unicorns”, $100M for a well-established and well-distributed brand actually seems pretty cheap. On the other hand, Mophie focuses almost entirely on USB battery packs and smartphone battery cases — and that’s quickly becoming a ridiculously crowded space, with competition from everything from no-name white label batteries handed out as conference swag, to affordable-but-generally-decent newcomers like Aukey and Anker, .
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Sarah Perez
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Image Recognition Invades Shopping As Curalate Raises $27.5M
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Josh Constine
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Pinterest. Instagram. Tumblr. The future of the web is visual, but how does anyone make money on that? By understanding what’s in the images people post and connecting them to where you can buy what you see. That’s job. The image recognition marketing startup just raised $27.5 million led by NEA, bringing it to $40 million in total funding. If a picture is worth a thousand words, Curalate makes brands literate.
Since Curalate is a suite of visual commerce tools rather than a single product, what the company actually does can seem a bit nebulous. Here’s a quick breakdown of what Curalate offers: Rather than sitting back and letting social media happen to them, Curalate allows brands to step up and start measuring, utilizing and enhancing it. Co-founder and CEO Apu Gupta didn’t plan to build Curalate. At first, he pushed an “Airbnb for parking and storage” app through Y Combinator. But he tells me “We recognized it was a really terrible idea and shut it down. We offered our investors their money back, but they told us to keep iterating and come up with something new.” Since 2011, Curalate has assembled a who’s-who of giant retail brands and social media powerhouses as customers, including Refinery29, Nasty Gal, Gap, Nordstrom, Neiman Marcus, Sephora, Urban Outfitters, J.Crew, True Religion, and BuzzFeed. That success attracted NEA, which has led all its rounds from seed to this Series C which also includes previous investors First Round Capital and MentorTech Ventures. “Today, social channels are starting to experiment with ‘Buy Buttons’, pointing to a world in which the point of purchase moves closer to the point of discovery,” Gupta explains. “The problem is that for this to happen, we need to know what products exist within images.” While the social platforms themselves are pushing to make in-line commerce easier, big brands will always want a little hand-holding. Famed investor Josh Kopelman, founding partner of First Round says “Curalate is tapping into trends that are reshaping consumer behavior and has built an innovative platform that has attracted an enviable client roster.” There are plenty of tools that take care of part of the visual commerce process, but Curalate’s strategy is to roll them all together in an easy to buy monthly SaaS subscription. The risk is that more nimble competitors could pick it apart with piecemeal, best-in-class products. The new $27.5 million in funding will go toward hiring and product development to prevent that. While marketing has typically been a top-down activity with brands trying to hard-sell their customers, the future is more bottom-up. Social media influencers are amassing enormous followings on social networks that stodgy brands can’t match. When they say they like or wear a product, huge sales ensue. Curalate’s product is well poised to adapt to this massive shift. Brands can monitor which of their products are visually trending, use the insights to hire social media stars to create sponsored content for them, and then make that content shoppable on their own sites. Bigger screens, better cameras, faster connections, and social networks have changed the rules of physics for marketing. Brand-written text is out. Customer-shot photos and videos are in. It’s a natural shift in power that businesses can’t control, but they can hope to harness. And is their hydroelectric dam.
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Yahoo Signals Its Core Business Could Be For Sale By Exploring “Strategic Alternatives”
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Matthew Lynley
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Well, we sort of expected this one to happen. After its core Internet business has continued to flounder, which could imply a number of things — including selling off its core business to another company, . “The Board also believes that exploring additional strategic alternatives, in parallel to the execution of the management plan, is in the best interest of our shareholders,” the company said in a statement that it released with the earnings report. “Separating our Alibaba stake from our operating business continues to be a primary focus, and our most direct path to value maximization. In addition to continuing work on the reverse spin, which we’ve discussed previously, we will engage on qualified strategic proposals.” Basically, this is an acknowledgment that things are not working over at Yahoo proper. The company , once again, flat earnings growth, and a series of products that still haven’t breached mainstream stardom. All this, taken together, is something that has investors very displeased. When Marissa Mayer took over the company in 2012, hopes were very high that, as CEO, she would figure out a new path for the company that would return it to growth. She oriented the company around a portfolio of mobile applications and sought to renew the company’s status as a household name on the Internet. The company also said it was laying off 15% of its staff, including closing some international offices — — as it continues to figure out what its core business looks like in 2016. Following the report, the stock basically went nowhere, meaning all of this was baked into expectations for the company’s earnings report. In fact, much of the value of Yahoo, to this day, is locked up in its stake in Alibaba. That’s part of the reason why the company has spent time mulling a spinoff or sale of its core business. When that, the company’s shares spiked 7% — unusual movement for the company’s share price, which has largely seen major declines recently. [graphiq id=”i3q3wAnCS4l” title=”Yahoo Inc. (YHOO) Stock Price – 1 Year” width=”600″ height=”490″ url=”https://w.graphiq.com/w/i3q3wAnCS4l” link=”http://listings.findthecompany.com/l/19200951/Yahoo-Inc-in-Sunnyvale-CA” link_text=”Yahoo Inc. (YHOO) Stock Price – 1 Year | FindTheCompany”]
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Salesforce Announces Latest Lightning CRM Release With SteelBrick Integration
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Ron Miller
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This afternoon at a big presentation in San Francisco, announced a new version of the Lightning CRM platform that includes built-in Wave analytics, intelligent email from in July, 2014 and configure-price-quote features at the end of last year. In addition, the company announced a new built-in phone tool which allows sales people to make a call directly from Salesforce. It may not give it the power of Skype for Business just yet, but it’s a sign that they could be going after that market too at some point. This functionality is built into the application using . With all of this new functionality, Salesforce is trying keep customers inside of Salesforce. They can manage the customer relationship. They can provide intelligent integration with email that can drive actions automatically. They can create a quote, send out a contract for signature and even make phone calls without leaving the application. Then there’s Wave analytics, which offers users quick visual dashboards, charts and graphs to see how well they are doing, what they can do better, where are the best opportunities and all of the metrics a busy sales team needs to do their jobs. In addition, they have componentized all of this functionality so that customers and third party developers can build all of this functionality into their applications. The fact that all of this is integrated did not escape CEO Marc Benioff, who pointed out that they were able to incorporate the SteelBrick acquisition directly into their platform so quickly because SteelBrick wasn’t just any third-party app. It was one that had been built on top of the Salesforce platform. As Benioff pointed out after 17 years, it’s hard to keep changing and growing, but they have done this with this new functionality. Of course, the proof will be in how well these components work together in practice and how deep this functionality goes. It’s one thing to add all of these features, but it’s another to do it with enough depth that they would replace popular alternatives.
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IAC Misses Expectations With Q4 Revenue Of $848.7 Million
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Megan Rose Dickey
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IAC just reported its Q4 2015 earnings, missing analysts expectations with revenue of $848.7 million and earnings of $0.75 per share. Analysts were expecting earnings of $0.93 cents per share on revenue of $865.49 million. Last year, IAC spun off its dating services, Match Group, which then went public itself in Q4 2015. Although Match Group reported its own results today, IAC included Match Group’s earnings in its overall Q4 revenue, which was $267.6 million. “Now IAC begins a new stage with four strong segments beyond Match Group – HomeAdvisor, Publishing, Applications, and Video,” IAC CEO Joey Levin said in prepared statements ahead of the earnings call tomorrow. “Our key businesses continue to perform well.” IAC also owns brands like About.com, Ask, CollegeHumor, the Daily Beast and Vimeo. Last quarter, HomeAdvisor’s domestic revenue grew 51% and total revenue in IAC’s video segment grew 13% year over year. Growth in IAC’s video segment was driven by Vimeo increasing its paid subscriber base by 19% to 676,000 and an 80% increase in revenue from DailyBurn. IAC closed at $50.68. In after-hours trading, shares went down 2.08% trading at $50.
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Tinder Owner Match Group Reports First Earnings Since Separating From IAC
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Katie Roof
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Average revenue per paid user fell to just 53 cents, down from 62 cents last year. Net income fell from $48 million to $36 million. “Match Group had a seminal fourth quarter, completing our initial public offering, the acquisition of PlentyOfFish, and the realignment of our management structure to better reflect our increasing global scale,” said Greg Blatt, Chairman and CEO of Match Group, in a statement. “At the same time, we delivered solid revenue and profit growth and we head into 2016 with increasing momentum, which we expect will continue to build throughout the year.” The online dating space is very competitive — While Match owns 45 brands, others in the space include Bumble ,Hinge, Coffee Meets Bagel and Happn. Monetization is also a challenge. The availability of countless free dating apps means that many users no longer want to pay a premium for sites like Match.com and OkCupid. And the most active users drop off when they find matches. Match closed Tuesday at $12.19, just cents above the $12 the company priced at when it separated from IAC in November. Shares ticked down in after-hours trading to about $11.80. The company has a market cap of $3 billion.
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Yahoo Plans To Cut 15 Percent Of Workforce, Reports $4.5B Writedown On Tumblr, Americas And Europe
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Anthony Ha
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Yahoo to lay off approximately 15 percent of its workforce. The company made the announcement in conjunction with its , where it reported revenue of $1.27 billion and earnings per share of 13 cents. That’s ahead of revenue estimates — had analysts had revenue of $1.19 billion and EPS of 13 cents. The Wall Street Journal previously reported that , and earlier this afternoon, that Yahoo would announce that it’s exploring “strategic alternatives” as part of . (Activist investor Starboard Value has been , including the sale of its core business.) Right on both counts — Yahoo says it will , with Yahoo’s non-Alibaba assets transferred to a new company. However, it said the board is .
The company also says it’s going to be “sharpening focus,” which it lays out in four broad categories: The cuts fall into that final category, with the majority of them expected to happen in the first quarter of this year. By the end of this year, Yahoo projects that it will have around 9,000 employees and less than 1,000 contractors. It also says it will be closing offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan. (We’d already heard that yahoo was .) In the press release, CEO Marissa Mayer said: Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation. This is a strong plan calling for bold shifts in products and in resources. We are extremely proud of the billion dollar plus business we have built in mobile, video, native, and social. Our strategic bets in Mavens have enabled us build an entirely new, forward-leaning business of tremendous scale and growth in just three years. The plan announced today builds from that achievement and will dramatically brighten our future and improve our competitiveness, and attractiveness to users, advertisers, and partners. [graphiq id=”dSAC1JNy8i9″ title=”Yahoo Inc. (YHOO) Stock Price” width=”600″ height=”646″ url=”https://w.graphiq.com/w/dSAC1JNy8i9″ link=”http://listings.findthecompany.com/l/19200951/Yahoo-Inc-in-Sunnyvale-CA” link_text=”Yahoo Inc. (YHOO) Stock Price | FindTheCompany”] Turning back to the earnings, for the the full year of 2015, Yahoo reported revenue of $4.97 billion and a net loss of $4.36 billion, compared to revenue of $4.62 billion and and net earnings of $7.52 billion in 2014. The big cost for Yahoo this quarter is the company’s massive writedown of nearly $4.5 billion. The crux is that it’s finally coming to terms with what it considers the actual value of its biggest assets, which include Tumblr, and its business in the Americas and Europe. “We recorded a $4,461 million non-cash goodwill impairment charge as a result of our annual goodwill impairment test conducted in the fourth quarter of 2015,” it noted in its earnings release. “We concluded that the carrying value of our U.S. & Canada, Europe, Latin America and Tumblr reporting units exceeded their respective estimated fair values. The goodwill impairment resulted from a combination of factors, including decreases in our market capitalization, projected operating results and estimated future cash flows.” As of 5:17pm Eastern, Yahoo’s stock is down 1.4 percent in after-hours trading.
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Facebook Opens Up Registration For Its F8 Developer Conference
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Greg Kumparak
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Each year, Facebook holds a big ol’ developer conference where it announces a few new products, host a bunch of sessions for developers to learn how to work with the various products under Facebook’s watch (WhatsApp, Oculus, Facebook itself, etc.), and everyone drinks a little too much under the guise of networking. At last year’s show, the company announced its plans to make Messenger a platform for developers, support for spherical videos in the newsfeed, and support for embeddable videos. It also announced that Parse was moving into the Internet of Things realm.. which, of course, because it has since killed Parse. This year’s F8 will happen on April 12th and 13th. Looking to get a seat this year? Good news! Registration just opened up — but there’s a bit of a catch. This isn’t a first come, first served kind of deal. If you want to go and weren’t invited by Facebook, you’ll have to apply for a ticket, explaining why you want to go, what you do for a living, etc. If Facebook decides you’re up to snuff, the tickets will cost $595 a pop — about two-thirds of the cost of a ticket to Google I/O and around one-third the price of a ticket to Apple’s WWDC, for reference. The registration site is now live . If you don’t get in, don’t sweat it too hard: As always, Facebook will be
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Wharton Professor Adam Grant On Creativity And The First Mover Myth
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Connie Loizos
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Adam Grant, a best-selling author and the youngest tenured professor at , is back with a that hits both real and virtual bookshelves today: “Originals: How Non-Conformists Move the World.” We talked about the book yesterday with Grant, who, despite being just 34, has already been teaching for a dozen years, including earlier at UNC Chapel Hill. (According to his LinkedIn profile, the Harvard grad has also been a record-setting ad director, a junior Olympic springboard diver, and a professional magician.) Grant told us what inspired him to share his new take on original thinking — and how to encourage it in both adults and children alike. AG: In part. One of the most frequent questions I get from students are: How do I become a successful entrepreneur? But people also wonder: How do I innovate from the inside of a company? How do I fight groupthink and know when someone is on to a valuable, original idea? There are a lot of myths out there [that I hoped to tackle]. AG: I wasn’t taking on the idea so much, but while 10,000 hours of deliberate practice are great when it comes to mastering a skill, they can also blind you to radical new ways of thinking and acting. You can miss out on breadth when you dive deep into one particular area. AG: Kids who evolve into creative adults tend to have a strong moral compass. They’ve been nurtured by their parents, who’ve talked with them and modeled values of excellence for them that [seed ] concern for the consequences of their [kids’] actions on other people. At the same time, they’re given a lot of autonomy to figure out how they want to live with those values. I love to see parents [invite] their kids [to think about] how they can make a real contribution to the world they live in by asking them: “How would you like to make it a better place? How would you define excellence? Who are your role models and what might they do?” Kids end up endorsing their [parents’] values when they feel like they’ve had an active role in choosing them. They’re also more confident in going against the grain rather than trying to fit in. AG: It’s a balance that has to be achieved. It starts with interest. Then some mastery has to be achieved before a new activity is as fun as it could be. After all, if you’re a novice at everything, it’s hard to be passionate about anything. But you want to expose your kids to many things, then let them pick what they want to do. AG: We actually see more and more people not dropping out of school and not leaving jobs and realizing instead that you can start companies on the side. In the past, people looked at Bill Gates and Steve Jobs and Mark Zuckerberg and thought they had to go all in. But people who start jobs on the side, rather than who quit their day jobs to start companies, are 33 percent less likely to fail. AG: We’re not sure we know yet. But a couple of guesses is that a job buys you the time to do things right. You don’t feel pressured to rush your product to market. Having an income also gives you more room to pivot. If your startup starts as a hobby, it’s easier to say, “That one didn’t work out; let me work on the next idea.” AG: Peter and I did an event together a little over a year ago and we talked about the pros and the cons of college. I think his goal is less to get lots of people to drop out and more to get people off of tracks and to be generally less conformist. He wants people to think about the best path for themselves as individuals, which is totally in line with my thinking. He also thinks we need fewer entrepreneurs, not more of them. He sees too many people pursuing their own ideas rather than trying to join an early-stage startup where somebody else has a brilliant idea and [others] can help make it great. One that I’m finding useful in my own life is that we can generate more original ideas when we become more comfortable with procrastinating. There’s a bunch of research that shows when you start [a project] early and finish quickly, you get stuck with the most conventional ideas. When you take longer, you do more divergent thinking and start to make connections between ideas. Also, a lot of people believe they have to be first to market, but the first-mover advantage is mostly a myth. With most products and industries, the settlers enjoy more success than the pioneers because the pioneers have to fight an uphill battle to create the market, whereas the second or third movers have to make the product better. AG: Uber carved out a very clear niche, but you could say that taxi companies were first movers; they created the market for on-demand rides from one place to another. Uber, with its vastly superior technology, made that market much more efficient. AG: You can’t judge your own ideas. You tend to be too positive. On the other hand, middle managers tend to be too risk averse and look at why ideas will fail. Your fellow creators can give you the most accurate picture of whether an idea is a strong one or it’s garbage. They typically know the domain and have a vested interest in seeing new possibilities succeed rather than looking for reasons why they won’t. Also, for managers who may be reading: Before you’re about to evaluate an idea, generate three of your own. You’ll be more inclined to look for potential and possibility.
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3D Is The New 2D
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Amitt Mahajan
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User interfaces traditionally have been 2D for desktops and the web. Mobile phone apps, while supporting 3D for specific cases like games, also have been 2D. The , although incorporating subtle elements of 3D, has only reinforced that 2D is the main and most optimal interaction mechanism for existing computing devices. Conversely, full 3D has always occupied niches, such as games, movies and industry-specific applications. A fully 3D UI was never going to replace the current simple and familiar 2D interface of your desktop or mobile phone. Other attempts to usher in 3D via the web (such as WebGL or VRML) have always failed because the web is natively 2D and easier to learn and interact with using your finger or a mouse; 3D elements always just added unnecessary complexity and friction without providing a significant improvement in user experience. This is about to change, however, with the release of virtual reality (VR) devices this year and augmented reality (AR) devices in a few years. VR and AR have the potential to completely transform our computing interface from being primarily 2D to 3D. VR and AR deliver immersive experiences to users by surrounding them with realistic 3D worlds. Additionally, new input devices like the controllers or hand tracking via a controller allow for new 3D hand gestures. Almost all of the content currently being developed for VR will incorporate 3D elements. Pinc is a VR company trying to bridge the gap between 2D and 3D Content being primarily 3D will have several implications and will provide new opportunities for startups:
The majority of VR content today runs on either Unity or the Unreal Engine. As VR and AR become more ubiquitous, the number of people wanting to create content for those platforms will also grow. These platforms are the default choice for people entering the industry due to their established ecosystems and credibility (the majority of the top-grossing mobile and console games are built on these engines). It’s also difficult for new players to enter this space because of the time required to not only create the underlying rendering engine but also the comprehensive tool chain that empowers non-engineering members of a team, such as artists and game designers, to be productive. There isn’t yet a or of 3D content, as there hasn’t been a major demand or channel for it. It’s arguable that the simplest 3D authoring tool today is Minecraft. is also fairly easy to use and is closer to professional tools like Autodesk’s 3DS Max or Maya. To create a 3D model or character today, it requires an artist to first create the model, then texture it. If the model is a character, they would also need an animator to rig and animate it. All of this work is time-consuming and makes creating 3D content a laborious affair (relative to 2D content creation). Even with this extra effort, the content that’s produced is rarely photorealistic and often falls into the . Software that helps reduce this burden and helps create more photorealistic content is going to be valuable as the demand for high-quality 3D content increases. Our portfolio company is tackling this problem with advanced computer vision technology. 2D UI paradigms will need to be rethought for 3D. Every new platform has faced similar challenges. When the mouse was added as an input device and when we learned how to use finger-based touch gestures for smartphones, we had to rethink how most of our core applications functioned. VR and 3D are also going to require a new set of interactions. Below, Leap Motion demonstrates its 3D interaction engine. There are going to be a lot of growing pains as we transition from 2D, but we experience the real world in 3D and it’ll be exciting to interact with computers in the same way.
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Uber Dribbbles Up A New App Icon
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Matthew Panzarino
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Twitter Starts Taking Its Logged-Out Users Seriously
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Frederic Lardinois
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Twitter two updates today that should make it easier to use for logged-out users — a group of people the company has generally not taken as seriously as it should. First of all, Twitter is now rolling out its updated homepage, which makes it easier for logged-out users to drill into interesting messages, pictures and videos on the platform without having to sign up for it, to more countries. Until now, this homepage was only available in the U.S. and Japan. It’s also bringing a better logged-out out experience to mobile users in 23 countries, the company said. Compared to Twitter’s earlier homepages, which generally left potential new users scratching their heads because it barely explained why they should use the service, this new page makes Twitter seems like a far more inviting place for newbies. That’s a challenge Twitter has long needed to address. The company has – a metric Wall Street needs to see rise. But on the flip side, the company knows that its service is used and seen by far more people than those who have actually created accounts, or those who remain signed-in to their accounts. In fact, that it has as many as 500 million users who stop by to read tweets without signing in or registering. It has experimented with reaching — and monetizing — this audience in different ways. Not only did it that lets these users better browse the site, it tested to those without an account, too. And the company other ways to tweak how Twitter profile pages were displayed to logged out users. Twitter first allowing users to browse topics like sports, news, entertainment, technology and more. The homepage has , with more emphasis on Twitter’s curated Moments and other “Featured” content, reflecting an increased editorial focus. Perhaps even more important than the global rollout of the web homepage, is Twitter’s announcement that it’s also launching a similar update on mobile today. “Before today, you could see individual Tweets but it was hard to discover stories and conversations happening on Twitter without signing in,” the Twitter team writes in today’s announcement. “Now, you can check out a news story as it unfolds, dive into the play-by-play discussions around a game, and then come back again to see that exchange between two rappers everyone’s been talking about.” The intent behind both updates is pretty much the same: make Twitter more attractive for those who aren’t the media junkies that make up its core user group. The new home timeline will become available across 23 countries, when users visit Twitter.com from their mobile device. This new mobile homepage is now rolling out in Argentina, Australia, Brazil, Canada, Colombia, France, Germany, Japan, Kenya, India, Indonesia, Italy, Mexico, Netherlands, Nigeria, Portugal, Saudi Arabia, South Korea, Spain, South Africa, Taiwan, the UK and the U.S. The same countries (minus U.S. and Japan, where it’s already live) will now get the web homepage as well.
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The Future Of Smart Home Payments
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Oren Levy
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The Internet of Things (IoT) has metamorphosed over the last few years. In the future, its applications will no doubt impact industry, urban development, healthcare, agriculture and other major ecosystems. Gartner projects there will be 6.4 billion connected things in use worldwide in 2016 (a 30 percent increase from 2015), and that the market will grow to 20.8 billion by 2020. While IoT will undoubtedly affect all sorts of global infrastructures, one of its prime applications is within the private home. By definition, a “smart home” is a house that incorporates advanced automation systems to provide the inhabitants with sophisticated monitoring and control over the building’s functions. A smart home may provide its owners with control of lighting, temperature, multi-media, window and door operations and security, as well as the ability to automatically replenish various supplies. True replenishment automation depends on the manufacturer’s ability to incorporate secure payment options within a preset refill process, enabling the system to complete the entire acquisition cycle without any user involvement. Several smart devices displayed at the recent CES show in Las Vegas feature the ability to replenish and pay for supplies automatically. For example, Samsung’s Family Hub refrigerator features an LCD screen that doubles as a communication center that can connect to Bluetooth wireless speakers. Three interior cameras capture images every time the fridge door closes, thereby enabling it to take stock of its contents and transmit them to the user’s smartphone. Consumers can select their needed items from various online grocer and key integration partners. The final shopping list is secured with a four-digit pin. Items are then paid for in a simple, single checkout experience that accepts U.S.-issued credit and debit cards. Amazon Dash embedding enables Whirlpool’s 2016 line-up of dishwashers, dryers and washers to order necessary supplies when you are running low. Amazon Dash buttons connect users with specific brands. For example, if you place an Ariel-branded Dash button on your washing machine, you can refill your laundry detergent with products from a given supplier. Users can connect the Whirlpool app to an Amazon account, enabling automatic payment capabilities. Your bright future might well contain a super cool synergy of Star Trek, Star Wars, James Bond and the Jetsons, with cars that fill up an empty tank and pay for gas automatically, not to mention sophisticated bots that can handle all of your shopping errands, from list preparation to finalizing payments. And maybe there will be spaceship shuttles with prepaid debit cards, too. What could go wrong, you ask? As it happens, quite a lot. For one thing, many of today’s smart appliances (like the Samsung refrigerator and the Whirlpool dishwasher) only enable consumers to hook up with certain suppliers, limiting you to their products, payment methods and price ranges. By hooking up automatically, you are actually depriving yourself of the option to search for timely special offers or use different payment options. Another problem is that many of these smart systems rely on Internet connection, Wi-Fi or Bluetooth to place and pay for orders. Several questions arise, like what happens if the Internet is down, your Wi-Fi is iffy or your Bluetooth isn’t working? Say your appliance placed an order but didn’t have the chance to complete the payment — does your appliance remember that? What if the system fails in the middle of the payment process? How do you know if the payment actually went through? Will the appliance stop washing dishes or doing laundry because it is connected to external systems that are currently disabled? Unless there are clear answers to these questions, what was supposed to be a really exciting convenience for homeowners may turn out to be a colossal headache that needs constant user attention. Security is another major consideration. Many consumers are still hesitant about various evolving disbursement methods, such as mobile payments, due to their fear of cyber breaches. One ongoing concern is that fraudsters will be able to hack into appliances’ systems and gain crucial payment data, such as credit card numbers and PINs. Even more frightening is the possibility that cyber attackers will be able to penetrate smart security systems and virtually unlock a home’s doors and windows. Will the self-replenishing home take off in a big way or will it remain a “nice-to-have” option for techie geeks? Smart appliances must offer households real added value and complete peace of mind when it comes to usage, easy and secure payments and system reliability. Otherwise, the typical household is likely to feel much more secure and better off in their old-fashioned “dumb home.”
