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Natasha Lomas
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AWS Bolsters High Performance Computing Offering With NICE Acquisition
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Ron Miller
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attempted to enhance its g today when it purchased NICE, an Italian software and services company for an undisclosed price. NICE provides a set of tools and technologies that were attractive to AWS, and brings with it an international clientele, which should help AWS expand its market with a set of customers who have high-end compute requirements. “These products help customers to optimize and centralize their high performance computing (HPC) and visualization workloads while also providing tools that are a great fit for distributed workforces making use of mobile devices,” AWS’s Jeff Barr announcing the deal. Among the technology that NICE owns is a nifty tool they call , which provides remote access to 2D and 3D applications, giving engineers, game designers and others access to their designs and the high-end hardware to make them work in the cloud, no matter what desktop or laptop they are using.. [youtube https://www.youtube.com/watch?v=8ZkxYbgYGIk&w=560&h=315] Another piece of technology called the NICE EnginFrame could also be particularly attractive to AWS. It enables customers to run high-end computing environments like HPC clusters, data, licenses and batch & interactive applications inside a standard browser. Constellation Research founder, R Ray Wang believes AWS gets quite a bit out of this deal. “The NICE acquisition gives Amazon a good trove of IP, access to good clients and a good presence in Europe, the Middle East and Africa (EMEA). These IP capabilities help with performance and some newer features that can benefit the overall Amazon platform,” Wang told TechCrunch. The IP he referenced includes an algorithmic model for performance, he said. It’s worth noting that AWS has had a substantial presence in Europe for some time with offices throughout the EU including Italy where NICE is located. The acquisition could give them access to a set of clients with much more intensive computing requirements. Just last year for companies with high performance computing requirements in the cloud. As TechCrunch’s Frederic Lardinois wrote at the time: As Amazon notes, these new instances are designed for applications where CPU performance is critical. These include “high-traffic front-end fleets, MMO gaming, media processing, transcoding, and High-Performance Computing (HPC) applications.” For now, AWS intends to keep NICE in place with its own brand, products, customers and team continuing to operate just has it has been with plans to enhance the company’s offerings and come up with new combined solutions in the future.
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Family App Life360 Acquires Couple, A Private Messaging App For Two
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Sarah Perez
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, the mobile application designed for families, announced today that it has acquired the private messaging application and Y Combinator grad (formerly known as Pair), based in Mountain View. Not a pure talent acquisition, Life360 sees Couple as being a potential initial entry point into its larger platform, which now counts over 55 million families using its location tracker and family communications app. Explains the company, Couple – at least for now – will continue to operate as a distinct app, and its team will build a migration path between Couple and Life360 for those couples who have children and are ready to move to a “Family Network” app. In addition, Couple’s co-founders Oleg Kostour, CEO; Jake Schwartz, lead engineer; and Andrew Jasso, lead designer, have joined Life360’s team as a part of the acquisition. There were no other full-time members. Deal terms were not immediately available, but Couple was backed by Y Combinator, SV Angel, CrunchFund, Ashton Kutcher’s A-Grade Investments, Dave Morin, Founder Collective, Lerer Ventures, Betaworks, Michael Birch, Paul Buchheit, Alexis Ohanian, Garry Tan, Gary Vaynerchuk and other strategic angel investors. , Couple had raised $4.2 million from outside investors. (CrunchFund’s founder also founded TechCrunch, by way of disclosure.) We understand the acquisition was a mix of cash and stock for both the team and assets. Couple was built to be a private messaging app for the use between two people. First launched in 2012, the app has seen over 4 million downloads to date as well as billions of messages sent between users. The app also includes a number of fun features, including support for emoticons, photo and video sharing, sketching, as well as more practical ones, like a shared list and calendar, reminders, date night suggestions and more. There’s also a cute “thumbkiss” feature that lets you tell your partner you’re thinking of them when you’re apart. It makes sense that the kind of people who would want a dedicated portal for a certain kind of private communication outside of text messages could be the ideal user base to eventually join Life360, which offers much of the same kind of thing, but for families. This is what Couple’s CEO Kostour also believes, noting that Life360’s focus on users with “high-trust” relationships makes the app a “perfect fit” to join the larger company. Adds Alex Haro, co-founder/President of Life360, “the fit between the team is amazing! Both Life360 and Couple were built on a foundation of putting user experience first and building an intimate relationship for users. We share the same values and approach to making our user’s lives better.” However, betting on the chance that the millions of downloads for Couple will eventually translate into converts to Life360 is sort of a risk – Couple today is ranked No. 164 in the “Lifestyle” section on iTunes – a not-so-stellar ranking in terms of having carved out a significant niche for itself in the crowded mobile messaging space. That doesn’t bode well for Life360 keeping Couple’s doors open indefinitely, either. To some extent, Couple was likely impacted by the rise of other dominant mobile messaging services, like Messenger, Whatsapp or Snapchat, for example, as have a number of other niche players. “We are excited to have Couple join the Life360 family,” said Itamar Novick, Chief Business Officer of Life360, in a statement. “We share a mission to better connect people with their loved ones. The team at Couple has built a great product loved by millions of highly engaged users. This acquisition represents a strategic alignment of our audiences as couples make up a significant percentage of our user base at Life360,” he added. This is not Life360’s first acquisition. The San Francisco-headquartered company, which has raised $76 million in venture funding to date, previously bought in 2010, in , and just . The focus is usually on talent, and incorporating ideas from the acquired companies into the main Life360 app, at times. Couple, then known as Pair, had also picked up an app of its own in the past. The company, Tenthbit which makes the Couple app, actually
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Google Is Finally Killing Picasa
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Sarah Perez
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It hasn’t made sense for Google to continue to invest in two separate photo storage and sharing applications, as it has been doing with the newer Google Photos and the dated software Picasa. And now the company is finally going to do something about that: Google this morning that it will no longer support the Picasa desktop application as of March 16, 2016. In addition, it will be archiving Picasa Web Albums data at a later date while encouraging those users to convert to Google Photos instead. It’s clear that Google is concerned about backlash from its devoted user base who still relies on Picasa, given the tone of today’s announcement. The company emphasized how much time it has invested in making sure it makes the transition as painless as possible for end users. “We know for many of you, a great deal of care has gone into managing your photos and videos using Picasa—including the hours you’ve invested and the most precious moments you’ve trusted us with,” writes Anil Sabharwal, Head of Google Photos on . “So we will take some time in order to do this right and provide you with options and easy ways to access your content,” he added. For those who are using the Picasa desktop application, it will continue to work as it does today – and if you choose to download it before the shutdown date of March 16, that will also be the case. However, the software will no longer receive future updates. To be fair, the software hadn’t been updated much as it was – the desktop app may have received minor tweaks, security patches and bug fixes, but its overall user interface is incredibly dated. It looks much like it did years ago. For those who want to make the switch to Google Photos, there’s a desktop uploader app available at that can be used going forward. Meanwhile, there’s likely more concern from users about the data collected on Picasa Web Albums, which includes very specific metadata about their photos. Specifically, users may have tagged their photos for organizational purposes, as well as added captions. Friends and family may have commented on some photos, as well. It doesn’t sound like that metadata has made the transition to Google Photos, however. Google notes that the easiest way to access, modify and share the content from a Picasa Web Album is to log into Google Photos, as photos and videos will already be there for you, automatically. But some Picasa Web Albums users don’t want to join Google Photos for whatever reason. Google is practically going out of its way to address their needs, saying that it will create “a new place for you to access your Picasa Web Albums data.” There aren’t a lot of details about this new place yet, except that it will offer users tools to “view, download, or delete” your Picasa Web Albums. However, it won’t allow users to create, organize or edit albums – to do that, they would have to move to Google Photos or some other program. This part of the transition is coming after the end date for Picasa on the desktop, as Google says it won’t start rolling out these changes until May 1, 2016. Google notes that it will also retire some functions of the Picasa API, It’s somewhat surprising that it has taken Google this long to end support for Picasa, given how much its newer Google Photos product is today. In fact, every time Picasa experienced a glitch and the Web Albums product would go down, I would ask Google if it had killed the service at last. Google spokespersons would always say “no.” Even as late as last summer, the company touted its devotion to the product, telling me that “Picasa continues to be part of our overall Photos offering, and we’ve worked hard to make sure that almost everything you do in Picasa is compatible with Google Photos.” That line of thinking, obviously, has now changed. But it does speak to what must be a still-sizable user base using Picasa software and its online albums – and when it comes to users who cling to dated products, it’s not likely they’ll be fans of this change.
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11 TechCrunch Stories You Don’t Want To Miss This Week
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Anna Escher
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This week, Twitter rolled out its new algorithmic timeline, Tesla confirmed the price of its next car, Zenefits CEO Parker Conrad exited the company and on the science front, gravitational waves were detected in space. TechCrunch held the 9th Annual Crunchies awards show, which you can . Or, you can just . These are the top tech stories of the week to keep you in the loop. Facebook’s Free Basics — the company’s zero-rated mobile service — has been under fire in India over net neutrality violations for months, and now the country’s regulator has weighed in hard on the issue: . Investor Marc Andreessen took to Twitter to express his in a statement that some on the Internet likened to colonialist attitudes. , noting that he found Andreessen’s comments “deeply upsetting.” Tesla has yet to unveil the Model 3, but this week the company confirmed that it will be It was a big week for Twitter, as the social network rolled out its , unveiled its . Josh Constine wrote about how using Twitter sometimes feels like yelling into a black hole, and that this new timeline tweak could help boost user growth by . The company also reported , meeting revenue expectations of $710 million but falling flat in user growth. It was an exciting week for science; , confirming Albert Einstein’s prediction of their existence. NASA released a that was created by stitching together images taken by the Mars Curiosity Rover. Reports surfaced claiming that , including missing revenue targets , and also running into issues with regulators. This week, CEO Parker Conrad exited the company and COO David Sacks took over. Conrad is also stepping down as a director of the company. Shortly after the news was announced, we learned that the around the future of browser maker Opera, and now that looks like it will soon be resolved. The company that it has received a from a group fronted by Chinese consumer tech companies Kunlun Tech and Qihoo 360. To the delight of social media managers everywhere, . Columnist Jon Evans wrote about . Natasha Lomas reported that analyst Canalys says the , with more than 12 million units shipped by its count in total — and more than 5 million of those in the holiday quarter. Ron Miller wrote about the as the company shifts from a licensing model to subscription pricing. Google from the Google Play Store – a move which had seen the company . The decision represents a change in course for Google, regarding its position on what sort of apps the company will allow in its app store for Android devices.
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Newcomer Rocket Lab Secures Spire As Their Next Customer
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Emily Calandrelli
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, the venture capital- space start up, is constructing the first private launch range in the world. The company told TechCrunch that they have secured as their next customer for a launch later this year. While Rocket Lab has yet to fly their first commercial mission, Spire has made an agreement with the launch provider for an impressive 12 launches over the next 18 months once their launch facility is complete. With companies like SpaceX, United Launch Alliance, and Arianespace dominating the launch market, it’s hard to believe that there’s room for a new launch provider. But satellite technology has gotten smaller and cheaper over the years, lowering the barrier to entry into the space industry. More companies have been able to affordably design and build their own small satellites, or satellite constellations, and are looking for launches to get their products into orbit. The increased number of small satellite owners brings a more diverse set of needs when it comes to launches. Unfortunately for small satellite owners, they usually have to “piggy back” onto heavy-lift rockets whose primary mission is to bring a larger, more expensive satellite to a specific orbit. When forced to rideshare, it can be difficult for small satellite companies to easily get where they need to go. Rocket Lab has created the Electron rocket, designed to bring small satellites to Low Earth Orbit (LEO), to fill this need. Peter Beck, founder and CEO of Rocket Lab, told TechCrunch “Rocket Lab is providing a dedicated service to orbits specific to our customer’s requirements. It’s the difference between the bus and a taxi, except our taxi happens to be better priced than the bus.” Rocket Lab is based in Los Angeles, but is building their launch pad and production facilities in New Zealand. Their other customers include NASA and even Moon Express, which 3 launches to the moon in an effort to win the Google Lunar X Prize competition. Moon Express’ launches are schedule to begin in 2017. Rocket Lab’s latest customer, Spire, plans to launch a constellation of 100 satellites designed to provide solutions for maritime intelligence and weather monitoring systems. For the maritime market, Spire’s satellites would assist with maritime law enforcement by providing near-real time signal intelligence anywhere on Earth. Peter Platzer, CEO of Spire, told TechCrunch that their satellite constellation would be able to identify a stolen vessel with beacon tracking from orbit. Once pirates enter a tanker, they turn off its automatic beacon and drive the tanker away to steal the goods on board. With their satellite constellation in place, Spire could detect a missing beacon signal within minutes and then identify that location and track the ship as it drives away. “Its the difference between relying on your neighbours to alert the police if someone breaks into your home when you are away, and having a silent alarm linked directly to the police.” – Peter Platzer, Spire CEO Platzer told TechCrunch that they opted to fly with Rocket Lab because they were able to fit their launch needs more precisely than alternative launch providers. Platzer said, “As use cases, sizes, orbit requirements, launch requirements for satellites are changing, there is a need for a more differentiated offering from launch service providers.” Rocket Lab is certainly an attractive option to small satellite companies who want rides to specific orbits that would be difficult to obtain through traditional, more established launch providers. However, the company has yet to prove the most coveted capability in the launch industry: launch reliability. The company’s success will hinge on their ability to keep their prices competitive while consistently launching failure-free missions. Rocket Lab hopes to launch their Electron rocket for $4.9 million per flight with, eventually, one launch per week. It’s an entirely different business model than someone like SpaceX whose Falcon 9 is estimated at $60 million per launch and completed 6 successful launches in 2015. In order to achieve this price and launch frequency, Rocket Lab has focused on creating and manufacturing their entire rocket in-house and building their own launch facility. They’ve even designed and developed their own 3D printed electrically-pumped engine which they’ve been testing for several years. The price of a rocket, however, becomes a moot point if a small satellite company can’t be confident that their product will launch successfully. These next few years will be important for Rocket Lab to prove that their price and launch frequency are obtainable feats. The New Zealand launch pad is scheduled to be completed by the end of the in 2016. Once complete, Rocket Lab will begin test flights of Electron in preparation for their first commercial missions.
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Sendbird Looks To Help Developers Add Chat Functions To Any App
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Matthew Lynley
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When John Kim and his team were working on a community-based application called — which was designed to connect nearby moms — they ran into a problem: They wanted to integrate messaging, but couldn’t find an off-the-shelf solution they liked. They ended up building one themselves, and that led a bunch of friends to ask to use the service. So Kim and his team decided to pivot the company toward building just that. The result was , a software development kit that enables developers to quickly build chat tools for their services. The company comes out of Y Combinator’s most recent class, and is launching today. Kim’s background is in gaming, so it’s a problem that he knows well — and an obvious one, to be sure. As gaming has generally shifted to mobile devices, the need for communication across those games is increasing. That’s doubly so for studios that are producing a big portfolio of games that still want to connect players across multiple games in order to keep a sense of continuity across those titles. Kim, originally a pro gamer, sold his last startup — a gaming studio called Paprika Labs — to GREE in 2012. “We’ve been building this for a couple times when we were building our social game, we had to build this chat functionality every time,” Kim said. “We felt like it was re-inventing the wheel every time. Even though chat is really important, as a startup you have limited resources. You want your product guys and engineers focusing on what matters most. ” Initially, Sendbird was focused on small- to medium-sized businesses, but a meeting with Parse co-founder Ilya Sukhar led them to start looking more closely at enterprise customers. In reality, businesses have been communicating with consumers all the way back when SMS was the primary mode of text communication on cell phones. Working with enterprise customers, in theory, offers an opportunity to operate at a larger scale than going directly to smaller app developers — and generate more revenue. Sendbird operates on a paid subscription model, where the pricing varies based on the number of users who are using the chat services and what level of support companies are looking for. “It’s a natural evolution to how technology is distributed from consumer to business side,” he said. “I hope we’re at the right time.” If this all sounds familiar, it should. There’s a competitor that’s raised a hefty $22 million called Layer, . The operations are quite similar, but Kim’s argument is that Layer doesn’t have the same functionality on a per-chat basis, like having an unlimited number of people chatting in the same room. Still, Layer has plans that allow unlimited monthly active users. There are other potential competitors, as well, like if Twilio were to release a similar service. Sendbird has 15 employees, and started in Korea. Now it’s based out of San Francisco, largely because the company hopes to build a global-based presence, and San Francisco is home to many business-to-business software startups and is “at the top of the food chain,” Kim says. Part of the reason is that building a startup out of Korea became tough following the subprime mortgage crisis. Sendbird is live in 340 apps now, Kim says. He also says Sendbird has around 2 million monthly active users chatting through its platform. The company is working on bot integrations, much in the same way Slack has, where users can tie third-party services into the messaging portions of an app.
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UK High Court Rules In Google’s Favor In Anticompetitive Maps Case
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Natasha Lomas
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While Google continues facing multiple , the company will be cheered today by a U.K. High Court decision that has ruled in its favor on a specific anticompetitive complaint. The case in question was filed by UK mapping company Streetmap , which accused Google of abusing a dominant position to promote its mapping service within search results — thereby having a knock-on effect on traffic to Streetmap’s own service. The complaint relates to Google launching Maps in the UK back in 2007. Streetmap, a very early mover in the online mapping space, said Google’s Maps launch decimated traffic to its rival mapping website. Its argument was that the inclusion by Google of a map at the top of search results displaying results from Google Maps promoted Google’s own maps more favorably than rivals — hence the claim of anticompetitive behavior. A similar argument regarding Google’s search comparison service is currently being examined by the EU antitrust commissioner. The EC issued a formal Statement of Objections regarding the operation of Google Shopping in April last year. It is also to investigate antitrust complaints. However the judge in the UK case has now dismissed Streetmap’s argument, ruling that the inclusion of the Google Maps box at the top of search results was “not reasonably likely appreciably to affect competition in the market for online maps” and that Google’s conduct was “objectively justified” (via ). Streetmap, while an early innovator in the domestic mapping space, clearly could not match the level of resources Google was able to pour into its mapping product. So, placement issues aside, there was also a mismatch in the overall product quality — which also inevitably incentivizes users to choose one over the other. (Although, of course, if people don’t encounter your product in the first place because it is being demoted in search results that’s going to have an impact, too…) Streetmap said it intends to appeal the High Court ruling but there’s no doubt it’s a hefty blow to its hopes. Commenting on the judgement, Google said: “The court made clear that we’re focused on improving the quality of our search results. This decision promotes innovation.” Streetmap said its appeal will focus on two points: firstly that the standard of proof being demanded of small businesses wanting to prove anticompetitive behavior is too high, given they are being asked to supply information they do not have — because it is held by the dominant company. And secondly on the issue of non-compliance with legal obligations. It notes that the trial showed Google had not done a UK market test prior to introducing Google Maps, thereby suggesting the company was shirking its duty to comply with UK law. Streetmap is one of several mapping companies reported to be on associated with the EU’s formal antitrust charges against Google. Although it is unclear whether the UK High Court decision will have any bearing on the European level antitrust case against Google. The two legal regimes are frequently at odds.