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How To Train Your Human: Designing For Healthier Habits
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Lakshmi Mani
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Meet Joe. He’s in his mid 30s and has two kids. Trying to watch his waistline, he decides he wants to lose 20 pounds. He buys the latest in wearables and the best in fitness apps to track his food and exercise. He tracks religiously for the first week and manages to lose a few pounds. But by week two, he’s less excited. And by the end of the month, he completely stops and he gains back the pounds. He’s unhappy about how he looks, and blames himself for failure. So, why is it so hard for Joe to change his behaviours? Because , which we do without much thought. Cues, such as boredom, hunger, an activity, a time or an emotion trigger us to do certain actions or routines. When we complete that routine, we get a physical or an emotional reward. Doing this often enough gets us into a habit-forming loop. Let’s take look at Joe again. Say Joe wants to go to the gym after work. But when he gets home (cue), he sits in front of the TV (routine) and he feels happy and relaxed (reward). By having repeated this cycle every day, Joe associates the cue of coming home to watching TV and feeling relaxed. This pattern , becoming a hardwired habit over time. That is why it is so hard for Joe to change his habits. Changing habits is possible, but it takes conscious and repeated effort. And technology can help. Technology has the ability to engage with users on an intimate level. As designers of technology, we have the opportunity to influence our users, beyond just prompting new behaviours. Done right, our products have the potential to promote and reinforce positive long term habits. Using as a framework, I will take a deep dive into how we can build products that shape user habits, and see some of those principles in action in existing healthcare apps. Nir Eyal’s Hooked Model on habit-forming products can help us design solutions that change user behaviour and increase engagement with an app. The Hooked Model states that in order for habits to be formed, the user needs to be sent a trigger that then leads to an action (the habit we want to form). When the user takes action, a reward encourages them to repeat the action in the future. By repeating the action multiple times, the user starts to invest in your product. Getting users through the Hook cycles again and again helps users form habits and increase their long-term engagement with the product. When starting to form new habits, triggers often come from the product itself. This could be in the form of emails, notifications, SMSes, vibrations to your wearable, etc. As designers, we often pay little attention to notifications: It’s more of an afterthought to the products we design. However, triggers are the key in getting users to even open the app. In order to be effective, a trigger must be timely, intriguing and actionable. Triggers need to occur at a moment when the user is most likely to take an action. Sending a user a notification to weigh in at 3 p.m. is not as effective as an early-morning reminder. Nike’s FuelBand is a great example of timely triggers. With “Win the Hour,” Nike encourages you to be more active. Every hour of the day, you’ll get a reminder to move for five minutes consecutively and “win” the hour. It encourages you to take an immediate action, serving as an excellent trigger. Users are flooded with notifications every day, and there is a big competition to get noticed. Intriguing triggers are a way to rise above the noise. MyFitnessPal, an exercise and food tracker, uses repetitive notifications to remind you to take action. CarrotFit, which is also an exercise and food tracker, uses mean (and funny!) and varied notifications to encourage action. Most importantly, triggers need to be actionable. Without a direct call to the target action, triggers are less effective in forming habits. At the end of every week, Fitbit emails users a summary of their weekly performance and how they compared to their previous week’s performance. Since users don’t even need to log in to see their stats, this email can motivate inactive users. However, the email does not contain clear calls to actions on what the user should do next. Without clear calls to actions, Fitbit is leaving it up to the hands of their users to decide what to do. Providing clear calls to actions in your triggers . Shapeup uses simple calls to actions such as “Park further away” and “Take the stairs instead of the elevator” in its performance emails to double the amount of weight lost by their users. While timely, intriguing and actionable triggers are important to get a user to take an action, in order to create repetitive habits, the triggers need to come internally from the user themselves. Positive emotional responses (e.g. need to belong, satiating boredom) and negative emotional responses (e.g. boredom, loneliness, depression, anger) are the most powerful motivators to forming habits. Users form habits by associating a strong emotional response with your product during each use. To elicit strong emotional responses, we need to identify what a user’s pain point is and aim to solve it. To do this, Nir Eyal recommends the 5 Whys method. The general idea is to keep asking Why until you manage to hit an intrinsic pain point. Let’s take a look at Joe and Jessica, both of whom have purchased a wearable. Both Joe and Jessica want to track their movements and exercises. But as we keep asking why, we realise that their intrinsic motivation for purchasing the wearable is different. Products fail to create habits when they use blanket triggers for users with different intrinsic motivations. The triggers are never internalised, as they aren’t targeting the right pain points. By grouping users based on their intrinsic motivations, we can now send highly specific notifications. For users whose primary need is for approval, notifications such as “ and could be used OneDrop, a diabetes management app, uses positive notifications to keep users motivated. For users whose primary need is for admiration, notifications such as and can be effective. Targeted triggers promote more action, and through repeated usage, users associate an emotional response to your product. That becomes an internal trigger that prompts future interaction and engagement with the app. Triggers alone are not enough in order to get a user to take an action. We need to also understand the user’s motivation and abilities to take those actions. (FBM) states that motivation to do a task and the ability to do a task have a strong effect on whether someone will take an action. The FBM states that, as long as someone is above the action line, a trigger is likely to succeed at eliciting the action. When a person has low ability and low motivation, triggers will not work. If a user is injured, and not particularly interested in running a marathon, no amount of triggers will be able to get him to go for a run. FBM is predicated on trying to get users to go above the activation threshold, which can be accomplished by either increasing their motivation or their ability. There are a couple of ways to increase motivation. People are highly motivated by one of these three factors: uses little LEDs on the band to indicate the amount of progress you’ve made for the day. The coloured indicators serve as a way to increase the user’s motivation by increasing the pleasure they received from leveling up till the end. The gets users to make pledges on their goals for the week. So users pledge that they will lose $X each time they fail to complete a pledge. Pactapp tries to motivate its users by reducing the pain of losing money. Another way to motivate users is through providing hope or alleviating fear. When users anticipate something good will happen, the hope motivates them to take the action. MyFitnessPal uses the hope of being able to reach your goal for the day as a trigger to encourage you to take more steps. Being social creatures, social acceptance and rejection are really powerful ways to increase motivation. does an excellent job of providing social acceptance. The community is a big part of their offering. So when a user completes an activity on Fitocracy, other users on the platform give them props and motivate them to keep going. This form of acceptance and approval, and feeling of being part of a community is a powerful motivator for users to keep using Fitocracy. More than social acceptance, In Nike groups, there is a tracker to show you how many other users have hit their goals for the group. This increases a user’s motivation to keep working out and hit their group goal and not let their group down. The way to increase ability is not through training or resources, but by making tasks simpler. That can be done through reducing the time taken, or the amount of physical or mental effort needed. For example, MyFitnessPal shows you a whole list of your previously added meals, helping you track food in one click, instead of having to search or enter the information again. By simplifying that food tracking process, MyFitnessPal increases the user’s ability, making it more likely that they will track their food intake. Understanding users’ motivations and abilities and designing appropriate triggers is only half the battle. Triggers can help users take an action and engage with your app. But their experience after taking that action is crucial in deciding if the user will even want to take that action again or not. In order to create habit forming products, we also need to understand how users are rewarded for taking certain actions and
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Gillmor Gang: ScuttleBot
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Steve Gillmor
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The Gillmor Gang — John Borthwick, Zach Seward, and Steve Gillmor. Recorded live Wednesday, February 17, 2016. Zach Seward discusses the release of Quartz, a conversational IOS news bot service. Also discussed: Bot Fatigue and the state of Notifications six months after the . @stevegillmor, @borthwick, @zseward Produced and directed by Tina Chase Gillmor @tinagillmor
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Japan Launches Observatory To Study Black Holes And Dying Stars
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Emily Calandrelli
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This week the Japan Aerospace Exploration Agency (JAXA) successfully launched a new space observatory designed to study black holes, dying stars and the history of galaxy clusters. The X-ray Astronomy Satellite, known as ASTRO-H, will be able to detect X-rays more than 10 times fainter than its telescope predecessor, . ASTRO-H was launched on the Japanese launch vehicle H-IIA from Tanegashima Launch Center on Wednesday, February 17 at 3:45 am EST. Within hours, the satellite deployed its solar arrays and was functioning normally. It’s tradition for Japan’s astronomy satellites to be given a provisional name before launch and be renamed once they’re in orbit. After its successful launch, JAXA announced ASTRO-H was renamed to Hitomi, a Japanese word that refers to an eye’s pupil, which is like an aperture collecting light for an eye. ASTRO-H is the eye to study the hot and energetic universe. so we name her Hitomi, means eye — JAXA Web (@JAXA_en) Celestial bodies in the universe emit radiation in many different forms. Perhaps the most obvious form is the kind we can see with our own eyes – visible light. The Hubble Space Telescope, for example, was an optical telescope that collected visible light and could study the universe in the visible spectrum. In contrast, Hitomi is designed to study celestial bodies that emit X-rays. X-rays are a form of extremely high energy radiation and are generated by high energy events in the universe like black holes, neutron stars, supernova explosions and galaxy clusters. While visible light spans an energy range from 2 electron volts (eV) to 3 eV, Hitomi is equipped with 4 co-aligned X-ray telescopes that are capable of detecting 300 eV to 600,000 eV. Hitomi is the sixth in a series of JAXA X-ray astronomy satellites. With technology improvements and state-of-the-art instruments, Hitomi will be able to provide a higher-resolution image of the universe in the X-ray spectrum than ever before. This is achieved with precise pointing (looking at a very small section of the sky) and the ability to measure and distinguish a wide range of frequencies in the X-ray spectrum. The astronomy satellite was an international project lead by JAXA with contributions from Europe, Canada and NASA. In return for their contributions, space agencies are able to compete for a certain percentage of observational time on Hitomi. As technologies improve, scientists are able to view the universe in ways they’ve never seen before. With Hitomi, astronomers will be able to view the X-ray side of the universe with higher precision and resolution than they’ve achieved with prior telescopes. As data comes in from Japan’s latest X-ray satellite, astronomers around the world hope to learn about the evolution of the largest structures in the cosmos, the behavior of black holes and the matter around them, and the internal structure of neutron stars.
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Kickstarter-Backed FOVE Delays VR Headset Ship Date, Begins Offering Refunds
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Lucas Matney
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FOVE, an eye-tracking VR headset company, announced today that due to unexpected difficulties in part-sourcing it will be delaying the expected ship date of its Kickstarter-backed HMD to fall 2016. Likely to be more upsetting to many of the developer backers, the HMD is losing support for HTC’s Lighthouse system and instead will be building its own positional tracking system. The team at FOVE detailed that this decision was made to avoid further delays. “This difficult decision was made solely such that we can get our eye tracking into your hands as soon as possible,” the company said in an posted to its Kickstarter campaign. “Considering production speed and the ever-changing market situation, we believe it to be the right decision.” The post details that due to losing Lighthouse support, the company will be offering full refunds to backers who request them within 30 days. FOVE had originally targeted the first devices to land in backers’ hands in March, but with this delay it appears that developers will have to wait another several months before getting the device in their hands. The company, which at Disrupt SF 2014, raised nearly $500 thousand in a Kickstarter campaign with backers pledging between $349 and $399 for the headset. The company has also received funding from Samsung Ventures, Microsoft Ventures London Accelerator and Rothenberg Ventures There are still a lot of questions of whether second-tier HMDs like FOVE will even be able to survive first-gen launches, especially with big companies like HTC, Oculus and PlayStation all set to drop headsets into well-built and well-supported ecosystems this year. FOVE may not hold its principle advantage of eye-tracking tech for long. Without referring to specific companies, Eye-tracking firms Eyefluence and Tobii have both told me that they’re currently working with headset manufacturers to implement their eye-tracking solutions. The technology is undoubtedly going to be a feature that finds its way into most future consumer VR headsets, but without widespread game developer support initially, it’s unclear whether early birds will actually receive much benefit.
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Solving The H-1B Visa Problem
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Tom Giovanetti
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In this corner: A number of employers, particularly tech companies, who claim they have a large number of unfilled positions and can’t find enough skilled American workers to fill all their needs, and thus need to attract skilled foreign workers through an expanded H-1B visa program. In the opposite corner: Immigration skeptics, including probably every unemployed programmer in the country, who think tech companies simply prefer to hire cheaper imported labor rather than more expensive American workers. From this perspective, even one unemployed American tech worker is proof that the H-1B program undermines citizen employment. How shall we break this impasse and make progress on what should be one of the easiest incremental reforms in the immigration reform debate? A bipartisan commission likely to end in gridlock? Raw political “we won, you lost” power? Further inaction, which just exacerbates the problem? Here’s a better idea — a market mechanism that would determine once and for all not only who is right, but what the market-clearing price for skilled immigrant labor actually is, thus informing future immigration policy formation. Right now, H-1B visas are issued on a first come, first served basis, for a flat fee, and the number is arbitrarily capped. Such a system tells us nothing about how much an H-1B visa (and thus a skilled immigrant worker) is actually worth to an employer. And because the number is capped and the fee low, the system actually encourages a lottery or jackpot approach — in other words, employers would apply for as many visas as possible, hoping to get enough. This is an irrational system. It would make much more sense to allocate H-1B visas via an auction process. If H-1B visas were auctioned to employers each year in a sealed-bid process, with the bids allocated from highest to lowest until the available permits were exhausted, supply and demand would establish the market-clearing price for the right to hire a skilled immigrant worker. Because of the likely higher fees resulting from the auction mechanism, employers would have no incentive to hire an immigrant worker if an equivalent American worker were available, which would lead to more accurately determining areas where shortages of American workers actually exist. Additionally, it has been estimated that such a process could raise significant revenue, perhaps as much as $1 billion annually, which could be directed toward funding improvements in border control, a biometric entry and exit system and other features of a modernized immigration system. Further, these new, market-determined H-1B visas should be transferable between employers, which would allow for further gathering of value information and market efficiency through a dynamic allocation of skilled immigrant workers. Such a system would effectively price the value of skilled immigrant workers to the U.S. economy, informing immigration policy decisions, providing tech employers with more certainty and particularly serving to help determine how many H-1B visas are made available based on market forces rather than the arbitrary fiat dictates of bureaucrats. Of all the controversial elements of proposed immigration reform plans, the H-1B visa impasse should be the easiest to solve. Moving the allocation decision from an arbitrary process to a market-clearing auction should settle the debate over our economy’s demand for skilled immigrant labor, and an incremental success in our highly controversial immigration debate might help break the immigration reform impasse in other areas, as well.
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EquiPay: “Reparations, One Meal At A Time”
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Megan Rose Dickey
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, a bill-splitting app that accounts for racial and gender income inequalities, is on its way to becoming a reality, after starting as a joke at Cultivated Wit’s Comedy Hack Day. With EquiPay, the idea is “reparations, one meal at a time,” so instead of splitting meals equally among friends, it’s about splitting them equitably. In March, the plan is to make an iOS app available to the masses, EquiPay creator and comedian told me. “For centuries, women and people of color have worked day in and day out only to be burdened by unequal pay for equal work,” Malbroux said on stage. If the U.S. were to pay reparations to African-American people for 250 years of slavery, 90 years of Jim Crow laws, 60 years of “separate but equal” doctrine and 35 years of racist housing policy, it would cost somewhere between $5.9 trillion and $14.2 trillion, . Given that it doesn’t seem likely that the U.S. government will pay up anytime soon, if ever, EquiPay enables individual people to take matters into their own hands. EquiPay “developed a complex algorithm that takes into account history,” Malbroux said on stage. “We call it, affirmative fractions.” In actuality, it’s based on income data from the U.S. Department of Labor. So, let’s say I, a black woman, am out to dinner with a white man and a white woman. The white man would pay the most, followed by the white woman. I would pay the least :-) If someone in the group isn’t down with the cost breakdown, the app makes it possible to protest from a range of pre-populated excuses like, “I’m conventionally unattractive,” “I was a middle child,” “I’m aware of my privilege,” “I spent $400 on improv classes” and “this isn’t an issue anymore.” If someone selects, “this isn’t an issue anymore,” the app prominently displays some stats on the wage gap, noting that women make 78 cents for every $1 a man makes. For women of color, that figure is even lower. African-American women earn 64 cents for very $1 a white man makes, and Hispanic women make 56 cents per dollar earned by white men. So, why would people — especially white men — ever want to use this app? Well, “we at EquiPay know people love social recognition for being socially conscious, so we’ve created a share feature,” Malbroux said. The share feature tweets something like, “I helped fix the wage gap with lobster bisque.” Although Malbroux and her team of six people are launching the app next month, the goal isn’t necessarily to make money, Malbroux told me. She’s more so interested in putting it out there and seeing what comes from it. “[The wage gap] is an issue that’s really important to me,” Malbroux told me. She also wants to contribute to the conversation around the way intersectionality operates in our society. I highly recommend checking out the pitch at Comedy Hack Day. It’s hilarious, and so on point.
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We Now Return You To Your Regularly Scheduled Cyberpunk Dystopia
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Jon Evans
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Apple will lose this battle with the US government. Maybe not this year, or next, but soon enough, and for the rest of our lives. It is folly to pretend otherwise. Most ordinary people, and most powerful people, don’t care about abstruse theoretical arguments against back doors and weakened security. They care about—or want to exploit—the raw visceral fear of terrorist violence. This isn’t a case about a single phone. Rather, as Amy Davidson in the :
the government is attempting to circumvent the constitutionally serious character of the many questions about encryption and privacy. It is demanding, in effect, that the courts build a back door to the back-door debate.
Or as Julian Sanchez in ,
If the FBI wins, it could open the door to massive surveillance … The high stakes of Apple’s resistance to the FBI’s order: not whether the federal government can read one dead terrorism suspect’s phone, but whether technology companies can be conscripted to undermine global trust in our computing devices. That’s a staggeringly high price to pay for any investigation.
Of course Apple win. I admire what Tim Cook is doing immensely. But in the long run they will lose. If they’re victorious in the courts–IANAL and make no prediction–then the day after the next major terrorist attack hits America. (And there be another major terrorist attack on America, eventually. Sorry. It will probably involve drones.) Anyone who thinks Congress won’t the tech industry into when that happens doesn’t remember what America was like from September 12, 2001, all the way through the catastrophic invasion of Iraq and beyond. Imagine if one of the men who brought down the World Trade Center had left a locked phone behind. Even today, opinion polls make it very clear that most Americans favor surveillance and intrusive government over security and encryption: “56 percent of Americans favor and 28 percent oppose the ability of the government to conduct surveillance on Internet communications without needing to get a warrant. That includes such surveillance on U.S. citizens,” to the AP. Again, that’s surveillance. Fulfilling a warrant to get information from a known terrorist’s phone? Forget about it. This encryption battle is quickly turning into Silicon Valley vs. The World — Christopher Mims 🎆 (@mims) (This goes for people who should know better, too. In the aftermath of the Tsarnaev brothers’ attack on Boston, Farhad Manjoo, now of the , wrote a piece entitled “ .” He went on: “Abuses and slippery-slope fears could be contained by regulations that circumscribe how the government can use footage obtained from security cameras.” Oh, . Whew. Problem solved!) The government knows all this. That’s almost certainly why they’ve chosen this as a test case. Not because the contents of the phone are likely to be valuable. . Those contents are (very likely) unavailable only because . Even so, its call and text metadata have already been strip-mined, and found useless. The irony is that there's an excellent chance there's nothing of investigative value on that now-infamous iPhone 5C. — Jon Evans (@rezendi) Rather, this appears to be part of a deliberate — and, as I’ve written before, completely — strategy to undermine encryption. “This is one of the worst set of facts possible for Apple. That’s why the government picked this case,” to University of Miami professor Michael Froomkin. Bloomberg :
In a secret meeting convened by the White House around Thanksgiving, senior national security officials ordered agencies across the U.S. government to find ways to counter encryption software and gain access to the most heavily protected user data on the most secure consumer devices
DoJ’s updated motion essentially attempts to describe encryption as an illegal technology… — ashkan soltani (@ashk4n) As a result, Apple itself faces a paralyzing paradox: If a company tells you they engineered your phone to resist compromise of their infrastructure, then maybe they anticipate a compromise. — Matthew Green (@matthew_d_green) Apple cannot simultaneously treat (compelled by governments) as a threat, maintain its of all software that runs on iOS devices, and protect its users’ security. Pick any two: you can’t have all three. If Apple itself can be compelled to be the enemy, right down to the firmware, then only third-party software can secure iOS users … but Apple forbids sideloading, tries to prevent jailbreaking and bar custom firmware, and gatekeeps all third-party software, so it could conceivably be compelled to forbid–or corrupt–any third-party encryption tools. “If Apple, the government, or anyone else has master access to your device, to a service, or communications, that is a security flaw,” to the Securosis blog. If you maintain absolute control over a platform, then , . An excellent David Schuetz summarizes this problem:
What is true, though, is that once Apple has built the capability, it would be trivial to re-apply it to any future device, and they could quickly find themselves needing a team to unlock devices for law enforcement from all around the world … [and even if this attack is mitigated] a normal OS update to an unlocked phone can change this at any time, restoring the attack for future use.
And so, as Nicholas Weaver on Lawfare:
Let us assume that the FBI wins in court and gains this precedent. This does indeed solve the “going dark” problem as now the FBI can go to Apple, Cisco, Microsoft, or Google with a warrant and say “push out an update to this target” … Almost immediately, the NSA is going to secretly request the same authority through the Foreign Intelligence Surveillance Court … How many honestly believe the FISC wouldn’t rule in the NSA’s favor after the FBI succeeds in getting the authority? … Every other foreign law enforcement and intelligence agency would demand the same access, pointing to the same precedent
…and the Chinese definition of "terrorism" is "protests peacefully against the government". — Robᵉʳᵗ Graham 🤔 (@ErrataRob) Hey, at least there’s one bright side here: https://twitter.com/JZdziarski/status/700829160403505152 But, to Securosis again:
The FBI, DOJ, and others are debating if secure products and services should be legal. They hide this in language around warrants and lawful access, and scream about terrorists and child pornographers. What they don’t say, what they never admit, is that it is physically impossible to build in back doors for law enforcement without creating security vulnerabilities.
…Seems like a good time to drop in this old perennial. Yearly reminder: unless you're over 60, you weren't promised flying cars. You were promised an oppressive cyberpunk dystopia. Here you go. — Kyle Marquis (@Moochava) The godfather of cyberpunk himself once said: People who feel safer with a gun than with guaranteed medical insurance don't yet have a fully adult concept of scary. — William Gibson (@GreatDismal) I submit that a variant of the same applies here; that people who are more frightened of than of have not yet developed a either. But from a results-oriented point of view, that doesn’t matter. What matters is that we live in a world in which people respond to the most visceral threats, not the most dangerous ones. Software backdoors are for the last war (terrorism) and wannabe tyrants. They make us more vulnerable to the next war (bots). — John Robb (@johnrobb) That disastrously bad threat modeling is, in a nutshell, why Apple–and, by extension, the tech industry–will ultimately lose its / our battle against government intrusion, surveillance, and compromised security. To protect ourselves, we will need better solutions, ones that do not require the centralization of control in any collective, corporate, or government entity. No matter how well-intentioned they may be.
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It’s Time For Edtech Entrepreneurs To Throw Out Stale Business Models
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Guido Kovalskys
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We hear it again and again: The U.S. K-12 education system is in crisis. , the National Assessment of Educational Progress, otherwise known as “The Nation’s Report Card,” revealed that just one-third of eighth graders and one-quarter of twelfth graders performed at or above “proficient” in math. In reading comprehension, the performance was only marginally better. Even more concerning is the fact that , but achievement has not. To further add to the complexity, many schools are now beset with budget cuts, teacher shortages and overflowing classrooms. The challenges are as complicated as they are entrenched, and fierce political disagreements, as well as the fragmented nature of the U.S. school system, have stunted progress. In response to these struggles, it is no surprise that so many decided to start educational technology (“ ”) startups serving the K-12 market. With 55 million kids in the U.S. attending elementary through high schools, it’s clear why startups have gained significant momentum over the past few years and taken advantage of the market size. These days, as more classrooms adopt “1to1” (one device per student) and BYOD (“ ”) programs, startups can gain meaningful user traction by pursuing mobile distribution strategies that are significantly more efficient than the traditional ones. Growing new users at scale in a cost-effective manner is a solid start, but growth only solves part of the problem. The next critical challenge for consists of implementing monetization strategies that will allow them to build sustainable businesses. Historically, this is where have failed. companies with strong MVPs frequently flounder in the crowded dead sea of startups trying to sell to the K-12 market. As passionate as these are about their users and the problem they are trying to solve, they don’t spend enough experimenting with and innovating around new monetization strategies. This is why most have failed and why investors remain skeptical. Building a truly disruptive requires driving transformative change on a large scale, attracting a meaningful number of users and building a with long-term sustainability. Let’s take a deeper look at the different types of monetization strategies startups use and what’s next for the industry… Fueled by massive VC rounds, startups decided to build a huge user base before they tried to monetize it. In K-12, this very selective league includes a small number of companies, including , and who have set the pace for consumer-like VC investments for the last three to four years. These companies are very much the canary in the coal mine when it comes to VC attitudes toward and their success or failure will ripple throughout the landscape. While their user growth has been nothing short of amazing, their “land grabbing” period may need to come to an end soon. As all three approach later rounds of VC financing (series C and D), they will need to start funding growth off of revenue, and not their investors’ money. It will be fascinating to see how these startups evolve in the next year or two, and whether or not they live up to the high expectations that they’ve created when it comes to monetizing their large user base. In fact, with regards to monetization, just begun, with Remind very recently announcing that , likely a paid version of its service. This is interesting, because it first seemed like they were pursuing a mobile platform path (à la . Instead, they are likely monetizing via paid school conversions, which is a hard path to take because, even with high teacher engagement, school conversions are slow and typically hard to get people to pay for something that was once free. So, now (much like what happened with ), they will have a hard growing conversion numbers as quickly as they grew their usage numbers. Startups with this model are implementing the same monetization strategies as the incumbent players that have dominated the K-12 industry for decades: They pitch district administrators with a top-down sales approach that involves large ranks of salespeople with their “boots on the ground.” While this model has been successful for some startups (notably , and by Instructure), it has two problems: It is slow and expensive. Sales cycles in K-12 are infamously bureaucratic, which makes it frustrating for startups that need to move fast and show continuous progress and significant growth on a monthly or quarterly basis. Even if a product does manage to catch the eye of the right person in the district administration, approval processes in these organizations are cumbersome. Startups with this approach can succeed, but sales and marketing expenses will drive up the price of the product. The monetization model, and thus the technology, remains a far cry from disruptive. Today’s most innovative companies are exploring alternative distribution and monetization strategies, such as grassroots or bottom-up. They also are showing the potential of the “consumerization of IT” movement by proving that the voice of the end user (in this case, teachers) is becoming more and more influential when determining where budgets get allocated. Take for instance, , , , or , who all got creative when it came to exploring distribution and monetization strategies. These companies have been able to scale their revenues without having to build massive sales teams and/or deploy “boots on the ground.” All of these companies are proving that the bottom-up approach can be a viable monetization model in K-12 education. They are applying best practices from consumer Internet companies and distributing directly to teachers/instructors as end users, then finding smart and elegant ways to monetize those relationships — either directly with the teacher or indirectly by charging schools and/or even parents or local donors for their products/services. They share an extremely low cost of acquiring new customers, and an alternative way of converting them into paid users. Moreover, they all pass along these savings to their customers in the form of free versions of their services and very affordable paid versions. Generally speaking, focus too much on product design and user acquisition, but not enough on building sustainable . This startup characteristic is hardly unique to , but it is particularly pronounced, and comes with a unique, steep set of challenges. In other areas (e.g., social media or digital content), figuring monetization down the road could be a fine strategy, but this may not hold true in K-12 education where engagement-driven revenue streams like advertising are not necessarily welcome by teachers and administrators. For existing and aspiring , it’s critical to think carefully about your model from day one. This will be particularly important in the new funding context in 2016, with the likelihood of an early stage funding crunch.
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Anyline Raises €1.5M To Let You Add Optical Character Recognition To Your App
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Steve O'Hear
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, the Austrian startup that provides mobile OCR tech to enable developers to add text recognition to their own apps, has raised €1.5 million in funding. The list of investors is interesting, too. It includes angel investor Johann ‘Hansi’ Hansmann, busuu co-founder Bernhard Niesner, Lukas Püspök, and the U.S.-based VC-fund iSeed Ventures. However, most notable is that the round was led by Gernot Langes-Swarovski Group. As one investor put it to me, “the fact that the Swarovski family led the round shows that finally ‘old’ money is moving into Austrian startups”. Offering its own mobile Optical Character Recognition (OCR) technology — which uses a smartphone’s camera to accurately scan and recognise any kind of text, code or number — Anyline co-founder and CEO Lukas Kinigadner tells me the startup is built on the premise that “people screw up a lot”. “Mistakes happen easily when you’re writing down a 10-digit-number and then have to type it in again a few moments later. Anyline can be the big helper on the side of a human, making data import faster, more accurate and safer,” he says. Applications for Anyline’s SDK including adding barcode or passport scanning to an app. Or things like scanning electricity meter values, serial numbers and “other process enhancing information”. “So far, we’ve seen lots of traction from enterprises which have digitalization projects running and need a reliable third party software provider,” adds Kinigadner. “Marketing and vision-wise we are targeting software developers, who are having fun in realising awesome use cases like a ‘Scrabble letter anagram builder’ in order to educate the market about all the possibilities Anyline can bring.” To that end, the startup says it plans to bring its OCR tech to smart glasses and will launch an Augmented Reality (AR) solution later this year. Current partnerships include a plugin for the AR technology of wikitude, a ready-to-download SDK for Epson Moverio Pro smart glasses and a distribution partnership with Konica Minolta.
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Shine Signs First European Carriers To Its Network-Level Ad Blocking Tech
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Natasha Lomas
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The are stepping up a gear today as mobile network-level ad blocker startup has announced it’s signed its first European carriers to roll out its tech. Three UK and Three Italy are implementing Shine’s technology, the companies said today, paving the way for other brands in the Three Group to follow. It’s not clear when exactly either carrier will launch a consumer ad block service — we’ve asked and will update this story with any response. In a statement on the Shine implementation, Three UK’s CMO Tom Malleschitz said: “Irrelevant and excessive mobile ads annoy customers and affect their overall network experience. We don’t believe customers should have to pay for data usage driven by mobile ads. The industry has to work together to give customers mobile ads they want and benefit from. These goals will give customers choice and significantly improve their ad experience.” Shine’s CMO Roi Carthy tells TechCrunch it is now talking to “over 60 carriers around the world including others in Europe and in the U.S.” — expressing confidence it will have more carrier rollouts to announce in the next six months. (For the record .) “We expect to finish 2016 with hundreds of millions of consumers either opting in or having the opportunity to opt in to Shine,” he adds. (For the record, Three UK, the smallest of the UK’s mobile network operators, had 8.8 million customers as of August last year.) Details on how exactly the Three implementation will work are thin on the ground at this point, although the carrier says its three “principal goals” for deploying Shine are: eliminating data charges for ads for its customers; protecting customer privacy and security; and swatting “excessive, intrusive, unwanted or irrelevant adverts”, arguing that “customers should be entitled to receive advertising that is relevant and interesting to them, and not to have their data experience in mobile degraded”. It is also saying its objective is not to eliminate mobile advertising , but rather “to give customers more control, choice and greater transparency over what they receive”. This is in line with nascent ad blocking steps being made by other UK carriers. Last November, for instance, it was conducting a strategic review of ad blocking. Another UK carrier it was actively testing ad blocking tech last fall. Both said they weren’t looking to eradicate ads but to offer their users more control. However the current proposition from Shine — which claims to be the only company offering network-level mobile ad blocking right now (other options for mobile users include using a , for example) — does not include any whitelists for so-called ‘acceptable ads’ (as the popular desktop era ad blocker does), so it’s difficult to see how its carrier partners will initially be doing much more than offering customers the ability to see fewer ads. At this point Shine is concentrating its efforts on blocking display ads. Carthy says this boils down to quashing basic banners, pop-ups, pop unders; aka third party ad content that actively interrupts the mobile browsing experience and, for example, requires users to click a tiny cross to dismiss it. “Display advertising is the stuff that everybody sees and hates and is usually not a lot of fun,” he argues. However native advertising, in all its snake-oiled forms, currently gets a pass from Shine. “There’s a couple of forms of native advertising. There’s native content — like dating tips sponsored by Durex — clearly that’s not something we’re going to be able to touch because it’s ‘content’. But that’s an issue between the publisher and the readership whether it’s clearly stated etc etc. That’s their own business,” notes Carthy. “The second type is the native product experience — Facebook, Twitter… this sort of thing… There we don’t touch the ads for two reasons. Number one the carriers haven’t actually asked us to rule that type of advertising. Although they may still not be happy with it being there and impacting the user experience in a negative way, they see more of a holistic product experience and have not asked us to touch it. “Secondly we won’t remove advertising where we are not confident that we can’t provide a proper user experience after we’ve removed the ad. That is, we’re not going to give a broken experience instead of an abusive experience.” Unlike Shine’s first carrier partner, Caribbean mobile operator , European carriers such as Three will be taking an opt in approach to implementing network-level ad blocking for customers. This is down to regional regulatory differences, according to Carthy. So European users will have to choose to switch on ad-blocking. Whereas Digicel customers were all automatically opted in. (Carthy says Shine has 14 million users on Digicel — aka the carrier’s entire customer base. Not one Digicel users has opted out of ad blocking, he claims.) Shine does not charge carriers for its technology — it’s carrying the cost of the hardware and operating the service itself. Indeed, the company has no explicit business model in place at this point, although it does have investors — it’s raised $3.3 million to date so far — so will need to monetize at some point. A point which Carthy concedes in our interview. So it sounds as if the future business model for Shine will inevitably involve offering users some form of opt in to ‘acceptable’ ads — AdBlock Plus — not just its current offering of an opt out of “abusive ads”, as he terms current gen display ad fodder. That said, Carthy is not giving any specifics on what Shine’s future business model might look like at this stage. “It’s not necessarily something we are bringing forth right now,” he says, discussing the notion of hammering out some form of ‘acceptable ads’ in discussion with ad tech folks in future. “But we are certainly happy to have conversations on it. To come to an agreement on what is a proper policy is something that requires conversation and time. It’s not instantaneous, and as you can imagine it will be contentions. We’ve seen how much criticism AdBlock Plus is getting.” “We’re in the consumer protection business and we won’t betray consumer trust for monetization. That being said we’re not philanthropists and we have investors who would like to have money back and we believe that we can monetize a relationship of trust and choice with consumers — that’s of a more longer play type of thing for us,” he adds. “We believe that if consumers trust us to protect them and their advertising experience we can likely find ways where we can make Shine a very successful company.” How long will it be before Shine expects to start monetizing its user-base? “I’m not really sure yet,” says Carthy. “For us it’s a long play. For us really the objective is to roll our technology across more and more carriers and opt in hundreds of million of consumers to our service. That’s our objective.” “Consumers will have every right to stop using us if we betray a promise or if they feel unsure if they can trust us, that’s perfectly fair,” he adds. Shine is also shy about talking about the specifics of how its technology works. Carthy will say it’s installed in carriers’ data centers, and he likens its operation to parental control software for blocking certain types of age-inappropriate content. On top of these hardware installation Shine works with carriers to offer specific services tailored for their users — focused on its twin pillars of ad blocking and privacy protection (i.e. ad tracker blocking). “The reason I can’t go into detail [about the technology] is because this is a technology war,” he says. “Fire-vs-fire. Cat and mouse game with high stakes. Being a cybersecurity firm by origin, we don’t divulge our bits & bytes publicly. “That said, I can explain the high-level. We use DPI [deep packet inspection] machines with real-time AI algorithms to detect ads (harder than it sounds as there is continued evading and masquerading). We then remove them, and ensure that the web page or app isn’t broken.” Why should consumers trust a third party company to have explicit visibility into their mobile browsing habits? On this point Carthy stresses Shine’s security credentials. The company’s line on its backstory is that it was founded to protect consumers from malware. “Staying true to our cause, we found ourselves as the strongest line of defence in protecting consumers from AdTech,” it writes. Carthy explicitly confirms Shine is not doing any data harvesting, network data analysis or user tracking itself. It’s just doing DPI in order to hunt and kill the ads, he says. “Our origin is in cyber security and white hat hacking. That’s where the company comes from. The company was founded to reinvent the antivirus. A few things happened and now we’re helping consumers protect themselves from adtech. But we are not in the business of abusing consumers, we’re in the business of protecting them, or helping them protect themselves. So any notion of us abusing data or doing it for any ulterior motive, it’s not plausible for us.” Returning to the ad blocking battlefield, one interesting development has been the rise in the number of publishers blocking ad blocker users. Carthy couches this as “an extremely short-sighted hysterical reaction”. But it’s also a reaction that risks making Shine less attractive to smartphone users. Because if people switch on Shine via their carrier and find they can’t read their favorite news site, well they may feel moved to switch it off again… “These [ad blocker blocking] properties have not embraced the fact that their monetization best practices are outdated,” argues Carthy. “We are now between two chapters and they need to understand it. One has ended and a new one is beginning, and it’s where monetization will not outweigh consumer benefit.” “Any time that ad tech or publishers would like to sit down with Shine and discuss the future, what is in the benefit of consumers, we’d be happy to do that,” he adds. Another development that might threaten Shine’s ability to deliver network-level ad blocking from a technical standpoint is of course growing use of encryption, which would block its ability to do DPI to identify ads. Add to that, there are questions about whether net neutrality rules might not rule out ISPs deploying ad blocking — albeit Three clearly thinks aren’t a blocker to offering an opt-in ad blocking service to its users. Despite all these challenges, Carthy says Shine has been approached by a number of media and adtech companies wanting to have discussions about its technology (but he won’t name any names). “The nature of the discussions was… what is really motivating Shine. And what we have clarified is that number one we are not against advertising, that we are against abusive advertising. And secondly that we will not look the other way — meaning there is no way to pay us off to look the other way. “Those were the key items of the conversations and that’s been communicated very clearly and also embraced on the other side very clearly. They understand where we’re coming from. They believe we certainly don’t make their life easier but they understand that we do stand behind what we’re saying.” So what might acceptable advertising look like to Shine in the future? Does Carthy have a rough idea of this point? After all, if he’s telling publishers they need to wake up and smell the coffee and evolve their business models it might be helpful to have some practical examples of an alternative monetization strategy for their content for him to point to. “Not yet,” he says responding to this. “But we are more than happy to have those conversations and if we believe that there are parties that are serious and we can come to an agreement that doesn’t put consumers at harm then maybe we can figure something out.” But of course Shine needs to build its network first — to become big and threatening enough to force ad tech firms to change their ways. And it’s still a long way away from reaching those target hundreds of millions of users. It’s won a battle here, snagging its first European carriers. But the ad blocking wars are just getting started on mobile. And it’s by no means clear how the various moves and counter moves will play out. “At the moment we are focused solely on bringing the right ad block to consumers and protecting them from digital abuse,” adds Carthy, eyes very clearly on growing its own network prize.