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SEO Doesn’t Have To Be A Shot In The Dark
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Dmitry Dragilev
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To many startups, search engine optimization (SEO) is a task that sits on their company’s back burner. With features to launch and customers to support, the idea of spending time fiddling with your title tags can seem like a fool’s errand. That’s especially true when there’s no guarantee that your hard work will result in a single additional visitor from Google. That’s one of the reasons that a recent study ranked SEO as for startups (behind social media and content marketing). Why do startups tend to shy away from SEO? From working with dozens of startups, I’ve found that founders hate the uncertainty that comes from SEO. Indeed, success with SEO can seem like throwing two dice and hoping you roll double sevens. Yes, there’s an element of uncertainty with SEO (after all, Google doesn’t publicly reveal the factors they use to rank websites). But according to a new ranking-factor study, SEO doesn’t have to be a shot in the dark. In fact, you can prioritize your SEO tasks based on what’s likely to give you the most bang for your buck. Backlinko recently teamed up with a handful of SEO software companies to evaluate . To do this, they analyzed one million Google search results. Of the 20 potential ranking factors they looked at, five were revealed to be especially important. I’m going to deep-dive into these five important ranking factors, and show you how you can apply them to squeeze more juice out of your SEO efforts. The study found that the most important ranking factor was number of different websites linking to your page. This ranking factor is . Despite the fact that so-called “black hat SEOs” manipulate Google with phony links, it appears that this ranking factor remains an integral part of what makes Google tick. This shouldn’t come as a big surprise. Google’s reliance on backlinks has taken it from two guys in a garage near Stanford to one of the most valuable companies on the planet. And today, Google’s worldwide search market share . This makes it unlikely Google will completely remove backlinks from their algorithm. This data suggests that, at least for today, backlinks are still heavily relied upon by Big G. Another interesting wrinkle is that this finding flies in the face of what many SEO consultants recommend: Many SEO agencies preach a “quality over quantity” approach to link building. While there’s no question certain backlinks provide more benefit than others (for example, a link from TechCrunch is significantly more powerful than a link from your average mommy blog), this study suggests that backlink quantity is also important. This is an important lesson for founders and startup marketers to learn. As someone who does PR consulting for startups, I notice that many founders shoot for the moon with their link and PR aspirations. In other words, to many founders, it’s “CNN.com or bust.” This new data suggests that this approach may be a mistake. In fact, one of the chief reasons is that I wasn’t overly picky about which sites we got mentions and links from. If a site looked legit and wanted to cover us, I said, “Let’s do it.” That’s part of the reason I’ve landed 1,300 mentions over the last few years. As you can see, a lot of these mentions were on major news sites. But the funny thing is that a good chunk of these major mentions came as a result of a smaller blog or niche news site writing about us. In fact, this is the exact strategy that Ryan Holiday recommends in his PR classic Not only are mentions from smaller sites beneficial for startups’ PR, but they can significantly boost your Google rankings, as well. Backlinko’s new study also found a strong tie between site speed and Google rankings. Using site-loading-speed data from , they discovered that fast-loading websites significantly outperformed slow sites. This finding shouldn’t come as a shock to anyone who follows SEO. Google has come out and said they use site speed as a “ .” Because users , Google doesn’t want to show them to their users. Fortunately, taking your site from “tortoise” to “hare” is relatively simple. If you happen to use WordPress, . Even if you don’t use WordPress, a few quick steps can typically move the needle for most websites: Backlinko also found that, when it comes to SEO, content may not be king, but it’s certainly queen. Specifically, their data revealed that long-form content tended to rank above shorter content. According to their analysis, the average article on Google’s first page boasts 1,890 words. Does this mean that Google has an inherent preference for long content? Maybe. The study authors pointed out that this finding was simply a correlation, and they couldn’t say for sure. But they hypothesized that Google would want to show their users through content that fully answers their query. In other words, long-form content. However, it may be that longer content generates more shares (in the form of tweets, Facebook likes and backlinks). In fact, BuzzSumo found that longer content tended to generate more social shares. Considering that shares can lead to higher rankings, long-form content may simply outperform short content in the share department, leading to higher Google rankings. If you haven’t attempted to publish long-form content because you feel your audience doesn’t have the attention span for it, this finding may give you the impetus to at least give it a shot. Additionally, the study found that focused content outperformed content that attempted to cover several different topics. Using software called , each article in their database was scored for “topical authority.” A high score represents an article that covered a topic in-depth. A low score indicates that the article skimmed the surface of a given topic. The authors guessed that Google would prefer comprehensive content. This is because of a fundamental shift in the way Google indexes content. In the last few years, Google has moved away from simply looking at the words on your page to actually understanding what your page is about. This is known as . For example, before semantic search, if you Googled “who is the CEO of Starbucks”, Google would look for pages that contained the exact term “who is the CEO of Starbucks” on the page. And they would present 10 links to those pages. Today, they know the actual answer, and present it to you. It turns out that Google may prefer in-depth content, as it gives them a deeper understanding of your content. This study found that content rated as having high topical authority ranked above content with a poor rating. The old writing adage “go an inch wide and a mile deep” may also now apply to SEO, as well. This research also found a correlation between a low bounce rate and poor rankings in Google. According to the study, Google may use bounce rate as a proxy measure of content quality. If someone searches for a keyword, clicks on your page and quickly leaves, it sends a message to Google that your page isn’t a good fit for that keyword. On the other hand, if you stay on the site and browse through several different pages, it implies that that person had a great experience and enjoyed reading your content. That may push Google to show your page to more people. While this finding is interesting, there are a few important caveats I should point out. First, this study didn’t analyze the bounce rate of the specific page in Google. Instead, they looked at the site’s average site-wide bounce rate. This means that there may be pages on a site with a high bounce rate, even though the site’s average bounce rate may be stellar. Also, being a correlation study, it’s impossible to say whether Google directly measures or uses bounce rate as a ranking signal. A high bounce rate may simply reflect content that isn’t very good. Regardless, reducing your bounce rate certainly won’t result in rankings — and it can boost conversions, as well.
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Flipagram Adds Direct Messaging To Share Photo Stories Privately
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Ingrid Lunden
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As the world’s big messaging apps add to keep their users , other apps are in the hopes of creating more stickiness of their own. In the latest development, , the app that lets you sew together pictures and video snippets with one minute of music to create packaged stories, has added a direct messaging feature. Now you can send your Flips through to specific friends or groups of friends without leaving the app. In the past, you could send Flips to people directly only by leaving the Flipagram app to do it. You can still send by email, SMS and other routes, but the functionality of the Flips will be more limited, Farhad Mohit, co-founder and CEO of Flipagram tells us. One key feature is the pause — crucial if you want to see more than a blur of images in the space of a minute, which is how many Flips set to the bouncy beat of a hit song end up looking. The DM feature will now get a prominent place, directly to the right of the + at the bottom of the screen that you press to create a new Flip. It will replace the music button, which will now live in the app’s “Explore” section. You find friends to message by following them and them following you back in the app. The messaging interface, meanwhile, will appear on a different screen, where you can exchange messages as well as Flips with friends. The move to add a messaging feature comes at an interesting time for Flipagram. The company (reportedly a round that was made at a ) in February 2014, announcing the funding in July of last year to coincide with the news that it had managed to sign licensing agreements with all the major music labels for the music on its service. Since then, Mohit tells me the app has ballooned to over 40 million registered users (from 33 million disclosed at the time the funding was announced), while the app has added other features like video, which is now in 40 percent of all Flips. The stats for how the app has been faring in download charts also point to sustained interest in Flipagram, with the app consistently hovering in the top 10 of photo and video apps in the key U.S. market. That lays the groundwork for a decent amount of users of the app, so that an in-app messaging feature becomes something that might actually be useful, and used. As an anecdotal measure of Flipagram’s growth, I’ve been noticing several of my non-tech friends creating and sharing Flips on sites like Facebook, which speaks to how the app appears to be gaining traction with people outside of the Silicon Valley bubble. But at the same time, the company has been facing some growing pains. In October, the company let go of with the aim of reorganizing its team more sharply around engineering, product and design (and the startup is still hiring). It seems that the direct message feature is a result of some of that sharpened focus. Flipagram has partly grown as a result of its multiple integrations (if you’re not a Flipagram user, chances are you’ve seen them shared on other platforms like Facebook and Twitter), so now more attention is being put on ways of getting its users to spend more time sharing and consuming on Flipagram itself. Using messaging to do that is a notable move. Messaging is in many ways the killer app on mobile at the moment, with apps like WhatsApp and Messenger (both owned by Facebook) now used by billions of consumers. The pull of messaging apps is so strong that there are examples from entirely different businesses — — looking to messaging formats as a building block to build their own apps. . More time spent on Flipagram, not just creating but consuming content, could help the company longer-term with its monetizing strategy. Up to now the company has been cozy with brands and marketeers, Mohit says, but there have been no moves to launch paid campaigns on the platform. Not yet, at least. “We are The DM feature could also potentially be used to develop products. Apropos of being launched the weekend of Valentine’s Day, I asked Mohit about whether he’d ever considered developing a dating category for Flipagram, where people browsed Flips of people looking to meet others folks, and then used the DM feature to contact each other. “I Aside from spitballing whatever may come in the future, adding messaging is also a move being made to capitalize better on existing user behavior. Mohit notes that of the Flips that have been shared off network, over 60 percent have been to personal communication services like email and SMS. Flipagram has been , in part because they all target a similar demographic, but also because Snapchat Stories and Instagram offers a similar kind of very visual-first experience. creation flow the app shows users a Snapchat folder, as well as one for Instagram, on a user’s phone to create Flips using Snaps and Instagram.
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Rakuten Writes Down $340M In Assets, Shutters Marketplaces In Southeast Asia
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Jon Russell
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Japan-headquartered e-commerce firm from a range of businesses, including its Kobo e-reader division and France-based e-commerce site PriceMinister, and announced plans to close a number of global operations as part of a new strategic focus. its latest financial results today, and they weren’t great. Net profit for the year slipped 38 percent year-on-year to 44.3 billion JPY ($393 million) on revenue of 714 billion JPY ($6.3 billion) — up 19 percent. Part of those results included a write-down of 38.1 billion JPY ($339 million) in consolidated impairment losses. The changes come from Rakuten’s new ‘2020 Vision’ ( ), a business realignment strategy announced today, and they break down as follows: Rakuten added that the (non-consolidated) loss on valuation of stocks of subsidiaries and affiliates came in at 62.3 billion JPY, that’s around $554 million. The company’s share price on the Tokyo Stock Exchange dropped seven percent in response to the news. Its total market cap stood at 1.436 trillion JPY ($12.75 billion) at the end of trading. Rakuten’s share price over the last year Explaining the measures, that PriceMinister had been “affected by the competitive environment of the French e-commerce market,” while its write-down for Kobo was a result of “a slower start to the rise of the global ebook industry than we originally expected.” That disappointment is tempered by some optimism. Rakuten said that PriceMinister has “an important position” in the European e-commerce space. Likewise, it is estimated its e-book division — which includes content platform OverDrive, , and Kobo — will return to profitability in 2016. One line item filed under ‘other’ costs looks to be a restructuring of Rakuten’s marketplaces outside of Japan. The company confirmed in an announcement ( ) that it will close down its e-commerce sites in Singapore, Malaysia and Indonesia next month, and it is looking to offload Tarad.com, the e-commerce company in Thailand that it acquired in 2010, too. Those closures will mean that around 150 staff are laid off, Rakuten confirmed to TechCrunch, but the company will retain its regional office in Singapore, which will continue to house Rakuten Ventures and Rakuten Travel. Its e-commerce business in Taiwan, which appears to be performing far better, will also remain unaffected. Rakuten Singapore’s website These marketplace are being replaced by a new project in Southeast Asia, a consumer-to-consumer app called which, Rakuten said, has grown 20 percent month-on-month in Japan. That concept sounds a lot like (indeed, the same as) Carousell, the app that Rakuten Ventures is an investor in. Singapore-based Carousell is currently in three countries in Southeast Asia but, as we reported late last year, it is trying to to expand its service significantly across Asia. It seems a little odd to pit Rakuma against Carousell. When we asked Rakuten for more details about that, it told us that its “the plans are still under consideration and we look forward to sharing more detail on this soon.” : Rakuten has not closed its site in Brazil, but it has shifted the model from a marketplace to a Saas-based approach. That’s powered by Ikedia, another Rakuten acquisition — the company back in 2011. Rakuten has exited countries in Asia before — it in China, and in favor of flying solo — but these withdraws are far more strategic and wider reaching. Chairman and CEO Hiroshi Mikitani, who took the step of addressing investors in Japanese not English as is usual on Rakuten results days, stressed that the 2020 Vision is based around three core principles: “strong, smart and speed.” Highlighting a number of new businesses that include acquisitions Viki, Ebates and Viber, Mikitani made bold growth predictions and hailed the disruptive potential of these mobile technologies when combined with Rakuten’s core e-commerce businesses. But Rakuten’s main domestic business is stagnating. Its Japanese e-commerce division grew 10 percent on GMV — the total amount of goods sold on platforms — but profit was up just six percent and revenue 13 percent on the previous financial year. Rakuten’s Internet services division has expanded with some early promise in Japan — revenue grew 22 percent with profit up 45 percent year-on-year — but there’s also pressure on overseas investments to pull in cash to compensate. Mikitani placed plenty of emphasis on Ebates, , which Rakuten said “contributed significantly to the growth” of its overseas businesses, with GMV rising 43 percent annually to $4.9 billion. Under its new plan, Ebates is tipped to triple to $15 billion GMV by 2020. That’s the model that the company is looking for, but it’s tough to find that in emerging markets like Southeast Asia and Brazil. Yes, millions of new Internet users are coming online via smartphones, but there’s plenty of competition in e-commerce (Rocket Internet alone has poured more than $1 billion into its two players in Southeast Asia) while buying online is not yet a mainstream trend among consumers. As a result, Rakuten looks to be clearing out its longer-term, less-certain bets and doubling down where it believes the healthiest chances of returns lie. The headline and article was updated to clarify that Rakuten has changed its marketplace model in Brazil. The write-downs on Kobo and PrimeMinister were also corrected.
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Microsoft’s New App “Fetch!” Tells You What Kind Of Dog You Are (And It Can ID Your Dog, Too)
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Sarah Perez
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Even Microsoft’s new image recognition app has no idea what kind of dog I have. If you don’t own a mixed-breed mutt saved from the kill shelter, however, you might have fun with the company’s latest Microsoft Garage project: a new iPhone app that looks at photos of dogs to identify its breed. Or, in the case when it can’t make an exact match, the app will show you a percentage of the closest match. Oh yes, in case you’re wondering – you can use it with people, too. The app is the latest in a series of fun projects that are meant to highlight machine learning’s potential. In this case, that’s the ability to look at an image and make some sort of determination about its contents – basically, it’s teaching machines to make the sort of intuitive leaps that people naturally do. As Fetch proves, this process is actually harder than it looks. People can easily put together different pieces of information on the fly to make an educated guess about something like a dog’s breed, but machines have to be taught using a combination of correct images, expert data about breeds, and machine intelligence. The app in particular uses a machine learning technique called deep neural networks. “…there is very advanced work underway at Microsoft in this area, which are able to take apart subtle differences, even when breeds look similar or through the many different colors within breeds,” explains Mitch Goldberg, a development director at Microsoft Research in Cambridge, U.K based team built the experience. “Every time we add more, that’s the beauty of the deep neural network in understanding new, unique breeds. This is a really complex problem.” Fetch, in fact, is the latest in a series of releases from Microsoft that try to make understanding the complexities of machine learning more accessible to the mainstream user. For example, last year The results, as with Fetch, were hit or miss. If the picture wasn’t perfectly framed and lit, the service had trouble making accurate guesses. The company has also been working , and in honor of the facial hair fundraising effort “Movember,” Microsoft launched , which uses similar technology to recognize and rate facial hair. And it has . But the dog breed app is also fun. When it works! The technology behind Fetch has actually been in development for years. In July 2014, Microsoft demonstrated how machines could tell the difference between people and dogs at the 15 annual . The team later released the website , but says the app is where the most progress is really apparent. According to Microsoft’s , the iOS app was released just in time for the and the , and demonstrates a different time of machine learning capability. Instead of examining photos of humans, Fetch tries to figure out what sort of dog breed is represented in a photo. “There was an interest in creating a framework that would allow you to take a domain – in our case, dogs – and recognize numerous classes, such as breeds. We were interested in enabling an app to allow you to make object recognition extraordinary, fun and surprising,” says Goldberg. To use the app, you simply show it a picture of a dog and it returns the breed. If there’s no dog in the photo, it says…”No dogs found!” But it also might guess what the photo is of, instead. (e.g. “This looks more like…flower?”) There’s also a pretty hilarious hidden mode where you show the app a picture of a friend, and it will tell you what type of dog it thinks that person is…which, you know, can be quite insightful. – Microsoft’s Fetch! app can tell you what breed of dog you resemble from a pic… — Discover News (@Discover_News_) The results Fetch presents can then be shared via social networks and email, so all your friends can comment on your doggie match. You can also save your favorites in an included scrapbook or browse the list of breeds included in the app which contain details like size, coat, disposition, and more. I think I’m okay with being called a Maltese, but I’m fairly certain my 49-pound mutt is a Chihuahua, though. Machines, you still have a lot of work to do.
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YouTube Acquires BandPage For $8M To Attract Musicians With Money-Making Tools
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Josh Constine
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YouTube wants to win the love of musicians by solving their biggest problem: how to turn popularity into cash. So today it announced it’s , a startup that helps artists show off and sell concert tickets, merchandise, and exclusive fan experiences. BandPage founder and CEO J Sider [Update: According to a source familiar with what BandPage shareholders were sent about the terms of the deal, the financial documents say that the acquisition price was $8 million. Only preferred stock will be converted into cash, and common stock will be cancelled with no payment. A second source later confirmed the deal was for around $8 million. Since that $8 million is much less than the , the deal appears to be a firesale and few will see any significant payout. Several sources I contacted refused to speak due to strict orders not to discuss the financial terms. It makes sense that the company would try to keep it under wraps since the price was so low. YouTube declined to comment.] Founded in 2009, BandPage began as an app that let musicians create a special Music tab on their Facebook Page. But after Facebook shut down these Page apps in 2012, it lost 90% of its traffic in three months. It went from 32 million monthly users and being the second most popular Facebook developer behind Zynga, to just a few million. It was a grim moment, as BandPage had just raised a big $16 million Series B from GGV Capital a few months prior. It eventually had a to raise a smaller $9.3 million Series C in 2014 to stay afloat. When Facebook banned Page landing tabs in 2012, BandPage lost 90% of its traffic Luckily, BandPage quickly realized it couldn’t stay on Facebook and unshackled itself. Now its swift seems to have paid off, or at least earned it a soft landing at YouTube. BandPage created a platform that artists could update with their tour dates and t-shirts, and have them appear in tons of places through integrations with Spotify, SoundCloud, Facebook, Twitter, Shazam, Rhapsody, StubHub, and more, as well as Google and YouTube. This BandPage Everywhere platform was initially free with a $2 a month subscription fee for extra features. But least year BandPage ditched its Plus tier, made everything free, and instead began relaying on a 15% transaction fee for anything sold through its ecommerce integrations. BandPage’s Spotify integration BandPage writes that “BandPage is dedicated to helping musicians build their careers by growing their fan bases and increasing their revenue on the largest digital music services in the world. By joining forces with the team at YouTube, we can help artists reach their fans in more powerful ways than ever before.” BandPage CEO J Sider referred me to this when I requested comment. One big question is whether BandPage will keep working with some of YouTube’s biggest competitors. BandPage’s backend editor for musicians But Sider did highlight that the blog posts insists that “Our collective goal remains the same: to grow an open network of digital music services, develop intelligent new tools for managing/distributing artist content and commerce, and create new revenue opportunities for all musicians, on YouTube and beyond.” That makes it sound like it will remain platform agnostic, though its non-YouTube partners might feel a little uneasy about it now. YouTube recently launched its ad-free Red subscription service and dedicated . If it can use BandPage’s money-making tools to curry favor with artists, they might be more likely to promote their YouTube presence and give it early or exclusive content. That could push consumers to subscribe to and get all of YouTube ad-free. Other steaming services, especially Apple Music, have leaned on promotional opportunities for artists to recruit them, and exclusive content to lure subscribers. But at the end of the day, artists want revenue, and streaming listeners don’t earn them much. The trick is pairing attention pulled in through cheap or free streaming music with things fans can buy like clothing, posters, box sets, concert tickets, or even signed memorabilia and chances to meet their heroes. Spotify’s artist pages show BandPage Offers that earn musicians revenue. Right now, YouTube’s Music app lacks these money-making tools As you can see above, BandPage’s Offers are integrated into Spotify artist pages but not the YouTube Music app’s musician profiles. When artists consider where to direct their fans, they’ll prioritize ones that make them more money. The BandPage acquisition could get more revenue opportunities into YouTube’s properties so artists push traffic there. Music is a cut-throat business. Artists feel underpaid while the tech giants compete to offer similar streaming music services that force them to pay out almost all their earnings to record labels. BandPage could make YouTube different — a place where artists and the platform capitalize on the attention music draws by selling everything surrounding it.