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Tesla Motors Finally Owns Tesla.com
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Matt Burns
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Tesla.com is now in the hands of Elon Musk. Stu Grossman owned the domain since 1992 but it mostly sat unused. As of February 19, 2016, it redirects visitors to TeslaMotors.com and all is right with the world. that Grossman bought the domain because of his affinity to the legendary engineer. Apparently he was going to turn it into a fan site. That didn’t happen. The details of the ownership switch have not been announced. It’s unclear if Tesla Motors bought the domain from Grossman or if the company scooped it up another way. Either way, as many companies can attest, it’s a big win for Tesla. Right, ?
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Zenefits Stumbles Into PayPal’s Old Drama
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Eric M. Jackson
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The tech world was stunned last week when — the unicorn that had once been called “ ”– announced that its the company and that it was . The company cited regulatory compliance problems as a factor in the decision. David Sacks, who is replacing Conrad in the top spot, was PayPal’s first COO and was the founding CEO of Yammer. Sacks had been for for over a year. The company also restructured its board of directors. Conrad stepped down while Antonio Gracias of Valor Equity Partners, Bill McGlashan of TPG Growth, and PayPal co-founder Peter Thiel joined it. (Disclosure: Thiel and Sacks are investors in our company , and we also use ’ software.) The news flew in the face of what previously had been conventional wisdom about the company. Forbes once called and Business Insider said was a . But now its path forward now looks very murky as risk and uncertainty obscure what had been a bright future. Regulatory fights. Management upheaval. A high flying startup crashing to earth. If it feels like you’ve read this book already, it might be because Eric wrote a similar one. It’s called . The similarities between what the challenges confronting with the obstacles PayPal faced 15 years ago go far beyond just the involvement of Sacks and Thiel. Many of the problems suddenly confronting are similar to what the early PayPal team had to confront back when Eric served as the company’s first director of U.S. marketing. News broke in November that is facing scrutiny in some states over . In a bluntly worded that was posted on the company’s blog, Sacks acknowledged that had played fast and loose with regulatory compliance: “We sell insurance in a highly regulated industry… The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong.” Similarly, PayPal found itself facing scrutiny in its early years as regulators in a number of states –including authorities in New York and Louisiana — initiated action against the company. The biggest problem was that no one was exactly sure what label to apply to PayPal. The startup wanted to avoid being classified as a bank given the arcane rules and burdensome regulations that went along with that status. Eventually the FDIC issued a ruling classifying PayPal as a money transfer service, which was regulated at the state level. This meant the company had to get licenses on a state-by-state basis. This very visible change of CEOs will no doubt cause concern for ’ stakeholders, especially its employees and customers. But isn’t unique in this regard. PayPal went through a similar level of change and tumult in its early years, with accomplished leaders such as Elon Musk, former Intuit CEO Bill Harris, and ultimately Thiel taking a turn at the helm before the company was acquired by eBay. The company was able to weather the storm of changing CEOs in part because it had a strong culture as well as a deep executive team (e.g. Sacks, Max Levchin, Reid Hoffman, Roelof Botha, etc. etc.) leading the company. faces the headwinds of a market that’s turned decisively toward tech valuations. Last November, Fidelity Investments , calling into question ’ $4.5 billion valuation. Meanwhile, reports also indicate that the company’s . Since small businesses are the company’s primary revenue source, it’s feasible to assume that a slowing economy could be at least part of the reason for this. As bad as that sounds, PayPal faced an even more daunting economic environment in its early years. The stock market crash from 2000-2002 . Those aren’t headwinds–that’s a hurricane. Meanwhile, venture funding began to contract at a time when the company was burning through $10 million a month. And yet, PayPal was still able to continue raising funds while it overhauled its business model, found a way to become profitable, and became the first dot-com to go public after the 9/11 terrorist attacks. Up until recently, the external narrative surrounding had been all about growth and disruption. Case in point, on the day that Parker was dismissed, the company was a nominee in the at the 2016 Crunchies. But now that narrative seems to have taken a dramatic U-turn. Again, PayPal had a similar experience. Its initial public narrative was overwhelmingly positive. But as legal and regulatory woes mounted and news of the management changes got out, the press turned on the company, suddenly heaping scorn on the former media darling. In the months leading up to its IPO, when the company was still in its mandated quiet period, outlets that had previously been friendly (e.g. BusinessWeek, The Wall Street Journal, and CNET) all turned critical. One columnist even penned a piece called “Earth to Palo Alto” that suggested PayPal was meant for “drug dealers and domestic terrorists” and that the company lacked “adult supervision.” Ouch. The good news for is that PayPal not only survived, but it thrived to the point of creating a new product category. It wasn’t easy, but with a talented team, strong culture, and commitment to execution, the company pulled it off. This should be encouraging to . While the challenges facing their company are real, PayPal’s history clearly shows that a determined company that executes well can overcome even these big odds. History never repeats itself, but in Silicon Valley sometimes it does rhyme.
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Apple Gets An Extension In iPhone Unlock Case, Response Now Due February 26th
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Matthew Panzarino
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Apple has received an extension in the timeline that it has to reply to a court order to modify an iPhone for the FBI. The deadline, originally Tuesday, has been pushed out to Friday, February 26th, TechCrunch has learned. Apple will need to make its case why the FBI’s request to create a special version of iOS is burdensome and taxes the limits of the 200-year-old All Writs Act. News of the extension was previously . The FBI’s request . It wants Apple to disable or bypass the auto-erase function of iOS that erases your phone if too many wrong passwords are input. It also wants Apple to remove the delay on password inputs so that the FBI can ‘guess’ the iPhone’s passcode without it locking them out for minutes or hours. Most controversially, it also wants Apple to create a new version of iOS that allows the submission of passcodes via wireless protocol like Bluetooth or Wifi or the physical port on the device. Apple has objected in a , but it will now have to respond legally and a court will have to decide whether to compel it to comply.
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Twitter’s Founder, Facebook Pledge Support For Apple As It Fights Court Order To Unlock iPhone
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Catherine Shu
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’s founder and have joined a growing chorus of voices from the tech community supporting as it used by one of the San Bernardino shooters. Twitter co-founder and CEO Jack Dorsey “We stand with @tim_cook and Apple (and thank him for his leadership)!” We stand with and Apple (and thank him for his leadership)! — Jack (@jack) TechCrunch has contacted Twitter to ask if Dorsey’s tweet represents the company or his personal opinion. Facebook issued this statement to the press: “We condemn terrorism and have total solidarity with victims of terror. Those who seek to praise, promote, or plan terrorist acts have no place on our services. We also appreciate the difficult and essential work of law enforcement to keep people safe. When we receive lawful requests from these authorities we comply. However, we will continue to fight aggressively against requirements for companies to weaken the security of their systems. These demands would create a chilling precedent and obstruct companies’ efforts to secure their products.” Other tech executives who have publicly backed Apple since Tim Cook posted a letter to customers earlier this week explaining why the company will oppose the court order. that forcing companies to hack into customer devices and data “could be a troubling precedent,” while (WhatsApp is owned by Facebook) that “We must not allow this dangerous precedent to be set. Today our freedom and our liberty is at stake.” The and have also issued formal statements of support for Apple’s stance. Apple has until February 26 to respond to the court order, which calls for it to create a special version of iOS that would help unlock an iPhone used by shooter Syed Rizwan Farook.
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Mark Cuban Commends Apple, Proposes New Law For Tech Security
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Katie Roof
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Apple says that because of its upgraded operating system which links data to the passcode instead of the device, it simply does not have the capability to comply with the government’s most recent request. The information on the phone disappears after too many failed log-in attempts. Cook suggests that going forward, altering its security would provide a dangerous loophole, that creating a backdoor to access the data would make the phone more susceptible to unauthorized hacks. “The government is asking Apple to hack our own users and undermine decades of security advancements that protect our customers — including tens of millions of American citizens — from sophisticated hackers and cybercriminals,” said the note from Cook. Many argue that complying with the FBI could also be deleterious for tech businesses. How would customers in other countries react to the idea of having their data potentially obtained by the U.S. government? And could other governments authorize data requests? It could be a slippery slope, suggested leaders in Silicon Valley. Jack Dorsey, who is the CEO of both Twitter and Square, tweeted that he stands by Apple’s decision. We stand with and Apple (and thank him for his leadership)! — jack (@jack) Google CEO, Sundar Pichai, also took to Twitter to praise Apple. 1/5 Important post by . Forcing companies to enable hacking could compromise users’ privacy — Sundar Pichai (@sundarpichai) Aaron Levie, CEO of Box, quipped: Simple security rule of thumb: don't build encryption for how the world is today, but how it could be if Donald Trump were President. — Aaron Levie (@levie) Donald Trump has in fact, against Apple’s decision. and TechCrunch that Apple will be getting an extension on its deadline to respond to the court order.
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Romain Dillet
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From Food To Flowers: The Push For Supply Chain Transparency
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Juan Palacio
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Try to figure out exactly where fresh products come from in a grocery store. The stickers may say “Mexico” or “Colombia,” but those are big places, and labels like this don’t give much insight. Research online; the information isn’t there. Try with a few other products, and you’re likely to find the same thing. Companies are not always forthcoming about where their products are sourced, and when the curtain is pulled back, scandals — including poor-quality products and unsafe working conditions — often come to light. Now, consumers are holding companies accountable, and expect sustainable and quality products to be delivered to their homes. Simplified and transparent chains appeal to consumers, and the farm-to-table movement is taking off, delivering fresh and direct from farms. This article will examine how product origins kept secret from customers can lead to dangerous working conditions and lower-quality products. Additionally, businesses that insist on and encourage the farm-to-table movement will produce a better product in ethical working conditions. The importance of was not understood a decade ago. Companies were content to not ask questions regarding the origins of the items they sold, , an Associate Professor in Operations Management at the University of Oxford. But now consumers do care about where their products come from, and knowing they were sourced ethically increases their value. This means products sourced unethically lose value. Scandals arise each year involving companies that hide how their goods are produced. At the end of 2015, an revealed migrant workers and children were working as slaves in Thailand, peeling shrimp sourced out to global retailers and restaurants, including Walmart and Red Lobster. In 2014, for British flower wholesaler Finlays. A year earlier took place in the U.K., in which horse meat was discovered in processed beef products being sold through several brands in supermarkets across Europe. This fraud in particular spotlighted the industry’s problematic . Just one package of meat could be linked to multiple suppliers in Romania, The Netherlands, France and across Europe. These cases prove chains shrouded in secrecy harm workers, products and consumers, and demonstrate the need for businesses to operate transparently. Let’s now look at the involving . First, are harvested at their point of origin, often in Colombia, which provided the U.S. with Next, are imported to the U.S. via Miami, and are then stored in large refrigeration units. The are shipped in trucks to wholesalers, and from there are sent to flower shops. With this process, the fastest can reach consumers is six days. The long delivers that are not at optimal freshness for consumers and detaches consumers from the farms where the grow. FedEx is pushing for in the industry through a shorter . Its new flower delivery system allows florists in the U.S. and Canada to place orders directly to flower farms in Colombia, Ecuador and The Netherlands. With the international priority delivery, the arrive fresh from the farms, directly to the florists, in 48 hours. This way, florists are able to build a relationship with the farms to ensure the are coming from a place that takes care of its workers. The flower industry has , but companies like are pushing for in the industry. The Miami-based importer owns the largest private flower farm in Colombia, and brings 700 million stems per year to the U.S. through a transparent, six-step . The importer is open about where its products come from; in fact, that’s its selling point. The company’s website provides information on its ethical farming practices and runs a foundation to ensure the well-being of its farmers. The company also operates a school for the workers’ children, where upwards of 700 students attend. As consumers become more preoccupied with where their products are sourced, the farm-to-table movement will grow. Organic products come directly from a farm to a consumer, and cuts the down to only two. The movement gives consumers the ability to feel a connection with the farmers, and creates trust that their goods are produced in a safe and ethical way. According to the the number of farmers’ markets in the U.S. has risen from 1,755 in 1994 to 8,476 in 2015. In Seattle’s King County, , a significant section of the economy (this includes Pike Place Market, which is famous for being Starbucks’ first coffee shop location). The farm-to-table movement isn’t just visible in farmers’ markets, however. Farmers are delivering fresh products by shipment, too. Companies like provide farmers with software to easily deliver fresh products directly to customers. It is clear that smaller, more transparent chains benefit consumers, farmers and companies alike. When a is transparent, farmers work in the public eye and receive fair wages, while working in safe conditions. Businesses have less product damaged in more direct chains and can brand their products as ethical, which increases their value. And finally, consumers benefit by receiving a fresher, healthier and more ethical product.
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No, Apple Has Not Unlocked 70 iPhones For Law Enforcement
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Matthew Panzarino
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The more highly technical the basis of a story, the more likely it is that some key detail will get jacked up by a journalist trying to translate it for the public. Call it Panzer’s Law. It’s only natural, especially when it comes to stories about security and privacy, such as Apple vs. the FBI. There are a myriad of complex technical mechanics at play, fiercely difficult Gordian Knots of encryption and hardware solutions to unravel and a number of previous interactions between Apple and the government that have set one precedent or another. But no matter how hard it is, it’s important to get this stuff right. The press has the ability not only to act as a translator but also as an obfuscator. If they get it and they’re able to deliver that information clearly and with proper perspective, the conversation is elevated, the public is informed and sometimes it even alters the course of policy-making for the better. When it comes to the court order from the FBI to Apple, compelling it to help it crack a passcode, there is one important distinction that I’ve been seeing conflated. Specifically, I reports that “70 iPhones” . And those reports argue that Apple is now refusing to do for the FBI what it has done many times before. This meme is completely inaccurate at best, and dangerous at worst. There are two cases involving data requests by the government which are happening at the moment. There is a — in which Apple is trying really hard not to hand over customer information even though it has the tools to do so — and there is , where it is fighting an order from the FBI to intentionally weaken the security of a device to allow its passcode to be cracked by brute force. These are separate cases with separate things at stake. The New York case involves an iPhone running iOS 7. On devices running iOS 7 and previous, Apple actually has the capability to data, including (at various stages in its encryption march) contacts, photos, calls and iMessages That last bit is key, because in the previous cases where Apple has complied with legitimate government requests for information, this is the method it has used. It unlocked these iPhones — it has extracted data that was accessible while they were . The process for doing this is laid out in its . Here’s the language: It’s worth noting that the government has some tools to unlock phones Apple’s help, but those are hit and miss, and have nothing to do with Apple. It’s worth noting that in in the New York case, the government never says Apple unlocks devices, but rather that it bypasses the lock to extract the information. The California case, in contrast, involves a device running iOS 9. The data that was previously accessible while a phone was locked ceased to be so as of the release of iOS 8, when Apple started securing it with encryption tied to the passcode, rather than the hardware ID of the device. FaceTime, for instance, has been encrypted since 2010, and iMessages since 2011. So Apple is unable to extract any data including iMessages from the device because all of that data is encrypted. This is that the FBI now wants Apple to weaken its security so that it can brute-force the passcode. Because the data cannot be read unless the passcode is entered properly. If, however, you assume that these stories are correct and that Apple has complied with requests to unlock iPhone passcodes before and is just refusing to do so now, it could appear that a precedent has already been set. That is not the case at all, and in fact that is why Apple is fighting the order so hard — to avoid such a precedent being set. The New York case has another wrinkle, which is a separate issue. Apple theoretically comply with the data extraction request there, but is : extracting data from devices diverts manpower and resources, and that the government is trying to use a wide application of the All Writs Act of 1789. At the behest of Judge Orenstein, the federal magistrate in the NY case, Apple . Apple also argues that since its reputation is based on security and privacy, complying with the court’s demands based on an expanded application of a 200-year-old law could put it at risk of tarnishing that reputation. Apple is still waiting for a final order on whether to comply from the judge there. The All Writs Act is also being used in the case in California. Still, even if Apple were to comply in New York, it would not be unlocking the device, merely extracting data off of it with standard methodology for pre-iOS 8 devices. If the FBI succeeds in ordering Apple to comply in California, it would have to build a new software version of iOS that allowed electronic brute-force password cracking. This is an important distinction to make when talking about such an important precedent-setting case.
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Imgur Gets Its Sheryl, Hires COO So Founder Can Nerd Out On Product
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Josh Constine
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is Internet dude paradise. The underhyped image sharing and commenting community has 150 million active users and saw 900 billion page views in 2015. Thanks to silly GIFs, science experiments, cute cats, and crazy inside jokes, Imgur has become the #1 web destination for millenial men according to comScore. Now it’s time to turn the adoration of that army of guys into a real business. Imgur’s new COO Roy Sehgal After years of founder Alan Schaaf running everything including its burgeoning sponsored content ads, the company has hired a Chief Operating Officer. Roy Sehgal will take over finance, marketing, sales, biz dev, and HR so Schaaf can do what he does best: product, engineering, and community. Back when Imgur was just an unmonetized, bootstrapped website, that was all Schaaf did. But it finally raised $40 million in 2014 to pay for hires like this. Now Schaaf will have an experienced manager to build out the business and company. Sehgal says “You can point to people like Mark Zuckerberg and Sheryl Sandberg as the epitome of a great partnership. If we can emulate a relationship like that, I think we’ll be doing an incredible job.” Sehgal was formerly the head of corporate development at Atom Entertainment, which he helped get acquired for $200 million by Viacom in 2006. He then became a General Manager and VP at Zynga back when Zynga was actually a good company. His teams’ products saw 10 million daily actives and $100 million in annual revenue. Recently he’s been an angel investor and advisor to YouNow, Shyp, Managed By Q, and Homebrew fund. Part of PlayStation’s Imgur ad for its game Uncharted When I talked to Sehgal and Schaaf, it became clear how complementary their personalities are. Schaaf is raw, dreamy, full of passion for a community that mirrors him — a somewhat strange but lovable nerd that’s easily excitable. Sehgal speaks clearly and definitively, strong with logic and rigor, a quintessential business executive but with a soft-spot for play and sentimentality. Imgur COO Roy Sehgal and CEO Alan Schaaf (from left) Schaaf says Imgur’s mission is to “lift the world’s spirits for a few moments every day, by experiencing things that make you laugh, make you feel smarter, make you feel supported or even inspired so you walk away feeling better.” How? Sehgal explains that his strategy is “Hypothesis-driven.” It’s about coming up with an idea and letting creativity forge into a product, then aggressively using data to measure and tune its impact. But he’s not just running the , where sources say they called creating virtual goods “cooking crack” and that “numbers were God”. Sehgal is aware of how mining entertainment out of other social networks full of highlight reels of people’s lives can make people feel insecure, even if the platforms earn lots of money. His acknowledgement that the wrong type of community can lead to “a lot of sorrow and regret because people portray illusions of themselves” convinced me he’s the right guy for the job. His biggest challenge will be scaling up Imgur’s ad business, which sees brands like MTV and eBay create their own Imgur content. These aren’t hard sells. They’re actually enjoyable content, like making insanely manly GIFs, or showing off cakes people could give their designated drivers like the one below. Part of Budweiser’s Imgur ad celebrating designated drivers So far, Imgur’s community has been remarkably receptive to the ads because they adhere to its zany culture. Sehgal will have to figure out how to retain that tone even as Imgur brings in more advertisers with less flexible brands. And eventually, he’ll have to help it exit by IPO or acquisition. It’s a pivotal moment for Imgur. Suddenly the world is embracing the weirdness it’s collected since 2009. “Star Wars is at the top of the list for highest grossing movie along with Guardians Of The Galaxy” Schaff beams. “Internet or geek culture is becoming mainstream, and that’s exactly the audience we have.” All Imgur has to do to win is avoid doing anything . Reddit, I’m looking at you.
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Digital Payments Startup ModoPayments Raises $2 Million
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Jay Donovan
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Today, that completed a $2 Million funding round by a group of individual angels that includes , , and Jay Kassing among others. way back in 2011 when they were still primarily focused on building a mobile payments platform for store merchants to monetized location check-ins. A lot has changed for the Richardson, TX startup since those salad days and they quietly launched a very interesting product last fall called their . This hub is a Swiss Army Knife of “moving value” between and along multiple financial systems—legacy systems and new systems. could be defined as money, but it could also be things like loyalty points or coupons. The uses a proprietary, secure data container called a COIN™ (not to be confused with the modular payment card for which Modo’s patent precedes by several years) to move the value/data along their network. It’s complicated but the “explainer” video at ModoPayments’s website does a great job of metaphorically displaying how the system works in the background. I spoke with Founder and CEO Bruce Parker this afternoon about their pivot to this larger backend integration product and he explained the transition as such: “We spent a few years chasing the mobile payments dragon, and came to the conclusion we didn’t have much to add to the discussion about the new digital user experiences. We are, however, extraordinary payments plumbers. So we decided to help solve the problems of integrating existing payments systems to the digital ecosystem.”
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Space Propulsion Startup Accion Systems Starts Taking Orders
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Emily Calandrelli
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The space propulsion company has announced that they will officially start taking orders for their micro-propulsion systems designed for CubeSats and other small satellites. The company is selling miniature electrospray ion engines that generates thrust by accelerating charged particles to very high speeds. Accion’s engine, about the size of a small coin, uses 480 microscopic nozzles that make use of capillary action that direct propellant out of the engine. Capillary action enables liquid to flow into narrow spaces without the assistance of an external force like gravity. If you put a straw in a glass of water, some of that water will travel up the straw because of capillary motion. Founded in 2013, Accion has completed a $2 million seed round and received a $3 million Department of Defense contract. While they’ve already sold 3 of their units to government and research partners, this will be the first time they are making their miniature ion engine available to commercial partners. Developed at MIT, the ion engine has undergone years of development and testing. Last August, Accion performed their first technology demonstration in space. Dr. , co-founder and CEO of Accion, told TechCrunch that this on-orbit flight test matched performance qualities they’ve achieved in the lab. What’s unique about micro-thruster technology is that it offers a capability to small satellites owners that they’ve never truly had before: propulsion. Propulsion is important for all satellites because it enables them to correct their position within their orbits around the Earth. “Everyone needs propulsion. Even folks launching without propulsion today could save hundreds of millions of dollars if they could stay in orbit longer, phase their constellations more quickly, or take advantage of cheaper and more frequent launches and then use propulsion to get to their desired altitude.” – Natalya Brikner, CEO Accion Systems In space, there are small perturbing forces that can slow a satellite down or change its position within its orbit. For small satellites, traces of the Earth’s atmosphere are strong enough to cause it to deorbit and burn up in the atmosphere within months. If these satellites had propulsion, they could extend their lifetime from months to years in orbit. More time in orbit means that satellite owners can get more bang for their buck. Traditionally, limitations on space and mass have forced small satellite developers to forego propulsion systems in their design. Companies like Accion and have worked to solve that problem by miniaturizing electric ion propulsion technology. Electric ion propulsion is different than the type of propulsion you see during a rocket launch (known as chemical propulsion). Electric ion propulsion doesn’t provide a burst of power, but rather a small amount of thrust by throwing charged particles out of the engine at very high speeds. Spacecraft whose missions require long journeys into the solar system have made use of ion propulsion. While it doesn’t provide much thrust at a given time, each individual “push” propels a spacecraft a little bit faster through the vacuum of space. Without much drag to slow the spacecraft down, ion propulsion can eventually get a satellite moving at very high speeds. NASA’s Dawn spacecraft, for example, used ion propulsion and achieved the record of highest velocity change of any spacecraft. As of 2015, Dawn has a velocity change of 38,300 kilometers per hour (23,800 miles per hour) since its launch in 2007. More recently, ion propulsion has been proposed for small satellites. Ion propulsion doesn’t require explosive chemical reactions, which is attractive to small satellites owners who typically “piggyback” onto launches and are discouraged from include toxic, volatile propellants in their design. The problem is that historically, electric ion engines have been too large for small satellites. Part of the reason for this is because traditional ion engines make use of relatively large pumps to move propellant around. To miniaturize the electric propulsion design, Accion and Busek did away with these pumps. Both companies have created small propulsion solutions for small satellites, but with distinctly different designs. Busek has nearly 30 years of experience over Accion and recently sold its first micro electric ion engines to NASA for use on small satellites. As a start-up, Accion is working to compete with companies like Busek with technology improvements to enable ion thrusters to work longer and eventually, be more powerful. Brikner told TechCrunch that their engine leverages an innovation that she worked on for her PhD at MIT. The now-patented technology allows Accion’s ion engine design to have a longer lifetime than Busek’s equivalent electrospray product. Comparing their competing products, Busek and Accion have achieved around the same level of thrust, but Accion is working to change that. Most recently, Accion completed a proof of concept lab test demonstrating that by including 4 times the number of microscopic nozzles on each engine they could greatly increase the amount of thrust provided. With the recent test, Accion’s engine achieved the same amount of thrust as traditional electric ion engines, but with 1/30 the mass and 1/30 the volume. This test has yet to be demonstrated in outer space, but could be a game changer for ion engine technology. “In the future, we’re going to incorporate new materials that can increase the thrust density by an additional 10-100x beyond this, totally eclipsing conventional engines in use today. Long lifetime and high thrust density are the keys to this era of super-capable smallsats.” – Natalya Brikner, CEO Accion Systems Because of their design, Accion’s thruster is scalable and can be used by a wide range of satellites. Brikner said that their engine can “provide station-keeping for the largest of Geostationary satellites and attitude control to the smallest of CubeSats.” Accion is now on their current product which is scheduled to be flight-certified by October and ready for a mid-2017 delivery.