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Uber Picks Up Another $200M From LetterOne To Push Into Emerging Markets
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Ingrid Lunden
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Along with its , it looks like Uber has picked up some new funding, too. (L1), a fund based out of Luxembourg and headed by Russian billionaire Mikhail Fridman, is into the transportation and logistics juggernaut to help it push further into emerging markets. This is a new, strategic investment, rather than a past investment only being disclosed now, the companies confirmed to us. Uber has been putting a lot of effort into building out its operations globally. In some cases, it has been coming head to head with stronger regional rivals, such as in countries like China (Didi Kuaidi being its arch rival) and India (where Ola leads the charge). But there are still many more markets to tackle, so this funding looks like it will go towards bolstering those existing operations as well as making headway in new places, such as the wider expanse of Eastern Europe. “Every day millions of people rely on Uber to get from A to B. Hundreds of thousands of drivers use our app to make money,” said Travis Kalanick, Uber’s CEO, in a statement. “Our goal is simple: reliable and affordable transportation everywhere, for everyone, at the push of a button. L1’s knowledge of emerging markets will be crucial in helping us make cities more accessible, opening up more possibilities for riders and more opportunities for drivers.” Neither Uber nor L1 would comment on whether this is a bigger round, or a standalone investment. “It’s early days so we’re waiting before we say more,” said the spokesperson for L1. (In December it was reported that Uber was another $2.1 billion at a $62.5 billion valuation, so potentially this could be part of that round. The company also specifically for its Uber China business in January.) Uber has raised some in funding prior to this latest investment. It has a long list of over disclosed 50 investors at this point, with some more financial and others, like LetterOne, on the financial and strategic side. LetterOne was formed in 2013 with its most public face in London. In 2015 it really burst onto the investment scene with a reported fund of — just in time to get involved in huge growth rounds for the very biggest of the e-commerce startups (the ones that many argue cannot be called “startups” anymore). L1, as of the end of December 2014, was a $25 billion operation, the company says. And today it’s giving a much more modest but still massive number as its investment target. It “is seeking to invest US $2-3 billion in late-stage technology growth opportunities globally over the next couple of years,” the company says, with its target “technology investments between US$100 and 500 million [and] new strategic partnerships.” “I’m excited by our strategic partnership with Uber,” said Mikhail Fridman, Chairman of L1. “As entrepreneurs, with experience in retail, banking, telecoms and energy sectors, and knowledge of diverse developed and emerging markets, we believe that Uber’s highly talented management team possesses the necessary vision and skills to build the company into one of the world’s preeminent technology businesses.” The head of L1’s tech investment group also underscored how we may be seeing more of L1 in the weeks and months to come. If the funding is strategic, it could be that we will be seeing a lot more expansion into the markets that L1 knows best. “We have access to considerable funds, and are looking at opportunities of a certain size and certain stage,” said Alexey Reznikovich, L1 Technology’s Managing Partner. “Digitalisation is creating opportunities globally for new digital businesses to provide innovative forms of customer orientated services, and for existing businesses, and for many sectors, to reinvent themselves. We aim to invest in young but proven businesses. Our focus is on investing in exciting and innovative technologies. We don’t want to focus on any specific sector – but on technologies – because they can jump from one sector to another. We take a long term view and have permanent capital.”
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Catherine Shu
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How DHL Pioneered The Sharing Economy
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Ryan Petersen
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started its business by offering free plane tickets to people on street. For trouble of giving up their baggage allowances, passengers were handed a free round-trip plane ticket to Hawaii. Founded as a courier service in 1969, used spare capacity in travelers’ luggage to transport high-value documents. To understand why it made sense for to provide free tickets to travelers, it helps to understand massive changes entailed by of ocean cargo in 1960s. First implemented in mid-1960s, ocean container dramatically improved efficiency of international shipping. But containerization also brought about an unexpected downside: When goods are shipped by sea, a piece of paper known as “original bill of lading” must serve as title to merchandise. Created by manufacturer overseas, this piece of paper must be delivered to purchaser in destination country. massive capacity of containerized ships meant that many more shipments would arrive in ports in a much shorter span of time. That was a problem: documents necessary to clear cargo arrived much later than cargo did. Goods started piling up in ports, frustrating importers, truckers and port terminals. That’s where came in. company offered businesses chance to transport documents by air. No, it didn’t invest in airplanes then. Instead, it found people who were willing to carry documents in their luggage in exchange for a free plane ticket. Waiters, secretaries and professors were sent on red-eye flights from San Francisco to Honolulu if only they would carry suitcases stuffed with these bills of lading. Once these high-value documents were on ground, company’s network of local couriers would take responsibility for delivering them to clients. system worked amazingly well. postal service then was notoriously slow and unreliable. By taking important documents and putting them in suitcases, was able to guarantee timely delivery of critical business documents. It’s no surprise that started with service from San Francisco to Honolulu: It was most active tradelane of Matson, one of first shipping lines to adopt standardized ocean containers. Couriers from helped businesses avoid unreliable postal monopoly so that goods could clear more quickly through ports. People on mainland suddenly found that their documents could be delivered before their offices even opened. soon expanded to other tradelanes, building a worldwide network that was especially prominent in Asian to U.S. air delivery services. Eventually it became a multibillion-dollar business that was acquired by Deutsche Post, helping to create what is now largest courier service in world (and ironically a former postal monopoly, before it was privatized by German government). That’s how was a pioneer in long before term was invented. People who wouldn’t otherwise fully use their luggage capacity would trade off that space to people willing to bid for it. Given that it skirted postal monopoly, you might even refer to ’s original model as “smuggling as a service.” Eventually, caught attention of now-defunct . company won these challenges brought by the board in a United States Court of Appeals for Ninth Circuit ruling. Two FBI agents sent to investigate were convinced that it was a legitimate enterprise—and then promptly became couriers themselves. developed a brilliant hack to solve an archaic problem. company found a cheap, scalable solution to deal with obstacles and built a multibillion-dollar business in process. saw that containerization brought a new challenge to importers: They didn’t want to wait for their shipments to clear simply because paperwork took too long to arrive. Nobody likes an obstruction, but having a bureaucratic one is especially galling. Did unreliability of postal service mean that everyone had to wait around doing nothing while port charges racked up? Surely we’ve figured out a better way to clear goods today. As it turns out, we really haven’t. Businesses still need an original bill of lading to securely collect goods from port terminals. It’s an incredibly outdated issue—starting with its very name. “Lading” is a British term for “loading” that dates back to Tyndale Bible of 16th century. Bills of lading used to be tradable goods in Britain. This was an innovation 400 years ago: You could sell a bill of lading in a marketplace, rather than having to transport goods there. Little has changed in last few centuries. When truckers come to pick up goods in terminal, they still need to present original bill of lading to get port to release goods. In a world with Internet, cryptography and blockchain, shouldn’t there be a better way to enable secure release of cargo internationally? Surely technology will solve this problem. Let’s take a moment to appreciate ’s innovation and its relevance to conversations about .
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The Probable, The Possible, The Delusional
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Eric Paley
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In 1961, President John F. Kennedy that before the end of the decade, America would put a man on the moon. This was not an empty political promise to get elected, but a commitment of a sitting president boldly exposing himself to political ridicule in the face of failure. If we can take ourselves back to that moment, it would be fascinating to analyze the probability that such a feat could be accomplished. It had never even been close to being achieved and was perceived by many to be insanely risky. It was only six weeks after the first human cosmonaut Yuri Gagarin had visited space in a short suborbital flight and three weeks after American Alan Shepard had repeated this historic milestone. Needless to say, the odds were long and our president was far from proposing something with a highly outcome. Had his ambitions defied the laws of physics, our best engineering plans indicated we were decades away, or cost estimates required more capital than US GDP, perhaps it would have been . Instead, history would prove that Kennedy was imaging an improbable, yet future. In my short two-year stint working in corporate America, I have learned a great deal about outcomes. Senior executives didn’t dare propose things that were merely . Proposals required evidence of a high probability of success. One could derail a carefully crafted career over missing a forecast by 20 percent, let alone being a year late on launch of a product. It was unwise to take real risks and dream big in such an environment. When planning for a new product launch, numbers and timelines were always very conservative, as it was considered irresponsible to imagine the but improbable upside. We were taught to keep things grounded in highly outcomes and, not surprisingly, rarely created any outcomes beyond conservative ones, as we were never inspired or incentivized to do so. Not surprising so few large company executives function well in the startup world. By contrast, in startups, great outcomes are never . The expected return of nearly every startup at the beginning is frighteningly close to zero. In the context of my corporate experience, it seems astonishing that anyone would ever start a company. Perhaps that’s why so few corporate executives ever chose to do so. Startups only exist because their founders are willing to suspend the disbelief of the and instead consider what is . I’ve joked that no early-stage startup should ever beat its plan; beating a plan would suggest that the founder didn’t imagine the totality of what was and undersold the potential of the startup. Dreaming big is the reason so many startups will fall short of their plan and nonetheless deserve to be called successful. Falling short of the extreme of the can yield a very exciting business. Corporate America might fire you, but an acquirer, by contrast, might reward you with a very significant exit. At the other extreme from the approach is a very dangerous view of the world – the . Some startup founders are so enthusiastic that they dream of futures that are not credible; they dismiss the need for customer feedback to validate their view; and they have no indicators that suggest they can build what they imagine. Many things can be quickly tested, and when data invalidates a hypothesis, it is very much time to move on. The entrepreneur will procrastinate finding that invalidating data for as long as , and then still be dismissive of the results. These founders will burn through all the money and talent he can garner, but with little or no value creation at the end. With the , there would be no reason to start a company. With the , there is a real risk that the founder is wasting years of his life on something that will never materialize outside of his own head. There is no truth of pre-ordained outcome when starting a company. Great founders live between these extremes in the world of the and inspire others to share that worldview. They test those possibilities every day and frequently refine what they believe is to find a winning path. Living in the world of the is how we put a human on the moon and how we will imagine and create the valuable technologies and companies of tomorrow. Keep your eyes to the sky and your feet planted firmly on the ground.
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Imagining Snapchat’s Future
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D.J. Sherrets
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However, messaging is arguably the core of the social experience now and even more so going forward. A reason is that messaging has become used by more people than social feeds and because messaging can help enable a range of different activities including applications and commerce. I don’t know what constraints and/or priorities are relevant for Snapchat’s product, and of course Snapchat has the details and data that are crucial to understanding what’s happening and deciding what to do.
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Seeing Beyond The Hubris Of Facebook’s Free Basics Fiasco
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Vivek Wadhwa
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At the moment, Facebook is being compared to the treacherous East India Company, and director Marc Andreessen is being accused of being anti-Indian, a racist, and worse. It wouldn’t surprise me if Indian activists launch a “Quit India” movement to expel Facebook from India, modeled on Mahatma Gandhi’s efforts against the British in 1942. All of this is because of a failed effort by Facebook to provide Internet access to the poor. Facebook’s intentions were good, but where Andreessen and Mark Zuckerberg went wrong was in their misunderstanding of the culture and values of the people they were trying to help. India suffered nearly two centuries of subjugation by its British masters, and, in this era, it saw its treasures pillaged, its economy decimated, and its cultural values suppressed. People became second-class citizens in their own country; they had to suffer untold humiliation and sacrifice their lives. It takes generations to recover from such trauma. That is why Andreessen’s tweet “Anti-colonialism has been economically catastrophic for the Indian people for decades. Why stop now?” created such an uproar. The damage was so great that Zuckerberg felt compelled to disown the comments of his own board member in a . Knowing Andreessen, I don’t believe that his intent was in any way to condone colonialism. He was just being his aloof and playfully combative self, criticizing the Indian government for its decision to disallow Facebook’s Free Basics Internet giveaway. Andreessen is one of the most open, inclusive, and accessible of the tech moguls. He readily endorsed my book, , when I asked him to and has been a strong proponent of skilled immigration. In his venture-capital firm, , you find many Indians, Chinese, and other nationalities at all levels. I have battled him on issues such as the that technology is creating, to add more women to leadership positions, and of having investors on competing tech companies’ boards. In Silicon Valley, you can have such public spats with people you hold in high regard. You can be blunt and abrasive. But you can’t do this across borders as Andreessen inadvertently did—or impose your values on them as Zuckerberg tried. Facebook’s Free Basics was an to bring Internet access to the poor in India. It created a walled garden in which Facebook and the Indian telecom providers selected which websites people could visit. Rather than being able to do Google searches and explore the web as we are able to, users of Free Basics would find that Facebook was the center of their virtual universe and would experience only what it allowed them to. Facebook didn’t seem to understand that what is limiting the growth of the Internet in India isn’t the cost of data access, which is relatively cheap, but the affordability of computers and smartphones. When the poor save up to buy these, they want to be able to surf the web as western users do: viewing music videos, visiting a broad range of websites, and downloading games and entertainment apps. Indian farmers can already get weather information on their cellphones and on TV; they don’t want to be limited to visiting the health and education sites that Facebook directs them to. Furthermore, there are hundreds of languages in India. How could Facebook possibly curate the right sites for them to visit in all of these? And what about the majority of poor people who can’t read or write, how will they watch videos to learn these?I know from speaking to the Facebook team and exchanging emails with Mark Zuckerberg and Sheryl Sandberg that Facebook’s intentions were good. It wasn’t trying to exploit the poor or gain an unfair competitive advantage. The Free Basics project originated from an idea that Zuckerberg had about connecting the next 5 billion people. He documented this in a paper titled The paper’s thesis was that data access is more expensive than smartphones. He wrote that in the U.S. “an iPhone with a typical two-year data plan costs about $2,000, where about $500–600 of that is the phone and ~$1,500 is the data”. Therefore, the key was to make Internet access affordable by making it more efficient to deliver data and improving the efficiency of apps to less data. What Zuckerberg and his U.S. team didn’t understand was that in India you can buy computer tablets and smartphones for as little as $50, and that 100MB of data—which is more than a Free Basics user will consume in a month— . So the entire basis of the paper was flawed. And then there was a complete lack of understanding of the language, and of the cultural issues, and of the distrust of foreign corporations bearing gifts. The problem in Silicon Valley is one of ignorance of the problems and ways of the world. The Valley lives in its own bubble and is cut off from the real world. There is no way that Zuckerberg and Andreessen can understand the suffering of the people in the developing world without actually being there. Over the next five years, half a billion Indians and another two billion people in the developing world are going to be coming on line. This will be without Facebook’s help—because the costs of computers and smartphones are dropping exponentially. As this occurs, the market for Silicon Valley’s innovations will explode. If Silicon Valley can learn the ways of the world and market to them in the same way that large corporations already do, by adapting their products and being culturally sensitive, it will reap huge dividends. If not, it will be excluded from economies larger than the United States’ and see itself sidelined.
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It’s True, Black Female Founders Receive Basically Zero Venture Capital
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Megan Rose Dickey
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In “ ,” a recent report by #ProjectDiane, you’ll come across several startling statistics like, for example, of all venture deals from 2012 to 2014, only 0.2% (24 of 10,238 deals) went to went to black female founders. In researching the state of black women in tech, #ProjectDiane examined over 60,000 startups and identified just 88 led by black women. Though, the bigger pictures shows that there’s been a 322% increase in the number of black female-led businesses since 1997. Today, there are over 1.5 million businesses ran by black women in the U.S. — over 100,000 of which are technical companies. Though, a lot of those companies are consultancies. On average, black female-led startups raise just $36,000 of outside funding, according to the report. There are only 11 startups founded by black women that have raised more than $1 million in VC funding. “digitalundivided conducted this research in order to quantify the problem and then use the results to as the foundation to building evidence based programs,” Darlene Gillard, partnership director at digitalundivided said. “Prior to this report there was really no discussion on intersectionality in the startup world, outside conversations about employment. The information on Black women and tech entrepreneurship was purely anecdotal. So we would say it was “bad”, what was exactly did that mean? Now that the information is out there, and we decided to release it even though we could have kept it to ourselves, organizations can make decisions on whether or not to move forward. But, no one can say they didn’t know there was a problem.” The report outlines solutions such as redefining entrepreneurship, financially supporting accelerators and other programs that produce and shape black female founders, and increasing black female founders’ access to capital. Regarding redefining entrepreneurship, the report suggests people and companies in the tech industry stop sponsoring conferences that don’t have diverse speakers and create a mandate that at least 13% of annual marketing or operations budgets go to efforts that feature or support women of color. “Years of institutionalized racism, sexism, and classism, as well as the pressures of being the ‘representative’ of an entire culture of people, has made failure a costly proposition to many potential Founders of color, especially Black women,” the report states. “Solutions must extend past the creation of scholarships or “remedial” accelerator programs within prominently white male accelerator programs and focus on an expanded definition of entrepreneurship, where calculated risks are encouraged and supported, and the goal isn’t assimilation, but valuing the potential of these markets.”
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What New Mobile Hardware To Expect At MWC 2016
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Natasha Lomas
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Mobile World Congress, the biggest tradeshow specifically focused on mobile, kicks off in just over a week’s time in Barcelona so here’s a quick rundown of some of the big hardware-focused announcements we’re expecting to land during the best part of a week of fully mobile-focused news… The big reveal for Samsung will be shiny new additions to its Galaxy flagship smartphone line-up — with a new and (its curved-edge screen variant) expected. Leaks suggest the new flagships will have — a la Apple’s 3D Touch addition — plus faster charging via a new USB Type-C port, camera enhancements and . It’s possible the company might also have a rethink on last year’s (unpopular) decision to remove the microSD card slot from its flagship. Android fans will surely hope so. In addition, the places plenty of emphasis on VR. So we’re expecting some substantial news around its platform too, likely linked to the new flagships — so perhaps some new VR capabilities baked into the new flagship phone hardware to give buyers an incentive to pick up not one but two new bits of Samsung kit this year. 2016 is the year of the great VR reboot so Samsung will be aiming to capitalize on the hype. And while full-fat gaming VR headsets such as the forthcoming Oculus Rift are going to be , Samsung’s Gear VR platform offers a mid-priced option that repurposes existing smartphone hardware to deliver a degree of digital immersion — letting people dip their toes in the VR waters without upending their piggybank to do so.
South Korea’s LG has had to play second fiddle to Samsung for years but that doesn’t mean it’s not going big on MWC announcements. The company will be unboxing its latest flagship, the , at an event on Sunday afternoon — admittedly a few hours before Samsung’s big reveal so that the LG G5 can have its own moment in the limelight. We already know the G5 will include a touch-enabled case — thanks to . The case will let users take calls, check the time/date and notifications without having to flip it open to get to the screen, thanks to the phone having an always on display. The case is reminiscent of HTC’s Dot View case, released with its flagship back in spring 2014. As they say, imitation is the sincerest form of flattery…. What else do we know about the LG G5? Rumors suggest a metal unibody design, which would be a step up from LG’s typical plastic design; a fingerprint scanner (and possibly iris scanning tech); and dual camera lenses on the rear, which would be another ‘inspired by HTC’ moment. Unlike in MWCs past we’re not expecting much in the way of new flagship smartphone hardware from Taiwan’s HTC, which is not holding a fully fledged press event at this year’s show. Given how much the company has struggled to turn its phone fortunes around in recent years this is not a big surprise. CEO Cher Wang even said that VR is now “more important” for the company than phones. So HTC’s MWC announcements are going to be focused on its forthcoming VR headset, which it’s building in partnership with games developer Valve. We already know the Vive headset is , with pre-orders starting later this month, but we’re expecting the company to take time at MWC flesh out a few more details about what will be in the Vive box — and specifically disclose a very key bit of intel: the price. China’s Huawei may not have the brand glamour of Samsung but it’s been making some in recent times, . At MWC the company has a press event scheduled for the Sunday afternoon where it says it will be unveiling “a brand new device that will meet the demands of the next generation of mobile innovation”. It’s possible this will be a new flagship smartphone — aka the , successor to last year’s P8. The company also has a line of mid-tier devices, and makes smartwatches too. So plenty of hardware options here. Ah who doesn’t love a . In years past the Nokia press conference was a staple of the pre-MWC hardware press conference circuit, given the company was the foremost force in mobile for multiple years. But since normal service has been disrupted. However, from this year, Nokia regains the ability to stick its own brand name on smartphones again — so it’s possible we could get a hardware-related announcement at its MWC presser again this year. Or it could unveil a new 5G basestation (or similar) — given networks is a core division of the remaining company. Nokia has already it’s launching a network security management center for operators at the show this year, for example. Albeit Nokia’s CEO Rajeev Suri confirmed the company’s intention to design and license handsets in 2016 — assuming it can find the right partners to power a return to the phone market. And it has already worked with Foxconn to put out an Android tablet ( ), which it was showing off at MWC last year. So we’ll soon find out whether it’s expanded that strategy to smartphones now too. If it has, it’s really taking the bull by the horns by directly clashing with Samsung’s Sunday evening press event timing. So it will either be a very bullish return to smartphones for the former world number one mobile maker. Or a ‘nothing to see here’ networks-related presser… Either way, TC will be on the ground in Barcelona to find out. China’s smartphone upstart Xiaomi will be holding a press preview of its forthcoming flagship smartphone at MWC on the Wednesday, on the same day as it holds a launch event in Beijing. It’s not being coy about this, with its invite to the event explicitly stating the Mi 5 name… What else do we know about the Mi 5? Xiaomi global VP Hugo Barra confirmed last month in a that it will have a Qualcomm Snapdragon 820 processor. He’s also tweeted a sneak peek at the homescreen — which includes what looks like support for dual SIM with two signal bars up top, plus NFC support: Here's a sneak peek of my home screen today. Spot anything new? — Hugo Barra (@hbarra) As with many an Android OEM Sony has had a pretty tough time standing out in the crowded smartphone space. So while it will be holding a press conference at MWC it’s more of a low key affair, scheduled for the Monday morning like last year (when it had a and a new mid-range handset to show off). Expectations for Sony’s 2016 MWC announcements are a grab bag of guesses at this point. Perhaps some new . Or an update to its line. A seriously cutting edge flagship Sony smartphone is far less likely at this point. We’re not expecting any major news from Redmond at this year’s show given it’s all but retrenching from smartphones, with continued job cuts to its mobile making division under CEO Satya Nadella. In its latest earning report, Microsoft noted it , down from 10.5 million in the year before quarter, with phone based revenue declining 49 per cent in constant currency… Ouch. So expect a very low key presence from Microsoft this year at the world’s biggest mobile show. Another former mobile giant that’s been cut to ribbons by the dominance of Android is BlackBerry. The company formerly known as RIM released its first Android powered smartphone, the , last fall. A touchscreen slider that took a cake-and-eat it approach to smartphone input options. There are rumors it has a non-slider follow up in the works; i.e. a full Qwerty-plus-touchscreen handset, code-named . So it will be interesting to see whether the company takes the plunge and launches a second Android device at MWC this year. The company is not holding an official press conference which suggests it’s not going to be making any flagship hardware launches. Which perhaps also suggest the Priv has not been selling well enough to convince CEO John Chen that BlackBerry needs to stay in the hardware making business. Time will tell on that one.