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Facebook Plans To Put Ads In Messenger
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Josh Constine
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A leaked document Facebook sent to some of its biggest advertisers reveals that Facebook will launch ads within Messenger in Q2 2016. The document, obtained by TechCrunch but kept private to protect its verified source, says businesses will be able to send ads as messages to people who previously initiated a chat thread with that company. To prepare, the document recommends that businesses get consumers to start message threads with them now so they’ll be able to send them ads when the feature launches. The document also notes that Facebook has quietly launched a URL short link fb.com/msg/ that instantly opens a chat thread with a business. Facebook confirmed the existence of the URL short link. That seems to back up the validity of the leaked document. An example of messages between businesses and users Regarding Messenger ads specifically, Facebook told me “We don’t comment on rumor or speculation. That said, our aim with Messenger is to create a high quality, engaging experience for 800 million people around the world, and that includes ensuring people do not experience unwanted messages of any type.” That last part sounds like Facebook trying to reassure users that even when there are ads, they won’t be completely unsolicited, and it’s going to be very careful. Messenger is one of Facebook’s most popular and fastest-growing products, with . Yet the social network has never monetized it directly before. Thankfully for users, Facebook isn’t going to let brands send ad messages to just anyone or even people who’ve liked their Pages. Only those who have voluntarily chatted with a business can be sent ads. This should somewhat limit the spam potential and annoyance. Right now, almost all messages come from one’s friends, so Facebook will likely try to preserve this high signal-to-noise ratio with limits on advertising. The news somewhat to calm users of WhatsApp when Facebook acquired it in early 2014. “I don’t personally think ads are the right way to monetize messaging,” Zuckerberg said on an analyst call. went further in a 2012 blog post, stating that “Advertising isn’t just the disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought,” but also a waste of engineering resources. Yet as more content from friends, news publishers, video makers and brands compete for limited space in people’s News Feeds, Facebook has apparently grown willing to let advertisers pay to ping people directly. It’s not the only one opening new direct channels between the two. new ways for companies to offer customer service through DMs. Facebook’s Head Of Messenger David Marcus Facebook has been slowly enhancing the ways businesses can privately communicate with people since . That’s when it first began letting users send messages to Pages, which were only then allowed to message them back. Originally, this was designed to let businesses move messy or irate customer service conversations off their Wall where other fans could see. Facebook redoubled its business chat efforts when it hired PayPal President to run Messenger in 2014. He came with that Facebook could do a better job of letting companies talk with customers than phones and 1-800 numbers with clumsy touch-tone menus and hold times. At its F8 conference in March 2015, Facebook announced its program that let e-commerce customers get receipts and chat with customer service reps to change orders. It also allowed businesses to integrate with like Zendesk and Conversocial to manage their incoming messages. Over the following months, Facebook enhanced chat capabilities for businesses by letting them show a big button on their Page, , show a badge that grades them on , and with private messages. Facebook also recently introduced that let businesses pay to get people to chat with them. Plus, it’s been secretly testing a that allows developers to create e-commerce experiences and personal assistants within Messenger. Now Facebook is pushing brands to use these tools to encourage people to message them so they’ll eventually be able to send ads in return. According to the leaked document, it’s also recently released a new tool: the Messenger URL short link. It’s now live for all Pages, through the format fb.com/msg/ and then the Facebook Username of the Page, like . Brands can share and promote their link. When tapped by a user, it will start a conversation with the brand either in the Messenger app, or on Facebook’s mobile web or desktop site. Facebook confirmed to me that a few partners include Canadian telecom Rogers are already trying out the fb.com/msg/Rogers shortcode, but Facebook didn’t talk about it. This short link is essentially the next-generation version of a 1-800 number. Instead of calling 1-800-FLOWERS, you’d be able to just click something like fb.com/msg/flowers and chat at your own pace with a customer service agent. No “Press 1 to hear a list of options.” No “Please hold.” If businesses achieve a 90 percent response rate to messages within 24 hours over the past week, their Messenger handle will become searchable on Facebook, the document details. This could further stoke in-bound message threads that will eventually become opportunities to show ads. It’s unclear exactly what businesses will be able to put in Messenger ads, but there are plenty of possibilities. The document says the ads are supposed to carry on the existing discussion users started. The ads could perhaps: Considering this is the most direct and forceful way for businesses to advertise to or interact with potential customers, Facebook could likely charge steep rates. There’s always a chance that early tests to Messenger ads receive negative feedback and the plan gets scuttled. The last thing Facebook wants to do is cram spam into Messenger and give people a reason to return to SMS or another chat platform. Expect these ads to be slowly and thoroughly tested before possibly being rolled out. Right now pretty much every time Messenger buzzes, you know it’s one of your friends and is probably worth looking at. Facebook will have to aggressively thwart spam or misuse of Messenger ads to make money while keeping its chat app at the center of our mobile lives.
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Uber CEO Travis Kalanick Says Company Is Profitable In U.S.
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Megan Rose Dickey
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Uber is officially profitable in the U.S., Uber CEO Travis Kalanick . H/t to the buried news in that story, which was titled “Travis Kalanick Speaks Out: Uber’s CEO On Risk, Regulation, and Women in Tech.” Here’s the key chunk, straight out of the horse’s mouth: “We’re profitable in the USA, but we’re losing over $1 billion a year in China,” Kalanick told BetaKit. “We have a fierce competitor that’s unprofitable in every city they exist in, but they’re buying up market share. I wish the world wasn’t that way. I prefer building rather than fundraising. But if I don’t participate in the fundraising bonanza, I’ll get squeezed out by others buying market share.” Last year, Kalanick told employees that the company would be profitable in Q2 of this year, . It’s not clear when Uber became profitable. TechCrunch has reached out to Uber and will update this story if we receive any additional information. Meanwhile, .
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Facebook Lures Video Creators With Minutes Watched And 10-Second View Metrics
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Josh Constine
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The better the videos are on Facebook, the more people will watch and the more lucrative video ads Facebook can show. So today it’s that will teach them what works and what doesn’t. Facebook Page insights will now show the total minutes spent watching each of their videos, and the number of times people watched a video up to the 10-second mark, or watched 97% of the video if it’s under 10-seconds. The new video post metrics view Until now, Facebook’s metrics simply highlighted “Views”, which it counts as someone watching just 3 seconds of a video — an amount of time some criticize as being too short to really absorb anything. Facebook’s Page Insights for videos are also being redesigned to be easier to read, and will include: Page admins will also be able to breakdown any of these metrics by a new Sound-On vs Sound-Off characteristic and the previously available Organic vs Paid. “47% of the value in a video campaign was delivered in the first three seconds”. Still, creators want to know what videos are good enough to actually watch, not just pretty enough to slow down for while scrolling. Old video insights before the addition of the new metrics With 100 million hours watched and 8 billion views per day, video on Facebook has exploded. It has a huge opportunity to push serendipitous discovery of videos by using what you, your friends, and the world watch to power recommendations. Unlike YouTube where people purposefully go to view specific videos or see what their favorite creators have released, Facebook video viewing is more accidental. But that’s actually an opportunity. There are way more great video content being created than you’re likely to know about, but you’d be happy to watch if slid into your News Feed. Facebook is already a daily addiction for a billion people thanks to the content from friends you can’t get anywhere else. As long as the videos are good, which these metrics will help with, Facebook could rack up more views, and therefore more focus from video makers, than competitors like YouTube.
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Indigo Is Mapping Plant Microbiomes To Produce Next Generation Crops
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Matthew Lynley
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David Perry thinks the secret to agricultural challenges like drought resistance might lie in the bacteria that live in a bunch of grass on the beach. That’s just one example that , a company that analyzes the microbiomes of plants to produce seed coatings that impart various attributes, is looking into as a way to combat difficult conditions for various crops. Indigo is launching today after having raised $56 million in financing over the course of its life. “We’ve always attributed those things to the plants themselves, what we’re increasingly understanding is the characteristic of their plant is something to do with the genome of the plant, and something to do with the genome of the microbes in it,” Perry said. “We’ve taken tens of thousands of plant samples — every continent except Antarctica. Everything from extreme Northern latitudes down to tropic. We take those, isolate the microbes, we grow them and sequence them. We now have over 40,000 microbial sequences of those that live in plants.” One of the company’s first goals is helping plants use water more efficiently, which is a big issue in drought-stricken areas. That increasingly includes California, but those conditions can be even worse elsewhere around the world, Perry said. “As the climate continues to change, we’re likely to see this problem exacerbated,” he said. Increasing crop yield is increasingly important as the population continues to grow — in short, we need more food, Perry said. But there’s another potential motivation for these experiments as well: backlash against the use of things like insecticides in plants. Perry said that, if analyzed correctly, there should be a way to produce plants that are insect- and pest-resistant through the use of microbes, which could help assuage consumers to buy produce yielded through Indigo coatings. The actual process of coating seeds is pretty simple and already exists, meaning the company can use existing technology to produce its seeds. As the seed sprouts, it takes in the microbes around it, incorporating them into an internal environment, Perry said. If it ends up improving crop yield, there are business implications here — not only can Indigo build itself into a real company, farmers too can improve their overall business. That’s the theory, at least. The whole area of microbiome analysis has become an increasingly interesting space. Many startups are working to analyze human microbiomes, like uBiome, in the hopes of improving health. So it does make sense that the eyes of scientists — and startups — would also shift to the food supply in the hopes of applying similar learnings to improve yield. After figuring out what kinds of microbes are present within plants, the company applies an algorithmic approach to determine which ones probably yield traits like drought-resistance. Then, it tests plants with a seed coating based on that microbe profile in a lab, then in a full-on field trial. Indigo has done four seasons of field trials, testing in North America and South America. Perry and his team have a background in pharmaceuticals and chemical engineering, who figured that they could apply that knowledge to agriculture. The theory, Perry said, was that while modern technology — like herbicides and pesticides — were improving crop yield, they were unintentionally destroying the microbes in the plants. So they decided to see if they could identify those microbes, and then add them back to the plants and see if it would impart traits that would make them more hardy under difficult growing conditions. To be sure, there is some competition looming. There are larger companies like Monsanto that are spending real money in the area, Perry said. And there are also other startups focused in the area, but the advantage that Indigo has is it starts with the microbiome in the plant, rather than the soil, Perry says. By doing that, Indigo doesn’t have to screen the millions of microbes in the soil that don’t have anything to do with the plant, Perry said. By doing that, the hit rate is higher in determining which microbes produce certain results, he said. Still, four seasons might not be enough to determine if the process will actually work long term — there can be a lot of variation between growing seasons. Indigo expects to launch its first products this year, though Perry wouldn’t be specific on which kinds of crops the company would focus. The primary goal through its first product will be improving plant yield under water stress for high-production crops. “The really interesting thing is we have a value proposition for both farmers and consumers,” Perry said. “Right now the tech that is available [like pesticides and insecticides] to farmers to help increase profitability and yield, are things that consumers don’t want in their food. It puts farmers in a weird tension, on one hand they’re trying to make a living, on the other ultimate consumers don’t like their methods.”
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Silicon Valley Keeps Winning Because Non-Competes Limit Innovation
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Chris DeVore
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Talent plus capital. Whether you’re building a company, a city or a national economy, these are the raw materials that make it possible to do things that others can’t. Silicon Valley is the world’s most magical mixing chamber for these two simple ingredients, home to the most exciting, creative and valuable companies on the planet. Every city in the U.S. — and around the world — wants to be the “Silicon Valley for X,” because somehow that simple recipe of talent plus capital produces such radically different outcomes there than anywhere else. Money flows to opportunity; if you can turn singles into twenties, somebody will write you a check no matter where you are. But humans have a stickier relationship to geography: they have friends and families, spouses with careers, mortgages and kids in school. Talent flows to places where the opportunities are greatest and the risk of getting stuck is lowest over the long term, so if things don’t work out in one job, you can move on to the next big thing without changing locations. How did Silicon Valley became the world’s leading innovation economy? The reasons are many, but one of the least celebrated and most fundamental drivers of that success is an obscure-but-powerful legal provision passed into law back in 1872. In that year, the California Civil Code was amended to include the following language: “Except as provided in , every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” In other words, human capital — talent — working in the State of California can’t be contractually bound to any employer for any reason (excepting a very narrow and well-defined set of edge cases). This is very different from many other states in the U.S., including several that aspire to compete with Silicon Valley for leadership in the innovation economy. By writing that simple human freedom into law, California ensured the free flow of talent to the best and most promising opportunities, whether or not that’s what their previous employer had in mind. From the “ ” that created Fairchild Semiconductor to the present day, human capital in California does whatever the hell it wants, and that free flow of talent makes the Bay Area what it is. Washington and Massachusetts aspire to greatness in innovation. Both have solid track records of success in nurturing world-class technology companies. Both are home to great cities, with outstanding research universities that attract talent from around the world. But both are also home to “champion” companies that have used lobbying power to block the passage of laws similar to California’s that would outlaw the use of non-compete agreements. Strong Federal statutes exist to protect intellectual property (via patents) and block the sharing of trade secrets (through enforceable non-disclosure agreements). Non-compete agreements don’t exist to protect trade secrets — as their defenders claim — but rather to prevent workers from pursuing goals that might conflict with those of their employer. Legislators in both Washington and Massachusetts have recognized the harm that non-compete agreements do to their innovation economies and introduced legislation to match California’s talent-centric policy. But in both cases, incumbent companies with powerful lobbyists — specifically, EMC in Massachusetts and Microsoft in Washington — have used their economic power to block any change to state non-compete laws. So in Washington, a Microsoft employee who spots a more interesting career opportunity at Amazon is likely to be sued just for taking a better job. And an Amazon employee who wants to leave to create a startup is equally likely to be sued for “competing” with their ($250 billion market cap) employer. The solution in both cases isn’t to stay put, but rather to — you guessed it — move to California where Washington non-compete claims can’t be enforced. Seattle and Boston are both fantastic places to build companies, and some founders will always prefer to pursue their dreams in those cities instead of pulling up stakes for the Bay Area. But as long as legislators in Washington and Massachusetts keep listening to lobbyists instead of founders and entrepreneurs, California will maintain its unfair advantage in the global war for talent.
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Even Barbie Has A Smart Home And Hoverboard Now
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Sarah Perez
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Consumers may have been slow to adopt smart home technology, but that’s not the case for . At the recent New York Toy Fair, Mattel unveiled a newly upgraded – and now tech-enabled – Dreamhouse for its iconic doll. The house lets kids control its various elements – from the lights to the elevator to other appliances – and even the music! – using voice commands. The $299 (yikes!) play house for Barbie and her friends is the latest addition to the Hello Barbie line of products. Like the somewhat controversial Internet-connected doll, which privacy advocates once the Hello Barbie Dreamhouse is also Wi-Fi connected. Developed in partnership with , the Dreamhouse the voice recognition technology, like the Hello Barbie doll itself. Similar to voice assistants like Siri or Amazon Alexa, the house responds to kids’ voice commands in order to take actions, like turning on lights that can be customized with various color schemes, or turning on the shower when it’s time for Barbie to get ready for school. To interact with the house, kids say things like “ or The house chimes brightly to indicate that it’s listening, then again when it responds to the request. [gallery ids="1279593,1279596,1279595,1279591,1279592,1279594"] The commands don’t necessarily have to be about taking explicit actions, however. As demoed by Mattel at the Toy Fair, the house also responded to broader commands, like by answering in Barbie’s voice. the house answers, The sound of running water is then heard and the shower lights up. Or, when asked to make pancakes for breakfast, the house turns on Barbie’s stove. The Hello Barbie Dreamhouse also comes with three pre-set modes, “hangout mode,” “dance party mode,” and “fun house mode.” Each mode gives kids a different lighting and music scheme and a different dialog in response to their play. For example, in party mode, the lights flash, the chandelier spins, music blasts, and the stairs convert themselves into a slide. [youtube https://www.youtube.com/watch?v=tKeKPDBWfZU] A fourth mode is enabled by way of the Hello Dreamhouse mobile app, which lets kids customize their own lighting and sound scheme – not entirely unlike the mobile apps that work with smart home devices today – like Philips Hue smart bulbs, perhaps. In addition, when Barbie steps into any room, the house responds thanks to embedded floor switches. The room then comes to life, as lamps turn on or the fireplace roars, for example. It’s truly a good time to be a kid. However, if you’re unwilling to cough up $300 for the ultimate party mansion, Barbie has another high-tech toy that’s a little less steeply priced. The Star Light Adventure RC Hoverboard is a small drone that Barbie can actually ride. It’s $60 and, like the Dreamhouse, will launch this fall. [youtube https://www.youtube.com/watch?v=1Do4Bx8JlRE]
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Hinge May Start Charging Users As It Zeroes In On Serious Dating
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Jordan Crook
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to which I cover dating apps, you may be surprised to know that I’m not much of a digital dater. In fact, I’ve only ever had monogamous, exclusive relationships with people I’ve met offline, with one booty call exception. Shout out to the man I now refer to as “Tinder Tim.” I met my current girlfriend at a BBQ, and the one before that through friends, and the two before that in college. I still use dating apps to swipe, and even exchange messages with folks (partially for entertainment, but mostly to stay in the know about new features and culture trends on the services I cover). But that spark that happens when you lock eyes with someone at a bar is something that only ever happens in real life for me. It’s a level of chemistry that goes beyond “DTF?” and wonders instead, are you down to tell me about what you want from life? What your favorite movie is? Take a walk? As it stands now, the real-life equivalent of this hasn’t yet been built by online dating services. At least not for millennials. Match.com and eHarmony focus on true compatibility, and host a network of users who are more likely to be looking for a serious relationship, whether it’s because they’re older or because they came specifically to the Match.com or eHarmony brands for that reason. According to , only 25 percent of its users are under the age of 30, with another 25 percent over 50 years of age, and the rest falling in the middle. Shockingly enough, eHarmony’s largest age group is aged 18 to 24, making up 30 percent of the 15.5 million members on the site. That said, the brand still feels much older and out of touch with today’s young single dater. OkCupid be considered as the only dating service for serious relationships that exists for a younger demographic. Still, it’s a heavy service, requiring an investment of time and energy to use. An opportunity presents itself. Currently, there is no light-weight dating app for ‘serious’ relationships serving millennials. From what we’re hearing, might be looking to fill that space. According to sources close to the matter, Hinge is undergoing a huge makeover, ditching the swipe mechanic and adding a paid subscription layer to ensure folks who use it are there “for the right reasons,” as they say on the Bachelor. Hinge provided the following statement: We are continually focused on helping our users find meaningful relationships. To that end, we’re always working with our users to test new concepts. However, at this point nothing is confirmed – everything from friend endorsements to concierge matchmaking has been on table. What we do know is that each global release continues to be the result of enormous amounts of work alongside our community in an effort to understand what sparks online connections that have the power to become lasting offline relationships. In short, Hinge seems clear on wanting to build real, lasting relationships, rather than facilitating hookups. While I’m short on details, there are a number of reasons why this seems like a logical move to me. From a revenue perspective, it’s nearly impossible to compete with with advertising. There is always a Lyft to the Uber, in all realms of consumer-facing technology, but no one to be the Lyft to the Uber. Right now, Tinder is overwhelmingly Uber, and all the dating apps that compete are only enjoying a small slice of Tinder’s pie. And when it comes to dating apps, monetization almost that you are the incumbent. No one wants to see native advertising as they browse for love and/or lust. They tolerate it on Tinder because Tinder is where is. If there was some magical bar where you could choose from thousands of potential sexual partners, you’d probably tolerate the crappy beer. But Hinge has never wanted to be a magical bar. Hinge wants to be more of a “get-together” with friends, where you might meet someone (a friend of a friend) who has already been “verified” in some way. The app has positioned itself as a more reliable, or even serious, version of Tinder, grabbing matches from people who know your friends through a Facebook connection. Hinge’s swipe mechanics, and the fact that it uses a “free to play” model, mirror Tinder so closely that it’s only natural for Hinge users to mirror the behavior of Tinder users. That wouldn’t be so much of a problem, except that it exposes one of Hinge’s greatest problems: inventory. Users on Hinge can’t simply swipe right on everyone they see, or even swipe endlessly. Your matches can only come from friends of friends on Facebook, which is a limited number. Users simply behave the same way they do on Tinder — playing the swipe game for the fun of judging others. This is why Hinge introduced expiring matches and the ability to re-match. Once a user has swiped and matched with their complete inventory on Hinge, that leaves nothing else to do. Nowhere else to look. By adding a level of curation to the system through subscription, and exposing that curation via re-vamped mechanics (ditching the swipe), Hinge will attempt to turn limited inventory into a pro instead of a con. This not only differentiates the service from behemoth Tinder, but also from other dating apps that have their own unique characteristics — Bumble lets women swipe first, Coffee Meets Bagel focuses on one match per day, and Happn zeroes in on location. Hinge’s core offering, eligible singles that have been verified through Facebook connections, is only strengthened through this revamp. And if the company can pull off actually serving up genuine companionship that turns to love through an app, consistently, then that differentiating factor may be strong enough to give Tinder a real run for its money. At that point, the main question is this: how will users feel about paying for Hinge? Part of the reason that younger dating apps like Tinder and Bumble have dodged the stigma of online dating, which has plagued more traditional services like Match.com or eHarmony, is that they are free to use. Paying to use a dating service could imply that the users are generally more desperate to find love or lust then folks who use free, lighter dating services like Tinder. A younger demographic may not respond well to this. That said, Hinge has already established itself as a popular dating service among younger people. Tinder introduced a premium version of its service with and, in some way, set the stage for other paid (yet still lightweight) dating services in the market. With that context in mind, Hinge might have a better chance at avoiding the the potential for user’s fearing they look desperate. There’s no word on when Hinge plans to roll out this new, more expensive version of its app. But Hinge, like most dating apps, is most certainly looking to make form follow function with regards to differentiating from Tinder’s perceived hookup app and focusing on more serious relationships.
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Google Decouples Play Games From Google+, Lets Gamers Choose Their Own Names And Avatars
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Frederic Lardinois
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Until today, you needed a Google+ account to use , Google’s online gaming service for bringing online multiplayer gaming, video recordings and like profiles and leaderboards to Android games. Today, Google is launching an update to Play Games, however, that removes this requirement. All you need to sign up now is a regular Google account and instead of having to use your real name (or at least the one associated with your Google+ profile), you can now choose any random Gamer ID and avatar to represent you. Google tells me these changes will roll out globally over the course of the next week, so if you don’t see it right away, just give it a few more days. Google is also now making it easier to sign into Play Games. Instead of having to sign in for every game separately, all you have to do now is sign in once for your account. After that, you’ll be automatically signed in when you install a new app and start a new game. As Google product manager Benjamin Frenkel (who now goes by the Gamer ID of ‘Caldorf’ on Google Play Games) told me, Google made these changes to improve the social experience and to remove as much friction as possible — though this is also obviously part of Google’s overall process of consciously uncoupling its services from Google+. Starting today, you can choose a new Gamer ID in the app. If you already have a Play Games account, you will also be asked to set up a Gamer ID the next time you sign into a new game that is Play Games enabled. As Frenkel told me, your Gamer ID is linked to your email address and you will be able to search for your friends by their email addresses (and, of course, their Gamer IDs). As Google notes, though, you can always choose whether to make your Play Games activity and profile public or private and whether others can find you by your real name and email address. To personalize your account, you can now also choose from over 40 avatars to represent you in Play Games. For now, you can’t customize these avatars, but Frenkel left the door open for more customization options to arrive in the future. Google says most developers won’t have to make any changes to their games, unless they added some additional to the sign-in process. All those developers would have to do is to remove these extra calls, though, and the process should just work for their apps, too.
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Apple Apologizes And Updates iOS To Restore iPhones Disabled By Error 53
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Matthew Panzarino
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Earlier this month, a report flagged a curious ‘Error 53’ message that was disabling iPhones. The error was caused by unofficial repair shops replacing the connector that ran between the Touch ID sensor in an iPhone’s home button — usually in the process of replacing faulty home button assemblies. Today, Apple is issuing an updated version of iOS 9.2.1 for users that update their iPhones via iTunes only. This update will restore phones ‘bricked’ or disabled by Error 53 and will prevent future iPhones that have had their home button (or the cable) replaced by third-party repair centers from being disabled. Note that this is a patched version of iOS 9.2.1, previously issued, not a brand-new version of iOS. : A new has been issued that details the causes and repair methods for Error 53. The update is not for users who update their iPhones over the air (OTA) via iCloud. If you update your phone that way, you should never have encountered Error 53 in the first place. If, however, you update via iTunes or your phone is bricked, you should be able to plug it into iTunes to get the update today, restoring your phone’s functionality. Apple issued the following statement to TechCrunch. Some customers’ devices are showing ‘Connect to iTunes’ after attempting an iOS update or a restore from iTunes on a Mac or PC. This reports as an Error 53 in iTunes and appears when a device fails a security test. This test was designed to check whether Touch ID works properly before the device leaves the factory. Today, Apple released a software update that allows customers who have encountered this error message to successfully restore their device using iTunes on a Mac or PC. We apologize for any inconvenience, this was designed to be a factory test and was not intended to affect customers. Customers who paid for an out-of-warranty replacement of their device based on this issue should contact AppleCare about a reimbursement. Apple is over the Error 53 matter. The quick fix could help to mitigate some of the suit’s claims. Note, that the update will NOT re-enable Touch ID. As we previously, this is the right thing to do. “…your fingerprints are stored on a secure enclave. The secure enclave is a coprocessor that utilizes a secure boot process to make sure that it’s uncompromised. It has a secret unique ID not accessible by the rest of the phone or Apple — it’s like a private key. The phone generates ephemeral keys (think public keys) to talk with the Secure Enclave. They only work with the unique ID to encrypt and decrypt the data on the coprocessor.” Allowing a third-party Touch ID sensor to function properly without an official Apple repair center both verifying that it is legitimate and recalibrating the cable to work with your iPhone’s Secure Enclave is a huge security risk. A malicious repair shop or corrupted part could allow unauthorized access to your phone or its data. Apple is absolutely right to disable TouchID — it was also wrong for it to disable your entire iPhone for getting your home button replaced on the cheap. If you want to retain Touch ID functionality, you can get your home button replaced by Apple. If cost is a concern (and you don’t mind losing Touch ID) you can still get it done elsewhere without fear of bricking your phone.
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Biden Comes To Silicon Valley For Innovation In White House Cancer Moonshot Initiative
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Sarah Buhr
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Vice President Joe Biden showed up at the this morning for a round table discussion with those in the tech industry about efforts towards a future without cancer. Biden’s 46-year-old son Beau passed away from the disease last Spring and President Obama announced Biden would be in charge of a $1 billion national cancer moonshot initiative during the President’s last State of the Union address in January. “It stuns me, the incredible worldwide response to #CancerMoonshot,” Biden told the crowd of press and medical professionals in attendance today at UCSF. The veep has been on tour since the announcement, discussing the initiative in several cities throughout the U.S. – he yesterday – but his visit to Silicon Valley is what could really help push his efforts to eradicate the disease in the long-run. The Bay Area teems with innovation and a culture encouraging different approaches. Several Silicon Valley VC firms have also already funded and helped launched startups tackling the disease. , , and s all came out of Y Combinator to progressively speed up the pace towards a possible cure. – a relatively new technology enabling scientists to snip out parts of genetic code and slip in other genes, is a Berkeley discovery that could help those with a genetic predisposition toward the disease. “Tech is driving immense advances,” Biden said, “The idea that 3D printing would have anything to do with cancer treatment? I mean, think about it.” The Vice President highlighted genetic treatments, engineering, precision medicine, big data research and other interesting endeavors in the fight against cancer during his speech. “I remember not too long ago many of you looked at immunology like it was voodoo,” Biden said. “We are at an inflection point,” he said, calling current treatments “barbaric.”
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Netflix: The Force Awakens
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Gene Hoffman
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I’ve that Netflix will have the last laugh — that its success with content production will soon rival and surpass traditional TV networks and movie studios. Now I’m more convinced than ever. Ironically, it’s a smear campaign spearheaded by NBC to undermine Netflix that has reinforced my opinion. NBC research guru Alan Wurtzel recently leaked data that indicated one of Netflix’s most-watched shows, , averages only 4.8 million viewers per episode. By comparison, the most-watched series on traditional TV channels, such as Fox’s and CBS’s , reach 9 million and 8.3 million viewers, respectively. The purpose of leaking this data, of course, is to poke holes in the Netflix business model. But, as this points out, NBC is “delusional about Netflix and the future of TV.” I couldn’t agree more. Why? Because, on an apples-to-apples basis, Netflix is outperforming the traditional TV networks. As this makes clear, Wurtzel’s misleading data neglects to mention that Netflix currently reaches 42 million U.S. subscribers, compared to the 116 million U.S. households that NBC, Fox, CBS and ABC reach. So what? So this means a show like is attracting an impressive 11.4 percent of Netflix’s total subscriber base, while shows like and command just 7.8 percent and 7.2 percent of their networks’ total audience, respectively. Now scale up the Netflix audience to the level of the NBC subscriber base; a show like would be reaching about 13 million viewers. That’s a number for which any exec at NBC — or any other broadcast network — would give his first-born child. The truth is that Netflix’s install base is much more engaged than NBC’s, and this should give Hollywood serious worries. Here’s another reason why Hollywood should be worried: Netflix is now able to leverage big data to produce hit shows almost routinely. This is a feat the networks have never been able to pull off. “Netflix has created a database of American cinematic predilections,” explains an enlightening . “The data can’t tell them to make a TV show but it can tell them they should be making. When they create a show like , they aren’t guessing at what people want.” How is Netflix getting it so right? By meticulously gathering and analyzing data on customer preferences, including not just what people watch but what they search for, what they like and even where they pause, rewind and fast forward. What’s more, Netflix has broken down its content into nearly 80,000 specific genres and subgenres — everything from Emotional Independent Dramas for Hopeless Romantics to Witty Dysfunctional-Family TV Animated Comedies. Yes, those are real categories. When Netflix people create a new show, they’re not guessing and hoping. They know if they make a show in a certain genre with a certain type of director and certain types of actors, they will likely have a hit on their hands. Call it Moneyball for the movie and TV business. It’s amazing that Netflix has achieved this level of competence considering that it didn’t even want to get into the content game in the first place. But Netflix had little choice once it became apparent that the major production studios would starve Netflix of quality content. Now they’ve created a monster. We could soon reach a point where Netflix is creating just as many new shows as the major networks. And it’s not hard to imagine Netflix having the top five shows in America next year. The balance of power is indeed shifting that dramatically. I could also see Netflix becoming a movie studio in 2016, as the traditional film studios continue to withhold their prime content. And, given that it’s only at 42 million subscribers, it is not a stretch to think that Netflix will double its audience by the end of the decade. In fact, Netflix CEO Reed Hastings recently quipped that “the goal is to become HBO faster than HBO can become us.” Right now, my money is on Netflix. It has the money and the data and the expertise it needs to make quality shows that subscribers will be eager to watch. In my opinion, Netflix is already making better shows than HBO. And those shows are capturing a larger percentage of their audience. Yes, HBO has had breakout shows like , and . But at HBO it’s often several years between such hits. By contrast, Netflix now seems capable of pumping out gold every few months. At the same time, HBO is clearly envious of the Netflix subscription model. That’s why it recently launched HBO Now — a standalone Internet-based streaming service priced at $14.99 that allows viewers to watch HBO content without a cable or satellite subscription. But, in my mind, this could be too little, too late, given Netflix’s huge lead in the marketplace and the towering piles of cash it has on hand, and future cash flows, from its subscription model that allow it to create new content. Not bad for a service that was initially written off by the major Hollywood players as a dumping ground for content that nobody cared about. Those big players should certainly care now, because Netflix is eating their popcorn by focusing on the most important link in the entire business — the people who want to watch great TV.