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How To Expand Your Marketplace To LA
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Arteen Arabshahi
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is diversity.” That is what DoorDash’s Kevin Huang told me in our conversation about how expanding on-demand marketplaces into Los Angeles differs from other markets. As an L.A.-based enterprise and marketplace investor, one of the most common questions I get from entrepreneurs is how to expand marketplaces into L.A. While this includes all the , like balancing supply and demand, finding the right pricing structure, and , it also presents difficulties unique to L.A. These are things like lots of traffic, not much parking, and the oh-so-many neighborhoods, each with their own unique personalities. After extensive interviews with general managers from the likes of Zeel, Luxe, Glamsquad, Homejoy, Washio and more, there are three hurdles that continued to resurface: supply and demand acquisition, rollout strategy and quality of workforce. Outlined below are the key factors to success for each of these hurdles, including the proper marketing strategies, acquisition channels and pitfalls to avoid. These all tie back to Kevin’s original proclamation: The key to unlocking L.A. really is about leveraging its diversity. Paying attention to the diverse strengths and weaknesses the city has to offer across these three categories can determine the success or failure of your L.A. marketplace. The first step is consistent across all cities: Figure out the most effective way to acquire both supply and demand, then begin to do so. After all, a marketplace without supply and demand isn’t much of a marketplace. Supply is rarely a shortage in L.A. It’s just a matter of accessing it. Marketplaces need to start by populating local supply in order to avoid the empty room problem when the demand arrives. Having a quality foundation of supply ensures a quality experience for your initial customers and encourages them to come back. Once that foundation is in place, carefully control the rate at which you allow the demand to access the platform. While there are many ways to populate supply, here are the few most common that have seen success in L.A. A quick scan of Craigslist shows that nearly every marketplace is advertising on the site to recruit supply. L.A. marketplaces are no different, but given the high penetration of Craigslist here, the city’s desire for flexible work and the lower competition of marketplaces, it can actually be more effective here than in other markets. In situations where Craigslist doesn’t work, like high-skill workforces or super competitive industries, you can supplement your Craigslist efforts by poaching from existing marketplaces. We’ve all seen this happening , but it works on the small scale, too. It can be especially effective if you’re disrupting an industry that already has small networks or unions that exist. Once you have a foundation of supply, referrals are one of the strongest ways to grow it. If your workforce is happy, they’ll want to invite friends to join them. Encourage them to do this and even incentivize them with referral bonuses. Not every marketplace is in an industry with existing networks. For those that are, hiring a head recruiter from your world to manage your supply can be the quickest way to boost your supply-side growth. When it comes to supply, L.A. has many advantages. The city’s population of nearly 4 million people is double that of the next largest market, Manhattan, which is just below 2 million. That alone is powerful when it comes to recruiting supply. But adding the diversity of established industries here, the desire for flexible work, and the entrepreneurial lifestyle that many choose to pursue, supply is rarely a shortage in L.A. It’s just a matter of accessing it. In L.A. particularly, you are forced to have a multi-city strategy even within just this one city given its diversity. While recruiting supply, marketplaces should also be establishing brand awareness on the demand side in L.A. before they actually launch. This way, when they decide to turn on the faucet, the demand will immediately flow to supply. Some of the most effective ways to grow users in new markets like L.A. are digital marketing, supply-side promotion, deal sites, ambassadors, offline marketing and business development. Almost every marketplace will find that their initial bread and butter of demand acquisition comes from digital marketing, whether that’s search engine marketing (SEM), Facebook, Twitter, etc. This has been proven to work across sectors, with the main exception being companies that have a complicated value proposition. If your value can’t be explained in a few short words, digital marketing may not be the most effective channel of customer acquisition for you. Otherwise, it’s a strong place to start. Your supply-side workforce can often actually be one of the biggest drivers of demand. Early on, Uber drivers were given a referral code and a commission on new riders they brought to the platform. This was great for a company like Uber where existing customers would often bring new potential customers into the car with them, and then the driver would convert them with a promo code. Win-win. For companies like Homejoy (which last summer), deal sites like Groupon were an effective channel from which to acquire customers. This tends to be effective for lower-value purchases that drive repeat engagement like housecleaning. But be mindful that it won’t acquire your highest lifetime value customers. Ambassador programs are an effective method of demand acquisition if done right. In order to succeed, you must identify key influencers in each new network you hope to infiltrate and incentivize them to perform. That could mean finding popular students, college athletes or influencers with large followings in different neighborhoods and incentivizing them to promote your product. Pay attention to the personality of each micro-region and the perspective of those in that community, then find influencers who can best promote the most relatable use case. L.A. offers a unique platform to test offline and out-of-home marketing. Given the temperate climate, marketplaces can experiment with year-round events and street teams. There are also existing channels for more traditional media buys like billboards, radio, and more given these have been core to the entertainment industry for years. For those marketplaces where SEM isn’t very effective, business development partnerships and enterprise sales are often higher converting channels of acquisition. For companies like Luxe, business development is a significant portion of their business when compared to their one-off consumer use case given they can establish relationships with businesses that need parking in volume every day. Look for similar parallels and super user opportunities for your platform; it’s the closest to recurring revenue that a marketplace will see. While there are many ways to approach demand acquisition, it is important to have the self-awareness to understand which channels are best for your platform. In L.A. particularly, you are forced to have a multi-city strategy even within just this one city given its diversity. Beyond that, it is critical to find some level of virality since paid channels only scale linearly while organic and word of mouth can grow exponentially. You can reach a carrying capacity of demand with some of the tactics from above, but at scale, organic growth will propel you to the next level depending on the strength of your value proposition. Now that you have the supply onboard and demand pent up, how do you actually launch? Your rollout strategy in L.A. is almost as essential as your value proposition itself given its unique size and distance. Compared to the two other largest markets in the U.S. — San Francisco and Manhattan, which are just 47 and 34 square miles, respectively — L.A. spans a massive 503 square-mile sprawl. That can be intimidating, especially when you factor in the different characteristics of each neighborhood and the traffic between them. After speaking to many marketplaces, it is clear that in order to overcome these factors, each marketplace has to approach their L.A. rollout slightly differently, plotting their specific strengths and weaknesses against those of L.A.’s. An effective rollout strategy for any marketplace here requires consideration for the two most unique components of the city: infrastructure and neighborhoods. L.A. is a story of neighborhoods, and the sprawl makes it harder to match supply and demand across them all. The infrastructure in L.A. is an obvious hurdle to conquer when expanding here. Between traffic and parking alone, you’re already adding two highly complex variables to your already complex expansion. In order to conquer these, you should look for predictability and try to stay two steps ahead of the city’s map. The answer to the traffic is obvious: allow more time to get between appointments. Glamsquad allowed an hour between each of a stylist’s meetings. While this can sometimes lead to deadweight loss of time when appointments are actually only 20 minutes apart, it still improves the consumer experience by ensuring their appointments always start on time. Long term, you can optimize this buffer to increase utilization rates, but to start, it is always best to err on the side of caution. When it comes to parking, you’ll have to learn each neighborhood’s different rules as you go, so just be mindful of them when implementing your pricing and onboarding supply. If a stylist has to pay $14 for parking in Santa Monica, it may not make their hourly take-home rate worthwhile. Make sure this is baked into what you pay your supply side or that you’re charging demand enough that you can comfortably cover the costs of inevitable costs like parking. One option to lower your costs of parking is through partnership deals with garages, lots or even companies like Luxe themselves. Finally, while the lack of public transportation is a pain for most L.A. residents, it can be an advantage for your marketplace. Given the limited accessibility via public transit, most people here have a car, making it easy to throttle your supply closer to demand or have them fill missing gaps for you. The best time to roll into new neighborhoods is when your live ones feel like well-oiled machines. L.A. is a story of neighborhoods, and the sprawl makes it harder to match supply and demand across them all. You must be prepared to either conquer the entire city at once (which takes careful preparation and lead time) or tackle each neighborhood one-by-one (which takes longer to reach full coverage). Take Homejoy, for example, which launched in L.A. all at once. It was able to overcome a mismatch between supply and demand in certain neighborhoods by throttling some of its supply to areas that had more demand. This can be done through financial incentives like neighborhood-based surge pricing or making messaging adjustments with your supply. All of this is possible in L.A. because the supply is a more mobile workforce than in other markets. To use that mobility to your advantage, you can also look to pattern match the people of L.A.’s behavior. According to Luxe’s Hans Yang, L.A. residents tend to live in a bubble where they spend over 90 percent of their time near work and home, as opposed to broadly exploring the L.A. area. By finding the patterns between consumer location habits in L.A., Luxe has been able to leverage predictability of demand to find efficiency in supply. In addition to Luxe, Doordash is another great example of a company that rolled out in Los Angeles neighborhood-by-neighborhood. This approach means a much denser area for supply and demand to operate in than if you open up all of L.A. at once. It allows you to focus on tightening up your processes in a small-scale, predictable environment before a larger rollout. It also gives you the ability to learn from the local infrastructure hurdles before expanding. Doordash used this time to take multifaceted variables like travel time, complexity of order, vehicle type and more into consideration when optimizing its routing. Once a neighborhood is streamlined, you are able to expand into new neighborhoods faster than you initially would have. The best time to roll into new neighborhoods is when your live ones feel like well-oiled machines and there is pent-up demand in new potential neighborhoods. Most marketplaces expand into contiguous neighborhoods, but you’ll also want to expand to places where the value you provide is most needed and the results are predictable. For instance, the demographic of Santa Monica might be similar to that of San Francisco. So if your marketing and value proposition were well-received there, they may be well-received in Santa Monica but not in Hollywood or Downtown L.A. without changing the strategy. Adaptability and agility are essential to success in L.A.’s many neighborhoods. The third pillar of marketplace expansion into Los Angeles is the quality of workforce. Due to the entertainment industry, there is a large population of people here looking for flexible work. For better or worse, it is a part of the lifestyle here in L.A. and part-time work goes a long way for many in this city. This alone is a massive differentiator when it comes to populating the supply side of your marketplace. Combine it with a lower cost of living, the larger population, and fewer marketplaces to compete against and you have a ripe workforce waiting to be onboarded. While expanding to L.A. can be a daunting task, it’s less daunting when you establish a play-by-play approach that accounts for supply and demand acquisition, rollout strategy and quality of workforce. Beyond the population of supply, their level of happiness tends to be higher, as well. This ties back into the fact that their earnings go further in L.A., but also that they tend to live closer to their work in L.A. and can pursue multiple interests. Unlike a market like New York — where the majority of the demand is in Manhattan but the majority of the supply lives outside of Manhattan — L.A. has supply living closer to their work and thus improves their overall quality of life. Lyft learned that another main contributor toward work quality was automating their training. There’s nothing worse than onboarding a new driver in El Segundo and asking them to come to Hollywood for training, so Lyft figured out how to automate its onboarding process through videos and local driver mentors. Airbnb’s approach to onboarding hosts is similar, and others have realized that the largest lever of quality control is the efficiency and effectiveness of your recruiting and onboarding. While expanding to Los Angeles can be a daunting task, it’s less daunting when you establish a play-by-play approach that accounts for supply-and-demand acquisition, rollout strategy, and quality of workforce. The cost of living here is cheaper, and the workforce is higher quality in many ways; the population is larger, and it’s looking for flexible part-time work; and the diverse neighborhoods afford you with more marketing opportunities. These are the hurdles you’ll have to face, but once you clear them, many of the other opportunities in the City of Angels can make it one of your top markets.
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The Health Sector Needs Tech Giants
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Carla Smith
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Big companies around the world have made – with varying degrees of success – plays at breaking into the health sector. Google and Apple are prime examples. Today, there are several technology and retail giants moving into health and healthcare that will surely cause disruptions, and push the sector further faster towards healthier populations that are being cared for in cost-effective, high-quality and accessible settings. As is so often true, we learn more from our failures than our successes, and healthcare is no exception. For example, the sector has benefited from Silicon Valley’s failed efforts. From Google Health’s online personal health record (PHR), the industry found a major difference between what the patient , and what the patient . A consumer-facing healthcare product will only be successful if the consumer sees and experiences the benefit. In Google’s case, their business focus was the “passive patient,” the individuals with one-off clinical experiences with providers that amount to perhaps one to two visits each year for annual check-ups or occasional visits for illness. This group makes up the majority of patients. Patients with chronic conditions, on the other hand, were already actively using PHRs as a tool to help them co-manage their health status. Silicon Valley’s failures are often linked to illiteracy about how clinicians and patients interact, and how individuals think about their health: lack of communication, cooperation or respect for the clinical community, underestimating the depth of regulatory hurdles, over-estimating healthy individuals’ willingness – or need – to actively use IT in maintaining their health, and impatience in understanding how IT needs to function within the patient-clinician relationship. Healthcare is complicated, because people are complicated. Though the technology may be sound, it takes time to understand human complexities and motivations to succeed in healthcare. Other tech giants making plays in the health sector are Apple and IBM. Apple’s Tim Cook is moving his team into healthcare via the Apple Watch and HealthKit; IBM and Google are two examples of firms with strong business analytics competencies. Whether or not these firms will continue to find success remains to be seen, and journalists have examined these efforts and , offering a healthy dose of skepticism and . What is clear of these budding efforts is that tech-first companies have waded into the health sector carefully, avoiding anything that requires regulatory oversight. And, while there have been some partnerships forged with clinical entities, a perplexing resistance still exists to ensure their devices communicate with others, a concept referred to as interoperability. For example, despite the existence of healthcare-specific guidelines, HealthKit has created its own connections that are not standardized. This lack of adherence will certainly create interoperability problems over time. It will be interesting to see if, and at what point, this current lack of interoperability among tech giants will impact the customers they’re trying to serve. It becomes a question of who will mold the other. Will the tech giants embrace industry standards or vice versa? Based on what my organization is seeing at a national level in terms of interoperability and the release of previously hoarded information, I think Apple (for example) will need to both be flexible and influence flexibility. Looking ahead, some tech and retail giants – Amazon, Google (again) and Walmart – have started to dip their toe in healthcare in a way I believe shows great promise. But, I would like to see more innovation around other areas. For example, IT-enabled communications and reminders could be repurposed to positively influence individuals to stay healthy. The tech giants with massive stores of data on consumer behaviors and trends – from what we eat to where and when we eat – could also position themselves as personal health coaches. And think of how consumer health could be improved if the same type of technology that can estimate how long it will take to get from point A to point B with any mode of transportation was customized around exercise habits, eating patterns and preventive care. Several startups are figuring out how to take existing shopping behavior data and use it to influence health status. These will be very interesting to watch and learn what’s possible. An increasing number of traditional healthcare players, such as pharma and life-sciences firms, providers and payers, are actively getting these novel technologies into the hands of individuals. Published success and lessons learned can propel innovations forward in the market. Innovations that demonstrate have the best chance of making it because there’s such a need. I am heartened by the progress of those in the healthcare sector today and the tech giants just entering the space, navigating the labyrinth of this industry. As technology continues to evolve, one thing is for certain: There’s more than enough room in the sandbox for new players.
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When Data Goes Bad
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Jon Evans
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So I know this guy Sulemaan from my Toronto days. Really good guy, despite being a Spurs fan. Sulemaan has a son, Syed, who is flagged as a security risk, a suspected terrorist, every time he flies. Syed is six years old. This is, of course, completely insane. But the data has been parsed; the algorithm has spoken; and so others must suffer from the idiocy of those who built the system. Sulemaan about this on December 31st, while on his way to watch the Winter Classic in Boston (like me, he’s a Habs fan, which almost makes up for his Spurs heresy) and an of media attention, which led to the discovery that of families have similar stories, and a the “no-fly list” by Canada’s minister of public safety. Which actually infuriates me even more than the original sin. How can a government (and the airline partners, in this case) construct an automated system that makes sweeping, important decisions about people, and build in scope for appeals, errors, and exceptions from the word go? How can anyone be so stupid, so short-sighted, as to treat their data and their algorithms as infallible? …But we trust algorithms over humans, because we believe we’re trusting infallible math, rather than the human who wrote the code that implements the algorithm. We believe in “data-driven decisions,” because we ignore the sad fact that bad data is often actually worse than no data, often in very subtle, and yet deeply malicious, ways:
The very fact that we were using historical data meant that we were “training our model” on data that was surely biased, given the history of racism. And since an algorithm cannot see the difference between patterns that are based on injustice and patterns that are based on traffic, choosing race as a characteristic in our model would have been unethical. Looking at old data, we might have seen that families with a black head of household was less likely to get a job, and that might have ended up meaning less job counseling for current black homeless families.
to quote a piece on “ .” This is just as true of machine learning: By default, your ML algorithms for people are trained to make the same decisions that institutional biases would have you make. — Matt Adereth (@adereth) One of the shadow benefits for some is that trained algorithms let you be biased without accountability. — Matt Adereth (@adereth) …and of neural networks, whose categorization decisions are often literally inexplicable–and yet at the same time, one can, relatively easy, into thinking a panda is a vulture, or a cat is a bath towel. And that’s without even considering datasets whose very collection is malicious, or, at least, a bad idea. Consider “ .” Consider the that China is considering assigning to every one of its citizens — based in part on who their online and offline friends are — and the ramifications thereof. (And, as a tangential aside, (PDF) just seems like bad strategy for the human race. Just sayin’.) I’m not saying that collecting more data is bad. Quite the opposite; I believe that as many datasets as possible should be made public, as long as we can be confident that they are sufficiently anonymized. (And I think the notion that scientific data shouldn’t be shared because, and I the here, people might “use the data to try to disprove what the original investigators had posited” deserves all the contempt we can collectively aim at it.) What I am saying is that most datasets should be anonymized, and when they can’t be, when decisions are made based on that data, there should be ample scope for, and easy access to, appeals, errors, exceptions, and above all, human judgement. You wouldn’t think this would be a contentious or controversial point of view. But, whether out of intellectual laziness or the belief in data and algorithms as a cheap panacea, it seems to be. Let us please remind ourselves: these are tools, not solutions.
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Unscaling Energy
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Hemant Taneja
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Solving climate change is the biggest opportunity for entrepreneurs in our generation. In fact, the planet’s best hope lies in unleashing startups to unbundle and “unscale” the global energy industry. So far, almost all the conversation and policy-making around climate change has focused on austerity — some mix of sacrifice and grudging duty. That came together in the Paris accords, which aimed to impose limits on carbon. Austerity marks the language of politicians who line up against climate change policy. The argument instead needs to be about prosperity, and how we can help entrepreneurs seize the moment. That will require “systems thinking” that lines up technology, finance and policy behind startups and innovation in energy. We need to help energy ride the same software-driven dynamic that let Uber disrupt the entrenched taxi industry in the 2010s or Skype to fluster the regulated, protected international telephone business in the 2000s. When that kind of unscaling happens to an industry, the sector becomes massively more efficient and nimble, churning out innovations at a pace that makes many incumbents look like zombies. An unscaled energy industry will create jobs and boost economic growth — and, most importantly, curtail the burning of carbon fuels. It’s already obvious progress won’t be fast enough without luring entrepreneurs and venture capital back into this sector. In the U.S., total federal funds spent on energy research and development come to less than 2 percent of federal R&D spending, and private investment in R&D by big energy companies is even worse — just 0.3 percent of revenues. Talent and investment stay away from energy because governments, which often fail to think long-term, keep tripping over policy design that would support innovation. Recent news about one of the most interesting companies in energy, SolcarCity, provides an example. was founded in 2006 by Lyndon and Peter Rive with guidance from Elon Musk. The company applied technology, design and business-model innovation to develop new solar power systems that made economic sense for homeowners to install in their homes based on net metering policies. By last year, the company was adding 12,000 customers a month, employed 12,000 people, and was worth around $6 billion. Photo courtesy of Flickr/ But earlier this year, regulators in Nevada gave in to pushback from the state’s entrenched utility, NV Energy, and significantly dropped the price paid to homeowners who sell excess energy generated by their rooftop panels back to the utility. The price drop was so damaging to solar customers, SolarCity decided to pull out of Nevada, laying off 550 workers in the process. This is a disappointing development. However, I remain optimistic about the longer term given how quickly we are seeing other industries like hospitality, transportation, and retail undergo change. It can be hard to believe that what Uber did to taxis can be done to a monolithic industry like power and energy, broadly. But unscaling is the profound and powerful force reshaping every sector of business and society. It’s the reason Warby Parker can come out of nowhere and challenge the biggest, oldest eyewear companies on the planet, or why Airbnb can now offer more rooms than the biggest hotel chains. Khan Academy and a number of startups are using the forces of unscale to challenge the education system. The advantages of “economies of scale” are disappearing, and the new upstarts are able to create better customer experiences than incumbents and scale them. The availability of new platforms for computing, manufacturing, logistics, finance and access to consumers make it possible for small, focused companies to build products and reach global markets with very little capital and in relatively little time. An innovative upstart can iterate quickly, connect to customers, and offer disruptive products and services that reinvent industries — even old ones. At the turn of the century, who would’ve thought that startups might take on generations-old auto companies or insurance institutions? But unscaled newcomers like Tesla and Oscar are showing how it’s done, and making those industries compelling again. Over the next 20 years, new platforms will get built that will enable unscaling of the energy sector. Tesla is developing home batteries that will, for the first time, allow homeowners to cost-effectively store excess energy from solar panels, completely changing the dynamics of electric service. (one of our energy investments), and are helping the electric grid work more like telecommunications networks, allowing power to move nimbly through the system to accommodate things like solar panels, electric vehicles, and home batteries. As these platforms get built, new small and focused — and unscaled — companies that we can’t even conceive of yet will be built on top, completely transforming the way we buy and use energy. Incumbent power companies will play an important role in this, too. Regulators have to allow utilities to invest in new technologies, and shareholders have to give utilities permission to innovate and take risks. Their role needs to evolve from operating mammoth power plants and transmission grids to operating software-powered platforms that interconnect the unscaled power solutions in homes and small businesses. Just as anyone can now be a hotelier because of Airbnb, in a decade anyone will be able to be a power company once storage becomes a reality. In an unscaled era, the mini power plant in a home or small business is better, cheaper, cleaner and more resilient than the next massive power plant. Customers will have choices, and if new energy technologies are better, cheaper and cleaner than old ones, that’s what customers will choose. Some of the smartest business people are recognizing the potential. Bill Gates unveiled his Clean Tech Initiative last fall to try to help catalyze investment in the sector. That’s great, but not enough. I’ve been involved in investing and policy in energy for more than a decade, and I haven’t seen many inspiring entrepreneurs take advantage of this opportunity. And until we get policy-technology-finance systems thinking, breakthrough startup ideas aren’t going to surface.
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Baidu-Owned Qiyi Could Go Private In Deal Valuing Chinese Video Site At $2.8B
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Jon Russell
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China’s online video wars are heating up again. Last year, , the country’s largest YouTube-like video portal, in a major $3.5 billion deal, and now there’s more happenings in the space after Baidu received an offer to sell its majority share in close rival . Baidu, best known for its search technology and investment in Uber, owns 80.5 percent of Qiyi, and on Friday it that it received a bid for that stake that values the video content service at around $2.8 billion. The offer is led by Baidu chairman Robin Li and Qiyi CEO Yu Gong, and, if successful, it could lessen Baidu’s financial responsibility to the business and provide new funding options by taking Qiyi public. In made at the end of its most recent financial year, Baidu disclosed that Qiyi — which is a subsidiary that is included in its financial results — was the primary reason for its content costs ballooning 125 percent to $301.7 million,and bandwidth expenditure rising 81 percent year-on-year. In , Summit Research Partners analyst Henry Guo suggested that a China IPO, not a U.S. listing like Baidu, could be on the cards for Qiyi if it is allowed to go private via this acquisition offer. “If you IPO in China, because of the brand awareness, you may get a really high premium. In China, people don’t care whether or not you’re profitable yet,” Guo said. that there’s little to separate Youku and iQiyi (Tudou remains a separate site to Youku) as the largest video platforms in China, but with Alibaba now in control of both Youku and Tudou, Qiyi and Baidu are making moves of their own. This bid for Qiyi follows another significant China-led deal this month. A consortium led by Baidu rival Qihoo 360 and Kunlun Tech, the , last week.
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Tidal Tops U.S. App Store After Landing Exclusive Rights To Kanye West’s New Album
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Fitz Tepper
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After scoring exclusive streaming rights to Kanye West’s new album, The Life of Pablo, Tidal has taken over the number one spot on the U.S. App Store. https://twitter.com/kanyewest/status/699089796690534401 The album, which went live yesterday, was originally supposed to be available for streaming on Tidal’s platform, as well as for purchase on Kanye’s website. However, yesterday Kanye tweeted that he was pulling the album from his own site, meaning Tidal would become the only place fans could listen to the album, at least until it hits iTunes in seven days. https://twitter.com/kanyewest/status/698972107166892032 West, who reportedly of Tidal through friend and Tidal owner Jay-Z, emphasized that “all music lovers” should subscribe to Tidal to hear his album. The call to action seems to have worked, as it took less than 24 hours for the app to takeover the number one download spot on iTunes. Of course while not all downloads will convert to subscriptions — Tidal is ranked the 30th top grossing app right now — many fans are presumably eager to hear Kanye’s new album, and are likely to at least provide a credit card and take advantage of the free trial that Tidal offers. So far, the streaming site has held up to the intense onslaught of traffic from Ye’s fans. However, last week was a different story, when millions of fans complained that Tidal’s of Kanye’s Season 3 fashion show / album debut was malfunctioning. Seems that Kanye and Tidal need some Pied Piper compression… Live stream immediately down. — Erol Tekkanat (@ErolTekkanat) Notably, West to release music exclusively on Tidal. Recent songs by both Rihanna and Beyoncé hit Tidal before any other streaming services. While this is most likely due to the close relationship between these artists and Tidal owner, Jay-Z, that Tidal is funding “a lot of his scripted content ideas,” meaning the exclusivity pact may be part of a larger deal between West and the streaming service. Ultimately, if the streaming service can continue scoring sought-after exclusives like The Life of Pablo, it may just have a shot against an incumbent iTunes after all.
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Apple May Ditch Samsung For Next iPhone Chip
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Romain Dillet
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Apple and Samsung have been asymmetric competitors for years, fighting to grab smartphone market share and partnering when it comes to chips. According to a recent report from , TSMC (the Taiwan Semiconductor Manufacturing Company) will be the only company manufacturing the A10 for the next iPhone. Samsung won’t be working with Apple for the next iPhone. This isn’t an overnight change as Apple has already been working with TSMC in the past. The A9 chips in the iPhone 6s and 6s Plus are currently manufactured by . Before that, TSMC was the of the A8 for the iPhone 6 and 6 Plus. Using multiple manufacturing partners provide different advantages. First, it’s a good way to make sure that you won’t have any supply shortage. Given that Apple sells tens of millions of iPhones per quarter, it’s unclear whether Samsung alone or TSMC alone can manufacture enough chips for all these phones. Samsung and TSMC also manufacture chips for other phones as well. Second, negotiating with multiple companies lets you get better prices. It’s unclear whether Samsung is more expensive than TSMC, but Apple can drive the prices down as the A10 represents a huge contract. Finally, Apple can pick the most efficient design. TSMC’s A9 was when it comes to battery life. So Apple might favor TSMC for this reason as well. According to The Electronic Times, TSMC should start production of the A10 in June ahead of the iPhone 7 release this Fall. It could feature a 10nm design. We’ll have to wait for an iPhone 7 teardown to learn more about the A10. For the end customer, it doesn’t change much if your iPhone chip is manufactured by TSMC or Samsung. Both companies implement Apple’s own CPU design. But Samsung’s chip business could take a hit from this failed contract.
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Gravitational Helps Deliver Software On-Prem And In Cloud From Single Code Base
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Ron Miller
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, a graduate of the Y Combinator 2015 class set out solve a very difficult problem for companies — how to deliver software in the cloud and on-premises from a single code base. Without a solution like the one from Gravitational, companies would have to maintain two sets of code, which is simply too costly for most companies to pull off. That meant these companies were sometimes leaving deals on the table from customers who wanted a delivery model they couldn’t offer. This wasn’t the founders’ first go with Y Combinator, Ev Kontsevoy, Gravitational’s founder told TechCrunch. His first company, was a member of the YC Winter 2011 class. It raised $1.2 million, before it . It was through his experience working at Rackspace for several years after the acquisition that Kontsevoy began to see some difficult problems facing companies hosting SaaS programs in the cloud, which would eventually come together and lead him to launch Gravitational. First of all, customers of SaaS companies liked the simplicity of the delivery model, which didn’t require as much IT overhead to manage, but at the same time, some still needed control over their data. That control issue was exacerbated by companies who were required by law (or preferred to) store their data outside of the United States. As all of this was happening, Kontsevoy also couldn’t help but notice the growing power of Amazon Web Services in the cloud market. He could see it was scaring some on-prem software vendors who wondered how they could compete directly with the public cloud juggernaut. At the same time Kontsevoy began observing these trends, some key enabling technologies were becoming popular including Docker and Google Kubernetes. As all of this came together, Kontsevoy left Rackspace and formed Gravitational. He created a solution that enabled companies to deploy their software any way they liked without maintaining two code bases by building a solution using Docker and Kubernetes as the underlying technologies. Gravitational provides a way to manage the code base from a single management console and deliver it in multiple ways without dramatically increasing costs or development efforts. He obviously understands the advantages of participating in Y Combinator having launched and sold one successful company after being a part of it, but he says this time around he could see how the incubator had evolved since he last participated in 2011. For starters, the sheer size of the network had grown enormously since 2011 and now included many more enterprise companies. This was in stark contrast to his earlier experience when many of the companies had focused on consumers and it wasn’t as easy for an enterprise company to get help. “By 2015, there were a lot of successful alumni who had built successful [enterprise] companies and could help you with their experience and connections,” he said. The company has some funding and some early Beta customers, although he didn’t want to reveal numbers at this point. He says by the end of the year he hopes to have a dozen enterprise customers, who have increased their sales through using his company’s software. At the end of the day, Gravitational hopes to help software companies make more money by letting them sell in whichever way makes most sense to their customers — on premises or in the cloud.
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View-Master Shows Off Updated Version Of Its Iconic Virtual Reality Viewer
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Lucas Matney
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Mattel’s Virtual Reality headset is getting some new upgrades that will likely cement it as one of the best Cardboard viewers on the market when it launches this fall. It was just last week that the viewer earned the milestone designation of being the of virtual reality-focused hardware to be sold in-store and online by Apple. Now, the company is showing off a preview of its newest hardware, the Viewer DLX, at the New York Toy Show. The current iteration retails for $30 (though it generally goes for much cheaper on Amazon). reports that the DLX will run a bit more expensive at $40, but some notable upgrades come with the price hike. The Viewer DLX makes up for a few of the slightly annoying quirks of the original. It now allows you to use headphones with the device rather than rely on the muffled sound produced by the phone stereo speaker inside the enclosure. It also is now sporting improved optics thanks to better lenses and a focal adjustment on the top of the device. New York Toy Fair just got the first look! View-Master® Viewer DLX is launching this Fall with 🔑features! — View-Master (@ViewMaster) The popularity of the Google Cardboard platform comes largely from the fact that for existing smartphone owners there’s very little additional buy-in to get going with Cardboard content. The platform is in a seemingly tenuous position right now, especially as it is rumored that Google is working on of its own. Nevertheless, there’s no question that Google’s initial jaunt into the world of VR was successful; since the program began. That being said, some headsets outshine others. Mattel really surprised people when it introduced the View-Master Virtual Reality and showed off what a high-quality product the cutesy retro headset was, now the company has seen its success and is improving on the design with the Viewer DLX.
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Black Future Month And The Tech Community Redrawing Silicon Valley’s Racial Lines
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Sarah Kunst
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players suited up and took the field to play in the NFL’s 50th Super Bowl. Walker & Co. chief executive Tristan Walker The more diversity in the ecosystem, the more it proves the value of diversity as well. Entrepreneur and investor “The black tech network has proven that there is valuable talent in the minority pool. And, the recent success of black founders underscores the size and validity of the opportunities that exist when we are able to tackle problems we know best and disrupt industries that disproportionately affect black people when, and if, given the chance,” says Lauren Maillian, Founder and CEO of LMB Group and host of upcoming Oxygen TV’s Quit Your Day Job.
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The New Face Of Behavior Change
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Glen de Vries
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In 1994, I eagerly accepted my first full-time position in research at the Columbia-Presbyterian Medical Center. Part of my job was to find patients willing to participate in a prostate cancer study. After meeting these men, I got a glimpse of how their diagnoses had changed their lives. Specifically, I observed a stark difference in between sick and healthy patients. The cancer patients obsessively tracked results of a blood test for circulating prostate-specific antigen, or PSA, which is typically elevated in men with various prostate conditions, including cancer. I realized that every man old enough to be screened for prostate cancer knew whether or not his PSA score was “okay.” However, every man with prostate cancer knew his PSA score down to the decimal point. I remember one man in particular – an engineer – who arrived at the clinic with his PSA score charted over time on graph paper. It seemed that tracking PSA gave him a sense of control in a stressful situation. I began to wonder if the very act of tracking this data improved his overall mental well-being and quality of life. What motivates people to become fastidious custodians of their own health? Clearly, a medical emergency – a cancer diagnosis, heart attack, or trip to the hospital – can be a powerful motivator. However, I left my university job thinking more broadly about the science of . Can tracking basic biology create positive reinforcements for health-related behaviors? Twenty years ago, graph paper, a pencil, and commitment were the only option. Today, however, the solution is something everyone has in their pocket, or on their wrists. Modern sensors can track heart rate, calories burned, sleep patterns and so much more. The data and trends can be presented on our computers and our phones every day. Early adopters of 24/7 monitoring are already seeing the benefits. As one of them, I can attest that my own has changed as a direct result of activity tracking. I use resting heart rate as a basic proxy for my overall health. It is a well-documented indicator of cardiovascular fortitude, and the positive reinforcement I get from my activity tracker is perfectly aligned with health habits my doctor wants to see. And yet, those who actively track their health metrics, including myself, still represent a minority of consumers. The reality is most people who should be keeping track of health metrics don’t – until something goes wrong. Ironically, while life science companies have been largely absent from the health landscape, the intersection of drugs and these technologies is an obvious place for them. So far, tech firms – like Samsung, Apple and Google – have been filling the void. Shouldn’t companies making drugs, medical devices and therapeutics also have skin in the game? I believe they should, and I suspect they soon will. The opportunity for and medicine to intersect and make a meaningful impact on patient is immense. According to the ’s (CTA) semi-annual industry report, the wearables segment will be dominated by fitness activity trackers where volumes are expected to hit 17.4 million units in 2016 and revenues reaching $1.3 billion. And CES this year, technologies focused on health and fitness dominated the show floor and went beyond devices to include clothing, ultimately making tracking one’s well-being as simple as putting on a T-shirt. The estimates that unhealthy behaviors account for almost 40 percent of the risk of preventable, premature deaths in the United States. However, have demonstrated that programs work to improve health but are vastly underutilized in healthcare. Medication non-adherence is one of those behaviors. For a number of reasons, many patients either forget to take medications or decide to forgo doses altogether. Nearly half of Americans are on at least one prescription medication, and at least 20 percent are taking three or more, . For example, statins are one of the most commonly prescribed medications for decreasing the risk of heart disease. If more patients with high blood pressure took their medication as prescribed, could be avoided in the United States per year. According to , more than 60 percent of American adults own a smartphone. Why doesn’t every pharmaceutical company that sells a statin have a program aimed at improving medication adherence? This could be as simple as a smartphone app that reminds patients to take pills on time, or that works as a companion to a medical device, such as a home blood pressure cuff. Integration with social networks, such as PatientsLikeMe or Facebook, could also give patients a social support system that helps reinforce . But I understand it’s not just about any old app – it’s about the right app. The same way it takes a lot of careful research to pinpoint the perfect dose for each drug, it requires a lot of feedback from patients to determine exactly how these apps should work most effectively. Still, the time has come to directly address the questions I started thinking about 20 years ago. Today we can reliably study the science of . Mobile and has replaced the graph paper and pencil, and most patients – not only engineers – already have. Everyone wants better outcomes for patients. The techniques, data and infrastructure necessary to democratize the science of exist today. Insurance companies, life sciences companies and patients all stand to benefit. So what are we waiting for?
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The Apple Watch Is On Sale Again, But It Doesn’t Mean A Watch 2 Is Coming Just Yet
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Romain Dillet
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The Apple Watch is now available with a $100 discount , , Target and possibly other stores. For instance, the 38mm Sport model now costs $249 and the 42mm version costs $299. You might think that it means that the Apple Watch 2 is right around the corner, but . Instead, it seems like Apple wants to grab market share with its first smart watch. The Apple Watch (at least the Sport version) is and was also discounted . In other words, Apple is firing with both barrels to capture market share as quickly as possible. If you buy an Apple Watch now, chances are you’re going to buy another one down the road in a couple of years. And the product life cycle of the Apple Watch is just beginning. There’s a long road ahead full of updates, late adopters and better margins. Even more important, your Apple Watch only works with your iPhone. Selling more Apple Watches is a way to increase brand loyalty. When it’s time to upgrade to a new phone, these Apple Watch users will buy a new iPhone because it works with the Apple Watch. Best Buy, Target and others started this sale a few days before Valentine’s Day. The Apple Watch makes a good gift, and it’s clear that Apple is also taking advantage of it. An Apple event on March 15 , but you shouldn’t expect a major update for the Apple Watch. There could be new bands and partnerships with fashion companies, but it’s going to be the same watch. Also worth noting, it’s interesting to see that Apple doesn’t want to discount the Apple Watch in its own stores. Instead, the company relies on third-party stores for these discounts, keeping the Watch at its original price point in the Apple Stores. It all comes down to perception. Apple wants to keep the premium perception around its brand and especially around this product. Other than the Sport variant, the Apple Watch is a luxury item. And luxury items aren’t supposed to be on sale.
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Worse Than A Cold Call? Polar Bear Pitching In The Arctic Circle
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Dennis Mitzner
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To make the most of its grey, rainy, cold and often freezing winter, the good folks in the Finnish have found a way to combine the wintry landscape, frozen Baltic Sea and eager startups into an annual pitching event. The people of Finland have an intimate relationship with ice holes and it’s customary to take a dip during a Sauna session in the winter. This time there was no sauna in sight, with 20 startups pitching in freezing cold water. Strong in tech, but lacking in either sunlight or warmth, the third annual competition, which took place on February 10–11, has found a perfect home in the city of Oulu, which lies 600 km north of Helsinki (and is reminiscent of the fictional depiction of the real city of Fargo, N.D.). But what’s the real value of startups pitching from an ice hole, standing in freezing water, fighting for the 10,000 euro grand prize, the chance of becoming a , and a two-week stay in Silicon Valley? “All events have value. It’s cool, dark and there’s slush on the ground – so not exactly Silicon Valley. There’s no point in mimicking what other countries are doing. With events like Polar Bear Pitching, Finland can distinguish itself,” said Peter Vesterbacka from Rovio – the maker of Angry Birds and the founder of Slush and MobileMonday. “Obviously you have to make great products, but distinguishing oneself is hugely important.” Finland is quite literally making the most of its dark side – snow, lack of sun in the winter and cold to distinguish itself globally and Oulu, referring to itself as the Capital of Northern Scandinavia, has a long history as a national hi-tech center, especially in IT. The exotic event draws prestigious guests. Ambassador Bruce Oreck, formerly stationed in Finland and once a successful body builder before embarking on a diplomatic career, has created a tradition of American diplomats speaking from the ice hole. Gladly following in the footsteps of his predecessor, Ambassador Charles C. Adams Jr. was also forced to take the plunge. Polar Bear Pitching might not be for the faint of heart, but it’s good practice for startup founders looking to make it big. “Perfecting your pitch comes down to repetition. The event is great because it’s different and obviously the best ice hole event in the world,” said Vesterbacka. Winning with his energetic pitch, Didrik Dege Dimmen from Norway-based FlowMotion Technologies – a stabilizer for GoPro – was a happy man. “It’s a huge deal, big win for us financially and motivationally. The press we get is amazing. Now the next step is to raise funds on Kickstarter and we are launching an ambassador program soon to make noise about the product.”