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Self-Driving Cars And The Kobayashi Maru
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Andrew Heikkila
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In 1966, Gene Roddenberry’s would boldly go where no man had gone before, telling the tale of Captain Kirk and his crew as they explored the galaxy while taking on myriad sci-fi adventures. In the opening scene of the franchise’s 1982 motion picture, , the U.S.S. Enterprise responds to a distress call from another ship, the Kobayashi Maru. Stranded in an area of space that the Enterprise can’t enter without risking interstellar war, the limping ship has almost 400 souls on board and is quickly losing life support. These people are going to die without help; the captain has an impossible choice to make. The scene is later shown to be an unwinnable simulation, created as part of a training scenario. Deciding to not aid the Kobayashi Maru results in the death of its crew and passengers. However, acting to help the stranded ship will trigger conflict and result in the death and destruction of the Enterprise. The theme of a no-win scenario is prevalent throughout the rest of the film, and many Star Trek fans have colloquially come to call “damned if you do, damned if you don’t” situations by the name of the ship: Kobayashi Maru. The idea of the no-win situation has gotten more attention over the last couple of years, as Google has been making strides with the driverless vehicle and market. But how does the Kobayashi Maru relate to self-driving automobiles? Imagine you are driving down the road and you suddenly find yourself boxed in. In front of you is a large semi-truck with heavy crates on the back, to your right is a person on a motorcycle and to your left is a big SUV. All of a sudden, one of the crates falls off the back of the semi, directly in your path. What do you do? If you swerve to the right, you’ll live, but the move would probably end up costing the person on the motorcycle their life. If you swerve left, you’ll collide with the SUV and possibly kill both yourself and its inhabitants — but there’s still a chance you’ll all survive the incident (albeit sustaining injury) because of the SUV’s high safety ratings. If you don’t swerve either way, you won’t injure anybody, but you’re definitely going to wreck and possibly die. So what should a driver do in this situation? What is the answer? This , and is meant simply to illustrate that there is no right answer, especially in a scenario where there is little time to think. Each choice has a negative consequence, and the driver simply has to determine which option is, in their mind, the lesser of the evils. Unfortunately, a person’s reactions in situations like these are more instinctual than they are based on decision or logic, simply because humans can’t process information that fast. Computers, on the other hand, can. The driverless car as an invention has the potential to prevent approximately 1.3 million deaths annually, as well as between 20 and 50 million injuries, . They are able to network with other smart cars and stop lights so that can get to work faster and more safely. Because machines don’t blink. They don’t sleep or get drowsy. Machines don’t get drunk and drive. In the only car, it was determined humans were at fault, not machines — and yet, therein lies the problem. Accidents happen, and a computer must be programmed to react in those situations, sometimes when death is inevitable. In those instances, it’s succinct to say that we’ll have to program computers to kill. Let’s take a look at another scenario. There is a thought experiment called the that asks you to imagine a runaway trolley headed for a group of five people tied up in its path. You’re standing near a lever, however, that will send the trolley to a different set of tracks if you flip it — the only problem is that there is a person tied up on those tracks, as well. You have two options: Do nothing, letting the trolley kill all five people on the main track, or flip the switch and send the trolley to the side track where it will kill one person. In , facilitated by researchers at Michigan State University, 147 subjects were given 3D headsets so they could actually experience this dilemma in an environment as close to reality as possible. Ninety percent of the participants flipped the switch, saving five people to kill one. This isn’t that surprising, as most people would say that five lives saved over one is ethically the right choice — but what happens when we switch the problem up a little bit? Let’s say there is no side track the trolley will divert to if you flip the switch; instead, you’re standing next to a person large enough to stop the vehicle. The only caveat is that you must push him onto the track. The second variation of the problem produces different results, because there is a perceived difference between somebody and . The trend you come across is that not as many people would choose to kill the large man, even if it meant saving more lives overall, because they don’t want to be held personally responsible for his death. Here’s a third scenario: What if were the large person that could stop the trolley via self-sacrifice? Even better, what if your self-driving car turns a corner only to see a crowd of five people standing in the road? Your car either can hit them, sparing your own life, or the onboard AI can run your car off of the road, killing you and saving five lives. If you answered that flipping the switch in the first iteration of the trolley problem was the right choice, because one death is better than five, then logically you would agree that your self-sacrifice is necessary to save the lives of the five people in the road ahead of you, right? Interestingly, if you defy the framework of logic and would rather choose self-preservation in this scenario, you’re actually in the majority. Jean-Francois Bonnefon and the Toulouse School of Economics in France that these types of logical fallacies run rampant. As such, they believe it will be interesting to watch public opinion inevitably play a role in deciding how the ethics of AI works. Says Bonnefon and company: “[Participants of our study] actually wished others to cruise in utilitarian autonomous vehicles, more than they wanted to buy utilitarian autonomous vehicles themselves.” Essentially, the problem is that people actually driverless cars to sacrifice the occupant in favor of saving a higher number of lives — but only if they don’t have to drive one themselves. Unfortunately, the biggest catch-22 is that people won’t buy autonomous vehicles if they’re designed to kill their passengers, meaning that the status quo allowing split-second human decisions will continue to define accidents and reactions around the world. If we never legalize self-driving cars, our own human driving will continue to contribute to more than a million deaths globally. Employing a fourth scenario, trend toward self-preservation: You’re driving through a tunnel and a child appears at the opening and trips, blocking your exit. You can’t stop, so you’re left with the choice of swerving into a wall to save the child, or running over the child to save yourself. Of 110 people polled, 64 percent said they would continue straight and kill the child. When asked which entities should determine how an autonomous car responds to the tunnel problem, 44 percent of respondents thought it should be the passenger of the vehicle, while 33 percent thought it should be lawmakers. Twelve percent thought the manufacturers or designers should be burdened with that choice; 11 percent responded “other.” Determining who will control these “ethical settings” that guide no-win responses is a huge problem that self-driving cars are going to have to face in terms of liability. Because if a car will have to be programmed to choose between two lives, that means whoever decides how the algorithm is going to function is also possibly condemning to death either bystanders or passengers. This type of “predetermined” action, an algorithm that chooses to spare children over adults, for example, would almost vicariously put the programmer in the driver’s seat, lending truth to the that a self-driven car will always have a “determinable human operator.” Insurance companies are going to have to wrestle with that one, because in any instance, will be liable if an autonomous vehicle gets into a wreck. If get to decide on your car’s ethics settings and decide to continue straight and kill the child in the tunnel situation, does that make you liable for that child’s death? If it’s left up to the auto company, will they be liable? The repercussions of these decisions extend much further into the future than anybody is able to foresee. As artificial intelligence advances, it may very well use the programmable ethics settings found in self-driving cars as a platform to build upon. Isaac Asimov once suggested there should be that govern AI: Obviously, the first law doesn’t work in this context, and is in danger of being trampled by militaries the world over searching for autonomous soldiers and vehicles (such as assault drones). Weapons aside, there are obvious reasons explored above that an AI would inevitably have to break the First Law of Robotics when faced with a Kobayashi Maru, and however we decide they should respond may constitute some kind of basis for how AI develops and writes its own ethical programming in the future. If we determined today that favoring “quantity of lives” is the sole rule to follow for self-driving cars, for example, a much more developed, Skynet-esque AI of the future might calculate that citizens of industrialized countries are making the world uninhabitable for a majority of people and their many generations of offspring. Ethically, that AI could justify eradicating a large swath of the population so that an even larger percent can live. Of course, there are much more immediate concerns that we’ll have to deal with in response to the self-driving car. What is going to happen to everybody in the trucking industry? Or to cab and Uber drivers? What happens if somebody remotely hijacks your car via the and crashes it with you in it? The autonomous vehicle is still in the very early stages of development, but the way we decide to build its AI will set precedents. Unfortunately, we’re a species that still fights wars over land and money, that murders over passion and justifies the actions of the wicked. On the other hand, we have the capacity to love and sacrifice self for causes greater than our own. Sometimes it seems like we’re these creatures trying to program ethics into machines, when, in reality, we barely seem to understand or practice ethical behavior ourselves. Nevertheless, we have an opportunity here to discuss these ethics and decide what type of character we want to define humankind, collectively, when faced with a Kobayashi Maru. Only once we’ve done our soul-searching and overcome that obstacle will we be able to follow in the footsteps of Captain Kirk, and bravely go where no man has gone before.
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Why Clayton Christensen Is Wrong About Uber And Disruptive Innovation
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Alex Moazed
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Silicon Valley has disrupted disruptive innovation, and Clayton Christensen isn’t happy about it. Christensen vaulted to rock-star status in the tech world in 1995 when he the theory of disruptive innovation in the ( ). Two years later, he published his bestselling book, . His work was widely praised, including glowing endorsements from Malcolm Gladwell, Michael Bloomberg and Steve Jobs. And rightly so. The concept of disruptive innovation was a hugely important breakthrough in understanding how and why major innovations succeed. Yet, two decades after Christensen published his original article, the idea of disruptive innovation has achieved almost meme-like status in Silicon Valley — and lost much of its original meaning in the process. Today, “disruption” is used to justify any and every innovation coming out of the tech sector. Dismayed by this misuse of his work, Christensen recently wrote a to his critics, titled “What Is Disruptive Innovation?” Given the overuse that “disruption” has endured over the last few years, his article (co-authored by Michael E. Raynor and Rory McDonald) was a needed reset around how the theory of disruptive innovation should be applied — and where it shouldn’t be. To prove his point, Christensen uses Uber as an example. He suggests that while Uber is innovative, it’s not a disruptive innovation. Instead, it’s a sustaining innovation, meaning that Uber represents only an incremental improvement on the existing taxi industry. That’s where Christensen gets it wrong. However, he’s wrong in a way that is instructive and unfortunately common: He misunderstands like Uber (and Apple, which we’ll get to in a second), and how they work. According to Christensen’s theory, a “disruptive” business has to either originate in a low-end market and move upstream to higher value markets, or it has to create a “new market foothold,” meaning it creates a new market where none existed. “A disruptive innovation, by definition, starts from one of those two footholds,” Christensen says. According to his article, Uber doesn’t meet either of these criteria. But he’s wrong on both counts. First, Uber clearly took off from a low-market foothold. Uber started its platform with on-demand black car services. This was a sustaining innovation in the higher-end black cab and limousine market. Uber essentially put a new interface on top of an existing market. In his piece, Christensen places a lot of emphasis on where Uber originated. However, this emphasis isn’t consistently applied across other examples he uses in his previous work — Hitachi, Sony and Quantum Corporation, among a number of others, are companies that introduced products Christensen has cited in his work as examples of disruptive innovation, even though these products weren’t their first. Likewise, Apple, which Christensen mentions in his recent piece, didn’t start with the iPhone. In that light, it seems unfair to apply this restriction as a way to dismiss Uber, given that the startup didn’t truly take off — or start to compete with regular taxis — until it introduced UberX. UberX, which Christensen ignores in his piece, is a classic low-end market disruption. Taxis are tightly regulated, and drivers face strict requirements. In most cities, drivers must obtain a special operator’s license and medallion in order to act as a taxi. There also are restrictions on the cars they can drive. In contrast, UberX started down-market from traditional taxis by allowing anyone with a car to drive other people around for money. No special knowledge or certification was required. As a result, UberX wasn’t initially very competitive with taxis for most passengers. UberX cost more than a taxi and took a long time to arrive, and drivers weren’t required to have extensive knowledge of how to navigate the city. UberX also lacked many of the safety precautions and regulations that traditional taxis used to protect both drivers and passengers. (UberX eventually added a $1 “safe ride” fee to improve its safety standards.) In short, the quality of UberX was lower than traditional taxis. However, as Uber’s network grew in each city, ride costs fell, wait times declined and its rating system helped keep driver quality relatively consistent. With this improvement in service quality, Uber was able to move upstream to attack taxis directly with UberX — a classic disruptive move. In New York City, this shift happened very obviously in the summer of 2014, around the same time Uber a nearly ubiquitous marketing campaign around the city. The ads all declared that UberX rides were now cheaper than taxis. Today, in most major cities, UberX is cheaper, faster and better quality than a taxi. But this wasn’t always true, which is why the service took a while to catch on and grow its network. This progression is perfectly in line with Christensen’s original disruption theory. “Disruptive innovations don’t catch on with mainstream customers until quality catches up to their standards,” he says in the recent article. UberX started from a low-market foothold and moved upstream to disrupt the taxi market. Only once UberX improved in quality did it catch on with mainstream consumers. So Uber started down-market and moved upstream, a clear example of low-end market disruption. Now let’s see whether Uber also qualifies as a new market foothold. Christensen added the idea of new market footholds to his original theory to explain Apple’s success. Multiple times over the last decade, Christensen declared his pessimism about the prospects for Apple’s products, including the iPhone. For example, in 2007, he that “the prediction of the theory would be that Apple won’t succeed with the iPhone,” adding, “History speaks pretty loudly on that.” He was widely criticized in the tech blogosphere for getting this wrong. Now, Apple’s iPhone disruptive in the original sense, something Christensen still misses. When it first launched, the iPhone had shorter battery life, used way more data and was much less secure than the BlackBerry, then the leading smartphone device. By all the traditional industry metrics, the iPhone was a worse product than the BlackBerry. In fact, this was the initial reaction of BlackBerry co-CEOs Jim Balsillie and Mike Lazaridis to the announcement of the iPhone: No one would want it because it was an inferior product. The BlackBerry also was primarily an enterprise product. Apple started down-market with consumers before moving upstream to take over the enterprise market, too. The iPhone’s popularity forced employers to create a “Bring Your Own Device” (BYOD) Policy that allowed employees to use any smartphone they wanted. This is another example of classic low-end disruption. However, in an attempt to improve disruption theory to account for Apple, Christensen added the concept of new market footholds. In the piece, he uses the iPhone as an example of this type of disruption. By building an entirely new market that connected app developers with iPhone owners, Apple built a platform that disrupted the smartphone industry. Christensen is right here. But he then compares Uber to Apple as a way to demonstrate how the iPhone is disruptive while Uber is not. Yet, as we hinted at earlier, Uber clearly created a new market in transportation with UberX. UberX allows anyone with a car and a license to drive a car for hire. It unlocked an entirely new source of supply that created a new market within for-hire transportation. It also brought into the market many consumers who wouldn’t regularly use traditional taxis. In many cities, the market that Uber created is several times the size of the original taxi market. This is new market disruption in action. Uber plainly seems to meet both criteria for Christensen’s disruptive innovation theory. So why does he get it wrong? Looking at the origin of disruption theory and the companies Christensen continues to get wrong, there’s a clear pattern. The theory applies well to old-school product and services businesses — what we call “linear” businesses because they are defined by a linear supply chain where value and information flow primarily in one direction (from the supplier to the consumer). It isn’t surprising that the theory works well for linear businesses, as it was originally based on Christensen’s research into shifts into linear companies such as disk-drive manufacturers and steel mills. Almost all the businesses in his original article and in his books are linear businesses, as well. But when it comes to platform businesses like Uber and Apple, disruption theory breaks down. This is because platforms operate in a different way than linear businesses. Rather than building and refining a supply chain, a platform creates and grows a network. This network is where the platform harnesses its supply — think Uber and its drivers and the iPhone and app developers. In other words, a platform doesn’t own or control its supply the way a linear business does. Why does this difference matter? Christensen’s theory only looks at customers and ignores the supply side. In the words of his co-author Michael Raynor, “the theory of disruptive innovation is a of customer dependence and competitive reaction in markets, Whether or not [Uber] is following a disruptive path to success is a function of the [emphasis added].” Christensen and company exclude Uber based on this distinction. While this approach worked for linear businesses, applying it to Uber shows a misunderstanding of how platforms work. Why? Because linear businesses own the supply side, they typically have one distinct customer group: the people (or businesses) to whom they sell their products. But platform businesses are different. A platform has at least two distinct customer groups: its consumers and producers. Uber is an excellent case in point. The company expends considerable resources to market to potential drivers and retain existing ones. In this, Uber is very different from the linear businesses on which disruption theory was based. For a platform like Uber, its producers are a customer group, too. Christensen hints at this difference in his use of Apple as an example, but doesn’t apply it equally to Uber. “By building a facilitated network connecting application developers with phone users, Apple changed the game,” Christensen says. In other words, one of the reasons Apple was so disruptive was that it added a second customer group: app developers. The same is true with Uber and drivers. Treating these examples as equivalent to changing a traditional, linear supply chain –– as Christensen does with Uber — shows a lack of understanding of how platform businesses work. The difference between linear and platform businesses has important implications for where you should look for disruptive competitors. Uber started in black cabs before adding UberX and disrupting the taxi market. Snapchat started in peer-to-peer messaging before adding Stories, a content platform that’s starting to compete with traditional content and advertising outlets. There are many more examples, including Airbnb, Alibaba, Etsy, Facebook, Google, Instagram, Pinterest, WeChat and YouTube. Once a platform has established a strong network around its original core transaction, it can easily tap into that network to unlock new customer groups and create new markets. Networks are extensible in a way that traditional supply chains are not. In fact, most platforms create new markets. They succeed not by building sustaining innovations but by introducing disruptive innovations that build new networks, communities and marketplaces. Going by Christensen’s theory and accounting for the nuances of how platforms work, almost all successful platforms are disruptive. That’s not surprising, given that you usually have an entirely new business model replacing the old, linear one. But what does this mean for the theory of disruptive innovation? Well, it’s time to update it to account for platforms. To maintain its usefulness, the theory of disruptive innovation needs to account for the differences between linear and platform businesses, especially because platforms are the dominant business model of the 21st century. We suggest using the term “platform disruption” to clarify the distinction from the original theory. As Uber did, a platform can shift its network within an industry to introduce a new, disruptive innovation. Or a platform can disrupt even seemingly unrelated industries, as Google did with Android, by building new transactions off its existing network. This ability to shift between industries means that a platform that doesn’t seem disruptive today can suddenly become a disruptive competitor tomorrow. And unlike disruptive linear businesses, which typically attack from a weaker competitive position, platforms can do it from a position of competitive strength. In other words, these businesses are far more dangerous for existing competitors than the original theory of disruptive innovation suggests.
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Heidi Roizen On How To Choose Your VC
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Connie Loizos
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On Thursday night, this editor hosted nearly 200 investors and entrepreneurs who in San Francisco to hear several guest speakers, including Heidi Roizen, a former entrepreneur, a , and a Stanford alum who has at the university for more than a decade. Roizen thinks the boom-boom tech economy we’ve been living through in recent years has officially turned the corner. She also thinks there are still plenty of great investing opportunities. (So do the LPs of her firm, DFJ, apparently; the Sand Hill Road outfit just closed a fund.) Indeed, among other things, we talked about how today’s newer companies might avoid the various mistakes of their predecessors. Here’s part of that chat, edited for length. HR: You like to think all these markets are scientific and disciplined, but it’s human nature just like everything else. Your friend raises money and he or she gets this valuation and you think you should have that valuation. So the Faustian bargain that happens is the entrepreneur tells the VC they need a certain number, and the VC says, “If you want that number, that means I’m going to own a lot less stock. In order for it to work for me, I’m going to put a bunch of terms on this. I’d like to have 2x [liquidation preference, meaning I’ll get two times my money back before anyone else gets anything] and ratchet provisions” and all this stuff. And the entrepreneur says okay, because he or she never thinks about the downside. They all think they are going to be the next Mark Zuckerberg. So many entrepreneurs don’t even do the math to understand this calculation to understand: How big is the bucket I need to fill before I ever walk away with a dollar? HR: I’ve been amazed by how many entrepreneurs don’t understand that when you raise money, it has all this preference structure in it and that they’ve created a situation where they only get paid after a whole bunch of people get paid lots of money. HR: One of the first things I do when I take over a company [as a board member] is I run a waterfall analysis. Well, a super awesome analyst named Becca does it. And it’s not easy. Let’s say a company has done three or four rounds with stacked preferences; it takes Becca two days [to figure out what’s what]. This is non-trivial stuff, especially when some of the terms are kind of squirrely. HR: What I’m looking at and trying to understand is everyone’s motivation around the table, because you can create these perverse situations for certain VCs. Some look at a company [with an underwhelming acquisition offer] and they say, “Well, I’m going to make 2x my money if it sells, whereas the chance that I’ll make 4x my money is zero given the way this company is going so I want to sell, sell, sell!” Meanwhile, the guy at the bottom of the stack [who invested earlier and has fewer to no liquidation preferences] might be saying, “I’m going to see zero unless this company sells for $400 million, so I’m going to dig in and never ever sell no matter how unreasonable that is because frankly, I’m never going to make any money anyway.” You need to understand that motivation. HR: If you ask your lawyer for this, they’ll give you an analysis of what each class of stock will make. That won’t do you any good, because most VCs are in multiple classes, in different amounts, and sometimes people get bought out and they get Series this and that. I like to look by human being and not by class. Because human beings make decisions, not classes of shares. HR: Let’s say you have two investors, and one is super rock star who also invested in a WhatsApp and has already returned billions of dollars to her firm’s investors. Her fund has returned 10x [to its institutional investors] and now you [the entrepreneur] need another couple million dollars for your mediocre company. Well first, the venture firm has plenty of money and second, she’s a rock star, and when she goes to her partners and asks for money for her deal, they’re probably going to say yes. We all have rules and systems but at the end of the day, the winning partners have more sway. On the other side, you have this other investor who’s part of a mediocre fund that is not going to return capital, and they had four shitty deals in the fund, and they are going to get fired if they have one more markdown. So that’s their life, and you [the founder] come in and you say, “You can write me a check [to keep the company going], or, we have this acquisition offer that’s only going to be for 20 cents on the dollar.” I can tell you right now that person will do anything they can not to take that acquisition offer, because they don’t want to go back to their partners and say, “Remember that $5 million you gave me? It’s now worth $1 million.” The individual dynamics going on within a venture fund are critically important to you. Unfortunately, they’re also very opaque. HR: What I tell my Stanford students: [Be able to] build a company without raising venture capital. Venture capital is debt. People don’t understand that. You’re going to have partners who you may or may not want. Entrepreneurs see VCs as just, “Give me my money and get the hell out of my way and let me do what I want.” But VCs see entrepreneurs as: “You’re going to be my partner for seven to 10 years and I’m going to trust you with my money.” So we have a very different relationship. Companies only to exist if they can make money from customers. So if you can actually start there, you’re in much better shape.
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Hands On With The 3Doodler Start, A $39 Kid-Friendly 3D-Printing Pen
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Lucas Matney
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It’s hard to believe, but 3Doodler launched the popular Kickstarter for its first plastic-extruding pen almost three years ago. Now, the company is back with the , a kid-friendly version of the device that boasts a safe-to-touch design with no hot points and a new eco-plastic material that makes building creations safe and fun. The device is available for pre-order now on the company’s for $39. As with most 3D-printing devices, the Start requires a bit of patience when building from scratch given the new eco-plastic material, but the company has introduced a line of cool little stencils called DoodleBlocks that are included with the “Super Mega Pack” so that young builders can 3D-print complex inventions from their new device. I sat down with 3Doodler co-founder Daniel Cowen to check out the new device, see what it looks like in action in the video above.
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Diffbot Aims To Build The Intel Of Data For Artificial Intelligence
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Jonathan Shieber
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$10 million commitment led by Tencent, one of China’s largest Internet companies, chief executive Mike Tung has come a long way from his days of eating beans and rice in the dark and solving the math problems that would form the core of his groundbreaking artificial intelligence software. Diffbot, which in 2012, has set itself the lofty goal of being the “Intel of data” for independent artificial intelligence application developers. Companies like , , and — which are all working on artificial intelligence — have the benefit of massive amounts of data at their fingertips that they and their data entry employees can use to categorize and define the web in a language that AI software can later feed into their algorithms . Small companies who don’t have the benefit of that data can turn to Diffbot. “We’ve been working on this technology for quite a few years. It was really last year that 90% to 95% accuracy was reached. And hitting profitability last year as one of the first AI startups to do so was a turning point,” says Tung. The major expenses for Diffbot had been electricity and bandwidth, Tung says. Unlike other artificial intelligence deep learning projects that rely on humans to classify web pages, Diffbot uses only the proprietary algorithms that it created itself and has refined over the years, according to Tung. “We want to build the world’s largest database of structured knowledge,” he says. If artificial intelligence is to achieve the promise (and potential peril) inherent in the technology, it still needs to be taught. Tung compares it to teaching a child. “The technology is scouring the web when they’re on the page,” he says. Research into artificial intelligence, and the ability to develop sentience in machines, sits at the intersection of a few very large trends in computing. It combines the development of new, and newly powerful, chipsets that can process complex increasingly quickly; the development of new kinds of database software that can organize massive amounts of data more flexibly, and the development of a nearly ubiquitous arrays of sensors and systems to collect that data. The problem with the data that these would be intelligences would learn and process is that it needs to be structured in a way that the systems can recognize and that’s exactly what Diffbot does. “We’re taking the Internet and converting it into semantic knowledge,” says Tung. And, in a strategy that drives down the cost of developing the massive trillions of facts that comprise the taxonomy that Diffbot is creating, the company’s secret weapon is its own AI software. “Google has this knowledge graph using human curation and it’s the same with Watson. There’s a lot of human beings behind the scenes creating the rules the way the algorithm works,” says Tung. And humans cost money that Diffbot simply doesn’t need to spend. Tung calls it the Manhattan project for AI — except computers are the researchers developing the bomb. Diffbot was always going to make money. The question of profitability wasn’t one that Tung ever wanted to address, nor was relying on fundraising as a necessity, the founder and chief executive said. To make money to support the development of the software, Tung pinched pennies and took on a second job after dropping out of Stanford’s graduate school, learning patent law and filing patents in the wee small hours of the morning to make rent money. “For each patent I was able to get 20K,” says Tung. “I would be good to get rent for a few months.” He lived on a diet of beans and rice and ramen, alternating working on the math at the core of the software with filing patent applications for money. Once the initial product was baked, Diffbot had the singular honor of being the first company to be accelerated in the program that would become Stanford’s premiere source for getting graduates to exit velocity with their business — StartX (where Tung is still a mentor). With the initial seed money from StartX, Diffbot was able to continue its research and launch its first, revenue generating, products. “From day one we made it an on-demand service,” Tung recalls. “You pass us a URL and we will process that. For every hit to our server we earn .008 cents… In retrospect it was a decision that Tung was happiest about. “Our on-demand customers were paying us to structure the web,” he says. Many of those on-demand customers are still on board. AOL (the parent company and owner of TechCrunch), Yandex, eBay, Microsoft’s Bing search service, Cisco and Adobe all pay Diffbot for its taxonomical services — and Diffbot got to increase the scope of its learning. While Diffbot couldn’t spider the web from day one, by 2015 its situation had changed. The company was profitable, confident in its ability to raise money, its AI software was identifying data on the web with a 90% to 95% reliability. It was time. So the company started spidering the web to speed up its data collection. The goal, ultimately is to get to trillions of discrete data points to provide a structured taxonomy for the entire internet (it’s a small goal). Since the company began its spidering project last year, it’s taxonomy already contains more than 1.2 billion objects and is adding 10 million objects per day. By comparison, Google’s Knowledge Graph only recently passed 1 billion objects, the company notes. Lofty goals attract big investors, and Diffbot has attracted some of the biggest. For its seed round the company attracted a who’s who of the Silicon Valley’s biggest names including: EarthLink founder ; , co-founder of Sun Microsystems; , Director of MIT Media Lab; , CEO of YouSendIt ( ), , Chairman of the Board at LiveOps, formerly eBay COO; , VP of Corporate Strategy at Twitter; , former VP of Technical Operations at Facebook; Redbeacon co-founder ; and founder of VitalSigns . The latest round brought in a strategic investor in Tencent, one of China’s largest Internet companies in one of the world’s largest markets. And Felicis Ventures, of artificial intelligence companies. A coterie of new angels and other institutions joined as well — all of them also bold-faced names in the Valley. Among the superstar new names are: Andy Bechtolsheim, the founder of Sun Microsystems and the first investor in Google; Amplify Ventures, Valor Capital, and Bill Lee — an early investor in SpaceX and Tesla.