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The Land Of Milk, Honey And Fraud Prevention
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Barak Rabinowitz
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Making Sense Of The Valuation Disequilibrium
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Nino Marakovic
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As we enter the second month of 2016, the Nasdaq is down more than 10 percent already this year and high-growth stocks are down even more. There hasn’t been a tech IPO yet this year, and the press is declaring the end of the unicorn era. Public market investors are “selling growth” and searching for value. From our vantage point in Silicon Valley, it has also become clear that the private markets for tech companies are in the early stages of a major correction. Not surprisingly, this creates a host of issues for entrepreneurs and VCs alike. The rules of the game are changing. The have diminished, as Rory O’Driscoll recently pointed out, and capital is becoming more scarce. And this means entrepreneurs and investors will be forced to make some hard decisions in the weeks and months ahead. But in the face of this near-term disequilibrium, let’s avoid making bad decisions. In order to return quickly to a place where the collective entrepreneurial machine can hum along again and create value and wealth for all, VCs need to provide greater transparency around how we think about valuations so that entrepreneurs can successfully navigate today’s volatile private markets. First, let’s briefly revisit that college Psych 101 class. Remember Jean Piaget? He popularized the idea that we all make sense of the world through the use of pattern recognition; we construct schemas – sets of perceptions and ideas to understand and respond to the world around us. When a schema no longer matches a sudden change in the environment, the world moves into a state of disequilibrium. For entrepreneurs who have been conditioned to , let’s call it the “hyper-growth schema,” the process of adapting to more measured and metric-driven growth presents disequilibrium. It’s no wonder that new, lower valuations that VCs are beginning to suggest for their companies are resulting in some serious cognitive dissonance. But while change is hard and uncomfortable, the process of equilibration makes us stronger – and better able to respond to the next disequilibrium. One of the most damaging things about a private market correction is how long it takes to discover a new equilibrium. Public markets are very efficient in getting back into equilibrium after a shock as everyone can look at the last trade to understand where they stand. But when the private markets are in flux, many poor decisions are made around spending, hiring and raising capital, all of which gum up the Silicon Valley value creation machine. This chill in the markets results in a rapid deceleration of deal velocity, as we have already begun to witness in Q4 of 2015 and in the first month of 2016. To bring the market back into equilibrium more quickly, VCs, particularly growth-stage VCs, owe it to entrepreneurs to offer candor and transparency about how we think about valuing companies. A lot of things change around the time we invest in Series B or Series C rounds: the company has just demonstrated product/market fit and is ready to take a larger round to pour fuel on the sales and marketing fire; the company’s legal documents get a thorough upgrade from the more “clubby” seed and A round docs; and the concept of an “exit” begins to appear as a dim light somewhere out on the horizon. With an exit in distant sight, valuation math begins to change. The math for early-stage VCs is pretty easy: invest in companies at really small valuations and exit them at really large valuations. The math for growth-stage VCs like Sapphire Ventures matters a lot more, but it’s still not complex. Revenue times entry multiple equals valuation today. Future revenue times exit multiple equals valuation at exit. Our goal is a 3x return on capital for our limited partners. So if the typical company that we look at today has $20 million in revenues, and if we know what multiple the public markets will likely put on a growing tech company, then all we need is revenue growth rate to back-solve for valuation today. Let’s take a look at how this math played out in the overheated markets of mid-2015. Putting aside real differences between GAAP revenue, run-rate revenue, current ARR and forward year-end ARR, the private market priced to a 10x equilibrium. High-growth SaaS public comps traded at 7x. So if we invested in a $20 million company at $200 million valuation, and expected a 3x return, we would need to achieve close to a $1 billion valuation (after accounting for the post-money valuation and at least one more round of dilution). At a 7x public valuation, this company would need to generate roughly $150 million in revenues at exit. This represents 8x growth from the time of investment, or approximately 100 percent annual revenue growth for three years. These deals may have been priced to perfection, but there was a local equilibrium that enabled companies to be funded and thrive. Today we have disequilibrium. Why? Entrepreneurs are still comparing valuations of their own high-growth companies to data points from 2015 – either their own last round or the last round of a competitor (or even to rounds priced in December 2015 that have taken 30-45 days to document, close and announce in Q1 2016). But from our perspective, these data points just don’t matter anymore. They are simply what a high bidder was willing to pay in a different market paradigm. Following their extended swoon, public high-growth SaaS comps trade at just 5x revenues today – on a good day. Even worse, small-cap lower growth public SaaS comps trade at just 2x. With these data-points as brackets, let’s pick 4x as representing the new paradigm. Using the example above, the exit valuation for a $150 million revenue company would be $600 million. Working backwards from exit, the new equilibrium valuation from our perspective is closer to $120 million now (which works out to 6x today, not 10x), a level which would allow for a 3x return after expected dilution. If your company doesn’t grow at 100 percent annually, but instead “only” grows at 50 percent annually, it will take five years (not three) to achieve revenue levels where we can earn our target 3x return. In this case the annual rate of return (IRR) that we deliver back to our limited partners will suffer – or we can further reduce the entry valuation we offer to account for a lower-growth environment. And some investments do fail. Other companies settle into a lower growth trajectory; 20 percent annually would be pretty good for most public companies, but doesn’t compound fast enough to generate venture returns. VCs invest in a portfolio of companies. The portfolio needs to return 3x. So let’s say that one-third of the portfolio just returns capital (1x), then a growth-stage VC would have to price the other two-thirds of the deals to 4x to achieve an overall 3x return.
Especially when the paradigm shifts as it has in 2016, entrepreneurs and investors alike may tend to think of valuation as a zero-sum negotiation. If one person wins, the other must lose. Not so fast. Remember we are living a multi-turn game – entrepreneurs have many rounds to raise, and perhaps many companies to build over time, and VCs have a portfolio of investments. And both parties are committing to working closely with each other over a long period of time. In our view, this is why it is a mistake for an entrepreneur to present the rosiest of projections upon which to base a valuation multiple or for a VC to always pay up to the highest comp. Neither is sustainable. Our suggestion for the new paradigm: agree on reasonably aggressive but achievable projections (based on achievable bottom-up unit economics) and then agree on a balanced set of comps (not just the three highest multiple companies in your universe). We would add this advice to the “ ” that Ajay Agarwal recently put forth to pave the way to a new equilibrium. To move forward and avoid making bad decisions in these turbulent times, we all need to process the new reality, get on the same page and be realistic in our expectations for valuations and returns. Most VCs don’t actually generate 3x returns in their funds. But think of 3x as the math that keeps the machine humming from the investment side. Without it as an aspiration, we can’t raise new funds from our own limited partners to continue the cycle of investing in the next great class of enterprise technology entrepreneurs. Of course the math has to work for enough entrepreneurs to keep showing up at the party as well. We think the new math still works, so let’s get back to business.
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Razer Raises At A $1.5B Valuation, With $75M From China’s Digital Grid For Immersive Gaming
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Ingrid Lunden
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, the gaming technology company based out of Southern California, has raised another round of funding, a Series C that values it at $1.5 billion, TechCrunch has learned. The backing comes in part from China, specifically the Digital Grid subsidiary of IT company Hangzhou Liaison Interactive. Yesterday, Hangzhou (a link first published by ) confirming the 5.01%, $75 million investment in Razer, as well as its valuation. TechCrunch understands that the $75 million is part of a “much larger” Series C investment. Contacted by TechCrunch, Razer said it would not provide more details about other investors at this time, nor the final size of the round. The participation of Digital Grid — which has backed other companies in the area of smart devices and virtual reality — underscores the bigger direction that we have seen Razer take as a company in the recent years and its intention to keep pushing ahead into new ways of gaming. Razer — company tagline “For gamers. By gamers” — made its name originally around peripherals like mouse controllers and keyboards that improved the PC gaming experience. But it has used its strong brand within the gaming community to expand into gaming-optimized laptops and other consoles. And, to make gaming experiences more immersive, Razer has been doing a with and , most recently with its new $200 . The Stargazer uses Intel RealSense tech to supercharge the video experience with artificial intelligence. The camera not only detects your motion and puts you deeper into the game’s action, but can be used for security ID and much more. But forging ahead with new hardware and specifically wearables — a relatively new and untested area of the market — comes at a price. The documents unveiling the Razer investment also makes note of some of the company’s financials that detail a swing to a net loss between October 2014 and September 2015, compared to a net profit in fiscal year 2014, along with revenue and related figures, translated here: For some background on Razer’s fundraising history, in 2014 we (and later ) that Razer raised a strategic round of funding from Intel that valued the company at $1 billion. Others who have in Razer include Accel and IDG Capital Partners. These appear to be detailed in the “other” category in the cap table published by Hangzhou Liaison Interactive (also translated from the document): Considering another potential investor, Razer has also worked on products with , specifically computers designed for high-end gaming. The financial relationships behind that partnership has never been detailed. It’s not clear if Intel is part of this latest round, either, but interestingly Intel has invested alongside Digital Grid before. For example, the two were part of a raised by Avegant, makers of Glyph, the VR headset that looks a bit like a pair of headphones when in rest mode. We will update this story as we learn more.
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Listen To The Apprentice’s Vana Koutsomitis Talk Online Dating, And Doing Reality TV
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Steve O'Hear
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It’s Valentine’s Day, so what better time to interview , the self-proclaimed dating expert and finalist of this year’s U.K. version of The Apprentice. Koutsomitis almost certainly qualifies as a serial entrepreneur, having previously founded The CityStreet, a sort of Facebook for the banking and financial services sector, and most recently launched her own brand of wine called ‘ ‘. The latter she developed when she was forced to go on gardening leave between the last day’s filming of The Apprentice and when the show airs and the winner is actually announced. However, her latest project (and the startup idea she pitched on the show) is , a new dating app that promises to gamify the online dating process. Specifically, it aims to eliminate ‘self reporting’ — the tendency to create an online profile as you’d want to be seen rather than how you actually are — which, argues Koutsomitis, typically results in a string of poor matches and, ultimately, the failure of online dating. That’s something she’s determined to fix. Listen to a lightly edited version of the interview below.
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Toshiba Nixes Wearvue, Its Smart Glasses, Less Than One Week Before Launch
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Catherine Shu
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has canceled its smart glasses less than one week before the devices were to start shipping. In an announcement today, the Japanese electronics company said it made the decision to stop developing and selling Wearvue TG-1 as part of an effort to streamline its business portfolio and operations. The firm is struggling to recover from and has been hit with a 7.3 billion yen (about $65.7 million) fine from Japan’s Financial Services Agency for falsifying its 2011 and 2012 financial statements. As part of rehabilitation effort, Toshiba announced that it will restructure to reduce costs by cutting jobs and selling off some segments, including . A company representative that the Wearvue, which was announced on Jan. 13, had gained enough interest that it “wanted to consider until the very last minute” whether to cancel its release. Designed for enterprise use, the Wearvue was meant to free the hands of workers in factories and logistics centers by projecting lists and images onto its right-hand lens. The smart glasses were slated to be the first in a series of devices that would “contribute to upgrading working environment for various industries and services,” the company said last month. A Toshiba representative told TechCrunch there are no plans to continue developing Wearvue in the future.
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SpaceX’s SES-9 Launch And Why They Land Rockets At Sea
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Emily Calandrelli
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This Wednesday at 6:46 pm EST, SpaceX is scheduled to launch the SES-9 communications satellite from Cape Canaveral, Florida with their Falcon 9 launch vehicle. The mission will mark the company’s second launch of the year. Wednesday’s mission will be coupled with a first stage landing attempt on SpaceX’s autonomous drone ship, “Of Course I Still Love You.” The floating barge, like its sister ship “Just Read The Instructions,” is named after a starship in the late Iain M. Banks sci-fi novels. Sea-based rocket landings, are considered to be more difficult than ground-based landings. It’s a smaller target area and the drone ship itself is constantly moving because of the motion of the sea. Once SpaceX landed a Falcon 9 first stage on land at Cape Canaveral back in December, it would be reasonable to question why all future launches aren’t attempted on stable ground. There was a lot of discussion around why SpaceX would choose a drone ship landing over a more stable landing pad. NBC News that a drone ship provided “more flexibility in when and how launches can proceed.” On twitter, however, Elon Musk said that the primary reason has to do with the speed that’s required to send the payload into orbit. As mentioned before, ship landings are needed for high velocity missions. Altitude & distance don't mean much for orbit. All about speed. — Elon Musk (@elonmusk) If speed at stage separation > ~6000 km/hr. With a ship, no need to zero out lateral velocity, so can stage at up to ~9000 km/h. — Elon Musk (@elonmusk) It seems like an issue of semantics, but Musk is saying that the root of the cause is really how fast that rocket needs to go in order to complete its mission. For orbital launches, a payload requires an arc-like trajectory and a sufficiently high velocity to complete an orbit around the Earth. In order to bring the first stage back to a launch pad, additional lateral maneuvers are required. This is on top of the deceleration maneuvers needed for all soft rocket landings. Depending on the rocket’s velocity and the mass of its payload, there may not be enough fuel to get back to the launch pad. Bringing a drone ship away from land and out closer to the trajectory of the rocket can reduce the fuel required for a landing. For certain missions, this may be the only option for rocket recovery. Of course sometimes there are other factors that play into that decision as well. SpaceX’s launch of NASA’s Jason-3 satellite included a drone ship landing not because of fuel issues, but because the company didn’t receive the necessary approval to bring the rocket back to land. Actually, didn't get environmental approval in time, but it was also good practice for missions where a ship is needed. — Elon Musk (@elonmusk) The payload for Wednesday’s launch, the SES-9 communications satellite, needs to reach geostationary orbit. Satellites in geostationary orbit (over 35,786 kilometers above the Earth) are much higher than satellites in low Earth orbit (between 160 kilometers to 2,000 kilometers), and therefore require more power – and fuel – from rockets to get them there. With this in mind, it’s not surprising that SpaceX would choose to land their rocket on a drone ship for this particular mission. A full-duration static fire test was completed on Monday, which puts SpaceX on track for their scheduled launch on Wednesday. Full-duration static fire completed. Targeting Wednesday for launch of SES-9 satellite — SpaceX (@SpaceX) Recently, SpaceX has invested a lot of energy into their live stream coverage of launches. The coverage has included co-hosts that explain what’s happening throughout the launch and other interviews to provide more detailed background information about the mission. For Wednesday’s launch, SpaceX will be hosting their live stream on .
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Investors, Entrepreneurs Upbeat On Energy Storage, China And The Internet Of Things
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Ankit Mishra
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For the last 15 years, the Cleantech Forum has been organized by the . Most recently it took place in San Francisco on January 25-27, 2016. Energy storage, China and the Internet of Things (IoT) were key topics at the forum, with investors and entrepreneurs confident on their respective futures. Energy storage, in particular, was keenly discussed, with Vic Shao, CEO at , predicting “2016 will be the year of deployment for storage.” Anticipation around storage deployment has been gathering for a few years now. In 2014, predicted that worldwide revenue from energy storage would increase from $675 million in 2014 to $15.6 billion in 2024. Last year, reported that technological advancement could make energy storage a solution that could be deployed on a large scale within the next five years. Andrew Beebe, Managing Director at Obvious Ventures, sees similarities between energy storage today and solar energy a decade ago. “Energy storage is just like solar panels were 10 years ago. We are at an early stage of that process, but what we are about to see in storage is what solar did a few years ago,” says Beebe. While Silicon Valley has been the driving force behind major breakthroughs in technology, the development of energy storage has also been moving forward north of the border. For the past few years, Canada’s largest province (similar to a state), Ontario, has been building up its energy storage system. Strong interest from Ontario’s utility sector and a supportive ecosystem for cleantech, developed by both the national and provincial governments, have enabled Ontario to establish a lead in energy storage. Tom Rand, Managing Partner at ArcTern Ventures, agreed that while energy storage technology is developing well, more work still remains in understanding the characteristics of this new asset. “We’ve established a lead in technology, and are now working to develop operational capacity and awareness in our utility sector,” says Rand. Toronto-based , an energy storage project developer, and are two examples of energy storage development in Ontario. Last year, NRStor with Tesla to bring the Powerwall Home Battery to Canada. Likewise, Hydrostor, one of the beneficiaries of the privately backed ArcTern’s investment, is with Toronto Hydro, a municipal electricity distribution company, to develop underwater batteries. Lately, China has witnessed major policy developments related to climate change and clean energy. The U.S.-China Climate Agreement, Chinese President Xi Jinping’s announcement of a cap-and-trade system and a leaner and greener five-year plan have created a new model of economic development, which could not only curb energy usage, but also provide opportunities for cleantech entrepreneurs. Alex Shoer, CEO at Seeder, is one such entrepreneur who is looking to address energy efficiency in buildings. His company provides a marketplace that connects commercial building managers with green technologies for retrofits, as well as the capital to pay for it. “There’s a huge amount of development, but while there are mandates in terms of efficiency targets and sustainability in buildings, there’s a knowledge and access gap between available solutions, qualified providers and financing options,” says Shoer. But while Shoer has successfully started operating in China, he points out that entrepreneurs looking to enter the Chinese market need to pay special consideration to building partnerships and relationships. “In China and in many other developing countries, trust is the most important thing. It takes time and persistence to develop these ‘trust’ relationships, but one way to speed up the process is to work with, or work through, an existing trusted party or marketplace already on the ground,” he says. Leo Zhang, Senior Analyst at Cleantech Group, echoes Shoer’s sentiment. He emphasizes that finding the right partner also can help entrepreneurs navigate and enter the market, especially when companies have no presence in China. “China is heavily relationship-driven, so having local partners will open lots of doors, rather than going into it blindly by yourself. A partner can provide their infrastructure to scale-up the technology, or can be the pilot program to test your product,” says Zhang. The unique nature of doing business in China requires a collective approach to building relationships and trust. Albin Jourda, founder of , says that French companies are working together to establish these partnerships in China. “Building partnerships is one of the main challenges French companies may face in China. For this reason, the UMO (Union de Maîtrise d’œuvre), which is a group of six French companies, worked together and signed agreements for a period of 5 years with the city of Chengdu,” says Jourda The potential for IoT solutions to be deployed in the energy landscape has created opportunities to drive efficiencies, increase productivity and promote economic growth. Joe Costello, CEO at , whose company was named in the and also won the North American Company of the Year award, believes that IoT is not only good for the environment and reducing costs, but also for creating new innovative tools for doing business. “Our clients who use the sensor technology save 50 to 75% of their energy costs,” says Costello, who was named the top American CEO in 1997 by Chief Executive Magazine. Enlighted’s client list includes Google, LinkedIn and HP. Costello, does, however, point out that the capital-intensive aspect of implementing sensor technology has hindered growth. To accommodate this, Enlighted created an innovative financing model for its customers. “This type of technology does require a large amount of capital. Small companies would require around $10 million, and large companies $100 million to implement our system. This was our biggest constraint to growth; so we put all the money down for our customers, and they pay us back from the energy savings that the system provides,” he explains. Through their innovative financing model, called GEO, Enlighted customers receive full energy benefits and have a sensor network that enables them to optimize commercial space with zero upfront cost. Even for large companies, IoT is gaining importance and being incorporated into their daily business activities. IBM, a company well-known to reshape itself, has made IoT “a major priority” for its business as the company continues to focus on its key growth initiatives. “IoT is a major priority for IBM, and is one of the new businesses that we have created as the company continues to innovate. IoT holds out the promise of more granular monitoring and optimization of process performance in just about any context — therefore, it will become integral to resource efficiency as one aspect of performance,” says Peter Williams, Chief Technology Officer, Big Green Innovations, at IBM. Aside from IBM’s business activities, the company is utilizing the benefits of IoT to improve daily operations within its buildings, manufacturing and, in particular, its data centers. “IBM is a heavy user of IoT in our buildings, manufacturing and in particular in our data centers, to optimize HVAC loads and building performance,” Williams adds. The benefits of IoT also stretch beyond advanced economies and, perhaps, create a greater impact. In Africa, the IoT is enabling customers to leapfrog over the conventional electricity grid and go straight to “mobile power” — in a similar way that they have already leapfrogged over conventional telecommunications grids to mobile communications. At the forefront, Jesse Moore, CEO at , is using IoT for solar system metering and performance management, and his company has connected solar power to more than 300,000 homes in East Africa. “What’s exciting and perhaps unexpected is the fact that IoT is enabling low-income, off-grid customers to leapfrog straight to solar power,” says Moore. Moore continues to highlight how the multidimensional nature of IoT is also providing ways to improve customer service. “Data coming back from our solar systems tells us when a customer’s rooftop panel is in the shade, so we can advise them to move it to a better location. To be able to remotely support customers in remote and rural parts of East Africa is a magical thing!” he says, regarding the additional benefits of IoT.
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‘A Small Number’ Of Rift Pre-Orders Were Just Canceled By Oculus
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Lucas Matney
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With the first orders of the Oculus Rift virtual reality headset slated to arrive in just over a month, a number of those with pre-orders awoke this morning to the disturbing discovery that their orders had been abruptly canceled. Many of the reported instances seem to point to the fact that buyers were aiming to have the product shipped to unsupported countries or were otherwise misrepresenting their order. Oculus has initially limited orders of the headset to buyers in 20 countries. This bout of cancellations comes only a day after launch details were released regarding Oculus Rift competitor HTC Vive. The Vive headset will notably include pre-order availability in China and a few other countries not supported by Oculus at launch. Oculus pre-order cancellations got me checking my email like — Scott Craft (@ScottCraft_) Oculus provided a statement to TechCrunch on the cancellation, noting, “A small number of pre-orders were unable to be processed and as a result were canceled. Customers can contact support if they have a question about their order.” A number of Reddit/Twitter users specified that they believe they were unfairly scooped up in the bout of cancellations after pre-ordering the device while traveling abroad or by having differing billing/shipping addresses. A representative from Oculus, Reddit user , commented in a thread titled “Order cancelled??” that the company is tuned into the concerns being voiced. “We’re aware that there are questions on pre-orders and cancellations and we apologize for any confusion this may have caused. Please contact our support team at if you have questions about your specific order cancellation.”