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GGV Capital Is Raising A Giant New Fund
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Connie Loizos
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, a 15-year-old, cross-border venture fund that invests in both U.S. and China-based companies, is raising two giant new funds, shows two new SEC filings that list a target of and , respectively. Both forms state that the first sale has yet to occur. The figures represent an enormous increase in the amount of money that GGV is managing; a fast close would also represent a remarkably short turnaround for its investment team. GGV closed its fifth fund with $620 million . The firm didn’t respond to a request for more information this afternoon. Still, one can imagine why its limited partners might be enthusiastic about plugging more money into its coffers. Among the IPOs in GGV’s portfolio in recent years is the customer support company , which went public in May 2014, and the hybrid array vendor , which went public in 2013. GGV also backed the payments company , which went public last November, and has seen its shares fall from $13 to $8.50 since. (We with managing director Glenn Solomon a week after the company’s public market debut to talk shop.) Several of the still-private companies in GGV’s portfolio have been marked up considerably since GGV invested, too, though it’s too soon to predict the outcome for any. One of its bets is on , a fast-growing mobile e-commerce platform that sells almost everything for $25 or less, and ships those items for next to nothing. (It takes advantage of the U.S. Postal Service’s ePacket program, which cuts shipping costs by processing goods overseas before they’re sent to the U.S.) Wish has reportedly had “soft” acquisition talks with both Amazon and Alibaba involving a over its last post-money valuation. (GGV Capital co-led its $19 million Series B round in the spring of 2014; the company has since raised nearly $600 million, shows CrunchBase, at a reported .) Another of GGV’s privately held portfolio companies is , an Internet startup that pays cash to buy people’s homes, then flips them. GGV led its $20 million Series B last February; Opendoor quietly raised in third round funding last fall. GGV is also an investor in the Saas business , which has raised nearly $500 million to date. GGV led a $60 million round in the business three years ago. GGV’s appeal also centers largely on the success it has enjoyed in China, a country to which many VCs flocked more than 10 years ago, then left, while GGV stayed put. Among its many China-based hits: the online travel information site Qunar (it went public in 2013) and the video sharing site Tudou (it went public in 2011 and was in 2012). GGV is also very notably an early investor in Didi Kuaidi, (more newly branded Didi Chuxing). The company is the combination of the two largest taxi hailing companies in China.
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Gillmor Gang: Poorly Educated
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The Gillmor Gang — Robert Scoble, John Taschek, Keith Teare, and Steve Gillmor. Recorded live Friday, February 26, 2016. The Gang finds it hard to concentrate purely on technology as we wake up to the increasing likelihood of more Trump in our diet. Plus, the latest G3 (below) with Halley Suitt Tucker, Rebecca Woodcock, Francine Hardaway, Mary Hodder, and Tina Chase Gillmor. @stevegillmor, @scobleizer, @jtaschek, @kteare Produced and directed by Tina Chase Gillmor @tinagillmor [ustream id=83798387 hwaccel=1 version=3 width=480 height=302]
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Google For Entrepreneurs Backs Diversity Organization Tech Inclusion
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, an organization and conference organized by Change Catalyst, which is geared toward helping people of color and women in tech gain equity. Through the partnership, Tech Inclusion will be able to scale and add more entrepreneurship programming to its events, Tech Inclusion co-founder Wayne Sutton told me via email. GFE will also offer financial assistance and Google employees as startup mentors and speakers. “We’re excited to join Google’s community of organizations working to elevate entrepreneurship and inclusion around the world,” Sutton and Tech Inclusion co-founder Melinda Epler wrote on the Change Catalyst blog. “With a commitment to diversity and inclusion, is an ideal partner for our work in exploring innovative solutions to diversity and inclusion across the tech industry – which spans education, workplace, entrepreneurship, policy, and ecosystem development. Together we can create a truly inclusive tech world.” Last year, Change Catalyst, founded by Melinda Epler, hosted its first-ever Tech Inclusion conference. This year, the event, which will take place in both New York and San Francisco, will be called Tech Inclusion: in partnership with Google for Entrepreneurs. Other organizations in the GFE network include Startup Grind, Galvanize, Gaza Sky Geeks and several others.
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Google Is Reportedly Building A Standalone VR Headset Not Powered By A PC Or Smartphone
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Lucas Matney
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Google may be preparing a consumer virtual reality headset for a release as early as this year that defies existing categorizations and doesn’t rely on a PC or mobile phone as the central brain, the reports. Rumors have been bubbling up on the company’s VR hardware ambitions over the last few weeks. The reported a few days ago that Google would be releasing a mobile-based Samsung Gear VR competitor in the near-future, possibly at Google I/O in May. The WSJ report today suggests that Google will be building this untethered headset utilizing “high-powered” chips from that will power the device and its associated head-tracking technology made possible by external cameras. Interestingly, Movidius just a partnership a couple of weeks ago involving its Myriad 2 processing platform, detailing that the company was working with Google “to bring machine intelligence to devices.” https://www.youtube.com/watch?v=GEy-vtev1Bw “The technological advances Google has made in machine intelligence and neural networks are astounding. The challenge in embedding this technology into consumer devices boils down to the need for extreme power efficiency, and this is where a deep synthesis between the underlying hardware architecture and the neural compute comes in,” said Movidius CEO Remi El-Ouazzane in the blog post from last month. There have been other significant movements from Google in the past several months on the consumer side of virtual reality, though most have been devoted to more broad platforms like Cardboard and Project Tango, which give third-party VR and AR hardware manufacturers and content creators a system to build upon. While Project Tango is still in its earlier stages with some of the first Tango devices to be released this summer, Google Cardboard is already strapped on the faces of eager consumers who have ordered of the bare-bones devices. These rumors also come in the wake of some interesting changes at the company over the past several weeks. Clay Bavor, Google’s VP for Product Management, left his work on other Google products to exclusively focus on managing the company’s virtual reality offerings. Some on Google’s site also raised questions with postings detailing a need for a that would lead a team in building “multiple” consumer electronic devices while also directing “system integration of .” A battery-powered HMD device that isn’t attached to a PC or mobile phone would definitely be a major development in an industry largely dominated by developer and consumer devices situated at either end. For a company like Google, with such clear ties to the mobile ecosystem, at first impression this feels like a bit of an odd move to me. Mobile VR offers major accessibility to users that are already sporting well-powered smartphones and tethered VR offers an unparalleled experience that prioritizes crazy resolutions and rapid frame rates. We may just have to wait and see. While the WSJ reports that the device could be coming later this year, other sources told the paper that the development was in its early stages and Google could still choose not to release it.
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Groupon Soars 23% On Favorable Earnings
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Katie Roof
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This is quite the bright spot for the company — until today, the stock had been down 71% in the past year. Shares closed Thursday at $2.24, a far cry from the $20 per share Groupon saw when it went public in November 2011. Rich Williams was promoted to Groupon CEO in November, and has helped the company streamline its efforts, by . Williams tells TechCrunch that “we need to win where winning is material.” Groupon “made the hard call to allow the team to focus on what really matters.” Williams tells TechCrunch that right now Groupon is focusing on the cities where it performs best and the goal is to “increase our customer acquisition and customer growth.” At one point, the company held acquisition conversations with Google, around a $6 billion price tag. Today, Groupon closed the day with a market cap of $1.4 billion.
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Zenefits Under Investigation In California
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Jonathan Shieber
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The hits just keep on coming at the embattled cloud human resources software provider Zenefits, as the California Department of Insurance has begun an investigation into its licensing practices. The company, whose , has faced a series of investigations into potentially criminal misconduct after a searing BuzzFeed investigative report late last year. BuzzFeed earlier today. At the heart of the investigation lies a tool called, benignly, “the Macro,” which allowed users to pad the hours they said they committed for pre-certification in the state of California. The brokers still had to take, and pass, a broker exam. However, by not committing the allotted time to pre-licensing classes, several of the company’s brokers in its biggest market of California could be disqualified. “We are communicating and cooperating fully with regulators with regards to this issue that we discovered and self-reported to them,” Kenneth Baer, a Zenefits spokesperson, told TechCrunch. David Sacks, the company’s new chief executive, sent a memo to employees saying Zenefits intended to fully cooperate with the commissioner’s investigation. “We are committed to full remediation and ensuring complete compliance with all licensing requirements,” Sacks wrote in the internal memo provided to TechCrunch by a source. The memo continues. Many of our California sales representatives received access to a software tool called a “Macro” that may have allowed them to complete mandatory online pre-licensing education courses offered by a third-party test preparation provider in less than the legally required 52 total hours. The Macro functioned to keep a person logged into the course and prevented the person from being logged out for inactivity. The Macro did not advance through the required material or quizzes in the education course — the Macro only kept the person logged in. The Macro only pertained to the prelicensing education course and did not affect the broker exam taken later. Use of the Macro enabled — but did not cause — a person to spend less than the 52 hours of required time in the prelicensing course. The company said it launched an internal investigation into the use of the Macro and, based on the results, had already informed the California Department of Insurance about it. Further, the internal memo said the company has fired the leaders who created, propagated and encouraged the use of the Macro and that it will look to take additional disciplinary steps if necessary. Needless to say, the use of Macro on the company’s network or on company-issued devices has been disabled. And Zenefits is developing a new remediation and retraining program for licensed employees who used the Macro to get licensed in California in concert with the Department of Insurance. A contrite Sacks said his company took full responsibility for its actions in the deployment of “the Macro”. “We must be — and I know we can be — strictly compliant in being properly licensed, for the benefit of our customers and our regulators,” Sacks wrote in the email. “As I told you on Monday, in order for us to move forward as a company, we cannot seek to hide or downplay our broker licensing issues. We must be transparent and admit it and remediate it as soon as possible.” Here’s the full memo: All- As you may have seen, the California Department of Insurance has begun an investigation of licensing issues at Zenefits that we self-reported. We welcome this announcement and intend to fully cooperate with the Commissioner’s investigation. We are committed to full remediation and ensuring complete compliance with all licensing requirements. I want to share with you a serious issue that we self-reported to the Department. Many of our California sales representatives received access to a software tool called a “Macro” that may have allowed them to complete mandatory online pre-licensing education courses offered by a third-party test preparation provider in less than the legally required 52 total hours. The Macro functioned to keep a person logged into the course and prevented the person from being logged out for inactivity. The Macro did not advance through the required material or quizzes in the education course — the Macro only kept the person logged in. The Macro only pertained to the prelicensing education course and did not affect the broker exam taken later. Use of the Macro enabled — but did not cause — a person to spend less than the 52 hours of required time in the prelicensing course. The company launched an internal investigation of the use of the Macro within the company. Based on the results of that ongoing investigation, we have already taken the following actions: 1) We informed the California Department of Insurance about the Macro issue. Again, we welcome the Department’s investigation and will be fully cooperating with that process. 2) We have terminated leaders who created, propagated and encouraged the use of the Macro, and we will take additional disciplinary steps as necessary to address the issue. 3) We have disabled the use of iMacros on the Zenefits network or on Zenefits-issued devices. 4) We are developing a comprehensive remediation and retraining program for all licensed employees who obtained and used the Macro in connection with their California resident broker license. We will work with the Department of Insurance on the development of those remedial measures. The company takes full responsibility for its actions regarding the Macro. As I said in my email to you on Day 1, the company did not have in place the proper systems, processes, and culture to ensure broker licensing compliance. While we are taking the appropriate disciplinary action against the leaders in this Macro issue, the company is focused on remediation rather than discipline with all of the other employees who used the Macro at the direction of the company. As part of our commitment to our employees, we are hiring an attorney to provide counseling and advice to individual employees on these licensing issues. Ultimately we will will work closely with the California Insurance Commissioner, as our lead regulator, as to the appropriate consequences or sanctions. Moving forward, any Zenefits employee who commits a licensing violation or does not promptly comply with our remediation steps will result in immediate disciplinary action, up to and including termination. We must be — and I know we can be — strictly compliant in being properly licensed, for the benefit of our customers and our regulators. As I told you on Monday, in order for us to move forward as a company, we cannot seek to hide or downplay our broker licensing issues. We must be transparent and admit it and remediate it as soon as possible. Then we can regain our positive focus on building our business and better serving customers, employees, partners, and regulators. Together with you and our new Board, we are quickly executing on the vision we described on Day 1. David
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Uber Proposes $28.5 Million Settlement Over Safe Ride Fee Class Action Lawsuit
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Megan Rose Dickey
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Uber is asking the U.S. District Court for the Northern District of California to settle two cases: Philliben v. Uber Technologies, Inc. and Mena v. Uber Technologies, Inc., which have since been consolidated into one case on behalf of Uber passengers seeking restitution for every $1 Safe Rides fee charged to every Uber customer in the U.S. In addition to divvying up $28.5 million among 25 million people, which comes out to roughly $1.14 per person attorney fees, Uber has agreed to change the way it describes safety-related features in its marketing materials, as well as get rid of the term “Safe Ride Fee.” Going forward, the term will be “Booking Fee,” which covers safety and operational costs. Uber first added the $1 safe ride fee in April 2014 to help pay for its safety program, which includes driver training, background checks and vehicle inspections. In the lawsuit, Uber passengers contend that they should not have had to pay the fee because the company’s background checks were misleading and not “industry leading,” as Uber had previously claimed. The lawsuits also cited “unfortunate incidents” that have happened to passengers during Uber rides. In Uber’s release, the company recognizes that “accidents and incidents do happen,” which is “why it’s important to ensure that the language we use to describe safety at Uber is clear and precise.” Uber competitor Lyft faced a similar issue, with riders in San Diego filing a civil suit around Lyft’s Trust & Safety fee in June 2015. Lyft has since changed its terminology to “Trust & Service.” If the judge approves the settlement, which we won’t know for at least a few weeks, those included in the class action suits — passengers who rode with Uber between Jan. 1, 2013 and Jan. 31, 2016 — will be notified by email and given the option to be paid via credit card or their rider account. In the event that the judge does not approve Uber’s proposed settlement, the company still plans to change the “Safe Ride Fee” to “Booking Fee.” This is just the latest in a series of legal drama faced by the multibillion-dollar ride hailing startup. Last month, for failing to provide information “in a full and timely fashion” around the number and percentage of customers who requested accessible cars, and how often it could provide rides for them. Meanwhile, . That lawsuit is set to go to trial this summer in June.
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Startups Selling To Other Startups: A House Of Cards?
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Bastiaan Janmaat
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“Don’t put all your eggs in one basket,” the saying goes. Well, if you’re running a startup that sells to other startups, you might be putting all your eggs in one blender. B2B companies whose customers are other early stage B2B companies put themselves doubly at risk: Not only are startups failure-prone by nature, but an early stage company with strong fundamentals can still falter if its client base is vulnerable to market corrections. Recession-proofing a B2B startup isn’t easy, but as fears of a tech bubble grow, it may be necessary for the company’s survival. Back in 2000, Regus PLC, an international real estate company that largely sold to other startups, raced to a valuation of more than $3 billion. Then, the dot-com bubble burst and its client base evaporated seemingly overnight. The company filed for Chapter 11 bankruptcy protection, and now — 15 years later — its market capitalization still hasn’t reached its turn-of-the-century high. Of course, times have changed since 2000. There are more people online, e-commerce has from 0.6 percent of total U.S. retail spending to 7 percent and big tech companies are sitting on mountains of cash. But, depending on who you sell to, you might be at risk when a correction kicks in (if it hasn’t already). There’s lots of talk about the impending doom in the venture-funding environment; , — but one thing’s for sure: We’re at a 15-year high in venture capital financing volume and there are lots of rumblings of a quieter 2016. What will happen if and when startup funding does retreat for some period, and valuations reset? Lots of pre-seed founders will need to find “normal” jobs, many seed-stage startups will fold, a bunch of Series A startups will falter, some Series B companies will retrench and so on. But here’s the thing: . The later the stage or the closer to profitability, the likelier a company is to survive. When funding streams dry up, many companies stay barely afloat by reining in avoidable expenses. They’ll do away with their office space, lunch caterer, health insurance — and possibly their . As a SaaS CEO with many venture-backed customers, I needed to understand these potentially major risks. And even more importantly, I had to make sure our customer base would survive a downturn. My investment banking experience kicked in, and I devised a quick and dirty framework to figure out how risky our revenues are from different customers and prospects. Which startups should we be trying to get more exposure to, and from which should we ensure we’re diversified? My aim isn’t to call out businesses I think may struggle. I wish every startup the best. But I hope this might help founders like myself seek a healthy and recession-proof customer mix. In other words, make sure you’re not a Regus, and that Regus isn’t your only customer. Perhaps a truly rigorous analysis would involve finding out what percentage of startups “die” at each funding stage or size, segmented by industry or business model. We could then endeavor to avoid overexposure to the segments with particularly high failure rates. Unfortunately, startups are much more vocal about their successes than their failures, so this data doesn’t exist. In the absence of that data, for my own analysis, I came up with heuristics for those success and failure rates. I based my prediction of a company’s long-term strength on two factors: I’ll go into scoring both factors in more detail. When funding dries up, products that are considered vitamins will quickly lose customers. It’s the painkillers that retain paying customers no matter what. To determine whether a startup delivers a vitamin or a painkiller, I looked at three criteria: Admittedly, the second criterion applies more readily to B2B companies than to B2C companies, but I think that’s fair; great consumer products, while incredibly valuable and/or addictive, can be abandoned in tough times. Moreover, the third criterion can favor consumer products that have very strong brands. Great products are both sticky and cost-saving or revenue-generating. Here are just a few examples: On the other hand: The companies whose products are painkillers are more likely to weather downturns. Next, I wanted to estimate how large and durable each startup could become in the future. I scored each company’s “long-term growth prospects” on two criteria: Mobile payments platform Venmo and groceries-as-a-service Instacart score highly on incremental addressable market, because they’re mass-market products. Uber is another example; they were an early Twilio customer and major fuel behind the latter’s growth. On the other hand, large and entrenched companies like UPS and CarMax can be great customers — for the logo, as well as the revenue potential — but they are less likely to fuel your startup’s growth the way Uber did Twilio’s. And on the profitability scale, previously mentioned Looker is a SaaS company with, I’m guessing, a healthy LTV/CAC. The path to profitability is clear, although often deliberately delayed in exchange for growth. That’s the kind of customer I want DataFox to have. Instacart, though? Nowhere near profitability, and therefore a riskier customer. All else being equal, I want to target prospects with a clear path to profitability. On the chart below, you’ll see a few of the examples I mentioned. The critical reader will notice that my framework favors post-Series B enterprise SaaS companies; for my worldview, I think that’s appropriate. There’s a reason the failure rate in SaaS is once a company approaches initial scale. I guess this is why private equity investors look for a diversified client base; it’s risky to be overly reliant on one customer or one type of customer. There are so many different types of companies and so many factors that go into each company’s probability of success. My intention with this rudimentary framework isn’t to score companies against each other. If I could actually pick the winners, I’d start a concentrated VC firm! Rather, I want to educate B2B founders — including myself. It goes without saying that I measure DataFox using this same scorecard. It took us a while to get here, but much of our product choices are made with the goal of being both a cost-saver and a revenue-generator: We would have been a pretty risky company to sell to 12 months ago, but by moving toward a painkiller product and healthy customer base, we’re on our way to protecting ourselves against a downturn. Many startups, as natural early adopters, are fueling other startups’ growth. With a potential correction in venture funding on the horizon, it’s becoming more important to be thoughtful about your customer mix. There’s still ample time to make sure you’re not stacked in a large, but fragile, house of cards. If you’re looking for more post-Series B SaaS companies to start diversifying your customer base, is a good starting point.
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Jonathan Shieber
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Pandora Has Mixed Q4 Earnings With $336M Revenue And 3.8% Growth To 81.1M Listeners
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Josh Constine
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Amid rumors that it’s trying to sell itself, Pandora missed on its where it said it had 81.1 million listeners, up from 78.1 million in Q3 but down from 81.5 million a year ago. Pandora saw 5.37 billion, up 4.5% quarter-over-quarter and 3% since a year ago. Earlier today, The New York Times reported that the company , sending shares spiking up as much as 10% in trading. But after-hours saw a 10% drop, until the company reported its earnings and the stock slightly recovered to be down around 5% after-hours but still up for the day. Revenue up 25% year-over-year isn’t shabby, but the company lost $169 million in that time and $19.4 million in Q4. After paying out royalties, there just isn’t enough cash to cover its expenses. Guidance for 2016 is $1.4 billion to $1.42 billion in revenue with an adjusted EBITDA loss expectation between $60 million and $80 million. Pandora’s business is a challenging one. It operates as an ad-supported radio with a subscriber arm, which is increasingly doing battle with major incumbents like Apple Music. Apple’s new subscriber-driven service has reportedly passed 10 million subscribers — and being baked right into the iPhone is likely a good driver for that and gives it an edge over Pandora. Then there’s , which works with a different model but is rapidly catching up to Pandora, and also offers services like algorithmically-driven radio. Pandora’s business started off as revolutionary, but has gradually become more commoditized as it starts to compete with other major players. In November, Pandora agreed to On the earnings call, the company said it hopes to convert 10% of its radio listeners to the on-demand streaming service it plans to launch using the Rdio resources. Pandora tried to revitalize its business at the start of Q4 with the big , a concert ticket seller. The idea is that Pandora has a huge audience and plenty of ad space, it just needed something compelling to sell them. If it can connect listeners to concert tickets from the artists they love, and let them buy right in the app, it could significantly boost revenue. Ticketfly brought in $10.2 million in revenue in the last two months of the quarter. This isn’t the first time Pandora shares have gone completely bonkers. When the Copyright Royalty Board’s decision on how much Pandora would pay artists came down — at 17 cents per 100 song plays for non-subscribers — . The rate for subscribers was 22 cents per 100 songs played, which ended up slightly more favorable for the company while investors were bracing for a worst-case scenario. [graphiq id=”dXjTBDg4sRv” title=”Pandora Media Inc. (P) Stock Price” width=”600″ height=”619″ url=”https://w.graphiq.com/w/dXjTBDg4sRv” link=”http://listings.findthecompany.com/l/11470696/Pandora-Media-Inc-in-Oakland-CA” link_text=”Pandora Media Inc. (P) Stock Price | FindTheCompany”] The fact is that the streaming music business is brutal. Record labels and rights holders demand such high royalties that it’s tough to eek out a profit after expenses. Spotify has had to raise enormous amounts of money, while Google and Apple fund their music apps with cash from more lucrative parts of their businesses. Pandora will either need to turn TicketFly into a huge money-maker, or else it might be more stable under the wing of a bigger company with other revenue streams.
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Sleep++ 2.0 Proves That There’s Still A Market For Apple Watch Apps
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Romain Dillet
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The Apple Watch was supposed to become the new thriving platform and App Store for third-party apps. 10 months later, it’s hard to name popular Watch apps. And there are reasons why the Apple Watch App Store isn’t as vibrant as the iOS App Store. But some developers, such as , have found ways to make your Watch more useful. isn’t a new Watch app. But today’s major update adds many important features making it a useful free app for anyone who wants to track their sleep. Sleep++ turns your Watch into a sleep-tracking device and gives you insights about your sleep. As long as you keep your Watch in airplane mode and , you can keep it on your wrist 24/7. Sleep++ leverages the accelerometer in your Watch to register deep sleep, light sleep, restlessness and wakefulness. I’ve been using it for the past week and it’s interesting to wake up in the morning and get instant feedback about your night. It’s been pretty accurate in my experience. Using it isn’t too cumbersome as the Watch app only has one button — a start/stop button. Today’s update improves the sleep analysis, lets you synchronize your sleep data with the Health app and other HealthKit apps and adds the ability to trim your night if you forgot to turn Sleep++ off when you woke up. David Smith reports that the app has been downloaded 170,000 times. It seems like an incredible number given that only a few million people have bought an Apple Watch over the past few months. But fitness is one of the core features of the Apple Watch and Apple doesn’t provide a default sleep tracking feature. Sleep++ proves that there’s room for Apple Watch apps. There aren’t as many Apple Watches in circulation as there are iPhones or iPads. Developers are still figuring out how to take advantage of the Apple Watch. It’s unclear if third-party apps even make sense on a Watch in the first place. And the first version of the Apple Watch feels underpowered. And yet, 170,000 downloads is quite impressive and should make third-party developers hopeful. Down the road, with a more powerful Apple Watch, more APIs and a bigger install base, there might be a future for Apple Watch apps.
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NBA Bolsters Partnership With SAP To Bring Natural Language Queries To Stats Site
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Ron Miller
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The NBA announced today that it was bringing natural language queries to its online stats pages on . The feature enables fans to type a question in a natural way and the site should come back with your answer without having to dig for it. The feature is launching in Beta starting tomorrow. The technology underlying this new functionality is supplied by a partnership with SAP using HANA technology. The natural language query feature takes advantage of HANA’s native text analysis ability, which can analyze the words in a question and come up with the right answer (at least that’s the theory). This is an extension of the work the two have been doing on the NBA Stats site for the last several years. The Stats site actually came online at the All Star game in Houston in 2013. “We formed a partnership with SAP in 2012 and have worked in conjunction with them on the development of NBA.com/Stats,” an NBA spokesperson told TechCrunch by email. Courtesy of Fans can type questions like ‘Who’s the leading scorer in the NBA this year’ (Stephen Curry) and ‘How many all-star appearances has Dwayne Wade had’ (12). Sports fans love statistics. They can argue for hours over who’s better Curry or LeBron and pull out the numbers to prove it. In fact, the NBA website is chock full of stats, but actually finding what you’re looking for often involves searching for information in a number of ways such as typing keywords in a search box, scanning alphabetical listings or changing the sort order of a chart. Often it requires drilling down through results or scanning charts for your answer. This new type of search should help users pinpoint the information they’re looking for. Today’s announcement is considered just a starting point. The plan is to continue to develop the natural language features, while leaving other ways to explore stats such as video box scores, player tracking information with and postgame infographics in place. Courtesy of The “The natural language search function will continue to evolve. It is important to note that this feature is simply another way for fans to search our official statistics on the site. Fans can still search through the various charts, content and statistical sections we have featured on the site,” the NBA spokesperson said. Adding natural language queries should help improve the experience for visitors, and help locate the answers to specific questions, assuming it works as described. We were unable to test the site prior to publishing this report.
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EU Approach To Regulating Data Needs More Hope And Less Fear
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Paul MacDonnell
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From Britain’s railway mania of the 1840s to the dot-com bubble of the late 1990s, innovative new technologies have routinely touched off periods of near hysteria as marketers and commentators promise world-changing disruption; excitement builds to a fever pitch and the marketplace wildly over-allocates resources to the latest shiny new thing until people regain their senses and calmly integrate it into their daily lives. The consultancy Gartner calls this recurring phenomenon the “hype cycle” for new technologies. A lesser-known corollary to this phenomenon is the “panic cycle” that occurs when innovative new technologies strike irrational fear into people’s hearts. In the 19th century, for example, Britons feared that a noxious “miasma” of bad air would seep into their homes when indoor plumbing was connected to new public sewers. Today, people worry that companies in possession of their personal data will take control of their entire lives, or that the latest advances in data-driven machine intelligence will spell doom, not only for , but potentially for . Legislators who respond to these sorts of fears by restricting the ways businesses and consumers use and share data undercut some of the important economic and social benefits of data-driven innovation. Europe will be far better off if its approach to regulating technology focuses more on hope and avoids this pessimistic trap. The history of new technologies triggering anxiety may go back as far as Gutenberg’s moveable-type printing in the 15th century. But to understand today’s panic cycles, we need only go as far back as the introduction of the first portable camera in the 1880s, when a series of scare stories appeared in U.S. media raising alarms about “Kodak fiends” taking pictures of women without their permission. The panic was not limited to the United States. One newspaper reported that a “Vigilance Association” had been established in Britain with the mission of “ ” Around this time, local governments and businesses started to ban Kodak cameras at beaches and other outdoor spaces. This sort of anxious response is still with us today, and it explains why some EU policymakers, when confronted with advances in the use of data, often overreact to privacy concerns and other anxieties by proposing policies that may create a fleeting sense of relief but curtail the long-term economic and social benefits of data. The latest proposal to is built around the same 19th century fears about a changing status quo that led to bans on cameras. The truth is that, while fears about data generate the most headlines, the biggest impact for consumers from data-driven innovation will come from its array of benefits, such as the rapid development of new medical interventions, an increase in personalized services and more efficient government operations. Europe has a great opportunity to use data-driven innovation to enhance the effectiveness of its public sector and the competitiveness of its private sector. Lawmakers should not succumb to the usual wave of fear and panic surrounding new technologies. Rather, they should recognize that service providers, the public sector and consumers will usually work out how they would like to adopt innovation and intervene only to prevent something that is obviously harmful.
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Watch OK Go Fly Weightless In Their New Music Video
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Emily Calandrelli
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The band released their latest creative music video and this one was taken on a parabolic airplane tens of thousands of feet in the sky. The video, which features OK Go floating in weightlessness, was for their song “Upside Down & Inside Out.” Hello, Dear Ones. Please enjoy our new video for "Upside Down & Inside Out". A million thanks to S7 Airlines. #GravitysJustAHabit Posted by on Thursday, February 11, 2016 OK Go, who is for producing highly creative and meticulously choreographed videos, partnered with Russian airliner for this gravity inspired performance. “Gravity’s just a habit that you’re really sure you can’t break.” – OK Go To create the video, the S7 Airlines plane flew up and down in a wave-like path. This parabolic motion created the sensation of zero gravity for the band members who were free-falling inside the plane. Parabolic flights have been around for decades. They’ve been used to train astronauts, conduct science experience, shoot movies like Apollo 13, and even conduct photo shoots like Kate Upton’s Sports Illustrated Swimsuit ZeroG shoot. During parabolic flights passengers experience periods of hypergravity (typically around 1.8 times gravity) and microgravity (close to 1 millionth the force of gravity you feel while standing on the surface of Earth). Typically, these flights will generate about 20-25 seconds of hypergravity and 25-30 seconds of weightlessness. If you watch closely, you can point out periods during the OK Go video where the band members are experiencing hypergravity, meaning the plane was beginning to accelerate up the curve of the wave. Parabolic airplanes date back to the Mercury program when NASA used this flight strategy to prepare astronauts for the feeling for weightlessness. Oftentimes, passengers would feel disoriented from repeatedly experiencing periods of feeling extremely heavy and then feeling weightless. Because of this, the first NASA parabolic plane was dubbed the “Vomit Comet.” For many years, university students were able to apply to fly on this type of aircraft through NASA’s . NASA received funding to provide parabolic flights and enable students to conduct microgravity experiments. Unfortunately, in 2014, that program ended. However, if you have $5,000 you can buy your way to a weightless experience. The , which uses a Boeing 727-200 aircraft, offers parabolic flights in Florida, Nevada, and California.