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“Space Music” Heard On The Far Side Of The Moon And The Science Behind It
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Emily Calandrelli
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Boy, that sure is weird music. We’re going to have to find out about that. Nobody will believe us. -Apollo 10 transcript This weekend, the Science Channel released the preview for their newest episode of that told the story of Apollo astronauts who heard weird sounds during their trip around the moon. The “space music” was heard during the Apollo 10 mission when astronauts Thomas P. Stafford, Gene Cernan, and John Young were on the far side of the moon. As a type of “dress rehearsal” for the first moon landing, the Apollo 10 astronauts went through all of the necessary procedures just short of landing on the lunar surface. During the mission, Stafford and Cernan went into the lunar lander while Young stayed inside the command module. The two spacecraft separated when the crew was on the far side of the moon and it was at this point in the mission when the astronauts began to hear a weird noise. Whooooooooooo. Did you hear that whistling sound, too? Yeah. Sounds like – you know, outer-space-type music. I wonder what it is. -Apollo 10 transcript The “space music” can be heard at the 2:05 mark in the video below. So what was this mysterious, but mostly just annoying, noise that the astronauts heard? In his book, , Apollo 11 astronaut Michael Collins that he had heard a similar noise when he was on the back side of the moon. He said it was certainly “a strange noise in a strange place.” However, Collins noted that NASA radio technicians had a pretty easy explanation: the sound was caused by radio interference. The kind of noise the Apollo astronauts heard is common to those who frequently operate radios. It can happen when radio waves interfere with the transmission of other radio waves passing through the same path. The “space music” radio interference occurred when the crew separated the command module and the lunar lander and each spacecraft turned their radios on. Despite this somewhat mundane explanation, this story has drawn a lot of attention, mostly because of a few misconceptions about what really happened. Collins’ book came out in 1974, but NASA didn’t officially release the transcripts until 2008. This lead people to believe (and the Science Channel episode suggests) that the “space music” information have been covered up by NASA. But today, the NASA History Office was quick to correct that theory. audio & transcripts were not classified, just no way to get them to the public before the internet. (1/2) — NASA History Office (@NASAhistory) transcripts here for years: Audio uploaded in 2012: (2/2) — NASA History Office (@NASAhistory) The full transcripts and audio of the mission are for anyone who’d like to listen to or read through them. In addition to questioning NASA’s motive for waiting until 2008 to officially release this information, some have noted that the location where the astronauts heard the noise was peculiar in itself. Many incorrectly referred to the location as the “dark side” of the moon, which makes the entire situation feel much more mysterious. However, there is no “dark side” of the moon. The lunar dark side myth propagates the belief that there is a frozen, desolate side of the moon which never receives sunlight. This myth came to be because, here on Earth, we can only see one side of the moon. Tidal locking causes the moon to rotate about its axis at the same rate it takes for it to orbit around our planet. Because of this, we only see one side of the moon. But this doesn’t mean that the Earth-facing hemisphere receives more sunlight. Both hemispheres experience the same amount of sunlight and darkness. With that said, hearing a weird noise at a time when your spacecraft was in radio silence with NASA was probably pretty unnerving. Reading through the transcripts, it’s obvious that the astronauts were a little confused. But in the end, it wasn’t aliens or a NASA cover-up, just a little radio interference in an otherwise very, very quiet place.
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Is Smartphone Innovation All Tapped Out?
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Natasha Lomas
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A panel session probing the perennial heads or tails of mobile device commoditization vs mobile device innovation here at MWC 2016 earlier today heard an interesting range of views. Speakers ran the gamut of mobile makers big and small (Samsung, Motorola/Lenovo and Wileyfox), through to chipset maker Qualcomm, alternative open Android flavor Cyanogen, and mobile operator Telefonica. Each had their own spin on what ‘innovation’ means in the smartphone space now, in the context of mature Western markets — and inevitably aligning with their respective business imperatives. And no one was quite willing to pronounce smartphones too boring to be bought in the sought for quantities to sustain the mobile growth engine. Although there were various takes on what being innovative in smartphone terms means now. Connected devices extending the capabilities of handsets — and thus acting as an added selling point incentive — are clearly front of mind for some, such as Samsung, which has of course in the hyper competitive smartphone market in recent years. The idea that both innovation and commoditization are happening simultaneously – with a two-tier smartphone market in play that’s simultaneously delivering increasing value on the one hand, yet still coming up with compelling new bells and whistles at the premium top of the line was also generally accepted. “On the innovation side when we hear innovation’s gone from the category… we think that’s absolutely wrong,” said Tim McDonough, SVP of marketing at Qualcomm, pointing to flagship announcements this week from and . “Innovation in the handset’s not constrained to the 4.5 inch or 5 inch screen in the device; it’s everything surrounding it, including the ability to capture virtual reality and watch it and share it over wireless with friends and family,” he argued. Samsung’s Jean-Daniel Ayme, Corporate VP of its IM division, asserted that the “centre of an ecosystem” is now building around the smartphone – talking up the VR angle it was pushing heavily at its flagship launch event yesterday. Its Gear VR headset links to and extends the capabilities of its flagship smartphones so the headset featured prominently in the launch of the Galaxy S7 and S7 Edge ( ). So you could argue a flagship phone in and of itself is not longer enough to turn heads and excite upgrades on its own. But throw in compelling enough connected accessories and that changes the game, argued Ayme. Stephane Maes, VP of product management and planning at Motorola, now owned by Lenovo, said its take on innovation is more about building features into phones that consumers are genuinely asking for –- noting, for instance, that it is selling a phone which . And talking up “meaningful innovations that matter to consumers”. So kind of the opposite of VR then; i.e. really practical stuff, rather than pure fantasy. The wild card on the panel, UK smartphone startup , which uses Cyanogen’s flavor of Android on its smartphones, argued it’s delivering innovative by offering consumers an alternative on the two-year carrier contract that locks people into paying a hefty chunk for handset hardware. CEO Nick Muir’s argument is that handset component costs have been commoditized so that when coupled with a lean startup philosophy it’s able to deliver ‘innovation’ in the form of a range of affordable yet acceptable (in terms of performance and design) smartphones to budget-conscious customers. “People may much too much for their mobile devices,” said Muir. “More and more people are beginning to see the cracks in the standard model – and that standard model being you have to pay for a two year contract to be able to afford the device you want… I know that the bill of materials allows us to be able to sell the device at a reasonable price and the reason we can do that is not enormous scale, it’s not just tier one components, it’s around the fact that we don’t have any sporting contracts, we don’t have legacy pensions, we don’t have glass offices, we all travel by EasyJet and we stay in Airbnb. We are a low cost organization and that low cost gets passed on to the consumer – and that’s part of it.” For Cyanogen itself, which builds its own software additions into open Android and thus aims to expand the capabilities offered by stock Android (being steered in that mission by asking a core community of developers what new OS features they would like to see), it’s latest software development is focused on reducing friction with app interactions. “Today we announced a platform on top of Cyanogen, called , and what MOD is essentially the post-app interaction model,” noted Vikram Natarajan, SVP, global partnerships & distribution, referencing its earlier MWC news. “We can take the best of apps and integrate them in the surface areas of the operating system – such as your dialer, such as your calendar, such as your lock screen, so you have much richer interaction models with those services that you know and love, while still potentially going back to the app for a more fully featured interaction. “MOD we believe is the future of interactions when it comes to these services, and it’s not apps vs MODS, it’s apps and MODs — because MODs extend the app experience. And we think this is interesting because now from a commodity perspective we can partner with handset makers and provide them differentiation over and above regular good old Android.” One interesting theme that emerged from the discussion was that privacy/security is becoming an increasing differentiator for different players in a commoditized smartphone space. In the Android OEM space you could argue that’s a symptom of the platform being steered by Google, a company whose business model is based on amassing huge amounts of data about users in order to power its ad targeting business. (Although when it comes to iOS may well be encouraging others to follow its lead too.) So little wonder there has been room for Cyanogen to expand Android by, for example, pushing the development of individual app controls for users (a feature which has now trickled down to Wileyfox’s Android devices, for example). The lone carrier voice on the panel, Francisco Montalvo, director of the group devices unit for Telefónica S.A, also asserted that privacy will be increasingly important as the Internet of Things proliferates — arguing that consumers will become more aware of the trade offs they are making in exchange for access to more and more connected services. “I don’t think the smartphone itself will be providing the innovation we are expecting. I truly believe the information gathered by the smartphone will create new use cases for consumers – that’s where the value is. And that’s why for us it’s so important that the consumer are aware of the information that the smartphone is gathering – and how that information is shared with other third parties. That’s why we are supporting Cyanogen. That’s why we believe consumers need to be aware about the value they are getting in exchange of information they are sharing,” he said. “This is where we see – in the next two years – a lot of movement.” Qualcomm’s McDonough also talked up future developments coming down the pipe related to privacy and security. “We think the next is the phone is your personal identity. We don’t mean your phone just for payments, or your phone just for your health records. But your phone as a representation of you. And when you think about how important that device could be for your, as your digital passport, going from country to country, the need for security and authentication becomes so incredibly important,” he said. “Qualcomm’s investing a lot in things like machine learning, the ability to run all of the sensors in your smartphone all of the time. And with a device that’s aware of who you are, what your behavior patterns are, it actually continually authenticates that you’re you – without having to put in a pin or a password or a fingerprint. So think about your phone as your personal identity and how important security is and how you can protect that information. I think that’s one area of innovation.” “The other is really your phone as a thinking entity. So again take the ability to run a neural network on your phone, have that neural network aware of what’s going on around it from all the sensors that are running on it constantly – can your phone become a personal assistant that’s context aware, can make decisions for you… That’s aware of you, your habits and what’s always going on with the data in the phone and the world surround it,” he added. “Those are just a couple of examples where anyone who’s saying there’s no innovation in the smartphone today is going to be here in a year or two or three is going to be surprised with what the next wave of handsets is going to do.” On security and privacy, Wileyfox’s Muir described it as one of the differentiating “pillars” for its affordable Android user experience. “We’ve spent a lot of time on that. I don’t think it’s right that apps should be able to harvest your data and give your data away to the highest bidder or use themselves. You should have more control over that,” he noted, listing it first in his list of critical tweaks, ahead of even device personalization and comfort.
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“Tough Sledding” For New And “Marginal” Funds In 2016, Says LP
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Connie Loizos
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Most institutional investors are notoriously circumspect. Chris Douvos is not like most institutional investors. In fact, Douvos, a managing director with — a fund of funds group that commits capital to venture capital, growth capital, and private equity groups — is very opinionated comparatively. It’s a refreshing quality, particularly when looking for insights into how the people who fund venture firms are feeling about the industry right now. And according to Douvos, they’re nervous, including because their venture customers are coming back to them a lot sooner for capital than they once did. He explained during a chat on Friday, which we’ve lightly edited for length. CD: A lot of people are worried right now that we’re in a game of musical chairs, and no one wants to be standing when the music stops. People think that 80 to 90 percent of the billion dollar companies will end up getting liquid for less than a billion dollars, and I think there’s truth to that. We’ve been in a market where capital has been relatively cheap, and we’re looking ahead to a market where capital will get more expensive potentially. . CD: LPs are definitely yelling at VCs to put some ‘moolah in the coolah.’ They’re hammering their GPs to turn some of that [paper] value into actual cash because of what I call the exit sphincter. When the capital isn’t coming back [to institutional investors], it interrupts the flow of things. We give out money expecting it will come back with profits in a reasonable amount of time. When it doesn’t, we can’t put more money into the asset class because a.) we’re at the top of our allocation [to venture capital and b.) we’re out of money. We have a down-trending public market at the same time that [our] private investments are really inflated [and not exiting], so LPs are getting doubly crushed. CD: We have seen money from Fitbit and there’s more on the way. We’re in some great funds. But now, all the funds we love are coming back in 2016. CD: As I look at my own portfolio, it’s fantastic: Data Collective, True [Ventures], First Round [Capital]. But as a result of these demands for new capital, it’s tough for new funds. It’s an industry-wide problem. People invested faster than they have in the past. The fund deployment cycle has compressed from three or four years to two years as companies started to come back to market more frequently for more fundraises. It used to be that a round would last a company 18 months, but in the last couple of years, it’s been more like 12 months, so you shortened the latency of a funding round by a third. CD: It’s symptomatic of a pendulum swing in the direction of founders in recent years. Entitled founders plus founder-friendly VCs equals trouble for LPs. Founders saw opportunities to raise more money, frequently, at ever higher valuations, with less dilution. Meanwhile their VCs were getting a quick mark-up. The way companies have been getting financed also made it easier not to focus on business building, which is bad for everyone – employees, VCs, and LPs. CD: I think we’re in a cycle with LPs where you’re not going to see a lot of new entrants. LPs are feeling tapped out, so I’d predict tough sledding for new funds, and that marginal funds will have trouble raising the same size funds that they’re accustomed to managing. As for shrinking further, I think the great shedding of VCs that took place around 2008 really dated back to 1999 and 2000 [because each fund is invested over a 10-year period, roughly]. I don’t think we’ll see a comparable number of bodies this time, aside from associates falling out, including through natural attrition.
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Three Things The Tech Industry Has Right And The Medical Industry Has Wrong
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Dr. Shantanu Gaur
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It seems like there’s no shortage of online apps and services to make life and business easier. You can stream movies in your own home, pay parking tickets with the tap of a finger and plan a world adventure from the comfort of your couch. But when it comes to healthcare, you’re living in the past. While medicine is better than it has ever been before, and companies are making remarkable strides in life-saving — or life-improving — medical devices, there’s a long way to go. In the same, tried-and-true path, devices keep chugging along in R&D, clinical trials and applying for approvals in the U.S. and abroad. There are many things healthcare companies do well when it comes to medical technology, such as testing for safety in humans, documentation and design. And there are a lot of things they fail at — and could learn from some of the leading consumer tech juggernauts today. This is because almost all data generated by pharmaceutical and medical companies are kept under lock and key. It’s in data sharing for healthcare, and there’s no widespread open-source movement or Elon Musk figure yet. This means incredible startup costs for a new company or device, but it’s also pretty terrible from a consumer perspective; we put our users through the ringer over and over again to study the same things. Of course, some data and information should be kept private. But imagine a world where medtech innovators could avoid reinventing the wheel and focus on bigger ambitions — what leaps could we make in technology? Google, Facebook and others have open sourced code to help build the greater online ecosystem, and they are still able to create proprietary products or make money off their platforms. We need to create a similar ecosystem where healthcare brands can compete, but where we eliminate busy work. Stewart Butterfield from Slack wrote with some on-point observations about consumer experience versus product. When you’re creating something new, you can’t just focus on the product — you need to think about how your audience is experiencing it. Meeting users where they are and building a beautiful experience — not just beautiful things — is something at which the best technology companies (like Slack) excel. Because medtech companies rely on reimbursement models to sell products, they don’t have the same pressures to create an excellent consumer experience. In fact, beyond the safety and efficacy of a device or therapy, how an individual experiences that product just isn’t a huge consideration. Granted, healthcare is a complicated industry, and there’s much more at stake than a company-wide messaging system. But safety and efficacy don’t preclude an amazing customer experience. In general, tech companies rely on user feedback and preferences not just to fix problems, but also to adapt their product and create new features. Wherever their users are, the most successful companies want to be there too, understanding both new and old customers and bringing them closer to the brand. They ask, “Why don’t we see you?” and then work to fix things. Meanwhile, medtech companies still operate at an arm’s length and on outdated assumptions. They rely on the myth that we all visit our primary care physicians, who then recommend which therapy to get. While a strong relationship and level of trust with a doctor might have been the case a decade or more ago, most people aren’t doing that today. Medical users are, like everyone else, online these days. Yet these companies are still focused on physician marketing to reach new potential. Instead of asking why they don’t understand where their users are, medtech companies are wondering “Why don’t you see us?” But social media, Yelp and online communities are not intuitive parts of many healthcare companies’ customer relationships. Said another way, medtech companies treat customers as purchasers, while tech companies treat them as participants. As much as we laud technology companies such as Facebook, Slack and Uber for their successes and impact, healthcare isn’t an easy industry to tackle. A person’s health is a serious thing, and implementing safe, effective medical technology isn’t the same as pushing an update to someone’s iPhone. Yet medtech should still look to the rocket ship success of the tech industry for inspiration and lessons. People today are not “patients” first — they’re individuals with more access to information than ever before. This also means that medtech companies now have unprecedented access to these audiences of users (and potential users!) in more places for valuable insights. We have new tools and a new consumer paradigm to create world-changing healthcare — we just need to build it.
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Mark Suster On Falling Valuations And LA’s Tech Scene
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Katie Roof
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TechCrunch sat down with Mark Suster, managing partner at Upfront Ventures. One of the most active investors in Los Angeles, Suster spoke of how local startups are able to draw upon the city’s creative talent to bring content, commerce and communication platforms to the next level. He also commented on falling tech valuations. “By any definition we’ve been in a funding bubble for years,” said Suster. With a “massive increase of supply of capital undoubtedly valuations go up and you end up with overfunding.”
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Fitbit Plummets 16% In After-Hours Trading
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Katie Roof
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While the company has managed to excel in the fitness tech category, growing competition from smartwatches meant that some early adopters are making the switch from Fitbit to Apple Watch. Fitbit went public on the New York Stock Exchange last June, pricing its shares at $20. The stock closed Monday at $16.48 and the company has a market cap of $3.4 billion.
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The TC Meetup + Pitch-Off Is Coming To BK, So You Can Have It Your Way!
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Jordan Crook
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Boy, am I excited! The is coming to the greatest place in the world: Brooklyn, New York. I live in Brooklyn, and travel all over the country to visit cities with awesome startups. Now, I’m happy to announce that you guys are finally coming to me. The will go down on March 1 at 6pm ET at Output, a pretty happening bar with a cool outdoor space (for those of you that enjoy freezing weather). As is standard with these things, we’re looking for ten companies who have the chops to pitch their wares in sixty seconds or less on stage. A panel of judges (with the help of a loving audience) will determine the winners. First place gets a table in Startup Alley at Disrupt NY in May. Second place gets two tickets to the conference and the Audience Choice winner gets one ticket to the big show. We always have fun at these events, and given that we’re going to be in BK, I can’t imagine anything but a blast. Applications close on Friday, so don’t tarry. But if you just want to go to the event (shake some hands, have a few drinks, and make a few new friends), now is the time to buy tickets. We humbly ask that you are at least 21 years of age. See you guys soon!
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Virtual Reality In The Enterprise
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Sean Jacobsohn
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This year is already shaping up to be the year (VR) goes mainstream. In January, Oculus Rift stole the spotlight at the annual Consumer Electronics Show in Las Vegas by (finally) announcing a . HTC and Sony have also confirmed launch dates for their headsets in the first half of 2016, and Google announced they are staffing up their for their new virtual reality unit. But will virtual reality really take off? Will the products be affordable and fashionable enough for today’s consumers? Facebook, Sony, Google, HTC, Samsung and Apple sure think so. Even research firms like have estimated that three million VR devices will ship this year, and, if all continues to go well, that number could increase to 30 million by 2020. While most people are excited about using VR headsets for immersive entertainment and gaming experiences, an entirely separate audience is busy building the future of business with the same technology — the enterprise. While the enterprise might not be what you expected, what I find most exciting about the market opportunity is the prospect of transforming industries like medicine, education, manufacturing, engineering, real estate and more. Instead of focusing on the endless possibilities of VR technology in the business world, it’s important to understand the current enterprise VR landscape and what already exists. Many different industries are leveraging the power of virtual reality; however, most of these amazing stories haven’t been broadly discussed to date. Maybe that’s because VR medical training might not seem as glamorous as playing basketball with LeBron James on Samsung’s Gear VR headset, but I beg to differ — the impact is much more meaningful for the masses. Let’s take a look at some of the first industries making strides in using virtual reality to improve business. The real estate sector has never been known for embracing new technology, but that’s finally starting to change. Brokers and developers are using virtual reality tours to speed up leasing and sales. The analyst firm Wedbush Securities believes one of the reasons Facebook purchased Oculus VR last year for $2 billion is because of VR’s real estate potential. is a company that provides VR software and 3D modeling programs to customers such as Sage Realty and Taconic Investment Partners. Floored’s software was recently used on an Oculus Rift headset to help Taconic market a six-story building in Manhattan before it was finished; now the tenant is Samsung Electronics. Although the medical world has been using advanced (and expensive) simulators and medical headsets for years, this is the first time in history when affordable VR devices are available. Just last month, a was able to perform open heart surgery on a four-month-old baby thanks to VR imaging software and a Google Cardboard Viewer. One emerging software developer in this space is . They provide instructional content for healthcare professionals, as well as patients. Through devices like Google Cardboard and Oculus Rift, medical professionals will be able to practice everything from CPR to rare surgical procedures. Patients are able to learn about the procedures being performed on them so that they fully understand the operation and their recovery needs. Product teams all over the world are using VR to optimize product engineering, design, manufacturing and operations. Ford Motor Company currently uses Oculus development kits and HTC Vive headsets to design new vehicles, develop autonomous vehicle technologies and collaborate with teammates across the globe. Ford’s immersive Vehicle Environment (FiVE) Lab team has seen a significant increase in productivity, as well as a huge drop in costs and time due to virtual testing and prototyping. At Ford, no vehicle can move forward in the production phase without first being virtually approved. The company supplying VR software to Ford is , a leading provider in virtual prototyping. Some of their other customers include giant corporations like Boeing, Caterpillar and Lockheed Martin. These companies use ESI’s virtual reality solution in a number of ways, including performing collaborative and immersive design reviews, verifying resources and tooling for maintenance. Instead of spending several hundreds of thousands on building a physical prototype, manufacturers like Caterpillar now have VR labs where they can virtually test new designs. Although virtual reality in the enterprise may not scale as quickly as it will in the gaming world, I still expect significant inroads — especially in the industries mentioned above, as well as in retail, travel, security, interior design, oil and gas and transportation. Before all of these industries start deploying VR headsets to workers, we’re going to need growth in enterprise VR software and content development. Imagine virtual training and certification programs for everyone from sales reps to aerospace engineers. There also will be a whole new wave of virtual meeting and collaboration tools that not only empower remote workers, but save on travel and training costs. The possibilities of VR in the enterprise are endless, and I can’t wait to see the ways it will reshape business as we know it.