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In Race to Build Kid-Activity Subscription Services, Pearachute Raises $1.2 Million
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Connie Loizos
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They’re starting to crop up here and there, new startups that have appropriated the monthly class-pass model and are focused on children’s activities. Last month, a New York-based startup called announced in seed funding, including from serial entrepreneur Kevin Ryan. Meanwhile, Brooklyn-based , which caters to local families and launched in October, has raised an undisclosed amount of seed funding from Notation Capital and Collaborative Fund. Now, there’s a new entrant. A Chicago-based startup that’s similarly focused on helping parents and other caregivers find affordable and varied things to do with young children, is launching this coming Monday. Called , it’s just six weeks old, yet investors love the idea so much that the company has already raised $1.2 million in seed funding, including from former Match.com CEO (and now ) Sam Yagan, Techstars cofounder David Cohen, Chicago Ventures, Hyde Park Venture Partners, HotelTonight CEO Sam Shank, SitterCity cofounder Genevieve Thiers, and various other angel investors. Yagan has even signed on as chairman. The company was founded by Desiree Vargas Wrigley, who’d previously cofounded , an eight-year-old, online fundraising platform for medical expenses from which she stepped down in December. “It was one of the first crowdfunding sites, and eight years in, I realized I wasn’t having as much fun as I used to,” says Wrigley. In fact, she intended to take some time off but was encouraged by former investors and mentors to jump straight into Pearachute, an idea she says “couldn’t stop thinking about.” Given the similar startups beginning to sprout up, her timing looks good. Pearachute has two subscription models. Customers can either sign up for five classes a month for $79 — a subscription that can be shared between siblings and family friends — or they can also pay $99 for an unlimited number of classes per child. The five-person company, which is focused exclusively on Chicago for now, is launching with 35 child-related activity centers and 1,200 parents. Wrigley says there’s demand from many more parents already, however. (“We posted one thing about Pearachute on a private mom group [email] list, and a day later, 1,200 people had signed up.”) Pearachute is focused on children ages zero to five for the time being, but it may well evolve into a platform where people can also subscribe to summer camps and classes for older children. Says Wrigley: “Parents are looking for varied and affordable entertainment, but it’s a big deal when you sign up your kids for something. It’s a risk. This [model] eliminates it.” The big question, for Pearachute and other class-pass businesses, is whether the economics are sustainable. Wrigley declined to talk about how Pearachute will split its revenue with the activities centers with which it’s working, saying each relationship is different. She does say that Pearachute plans to focus heavily on data analytics, endearing itself to its clients by providing them big-picture information that they might not have otherwise, such as what days and times families might be inclined to sign up for a music class. Wrigley and her investors are also anticipating sufficiently healthy margins that they’ll be be able to expand into at least two other cities by later this year. Asked whether she’s concerned about how quickly she can reach them, with other upstarts gravitating to the same idea, Wrigley says she’s not. “This is such a broken and fragmented industry,” she notes. “It’s reminiscent of the early days of food delivery, even before Seamless and GrubHub, and you see how many companies that industry has supported.”
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Yeezy Season Approaches As Tidal Scores Stream Of Kanye’s Fashion Show Concert
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Fitz Tepper
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Yesterday, Kanye West took to Twitter to announce the launch of both his new album and season three of his ultra-popular fashion brand, Yeezy. The brand will debut its latest duds and kicks at a star-studded fashion show concert today at 4 p.m. ET at Madison Square Garden in NYC. Want to see Ye onstage but didn’t score that exclusive invite? Not to worry, because West also announced that the whole event will be . https://twitter.com/kanyewest/status/697526586887794693 While Tidal has previously streamed concerts, most have been restricted to subscribers only. However, Kanye’s tweet emphasized that the stream will be open to “ALL,” which Tidal has also confirmed. Opening the event to the entire Internet is likely Kanye’s way of continuing to make the Yeezy brand more accessible to everyone. He has previously expressed discontent at how scarce his shoes have become within secondary markets, exclaiming that “eventually, everybody who wants to get Yeezys will get Yeezys.” It’s also no shock that West chose Tidal to stream the event. Kanye is close with Jay-Z, and the two have previously collaborated on the 2001 album, P.S. If you need anything from Ye, please wait until next week to ask, because he’s pretty busy this week with this whole artist/fashion designer thing. https://twitter.com/kanyewest/status/697503829449928704
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Facebook Tests SMS Integration In Messenger, Launches Support For Multiple Accounts
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Sarah Perez
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Facebook says it’s testing a way for users to receive, read and respond to their SMS-based conversations in its Messenger application for mobile devices. The feature, which would be optional if broadly rolled out, could help to shift users away from their default texting application and see them increasing their time spent Facebook Messenger instead. Also new is added support for using Messenger with multiple accounts – a feature designed for those who shared devices. The social network confirmed the SMS tests were underway following reports of what appeared to be the return of SMS support in Messenger. As the some users were seeing a new SMS Settings pane that allowed them to use Messenger as an SMS client. When texting a friend in Messenger with the option enabled, the prompt in the text input box would read “Write an SMS message.” The messages sent as SMS texts would then appear as purple bubbles, instead of Messenger’s usual blue, the blog also said. Though many of today’s younger users may not remember, Facebook Messenger originally operated as an SMS replacement app as well as a way to quickly chat with Facebook friends. However, and added a way for users to message non-friends by their phone number. Those messages were delivered inside the recipient’s Messenger app. At the same time, Facebook pulled the option to actually send out SMS messages, saying that the feature had seen “low traction.” In reality, the company likely wanted to force Messenger adoption – something it did very well, also The fact that Facebook may now be considering bringing SMS support back to Messenger lines up with the company’s which included plans to make the phone number disappear, the company had said. As , Messenger is so far ahead of other messaging apps in the U.S. that its only real competition is SMS and iMessage. To date, the company has already made several big strides to help transition people away from using their phone’s native texting app, including the launch of which eliminated the need to know someone’s phone number. “Message requests,” as the feature is known, brings privacy to the mobile messaging experience, too – while you can view these requests along with more information about the sender in your Filtered Requests folder, the message’s sender never knows if you looked at their message. The feature also allows for a different type of social connection on Facebook – people who can message you, but aren’t your Facebook “friend.” However, to truly kill off SMS, it seems that Facebook may have realized that it will (once again) have to allow people to use Messenger as their SMS client. All the bells and whistles – including GIFs, photo and video support, voice calling, , etc. – are not enough if your friend doesn’t have the app installed. You’ll probably still just text them. Turning a mobile messaging app into the default SMS client is something that Google has also done on Android, of course. However, it’s been backtracking on its implementation in recent days. The company’s , users have noticed. Facebook, clearly, is taking the opposite approach. A company spokesperson confirmed the SMS test, saying: At Messenger we are always trying to create new ways for people to communicate seamlessly with everyone. Right now, we’re testing the ability for people to easily bring all their conversations – from SMS and Messenger – to one place. It’s a really simple way to get, see and respond to all your SMS messages in just one app. By choosing to access your SMS messages in Messenger, they’re right alongside all the other enhanced features that Messenger offers. We understand that the tests are currently live only with a small number of Android users in the U.S. Unfortunately, because of the deeper OS integration required to make this feature work, it’s unlikely that iOS users will ever have the option to use Messenger for SMS messages. SMS support is not the only change coming to Messenger – Facebook also announced support for multiple accounts in the app. Until today, Messenger hasn’t yet offered an easy way for users to switch accounts, which meant those sharing a device would often install, then uninstall Messenger in order to use the app privately. Now Messenger for Android has a new section called “Accounts,” which lets you add and remove accounts on the app. These can also be password-protected so only the account holder can read their messages. Others will only see notifications that a message has been received – not its content. A spokesperson confirmed this addition, as well, saying, “millions of people share phones with their family and friends. Until now, there hasn’t been an easy way for people to access their individual Messenger accounts from shared devices. To address this, we’ve launched a feature on Android to enable multiple people to log in and use Messenger from a single phone.” This feature, unlike the SMS option, is available worldwide.
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Drive Motors Lets You Actually Buy A Car Online. How Did This Not Exist?
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Josh Constine
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No one wants to go to a car dealership. We’re in the era where everything can be done online, so it’s crazy you can’t buy a new car straight from the web. Every site and startup that claims to help you do that just dumps you on a contact form to request more info or a meeting with a car dealer. But does exactly what you imagine should already happen. It’s a plugin for car dealer websites. Pick a car you like, and Drive lets you configure options, set up a financing plan, and pay the dealer right there. Then all you do is drop by the lot and pick up your new car. Drive brings the Tesla buying experience to every other car brand. If it sounds simple, that’s because it is. But still, no one had built it right. Car dealerships don’t know their way around tech. Neither do the car manufacturers, and even if they did, the dealerships don’t want to give them any more leverage. Plus, dealerships would want a manufacturer-agnostic system. So that’s what Drive Motors built. The startup is part of this season’s Y Combinator batch, and has raised a $1.5 million seed round from the accelerator, Khosla Ventures, Propel and Gil Penchina. In something almost unheard of for fast-growing YC startups, Drive will profitable by Demo Day thanks to its uncomplicated $695 per month SaaS licensing fee it charges dealerships. They don’t have to give it a cut of sales. And since just a cars or two sold a month via Drive will cover the cost it’s a no-brainer. Drive Motors founder Aaron Krane “Do I love cars? Yes, I love cars”, Drive Motors founder Aaron Krane tells me. “I grew up in a culture where we fetishized cars. I had the car calendars. Anywhere I went that had magazines, I’d run right to the Dupont Registry and look for photos of Lamborghinis.” Yet still, crashing into the idea for Drive Motors was a total accident. his to Yahoo, and become an at Khosla Ventures. But Krane lived in San Francisco and Khosla was down in Palo Alto. After months of bumming rides, he decided to buy a new car online. The experience left him utterly confused. He couldn’t. “It became shockingly clear that ecommerce had not reached new cars” he says. So he set off to find out what dealerships actually needed. Krane worked with someone who’s family owned a dozen dealerships in California and set up a pilot program with one. He built out the product over the next five months, then signed on over 50 dealerships in the six months after. Consumers click a car and a panel slides out from the right. Along with configuring options and financing, they can trade in their existing car, buy upgrades and accessories, and see the real out-the-door price before they order and pay the dealership. Krane jokes “It’s everything you need to buy the car and get back to Netflixing or World Of Warcrafting…but maybe that’s just my life.” Dealers dig how Drive jacks right into their existing system. They don’t have to change anything. Just sometimes, an order appears in their logs without needing a smarmy salesperson to coerce anyone in person. With about 15,000 new car dealerships and 30,000 used ones in the U.S. alone, there’s quite a market out there. What Drive Motors made clear was that customers desperately wanted to shop at night when dealerships were closed so they could calmly research the purchase with their family from the comfort of their home. “My favorite story” Krane tells me, “was the customer who purchased a Prius at 3:20am on New Year’s Day, and picked it up from the lot at 9am.” Guess they got burned on New Year’s Uber surge pricing. Krane mentioned a survey recently that said 75% of respondents would like the entire car buying process to be online. Surely there’s some risk of people impulse-buying a vehicle, but as long as it’s transparent about everything, it’s not Drive’s place to tell people to slow down. We’re in the age where you can get loans and mortgages and helicopter rides from your phone, so Drive Motors seems inevitable. Plenty of other companies have tried to make buying a car as easy as ordering lunch, but none have gone the last mile to actually letting the customer pay. Oldschool properties like Auto Trader, Kelley’s Blue Book, and Edmunds literally just put their magazines online. Then there are newer sites like TrueCar, Cars.com, and CarsDirect, plus the broker-based Cartelligent and BuySide Auto. But they’re all actually just for research, and still require consumers to fill out a contact form and talk to a broker. Some people surely do want the in-person dealership or broker negotiation experience so they can get the absolute lowest price. But Krane believes there’s a much bigger market making car buying easier than that. “If I can get a good price with 10X to 100X the convenience, I’ll take it and I think 70% to 80% of car buyers will too.” He’s confident that people who enjoying haggling for sport are the minority. Drive Motors will have to keep customer satisfaction high and fend off competitors who might try to cut in. But for now, it’s the most tech-centric approach to the problem. If Drive Motors can replace the dealership as the main touch point, there’s a ton of open road ahead. It’s easy to imagine how Drive could integrate car service and maintenance so you’d never have to talk to a mechanic. You’d just enter what you thought the problem was, authorize payment, and the service would get done. An integration with courier, valet, or tow providers could mean you don’t even have to take the car to the dealership yourself. When people buy a car would also be a natural time to sell them car insurance. An alliance with innovative could make it simple. For millenials who frequently augment car ownership with Uber rides and therefore drive less, per-mile insurance is a perfect fit. Plus, then people could immediately drive the car they just bought. Krane dreams of becoming the “car ownership operating system”. It’s a lucrative prospect, and one he sees as addressing a fundamental challenge for humanity: the evolution of transportation. Yet at its core, Drive seems almost obvious. Software is eating everything, so why not dealerships? Krane exhibits a nervous, almost manic energy when talking about his company. From the start, he says “I had a tinge of paranoia. There must be someone else trying to do this.” But that’s often where the best startups come from — a problem most people assume is impossible to solve in a new way, or it’d already have been done.
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Chrome Will Drop SPDY Support On May 15
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Frederic Lardinois
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With SPDY, Google laid much of the for what later become , the next-gen version of the HTTP protocol that is responsible for sending websites to your browser. Now that HTTP/2 is an official standard, Google is getting ready to deprecate support for SPDY in its Chrome browser and as the company today , starting May 15, Chrome will no longer support SPDY. That doesn’t come as a total surprise, given that Google already it would start fading out SPDY support in favor of HTTP/2 a year ago. For the first time, though, we now have a date for when Chrome will officially stop supporting SPDY. So if you’re running a server that currently supports SPDY but not HTTP/2, it’s probably time to make the switch. Google says 25 percent of the resources in Chrome now arrive over HTTP/2 connections and only 5 percent over SPDY. Chances are, Google waited for SPDY to drop to 5 percent to announce this switch. The Chrome team also today announced that Chrome will stop supporting the TLS protocol extension on May 15. NPN (the ‘Next Protocol Negotiation’ extension) allows the server and browser to negotiate which protocol to use. It has now been superseded by the ALPN (Application-Layer Protocol Negotiation) extension. For users, this switch likely won’t result in any obvious changes. Both HTTP/2 and SPDY allow for faster and more efficient connections between browsers and servers. HTTP/2 is partly based on SPDY and includes a number of additional optimizations, so if anything, your connections will be even faster now.
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San Bernardino survivor’s husband backs Apple in battle with FBI
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Jon Russell
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that the majority of Americans support the FBI and its order to open the iPhone used by San Bernardino shooter Syed Rizwan Farook. While some of those voices may be less aware of the specifics of the situation, Apple has the backing of the husband of one of the survivors of the terrorist attack, which left 14 people dead and 22 others seriously injured, after he changed his mind over the case. Salihin Kondoker, whose wife Anies Kondoker was shot three times in the attack but avoided the main hall after taking a trip to the bathroom, filed a friend of the court brief siding with Apple in its dispute with the FBI, . Writing in a letter to Judge Sheri Pym, Kondoker, Kondoker explains how his opinion on the case turned when he delved deeper into the longer term implications of the FBI’s order. “When I first learned Apple was opposing the order I was frustrated that it would be yet another roadblock. But as I read more about their case, I have come to understand that this software the government wants them to use will be used against millions of other innocent people. I share their fear,” he writes. Kondoker also makes the point that shooter Syed Farook’s iPhone was owned and operated by the County of San Bernardino. That was standard and “common knowledge” among all employees, he says, including his wife who “did not use use [her phone] for personal communication.” “Why then would someone store vital contacts related to an attack on a phone they knew the county had access to. They destroyed their personal phones after the attack. And I believe they did that for a reason,” Kondoker says. the FBI’s request to develop software to grant access to the data on the device “chilling.” In a lengthy interview last week, Cook lamented the potential for such a backdoor to get into the wrong hands and cause damage to “hundreds of millions” of people. “We have no sympathy for terrorists,” Cook said. “We’re not protecting their privacy, we’re protecting the rights… and public safety of everyone else… Developing that software, it’s so powerful it has the capability to unlock other iPhones. That is the issue.” In a earlier editorial, the FBI isn’t out to create a backdoor or ongoing access to iPhones. Apple claims it has provided all of the user data that it has on file for Farook, but Comey suggested that the FBI has a duty to leave no stone unturned in its search for information. “Maybe the phone holds the clue to finding more terrorists. Maybe it doesn’t. But we can’t look the survivors in the eye, or ourselves in the mirror, if we don’t follow this lead,” in legal blog LawFare. BuzzFeed has a full copy of Salihin Kondoker’s letter .
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PayPal Commerce Matches Stripe With PayPal’s Own Native Shopping Toolkit For Apps
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Ingrid Lunden
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PayPal’s first acquisition after it was of a young startup called , which had for small businesses to integrate buy buttons across third-party apps. Now, PayPal is taking the wraps off a new product that will integrate Modest’s technology. — as the new service is called — launches today in closed beta, setting the stage for how PayPal could potentially reboot its platform for the next generation of the Internet and the 179 million customers already using PayPal. “Ten Internets ago when PayPal was started, it was all these tools that no one had built yet to bring commerce to the internet. My first startup used PayPal,” said Harper Reed, the co-founder of Modest (and before that, the CTO of the Obama campaign and Threadless), who is head of commerce at PayPal’s Braintree. “Now there is a lot of competition and people doing really neat stuff. We want PayPal to be that foundational level again. It’s doing the same thing that PayPal did back in the day, creating building blocks for small retailers to focus on what the future of commerce will look like.” PayPal Commerce is based around a set of APIs. Third-party services will be integrated in the back end to the Commerce platform. Then, merchants will be able to pick and choose where they would like their buy buttons to appear — be that email, social shares, blogs, articles, ads, apps, or wherever. While in the past, online shopping was largely carried either on businesses’ own websites or on shopping portals, PayPal Commerce is tapping into the idea of “omnicommerce.” Wherever people are going on the Internet, wherever they may come across a company’s products on social media or elsewhere, they can now buy those things. And PayPal will provide merchants with a one-stop set of tools to be able to do that (while also using the PayPal network to process that transaction). If this sounds a little familiar, that’s because it sort of is. This is not unlike a product unveiled by Stripe last September called . PayPal is launching now in a closed beta and is not talking partners just yet, but there are a few places where PayPal has already been enabling experiences like this and those sound like they were gearing up for Commerce and will be included, such as Pinterest’s Buyable Pins and with Uber via Facebook Messenger. Stripe has made a little more headway. Stripe’s merchant customers include Best Buy, Adidas, PacSun, Warby Parker, Saks Fifth Avenue, Wish, Tuft & Needle, Teespring, Hello, Glossier and FabFitfun. The apps included are Twitter, ShopStyle and Spring. Its technology partners are SAP and InMobi “to extend the reach of Relay to hundreds of new retailers and to an ad network with over 30,000 mobile applications across 1 billion devices,” a Stripe spokesperson tells me. Merchants have uploaded over 7 million products to Relay. PayPal’s closed beta state also means it’s not getting too specific on what kind of percentages it will take for transactions made using integrations via PayPal Commerce, or any of the other nitty gritty. As a point of reference, Modest charged a monthly fee to its larger customers — $200 — and a percentage of transactions for smaller businesses. One thing that caught my attention is that PayPal Commerce is being thought of as an “agnostic” and open platform, Reed said, which means that users who buy with these may not even need PayPal accounts to complete the transactions. The other is that while people can sign up to become a part of the beta, it will be interesting to see how PayPal rolls this out to existing customers when it full launches: potentially it could simply turn it on for everyone. For now, it sounds like the open platform could mean a thinner margin than PayPal’s core product, with the tradeoff being a much bigger funnel of purchases to improve the returns. “The main ideas for us are scale, stability and audience,” Reed said. [youtube https://www.youtube.com/watch?v=hJl3joD_TIs]
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Tinggal, a budget hotel network in Indonesia, lands $1M from backers of India’s Wudstay
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Jon Russell
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This year it looks like budget hotel networks are a major trend for the tech industry in Southeast Asia. Already close to half a dozen startups offering standardized accommodation options have sprouted up, and today another new entrant has emerged in Indonesia — with a slight twist. Indonesia-based is less than one month old, but today it announced that it has raised $1 million in funding. Particularly of interest is the fact that this financing has come from the investors and members of the executive team behind India-based , . The premise for Tinggal is simple, Indonesia’s internal and overseas travel market is booming with particular demand around budget stays, but there’s a major disconnect between booking a place that looks nice in photos and then arriving there. Tinggal is taking the budget hotel model — pioneered by — to add a guaranteed level of expectation for each stay. For example, all rooms booked via Tinggal include a range of expectations, both in terms of bed and room quality and additional items like free breakfast and WiFi. Beyond catering to travelers, with rooms priced around $17, the company also includes an ‘elite’ option that goes to $60 per room per night. The funding for Tinggal comes from VC firms Mangrove Capital and Simile Venture Partners and CEO/angel investor Vikas Saxena — all three backed Wudstay last summer — and Wudstay CEO Prafulla Mathur. Tinggal plans to cover Indonesia’s major cities over the next 12 months, and right now it has 35 properties across four cities. That’s considerably less than other rivals like , , and Rocket Internet-backed , but Saxena and Tinggal co-founder Arjun Chopra stressed the advantage of leaning on the experience and tech that Wudstay has developed. “Tinggal is an independent company,” Saxena told TechCrunch in an interview. “But what’s quite obviously is that we’ve taken advantage of a strong technology backbone [via Wudstay] in India. A lot of early efforts [from rival companies in Indonesia] went into building the tech and understanding the market, we come with a level of that already to some degree.” Chopra, who is Indian but spent significant time in Indonesia over the past decade via roles with PayPal and Intuit, said the plan is to increase Tinggal’s headcount from nine right now to 35 over the coming six months. Its older rivals are either in multiple markets in Southeast Asia already or aiming to expand soon, while India’s market leader OYO Rooms entered the region recently, but Tinggal is taking a slower approach. “As of now we’re just focusing in winning in Indonesia,” Chopra said. “Within this year, we hope to make Tinggal the winner in Indonesia — when that milestone happens, we’ll look at other markets.” Wudstay hasn’t backed Tinggal in an official capacity, but with three common investors and investment from its CEO, there are clearly links. All parties said it is too early to speculate over a possible acquisition in the future, and Tinggal said it will be open to investment from other backers when it chooses to raise additional funding, which could be later this year. Why didn’t Wudstay simply expand its service to Southeast Asia, rather than going to the hassle of backing a new company? Saxena said it doesn’t need the distraction of a new market which requires a different approach. He cited ZO Rooms — which — as an example of the pitfalls of doing too much too soon.
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Korean last-minute hotel booking app DailyHotel launches in 10 new countries
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Catherine Shu
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, a Seoul-based app that lets harried travelers quickly find hotel rooms, has launched in 10 new Asian countries. The startup was founded in 2013 by brothers Ryan and Jimmy Shin after Ryan struggled to find a last-minute hotel room in Seoul. It has raised more than $10 million from Sequoia India, but declined to say exactly how much funding it has received so far. While DailyHotel wants to increase its market share throughout Asia (the app is now available in Indonesia, Malaysia, Singapore, the Philippines, Thailand, Macau, Taiwan, Hong Kong, China, and Japan), its expansion currently focuses on Singapore and Indonesia, where DailyHotel already works with 300 and 2,000 hotels, respectively. “In Korea, we’ve reached the top of the market, so we need to expand our services to other Asian countries,” Ryan Shin, who is DailyHotel’s chief executive officer, tells TechCrunch. Shin says its ability to strike deals with luxury hotels, help manage their surplus inventory, and provide customers with steep savings on last-minute bookings is how it differentiates from other hotel booking platforms (in Southeast Asia, it competes with other startups that offer last-minute bookings, such as and , as well as established players like , , and ). DailyHotel now claims to be on of South Korea’s largest hotel apps, and says that it has grown at a rate of eight times in revenue over the past two years. DailyHotel woos luxury hotels by promising to fill surplus rooms. Its says its biggest partners in Seoul, which include Hilton Hotels & Resorts, Marriott International, and Intercontinental Seoul Coex, each get over 120 rooms booked through the app every weekend. The DailyHotel app usually has more than 3,000 rooms available at a time, many at a 70 to 80 percent discount. In addition to launching in new markets, DailyHotel also plans to grow its platform by adding other verticals. For example, it has already started a restaurant booking service in South Korea.
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Mobile ad-tech startup NativeX acquired by Chinese advertising company Mobvista
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Catherine Shu
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NativeX founders Ryan and Robert Weber , a startup that makes advertising for mobile games and apps, is being acquired by Chinese mobile ad platform . In a statement today, the companies said that all-cash deal is valued at 160 million RMB (about $24.5 million). Based in Sartell, Minnesota, NativeX was founded in 2000 by twin brothers Robert and Ryan Weber. The company says it has been profitable for 12 consecutive years and currently has more than one billion users on 1,000 publishing networks. Mobvista claims to be one of the world’s largest mobile advertising networks with 10 billion daily impressions and a user database that covers two billion devices. Rob Weber that it focuses on three kinds of mobile ads: Lightning Play video, or full-screen videos that play between game transitions, multi-offer walls and interstitials. After the acquisition is finalized, NativeX will remain in Sartell and become a subsidiary of Mobvista. Rob Weber will continue to serve as its chief executive officer, and also take a position as vice president of Mobvista Group. In a statement, Mobvista founder and CEO Wei Duan said that the deal will make achieving his company’s global expansion plans easier. “NativeX is a solid, sustainable business and our technology focus and values are perfectly aligned to deliver rich growth opportunities to the mobile market and to further secure Mobvista’s international goals and success, especially to speed up our ability to supply substantial audiences in Western markets,” said Duan.
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Apple vs FBI: Read Apple’s Opening Statement To Congress Tomorrow
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Natasha Lomas
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Apple’s general counsel Bruce Sewell will testify before a congressional Judiciary Committee tomorrow. The hearing has been convened to discuss what is being described as “The Encryption Tightrope” — subtitle: “Balancing Americans’ Security and Privacy”. Sewell’s opening statement can be read below in full. FBI director James Comey will also testify. The reason for the hearing is the publicity surrounding an FBI-induced court order relating to an iPhone 5c used by one of the San Bernardino shooters. A judge in California ordered Apple to comply with the FBI request to create a modified version of its OS with intentionally weakened security features to make it easier for the agency to crack the device’s passcode via brute force techniques. Apple has , warning that the court order would set a dangerous precedent, and arguing it would not just be used to unlock one device, as the government claims. But rather that state agencies would seek to apply the same security bypass to multiple cases (as we there are 12 other active cases involving iPhones or iPads and government unlocking requests). In other words, Apple’s argument is that the FBI’s demand would effectively create a backdoor into iOS, with the risk that this yet-to-be-created more vulnerable version of the software might find its way into the wild — risking the data of millions of iOS users in the process. The long-in-the-tooth general purpose legal mechanism used by the FBI to try to force Apple’s hand is called the All Writs Act (AWA). Today a New York judge weighing the US government’s use of the AWA in another case involving a locked iPhone has , denying a request to compel Apple to unlock the device in question. Apple will be buoyed by that ruling, which puts yet more emphasis on the congressional hearings that are about to kick off. Point being, systematic state use of a general purpose Writ for such a specific purpose has a distinctly unconstitutional pong to it — hence the NY judge seeking to push lawmakers off of this “murkier area” (as he has ) and create some legal certainty, one way or another. A “healthy” and public debate is also what Apple has been calling for since the FBI made the San Bernardino request case public. Sewell will re-iterate this sentiment in his opening statement tomorrow, arguing that: “The American people deserve an honest conversation around the important questions stemming from the FBI’s current demand.” He will also describe the case as “an extraordinary circumstance”, and note that the US government has spent tens of millions of dollars — through the Open Technology Fund and other domestic government programs — to fund strong encryption, thereby underlining the that apparently keeps afflicting governments when politicians and state security agencies clash with increasing use of encryption. “Encryption is a good thing, a necessary thing,” Sewell will argue. “We have been using it in our products for over a decade. As attacks on our customers’ data become increasingly sophisticated, the tools we use to defend against them must get stronger too. Weakening encryption will only hurt consumers and other well-meaning users who rely on companies like Apple to protect their personal information.” He will also foreground what’s at stake on the privacy front, invoking the “hundreds of millions of law-abiding people” whose iOS devices are used to store what he will describe as “the most intimate details of their daily lives” — whether that’s photos, private conversations, health care or financial information or location data. His opening statement can be read in full below: Thank you, Mr. Chairman. It’s my pleasure to appear before you and the Committee today on behalf of Apple. We appreciate your invitation and the opportunity to be part of the discussion on this important issue which centers on the civil liberties at the foundation of our country. I want to repeat something we have said since the beginning — that the victims and families of the San Bernardino attacks have our deepest sympathies and we strongly agree that justice should be served. Apple has no sympathy for terrorists. We have the utmost respect for law enforcement and share their goal of creating a safer world. We have a team of dedicated professionals that are on call 24 hours a day, seven days a week, 365 days a year to assist law enforcement. When the FBI came to us in the immediate aftermath of the San Bernardino attacks, we gave all the information we had related to their investigation. And we went beyond that by making Apple engineers available to advise them on a number of additional investigative options. But we now find ourselves at the center of an extraordinary circumstance. The FBI has asked a Court to order us to give them something we don’t have. To create an operating system that does not exist — because it would be too dangerous. They are asking for a backdoor into the iPhone — specifically to build a software tool that can break the encryption system which protects personal information on every iPhone. As we have told them — and as we have told the American public — building that software tool would not affect just one iPhone. It would weaken the security for all of them. In fact, just last week Director Comey agreed that the FBI would likely use this precedent in other cases involving other phones. District Attorney Vance has also said he would absolutely plan to use this on over 175 phones. We can all agree this is not about access to just one iPhone. The FBI is asking Apple to weaken the security of our products. Hackers and cyber criminals could use this to wreak havoc on our privacy and personal safety. It would set a dangerous precedent for government intrusion on the privacy and safety of its citizens. Hundreds of millions of law-abiding people trust Apple’s products with the most intimate details of their daily lives – photos, private conversations, health data, financial accounts, and information about the user’s location as well as the location of their friends and families. Some of you might have an iPhone in your pocket right now, and if you think about it, there’s probably more information stored on that iPhone than a thief could steal by breaking into your house. The only way we know to protect that data is through strong encryption. Every day, over a trillion transactions occur safely over the Internet as a result of encrypted communications. These range from online banking and credit card transactions to the exchange of healthcare records, ideas that will change the world for the better, and communications between loved ones. The US government has spent tens of millions of dollars through the Open Technology Fund and other US government programs to fund strong encryption. The Review Group on Intelligence and Communications Technology, convened by President Obama, urged the US government to fully support and not in any way subvert, undermine, weaken, or make vulnerable generally available commercial software. Encryption is a good thing, a necessary thing. We have been using it in our products for over a decade. As attacks on our customers’ data become increasingly sophisticated, the tools we use to defend against them must get stronger too. Weakening encryption will only hurt consumers and other well-meaning users who rely on companies like Apple to protect their personal information. Today’s hearing is titled Balancing Americans’ Security and Privacy. We believe we can, and we must, have both. Protecting our data with encryption and other methods preserves our privacy and it keeps people safe. The American people deserve an honest conversation around the important questions stemming from the FBI’s current demand: Do we want to put a limit on the technology that protects our data, and therefore our privacy and our safety, in the face of increasingly sophisticated cyber attacks? Should the FBI be allowed to stop Apple, or any company, from offering the American people the safest and most secure product it can make? Should the FBI have the right to compel a company to produce a product it doesn’t already make, to the FBI’s exact specifications and for the FBI’s use? We believe that each of these questions deserves a healthy discussion, and any decision should be made after a thoughtful and honest consideration of the facts. Most importantly, the decisions should be made by you and your colleagues as representatives of the people, rather than through a warrant request based on a 220 year- old-statute. At Apple, we are ready to have this conversation. The feedback and support we’re hearing indicate to us that the American people are ready, too. We feel strongly that our customers, their families, their friends and their neighbors will be better protected from thieves and terrorists if we can offer the very best protections for their data. And at the same time, the freedoms and liberties we all cherish will be more secure. Thank you for your time. I look forward to answering your questions.
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Can Emerging Nations Create Their Own Silicon Valleys?
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Jenny Q. Ta
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Silicon Valley has dominated the fields of technology and tech investment for the past two decades, operating virtually unchallenged during the zenith of its power. But the investment landscape is changing, bringing shifts in a number of factors that are edging out the major player in the technology investing game — and disrupting its domination of the playing field during the next one or two decades. According to , other nations around the world should give up trying to create their own versions of Silicon Valley. In his view, “It’s too late. Silicon Valley has a decades-long head start creating the perfect environment for creating Internet businesses.” Instead, he believes, emerging nations should stick to their own areas of “domain expertise” — which he defines as “deep knowledge about a single industry.” They should embrace domains, rather than the Internet kind, leveraging “big data” to innovate in these areas. Even as he refers to “rising hotbeds of innovation around the world,” he relegates those hotbeds to working within their own limited domains, effectively stifling their freedom of choice in selecting the areas where they themselves would opt to innovate. At the same time, Ross sings the praises of “Silicon Valley ‘s influence,” which, he says, “lingers and continues to draw start-ups in almost every industry.” Sounds a lot like elitism dressed in the garb of “equal opportunity.” A truly level playing field would encourage innovators to work in their own areas of passion, preference, need and skill — whatever they may be — where they can use that big data Ross recommends to create new and wonderful innovations that could very well rival those of the Valley. With a whole world of possibilities open to them, there’s no reason why these talented pioneers should not be able to create the same kind of “self-perpetuating cycle” of innovation that Silicon Valley has built. According to a piece in , impact investments — investments allotted to companies that are expected to generate positive social and environmental returns, along with their monetary ones — are expected to grow from their current $60 billion asset value to $2 trillion in invested assets over the next decade. These are assets that will be available to, from and for emerging nations worldwide to help innovators good while good. Clearly, impact investing is on the rise globally. And yet this $2 trillion market — as huge as it is — is still assessed to represent just 1 percent of global invested assets. Why is that? Surely it isn’t because few people have any desire to better the world when they invest. As education about impact investing increases, in an investment arena that many tend not to understand, the potential for this percentage to rise to even higher levels will increase. The existing roadblocks to encouraging investors to allocate a larger portion of their portfolios to impact investments around the world also extend to assessing the actual value of already existing conscience-based investments. Because there are so many differing views on which types of offerings actually constitute impact investments, the lines delineating the boundaries of this investment category can be difficult to draw, making it equally difficult to get an accurate picture of its true size — meaning it’s likely already far larger than we think, with the potential for even more explosive growth as ever-larger numbers of investors are coaxed into entering this exciting investment field. In every country of the world, the impact investment category holds many possibilities for bettering the world while also growing monetary returns. And it all boils down to a phenomenon called Silicon Valley is clearly at the pinnacle of investments — both impact and otherwise — in sheer number and dollar volume of deals. However, that’s where its ascendancy ends. In terms of relative investment activity between 2014 and 2015, and average annual rate of growth (AAGR) over the past four years, the Valley/Bay Area has not fared as well. Bay Area/Valley investment activity in 2015 showed a decrease of 1.335 percent in comparison to 2014, ranking 15th in a pool of 17 cities whose investments were , whereas the top 10 cities experienced increases ranging from 20.07 percent to 200 percent, and the average increase of all 17 cities was 18.987 percent. Based on average annual rate of growth, Mattermark found the Bay Area to be relatively deficient, as well. Calculations showed that from 2012 to 2015, inclusive, the Bay Area — at an AAGR of 2.186 percent — achieved less than half the average of the 17 cities’ AAGRs, which it calculated at 4.656 percent. Comparatively speaking, in this pool of 17 cities, the top three achieved AAGRs of 14.614 percent to 20.545 percent, placing their AAGRs roughly 10-15 percent higher. The above numbers demonstrate that while Silicon Valley is definitely a “value” player/destination, it falls far short of being a “growth” player/destination — a critical requirement at this juncture and one that is being more than adequately fulfilled by a steadily rising class of players in emerging markets around the globe. For example, (which features the in the world), (which currently produces some 2.75 million software developers, a number that is expected to jump by 90 percent to 5.2 million in 2018, surpassing the U.S.) and even (which has become one of the fastest-growing markets in the world, going from 4 million to 40 million Internet users and from virtually no smartphones to 30 million over the past 10 years). The emerging nation even has an initiative to create its own version of Silicon Valley, called Saigon Silicon City. These nations — and others — are distinguishing themselves in markets that have only begun to emerge in the last decade, meaning they aren’t very far behind the Silicon “king,” who took two decades to fully ascend the tech throne. Yes, the King has about a 10-year head start. However, these nations are serious contenders — either individually or collectively — to dethrone the currently reigning tech monarch. Another example of an emerging nation that is making a name for itself in the race to birth its own “Silicon Valley” is . Bandung, the Southeast Asian nation’s third-largest city, after its capital Jakarta and No. 2 city, Surabaya, has its sights set on making it a startup-friendly place that will attract tech-based companies to join the ranks of the impressive list of tech startups that have already made the city their home base. A city of 2.5 million residents (as of 2013), 60 percent of whom are under the age of 40, Bandung, like the rest of Indonesia, is home to a highly , and is strategically located in a country where — a higher rate of adoption than any other country on earth. These are just a few among that place the city in a good position to win at the technology game. The city’s “Silicon Valley” project, called Teknopolis, is an ambitious undertaking, supported by Indonesia’s tech-friendly government, and is a project that has hefty investment capital and a great deal of government support backing it. Will it succeed in becoming the “Silicon Valley” of Indonesia? Ross — and others — would say no. But, only time will tell — and whether or not it does, this tech-centric nation certainly has every right to try. After all, isn’t that what innovation is all about? Whatever the outcome of this particular “Silicon Valley” project, it will not change the fact that the currently reigning king may very well be on his way out. It might be said that the original Silicon Valley — like every industry, technology or empire before it — is reaching the end of an S-curve — one that it may no longer have the momentum to sustain in that highly coveted upward trajectory. Many believe the Valley lacks the ability to re-engineer itself and make the critical shift to the next S-curve that it would require to maintain its ascendancy. But, perhaps even more importantly, external (aka “global”) conditions just happen to be right for a new king to be crowned. And just as the mighty giant, Goliath, fell, despite his size and power and brazen self-confidence, Silicon Valley has arguably passed the point of no return, and may soon be taken down despite its own self-aggrandizing over-confidence and swagger, by one of the smooth, innocent-looking stones from a foreign stream. On Bloomberg’s recent list of , the U.S. ranked No. 8. South Korea was No. 1, with slots 2-5 filled by Germany, Sweden, Japan and Switzerland, respectively. With the U.S. outranked by seven other nations, there’s simply no room in the global tech landscape for the Silicon Valley elitism that quashes innovation and destroys equality. There may be only one Silicon Valley — made up of “some 28-year-olds in California” who are waiting for their opportunity to step in and pull the rug out from under the other innovators of the world. But that doesn’t mean the rest of the world will continue standing by, letting them do it. After all, H.G. Wells’s “adapt or perish” maxim can cut both ways.
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Buffer Adds Twitter-Based Customer Service Tools
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Haje Jan Kamps
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is best known as a scheduling tool to help marketing teams schedule content on social media, but with the , it signaled a plan to expand its repertoire to also cover customer service users. One of Buffer’s claims to fame is its policy of radical openness, . This week, the company is launching the fruits of its acquisition, in the form of a new product: Respond. Respond helps companies reach their audiences, reply to queries, and monitor what’s being said about them. The service imports tweets @-mentioning the company, or simply mentioning them by name. From there, they are put into an inbox, enabling the customer service / social media teams to respond and engage, keep track of conversations, and ensure no interactions slip between the cracks. The Respond user interface In addition to facilitating DMs and public conversations, Respond supports custom search queries, which appear alongside user tweets etc., making it possible to step into conversations even where the company isn’t @mentioned. Respond’s launch comes at a time when functionality on its own platform. Respond retains most of the original look and feel of the old Respondly app, but the Buffer team did make a few changes. Among other things, Buffer implemented Gnip search to facilitate real-time search, for example. In addition, the package was optimized for teams, including double-reply detection, signatures for customer service representatives, and the ability to assign conversations between users. “ says that some Silicon Valley household names are already using Respond, including Product Hunt, Slack, WordPress and Stripe. Users can sign up for now, and the basic plan is free.
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NY Judge Rules In Favor Of Apple In Government Request For iPhone Data
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Matthew Panzarino
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In a New York case, Magistrate Judge James Orenstein of the US District Court for the Eastern District of New York has ruled in favor of Apple, denying a government request for information on an iPhone. Orenstein had paused the request to allow Apple to file in opposition of the order because it involved the broad interpretation of a law that has been used to force private companies to comply with requests for user information. The request to compel Apple to provide information on the iPhone was relatively routine (Apple has ,) but relied on an expanded interpretation of the All Writs Act (AWA) — which is currently also being used to try to force Apple to unlock an iPhone . In the NY case, Apple could provide information because the iPhone involved was running an older version of iOS, which allows it to extract data similar to an iPhone backup and provide that to the authorities with proper warrant for further analysis. A senior Apple executive, commenting on the case in a press conference, said that an important precedent of opinion had been set by this ruling in NY that could apply to other cases like the one in California — while acknowledging that there was no binding legal precedent being set that would affect the San Bernardino case. “…after reviewing the facts in the record and the parties’ arguments, I conclude that none of those factors justifies imposing on Apple the obligation to assist the government’s investigation against its will. I therefore deny the motion,” reads Orenstein’s order. The ruling is clear and concise, making the case that the All Writs Act cannot be stretched to cover the blanket license to compel private companies to extract customer data from locked devices that the government wants. The document makes a strong argument that there needs to be legislative ruling on the breadth of the All Writs Act. It even brings into question whether this interpretation of the AWA would be in violation of the 4th Amendment. Specifically, Orenstein questions whether interpreting the AWA as broadly as the government wanted to in this case could even be supported constitutionally: As set forth below, I conclude that in the circumstances of this case, the government’s application does not fully satisfy the statute’s threshold requirements: although the government easily satisfies the statute’s first two elements, the extraordinary relief it seeks cannot be considered “agreeable to the usages and principles of law.” In arguing to the contrary, the government posits a reading of the latter phrase so expansive – and in particular, in such tension with the doctrine of separation of powers – as to cast doubt on the AWA’s constitutionality if adopted. The ruling also features some of the strongest footnote game I can recall in a ruling from a Judge. In considering the burden the requested relief would impose on Apple, it is entirely appropriate to take into account the extent to which the compromise of privacy and data security that Apple promises its customers affects not only its financial bottom line, but also its decisions about the kind of corporation it aspires to be. The fact that the government or a judge might disapprove Apple’s preference to safeguard data security and customer privacy over the stated needs of a law enforcement agency is of no moment: in the absence of any other legal constraint, that choice is Apple’s to make, and I must take into account the fact that an order compelling Apple to abandon that choice would impose a cognizable burden on the corporation that is wholly distinct from any direct or indirect financial cost of compliance. That, which pretty much negates the whole ‘Apple is doing this because it’s good for marketing’ argument that has been put forward by the FBI in CA, is a to the actual ruling. Spicy. Orenstein concludes the ruling by explicitly laying out what many security experts have been talking about in the California case, where the FBI wants Apple to create software to help it crack an iPhone passcode. Namely, that this is absolutely not just about a ‘single device’, but instead whether the All Writs Act can be used to force compliance by private companies: Ultimately, the question to be answered in this matter, and in others like it across the country, is not whether the government should be able to force Apple to help it unlock a specific device; it is instead whether the All Writs Act resolves that issue and many others like it yet to come. For the reasons set forth above, I conclude that it does not. The government’s motion is denied. Orenstein has been using this case as an opportunity to rule on whether the All Writs Act allows private companies to be ‘ ‘ in government investigations. A question was put to Apple during the call about whether Apple had ever signed a piece of software to assist in the de-encryption of information or extraction of said information from an iPhone. “Absolutely, unequivocally, no. We have not done that,” responded the Apple executive. The New York case, which is about Apple giving the government access to information on an older locked iPhone, has implications for Apple’s fight in California. The California case involves the FBI trying to use the All Writs Act to force Apple to actually new software which would weaken the security of its devices — something it argues the government has no authority to compel it to do. The iPhone belongs to San Bernardino shooter Syed Farook and we’ve . This ruling, then, could influence the eventual decision in California, though many are assuming that it will eventually hit the Supreme Court. Apple has argued that it should be a congressional matter, to be decided by legislation, rather than the courts. Here is the full ruling:
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Why Facebook Hosted 200+ African-American Students From The SF Bay Area
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Megan Rose Dickey
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Just one day after Mark Zuckerberg’s internal memo leaked, , Facebook hosted more than 200 African-American students from the San Francisco Bay Area. The day-long field trip to Facebook this past Friday, which had been weeks in the making as part of Black History Month, was spearheaded by the employee resource group Black@FB and Facebook’s community engagement team. It included a tour of the Menlo Park campus, a career panel, a presentation on to help grow the pipeline of underrepresented people in tech, an informative session on internships, as well as other activities. “When diversity is working well, if you have a system that’s scaling well, there will never be one point of success or failure,” Facebook Global Director of Diversity Maxine Williams told me. “So that is our goal. It is a wonderful thing when there is a diversity event and I have nothing to do with it. I had nothing to do with this.” Although Williams started TechPrep, the community engagement team has since taken it over. Williams went on to say that the program “shouldn’t be owned by the diversity team.” Instead, Tech Prep, as well as other initiatives launched by the diversity team, should become deeply embedded throughout all of Facebook’s teams and overall culture. “One of the underpinnings is that through the diversity efforts and through the efforts of others, we have gotten the whole company to be much more focused on root issues,” Williams said. “You can keep trimming the branches here, but with those issues going on in the root, you’re never going to get a healthy tree growing. Our focus on what are the root issues — what is causing there to be less opportunity for some, more for others? What’s causing there to be a more robust pipeline for some talent and less for others? — has inspired people to do more kinds of these events.” [gallery ids="1284563,1284561,1283690,1284564"] The ultimate goal of the event was to teach students about opportunities in tech, as well as to debunk the myth that in order to work at a tech company, you need to know how to code. Before coming to Facebook on Friday, Henry Davis, a junior at St. Ignatius College Preparatory had never visited a tech company. He also didn’t realize there were so many job opportunities at tech companies outside of coding. Linda Jordan, a parent and community coordinator at San Francisco Unified School District’s Mission High School, helped bring a handful of students — some interested in graphic design and some who already know how to code — to Facebook. QuinSi Dominguez, a junior at Mission High School, is one of the students who already knows how to code. Dominguez, who told me she’s interested in pursuing a career in graphic design and marketing, is able to code in Python and HTML. Dominguez envisions herself one day working at Facebook full-time, so she was eager to learn more about what it would be like to work at such an influential tech company. She had visited Facebook once before when she was in sixth grade, but this trip had more significance for her.
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Is Singularity Near?
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Truls Unholt
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, a nonprofit artificial intelligence research company, on December 11, 2015. With $1 billion in funding from high-profile investors, such as Elon Musk, Reid Hoffman and Peter Thiel, the company put forward an ambitious research agenda to keep artificial intelligence beneficial to humanity. Both the research agenda and the objective of the company are based on the premise that machines, in the future, can reach beyond human-level intelligence and potentially turn against humankind. This scenario is thoroughly explained in Ray Kurzweil’s books and , as well as in numerous essays and articles. Kurzweil argues convincingly in favor of the singularity hypothesis, and gives the human race a 50 percent chance of survival. Leading technologists and investors are not only convinced by his argument, but also are willing to fund research on how to manage and control the potential superintelligence. At the same time, some of the most influential intellectuals in the 20th century, including Daniel Dennett and Noam Chomsky, dismiss the idea of singularity as an or even as . So, what should we believe? A brief survey of the shows that hardcore scientists and technologists tend to give at least some support to the possibility of singularity happening in our lifetime, whereas social scientists, philosophers and intellectuals are more sceptical. It almost seems like C.P. Snow’s much criticized essay, , is still relevant more than 50 years after its initial publication, and after several decades of inter- and multidisciplinary research programs. Although there are certainly more than two perspectives on singularity, technologist’s and intellectual’s positions tend to fall into two distinct categories. Perhaps not surprisingly, most technologists favor a materialist perspective based on the . Intellectuals, on the other hand, often prefer a more . The key question seems to be whether one believes that the human brain is a machine or not. AI scientists and technologists answer this question with a certain level of confidence. ”Of course, the human brain is a machine,” they say, ”it is only a matter of time and research funds before we have solved the problem of creating a truly human-like intelligence.” Even sceptics, such as Paul Allen, believe that . After all, ”an adult brain is a finite thing, so its basic workings can ultimately be known through sustained human effort.” The underlying assumption, of course, is that at some point in the future, scientists will be able to turn dead matter into life. If this can be done, exponential growth in computing power, and the corresponding would certainly present humankind with serious existential risk. If, on the other hand, the human brain is not a machine, if it is something else, something more, perhaps something with a soul, whatever that is, then human consciousness is not a technological, but a and as such not possible to solve through the application of scientific method. From an intellectual’s perspective, science is a and superintelligence a big word. We hardly know what intelligence is, let alone superintelligence. All too often, we assume that signs are reliable representations of subjective phenomena, when in fact they’re not. There is, and will always be, Proving a scientific theory or hypothesis is not the same as getting to the truth, and certainly not sufficient to predict the future. Intellectuals are usually sensitive to this kind of argumentation, and frequently get frustrated by detailed mathematical equations based on more or less unrealistic assumptions. Maybe we should think less about singularity and more about how augmentation technology will change the human condition in a slow and gradual manner. Maybe is not a singular entity, but a networked environment in which thinking is no longer an individual activity. Maybe the global brain consists not only of all connected devices, but also the connected humans using those devices, like an omnipresent cyborg with billions of beating hearts.
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Meet The Judges For The TC Meetup + Pitch-Off In Brooklyn Tomorrow Night!
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Jordan Crook
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Did I mention we’re having a tomorrow night? Because we are! It will be held at Output in Williamsburg at 6pm, and tickets are still available, which you can . But what is a pitch-off? Well, have been selected to show off their wares on our stage. They will have exactly sixty seconds to wow a panel of expert judges and the audience, after which they’ll survive a quick Q&A. At the end of all the pitches, the judges (and the audience) will determine the winners. First place gets a table in Startup Alley at TC Disrupt NY in May. Second place gets two tickets to the conference and the Audience Choice Winner walks away with one ticket to the big show. But who are our judges? Amol co-founded several startups including Virgin Mobile USA, Peek, Halo Neuroscience, Knotable, BEMAVEN, Knotel, and built a building in New York called East of East. He studied cognitive science for his Ph.D. at Stanford with undergraduate degree from Columbia. is the sole Partner and Founder at Brooklyn Bridge Ventures. The fund makes seed and pre-seed investments and was the first venture firm located in Brooklyn–where he was born and raised. Brooklyn Bridge invested in the first rounds of Canary, Orchard Platform, Tinybop, Hungryroot, Clubhouse, Ringly, and goTenna among others. Sutian Dong is a Partner at Female Founders Fund, a seed-stage investor of technology companies founded by women. They believe that there is a large opportunity to bridge the gap in funding the next generation of female-led technology businesses. The fund has built a network of investors and female founders nationwide to provide access to strategic deal flow and serve as resource for the portfolio. Most recently, she was an investor at FirstMark Capital, a leading early stage venture fund in New York City. Prior to that, she was the Director of Marketing at Norisol Ferrari, a womenswear couture line based in New York City. Nimi is an investor at BoxGroup, a seed stage venture fund based in NYC. BoxGroup invests in talented entrepreneurs building technology companies with visions to create the next generation of category defining businesses. Prior to joining BoxGroup, Nimi worked at Google as a product marketing manager focused on growing small business advertisers. In a prior life, she was an investment banker at J.P. Morgan advising power and energy clients on financing, mergers, and acquisitions. Nimi earned her MBA with Distinction from Harvard Business School and Bachelor of Arts degree cum laude in Economics from Harvard College.
John lives in Brooklyn, NY and writes about technology, security, gadgets, gear, wristwatches, and the Internet. After spending four years as an IT programmer, he switched gears and became a full-time journalist. His work has appeared in the New York Times, Laptop, PC Upgrade, Surge, Gizmodo, Men’s Health, InSync, Linux Journal, Popular Science, Sync, The Stir and he’s written Black Hat: Misfits, Criminals, and Scammers in the Internet Age and Bloggers Boot Camp. He also speaks and consults. He has forthcoming books about Marie Antoinette’s watch as well as a YA fiction book, Mytro. He is currently East Coast Editor of TechCrunch.com and runs the BWL family of blogs, SlushPile.net and WristWatchReview.com. He also records the HourTime Podcast with Ariel Adams. Again, I urge you to and come hang out in BK with me tomorrow. See you there!
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Innovations In Cybersecurity At RSA 2016
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Mahendra Ramsinghani
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At the 25th RSA 2016, it will be the year of Security + Machine Learning + Artificial Intelligence. With global cyber spending expected to reach by 2020, startups & legacy companies alike will be competing for this ever growing pie. And thanks to Obama’s latest push for $14 billion in new Federal spending on cybersecurity, even defense contractors like Raytheon, Lockheed Martin and General Dynamics want a seat at the table in this new arms race. According to McKinsey, 74% of enterprise security spend is via procuring tools, technologies and services from outside vendors. New security solutions (possibly old wine in new bottle) is now available for automotive / autonomous vehicles/ drones / IoT / SCADA Systems and even hospital infusion pumps. (Source: by James Kaplan et al, – Wiley, 2015) Over 500 cybersecurity exhibitors will be at Moscone Exhibition Center in San Francisco starting next week. A quick snapshot of exhibitors shows that DataSec (data security) is new wave. Data security means everything to everybody so let’s look at market pain points instead. Security markets can be tiered in a few categories, depending on the buyer’s and the budget. Let’s start at the top. Pain points for “C” level executives / board room: Executives do not always understand the technicalities of a DDOS attack, PCAP, ML or east-west traffic. These bits and bytes are best understood by the heroes of this game. But executives understand risk, liability and budgets. Companies that focus on helping executives understand their risk clearly will benefit from the growing spend. Companies like and offer security ratings to assess risk posture. But what about the alleyways of the dark web? What threats lurk beneath? Domenic Perri, VP Business Development, says “The Deep & Dark Web is vast underground, where professional threat actors plot campaigns that can impact any company, executives and customers. Here, criminals and hacktivists are able to find the skill sets, people, and tools they need to conduct wide-reaching campaigns against a brand for financial or political gains. Enterprises must see beyond Surface Web and social media searches, if they want to protect themselves against the threats actively being planned.” Darkweb hacktivism can impact major brands, financial institutions and all those who have the potential to cause ire to the hacktivists. To take advantage of this opportunity, for $275 million recently. Board level tools to assess risk will evolve rapidly over the next few years. And the CISO will be the point person to bridge the business side with the technical. For some CISOs, a big challenge is to stop being technologists and start being executives. This is a mind-shift that most techies hate – the world of people, politics, money is a messy world. Yet to be able to address the board of directors on security risks call for this mind-shift. Automation and Machine Learning (ML) may be the RSA 2016 theme but ML has some ways to go. , CEO of says “ML tools still not precise enough to be used broadly for security without human intervention. Security tools can become more precise by using models such as Deep Neural Networks. Enhancing ML results with multiple different sources of knowledge is necessary.” Audits & compliance come first and beyond these are administration, setting policies, tracking and control of the environment. One of the reasons why has achieved such rapid growth is because of its ability to offer visibility and compliance. Having raised over $100 million, it’s a rare unicorn in the security arena with investors like A16Z, Accel, Formation8 and Data Collective. The smart and delightfully crazy team is offering at their Disaster Recovery breakfast. A new category has thus been created! At RSA 2016, all bleary eyed and hungover will have non-prescription solutions. But Securoris is planning a new offering in – if I had a farm, I’d bet on them. These guys know what they are doing. Speaking of automation, automated hacking is on the rise and thus, automated protection will soon follow. As the attack surface grows with IoT, we will see some Mobile and Endpoint security offerings morph to take advantage of this market opportunity. and are taking a shot at the Enterprise IoT with different approaches, while and are not my pet pigs pictured, but consumer IoT startups. Picture caption: Got Iot? Not Cujo nor Dojo – just two happy pigs (Picture Credit – Anastasia Van Wingerden) Thwarting intruders via deception networks (or the nextgen Honeypots) has also attracted attention from leading VCs. (backed by NEA), (backed by Intel Capital) and (YC alum, backed by Sherpa Ventures) are a few that are aiming to be the category killers in this landscape. Former CEO of Microsoft, Steve Ballmer expressed in a very unique manner. But at RSA, we ain’t be seeing such ‘developers developers’ chants of love yet. Classical security companies can ignore this rapidly growing audience to their own peril. Of course, this audience does not tolerate the usual sales /BS tactics, can see through vaporware and demands a very high standard. So the rest of the industry needs to catch up. Budgets are a challenge and buying power can be questioned, but these are the early adopters. Those cut from the same cloth are making the most of this opportunity. Appsec solutions that drive speed without compromising security are on the rise. Andrew Petersen, CEO of (backed by Index Ventures) was frustrated. At Etsy, he and his team tried to find some existing solutions that would enable security without compromising speed. No good solutions existed. They engineered their own in-house solutions and shared it with the world. The feedback was rich, indicative of pen-up demand and Signal Sciences was born. “With the rise of agile development and the devops movement, security teams must evolve both culturally and technologically. There’s not an engineering team on the planet that’s doesn’t have the goal of deploying their applications faster. The challenge for security teams is to enable rapid deployment, not slow it down. DevOps teams care more than ever about security and are involved in both selection and implementation of security tools. Application security solutions that don’t address all of these constituents will not get adopted” he says. Indeed, cloudsecurity startup (backed by True Ventures, Bain Capital) announced the – we celebrated this new era of security. There is no SecDevOps exhibitor category at RSA yet but this is a growing pain in the market. This audience also cares about container security, which aims to address kernel exploits, breakouts, compromised secrets and poisoned images. Container security startup co-founder 2016 on futuristic panel “Cybersecurity in 2020.” Innovators to watch in this space include & and of course, the big boys – and CoreOs . Cloudera and Hortonworks have built identity / authentication and encryption solutions. Access control, Code-signing, Governance and encryption are ongoing challenges with new solutions under various stages of development. Pratik Verma, Founder of (backed by Data Collective) says “Rapid, organic evolution of the data ecosystem makes it really difficult for businesses to specify what data should be protected. Security teams cannot become data scientists overnight. And with security controls siloed in different parts of the data stacks, this problem can become intractable. Decisions like “who can do what with which data” should be made easily. Centralized enforcement with clarity on protection of data in use can make their life a lot easier.” RSA 2016 underestimates the impact blockchain could have on the world of security. , Co-founder and CEO of is bringing private blockchain to financial universe. He says “The potential for blockchain in the financial universe will impact multi-signature contracts, real time APIs to assess financial health, ledger for recording all transactions. This can lead to innovation in areas like crypto, key management, identity and access management.” : 2016 could well be the last year of Symantec as public company. in Symantec, closely followed by an investment from activist investor Elliott Management, the writing’s on the wall. Thank you, Symantec – it’s been a great run. Even as we approach the biggest spend increase in cyber security, you missed the boat. Which is OK. We need to make some room for the new!
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