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Uber Says Kalamazoo Driver Had 4.73 Rating, Completed Over 100 Rides
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Megan Rose Dickey
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Uber just hosted a conference call regarding Uber driver Jason Dalton, who is suspected in the . That night, Dalton allegedly picked up Uber passengers in between shootings. The call, which includes Uber Chief Security Officer Joe Sullivan, and Ed Davis and Margaret Richardson of Uber’s safety advisory board, has touched on background checks, the driver’s rating, feedback system and firearms policy. Before the incident, Dalton, had a 4.73 driver rating prior to the incident and generally received “favorable feedback,” Sullivan said on the call. The max rating drivers can have is a five. If a driver’s rating is below 4.6, that’s when Uber might start to consider kicking that driver off the platform, according to a leaked . Dalton was cleared to drive for Uber on Jan. 25, 2016 and in the following month, had completed slightly over 100 rides. Dalton had passed Uber’s background check and Dalton had no prior criminal record, according to Kalamazoo Prosecutor Jeff Getting. This is something Sullivan reiterated several times on the call, noting that no background check — whether or not it included fingerprinting — would have been able to predict or even suggest that something like this would’ve happened. Dalton was arrested Sunday morning and arraigned today on six counts of murder, two counts of assault with intent to commit murder and eight felony firearm counts. Dalton has since admitted to carrying out those acts and waived his right against self-incrimination, . Yesterday, : “We are horrified and heartbroken at the senseless violence in Kalamazoo, Michigan. Our hearts and prayers are with the families of the victims of this devastating crime and those recovering from injuries. We have reached out to the police to help with their investigation in any way that we can.” This comes shortly after class action lawsuit. 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. 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.”
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Facebook “Birthday Cam” Encourages Videos, Not Robotic Wall Posts
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Josh Constine
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Birthdays on Facebook have become a dystopian chore. Typing “HBD” or just “Happy Birthday!” on a friend’s profile is basically the least human way to interact with them. So Facebook is pushing people to record more intimate greetings with its new Birthday Cam feature launching today on iOS. A banner on the birthday boy or girl’s profile will solicit you to capture a video message up to 15 seconds long. You can then add special birthday frames before sharing it on the friend’s wall. Oddly, the videos only appear separately rather than compiled into something more watchable. Even if you just say “happy birthday,” it’s still a lot more unique than typing it. Over the years as Facebook has grown into a ubiquitous utility, it’s also developed some strange emergent behaviors. From pity liking to inviting friends to events thousands of miles from where they live, we do weird things to make our friends feel appreciated without going to much effort. “Happy Birthday” wall posts are perhaps the most ingrained of them all. Since the early days of Facebook, it’s given you a heads-up on friends’ birthdays. That spawned the practice of posting something — anything — on their wall. Typically it’s a generic “happy birthday,” but you always get those few actually considerate friends who at least throw in a meme, add a photo of you two, or conjure up a memory. It was always nice to skim through the posts on your cake day, and even count them and compare the number to previous years to see if your social life is up and to the right, or in need of restructuring. Yet with time, the yearly habit lost some of its luster. The messages eventually felt repetitive and Facebook’s evolution on mobile saw upcoming birthdays moved from the web home page to the bottom of the Events tab on mobile. Perhaps the Birthday Cam can breathe some new life into one of Facebook’s oldest rituals.
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Amazon Brings X-Ray To Web Video
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Sarah Perez
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Amazon’s X-Ray for Movies and TV Shows – the feature that brings additional content, like actor bios and other background information – is now available on Amazon Video and Prime Video on the web. HTML5 was actually one of the few major platforms Amazon had yet to address with this version of X-Ray, as support is already available on iOS and Android and other Amazon platforms including Fire tablets, Fire TV and Fire TV Sticks. Amazon Video’s HTML5 player launched in June on Chrome, and later expanded to Internet Explorer 11, Edge and Opera browsers. The Chrome version also runs on ChromeOS and Linux, while the player itself offers other features like (Advanced Streaming and Prediction) for instant playback, for easy navigation by offering visual feedback when you fast forward and rewind, auto-play, and support for up to 1080p HD video. At the time of its debut, Amazon was one of many companies moving away from technologies like Flash or Microsoft’s Silverlight in order to focus on HTML5 instead. Around the same time, and before that, n most browsers. However, Amazon’s HTML5 video player had not been feature complete, when compared with video playback on its Fire devices. Support for X-Ray will help to improve things in that area. With the addition of X-Ray, those who watch online will be able to access information sourced from Amazon-owned IMDb, allowing you to look up other shows or movies the actors have been in, read more about the show or its main characters, or even view trivia information about what’s on the screen. Though a minor addition in the grand scheme of things, Amazon’s X-Ray is something unique to its platform thanks to its acquisition of IMDb – and that offers it a competitive advantage in the growing streaming video market where it’s trying to take on services like Netflix and Hulu, among others.
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Every Angle Of The New Samsung Galaxy S7 And S7 Edge
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Lucas Matney
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[gallery columns="6" ids="1281226,1281240,1281239,1281242,1281241,1281238,1281237,1281236,1281235,1281234,1281233,1281232,1281231,1281230,1281228,1281227,1281225,1281224,1281223,1281222,1281221,1281220,1281219,1281217,1281216,1281215,1281214,1281213,1281212,1281211,1281210,1281209,1281208,1281207,1281206,1281205"] Samsung aimed to gather the best features of Galaxies past for their S7 line. That included features missing from the S6 like water resistance and a microSD slot, but the company also took the improved design from the S6 line and made it even better. Check out the photos above to see every angle of the sleek new hardware and look for a run-down of everything that’s new. You’ll be sure to notice the improved design of the larger S7 edge as soon as you pick one up. The sharp, flat back of the S6 edge has lost its unpleasantness and has been replaced with lightly curved edges that feels exceptionally more comfortable in your hand. Other than the new dual-SIM microSD slot (which sits in the same positioning) the ports remain unchanged, a major feat given the top-of-the-line IP68 water resistance. On that note, Samsung confirmed to me that the phone should be able to withstand a half hour of submersion at about five feet of depth. This means it’ll be no problem to take an S7 into the shower or pool without worrying for your device’s life. The devices will be available March 11, with pre-orders beginning tomorrow at 8:00AM EST.
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Mobile World Congress 2016
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Contributor
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Skype Kills Its Standalone Video Messaging App Qik
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Sarah Perez
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, Microsoft’s attempt at spinning off video messaging into , is shutting down. The app was first introduced in fall 2014 to serve a different audience than the larger, more fully-featured, Skype application. Instead of offering real-time chat, screen sharing and audio and video calling, Qik was designed only for asynchronous video messaging. The Qik app was the team’s re-imagining of the Skype experience if Skype had been built for mobile first, the company said at the time of its debut. And while the app shared its name with the mobile video startup , the technologies were completely different. The older version of Qik was about live streaming – a sort of proto-Periscope, if you will. was built from the ground-up with all new code and a unique purpose. With Qik, users could communicate with their friends and family by quickly sending video messages. You’d press a button, record your short video, then hit send. As you communicated back and forth with a recipient, a history of your video responses were saved at the bottom of the screen as rounded profile icons in chronological order. That allowed you to re-play past videos, but only up to a point – after 8 messages sent and received, the older ones would disappear. That feature was a nod to the growing trend of ephemerality in social apps, made popular by Snapchat. However, according to , many of the ideas from Qik have now made their way over to Skype’s main application – including video messaging. Skype has also introduced fun features, like filters, to make messaging more personal, as well as other tools for communicating with groups – Because Skype now supports Qik’s core functionality, the Qik app is being shut down. Of course, what Skype also hints at in its blog post is that the Qik app bombed. When referring to how Qik was designed to help users share moments with friends, the Skype team writes: “Since [Qik’s launch], we have learned that many of you are already doing these things in Skype, and as a result, we migrated some of Qik’s most used features into the Skype app you already know and love.” In other words, Qik did not gain traction. Skype’s user base stuck with Skype. According to App Annie, Qik’s current ranking is #350 in the Social Networking category on the iOS App Store, and #239 in the Communications category on Google Play. It’s practically invisible. The Qik app for iOS, Android and Windows Phone will no longer be available after March 24, 2016, says Skype. The company is now urging users to save their important messages before that date.
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Apple Hires Developer Behind Signal, Edward Snowden’s Favorite Secure Chat App
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Jon Russell
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Apple hires plenty of interns all year round, but one particular addition revealed this week caught the eye given the company’s current position opposing a controversial order to enable the FBI to access the iPhone used by one of the San Bernardino shooters. , a Switzerland-based developer who worked to develop secure messaging app — the communications app of choice for NSA whistleblower Edward Snowden — announced today that he is joining the Cupertino-based company this summer to work on its CoreOS security team. Jacobs spent two-and-a-half years with Whisper Systems, the company behind Signal, before leaving earlier this year. I'm delighted to announce that I accepted an offer to be working with the CoreOS security team at Apple this summer. — Frederic Jacobs (@FredericJacobs) Signal has been praised by the cybersecurity community for its robustness. Snowden, for one, said he uses it daily. It was one of the few apps to receive top marks for security , while Jonathan Ździarski, a security researcher who has been much cited in Apple’s battle with the FBI, for revealing “virtually nothing” when put through its paces with data excavation tools. It’s unclear exactly what Jacobs’ role will be at Apple, but his hiring comes at a time when the firm is under major pressure. Apple increases the security measures within iOS with every major software release, but that the company is working to remove the current passcode-free recovery option from future iPhones, while it wants to begin encrypting iPhone backups on iCloud. Why make these moves? The company has been ordered to create software to allow the FBI to access data stored on the iPhone but — were these new changes implemented — it would be unable to do that. In effect, the company has identified itself as a potential weak point in the security process because the FBI can compel it to provide data, thus, removing its ability to do that, mitigates that risk. Or at least it forces the FBI to find new ways to get inside devices. As regards the current situation, Apple and the FBI have voiced very different opinions on the order. wanting to create a backdoor to all iPhones. “We don’t want to break anyone’s encryption or set a master key loose on the land. I hope thoughtful people will take the time to understand that,” Comey wrote in an editorial. Apple CEO Tim Cook focused on the long-term implications that such a move might have. Cook called the FBI’s strategy “chilling” and, , he went so far as to describe the software that Apple has been ordered to create as being the “equivalent of cancer” which would compromise the security and safety of all Apple customers. “[A] master key to turn 100 million locks, even if in the possession of a person you trust, could be stolen,” the Apple CEO explained. “You can imagine the target on that piece. I’m not saying [that] the government would abuse it, but there are lots of bad guys in the world. Millions of people have [already] had their personal information stolen by hackers.”
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Apple Changed Its Site’s Code So The Word “click” Doesn’t Look Like…
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Josh Constine
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If you squint, you can see how the word “click” might look inappropriate. But Apple’s too prim and proper for that. So when it wanted the tagline for its new desktop operating system El Capitan to be “There’s more to love with every click”, it made a tiny, hilarious to its . By adding a little extra spacing between each letter in the word “click”, it’s a lot less likely to be mistaken for “dick”. Otherwise, “Upgrade Now” would have taken on a whole different meaning. Sometimes the only thing standing between your brand and a ‘dick’ is a little . before & after — ᴧᴄᴋᴇᴙᴍᴀᴎᴎ (@naturaln0va)
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This Little Bluetooth Sensor Shouts The Second Anyone Tries To Move Your Stuff
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Greg Kumparak
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Uh oh. You’re three cups of coffee into a busy work day, and you’re starting to get the ol’ caffeine rumble gut. But you don’t want to give up your table at the coffee shop. It’s . “Hey, can you watch my stuff?” you say to the nearest complete stranger who doesn’t look like they’d love a shiny new laptop. is an itty-bitty box that watches your stuff for you. If it moves ever so slightly, it can fire off a siren or send a notification to your phone. But it’s not just for watching laptops. Want to make sure room service at your hotel is respecting the “Do Not Disturb” sign? Pop the sensor onto your door. Even when your phone is out of range (it taps low-energy Bluetooth Smart for communication, though it can relay notifications to you through the Internet if you pair it with a nearby laptop or tablet), it’ll keep logging data. How about a log of every time your garage door opens? Or an alert if anyone has opened your gun safe? Or to know within about a split second if someone is screwing with your chained-up bike? That’s the core idea behind the Sensor-1: if you want to know when/how something moves, just stick this little 1″ sensor on it. MetaSensor has crammed a good amount of stuff into that 1″ package: a 3-axis accelerometer, gyroscope, magnetometer, a set of RGB LEDs, and a surprisingly loud siren. It’s all powered off of a standard (and user-swappable!) coin-cell battery, with an estimated battery life of up to a year depending on which mode it’s in. It’s got a built-in 3M sticky pad for attaching it to most objects, and the company is working on other case attachment concepts — and they’ll give you a 3D printing template if you want to crank out your own. Oh, and for the tinkerers: yeah, there’s an API. Hook it to your laptop, Raspberry Pi, or Bluetooth-enabled Arduino, and you’ll be able to tap into the raw stream of motion data for use in whatever crazy DIY projects your heart desires. MetaSensor is currently at the , where they’ve already blown past their $10,000 goal. $79 gets you one sensor, though the price drops a bit if you buy them in packs. If all goes well, they intend to ship the first units come October of this year.
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The Politics Of The Internet Of Things
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Dominique Guinard
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The prospective scale of the Internet of Things (IoT) has the potential to fill anyone looking from the outside with the technical equivalent of agoraphobia. However, from the inside, the view is very different. Looked at in detail, it is a series of intricate threads being aligned by a complex array of organizations. As with any new technological epoch, questions around shape, ownership and regulation are starting to rise. Imagine trying to build the Internet again. It’s like that, but at a bigger scale. The first hurdle is that of technological standards. We are at a pivotal moment in the development of the IoT. As the diversity of connected things grows, so does the potential risk from not allowing each “thing” to talk to one another. This begins with networking standards. From ZigBee to Z-Wave, EnOcean, Bluetooth LE or SigFox and LoRa, there are simply too many competing and incompatible networking standards from which to choose. Luckily enough, things seem to be converging and consolidating. Moreover, the already well-established alliances are regrouping. First in the indoors world, where is getting closer to — albeit still challenged by the Bluetooth consortium, who are about to release the Bluetooth mesh standard. More interestingly, the Wi-Fi Alliance is working on IEEE 802.11ah known as . All three standards specifically target lower power requirements and better range tailored for the IoT. Similarly, in the outdoors world, the Next Generation Mobile Networks (NGMN) Alliance (working closely with the well-established GSMA, ruling the world of mobile standards) is working on an important piece of the puzzle for the world of smart things: 5G. With increased data range, lower latency and better coverage, it is vital to handle the multitude of individual connections and will be a serious global competitor to the existing LPWAN (Low Power Wireless Area Networks), such as and . Whilst trials are currently taking place, commercial deployment is not expected until 2020. Before this can happen, spectrum auctions must be completed; typically a government refereed scrap between technology and telecoms companies, with battle lines drawn on price. It’s important to put an early stake in the ground with regulators to ensure sufficient spectrum is available at a cost that encourages IoT to flourish, instead of being at the mercy of inflated wholesale prices. But the challenge doesn’t stop at the network level; the data or application level is also a big part of the game. The divergence in application protocols is only being compounded as tech giants begin to make a bid to capture the space. Apple HomeKit, Google Weave and a number of other initiatives are attempting to promote their own ecosystems, each with their own commercial agendas. Left to evolve in an unmanaged way, we’ll end up with separate disparate approaches that will inexcusably restrict the ability of the IoT to operate as an open ecosystem. This is a movie we’ve seen before. The web has already been through this messy process, eventually standardizing itself by Darwinian principles of technology and practices of use. The web provided a simple and scalable application layer for the Internet, a set of standards that any node of the Internet could use whatever physical technology it uses to connect to the Internet. The web is what made the Internet useful and ultimately successful. This is why a Web of Things (WoT) approach is essential. Such an approach has substantial support already. A has recently been submitted to W3C, based on research done by a mixture of tech giants, startups and academic institutes. These are early tentative steps toward an open and singular vision for the IoT. The resolution of this issue opens up the possibility of a vast collaborative network, where uniform data can optimize a wild array of existing processes. However, as data gradually becomes the most valuable asset of a slew of once inanimate objects, what does this mean for legacy companies who build the products which have had no previous data strategy? The tech sector is comfortable with sharing and using such information, but for companies that have their grounding in making everything from light bulbs to cars, this is a new concept. Such organizations have traditionally had a much more closed operational approach, treating data like intellectual property — something to be locked away. To change this requires a cultural shift inside any business. Whilst this is not insurmountable by any means, it brings to the fore the need to effect a change in mind-set inside the boardroom. For such a sea change to happen, it will require education, human resources and technology investment. Security is one of the biggest barriers preventing mainstream consumer IoT adoption. A Fortinet survey found that 68 percent of global homeowners are concerned about a data breach from a connected device. And they should be: Take a quick look at , an IoT search engine that gives you instantaneous access to thousands of unsecured IoT devices, included! In 2015, the U.S. Federal Trade Commission stated that “perceived risks to privacy and security…undermine the consumer confidence necessary for technologies to meet their full potential.” For manufacturers to boost consumer confidence, they must be able to demonstrate that their products are secure, something that seems to have come under increasing pressure lately. The problem with security is that it is simply never . Security is a constant battle against the clock, deploying patches and improvements as they come. This clearly can be overwhelming for product manufacturers. In order to do this, relying on an established IoT platform that has implemented comprehensive and robust security methodologies and that can guide them through such a complex area is a wise move. Consumers also share some responsibility in increasing the security of their data — by using strong passwords for product user accounts and on Internet-facing devices, like routers or smart devices; use of encryption (like WPA2) when setting up Wi-Fi networks; and installing any software updates promptly. However, as consumer adoption of IoT rises, it is critical for manufacturers to ensure that the security of smart, connected products is at the heart of their IoT strategy. After all, the security of a smart object is only as strong as its weakest connected link. Coupled with security, emergent issues around data privacy, sharing and usage will become something everyone will have to tackle, not just tech companies. In the data-driven world of IoT, the data that gets shared is more personal and intimate than in the current digital economy. For example, consumers have the ability to trade though their bathroom scales protected data such as health and medical information, perhaps for a better health insurance premium. But what happens if a consumer is supposed to lose weight, and ends up gaining it instead? What control can consumers exert over access to their data, and what are the consequences? Consumers should be empowered with granular data-sharing controls (not all-or-nothing sharing), and should be able to monetize the data they own and generate. Consumers should also have a “contract” with a product manufacturer that adjusts over time — whether actively or automatically — and that spells out the implications of either a rift in data sharing, or in situations where the data itself is unfavorable. The onus here also lies on regulators to ensure that legal frameworks are in place to build trust into the heart of the IoT from the very beginning. The industry needs embrace this and embark on an open and honest dialogue with users from the very beginning. Informed consent will never be more important, as data and metadata from connected devices is able to build a hyper-personalized picture of individuals. Brands would be wise to understand that the coming influx of consumer data is a potential revenue stream that must be protected and nurtured. As such, the perception of privacy and respect are tantamount for long-term engagement with customers. So much so that it is likely that product manufacturers will start changing their business models to create data-sharing incentives and perhaps even give their products away for free. Due to its massive potential, the Internet of Things is advancing apace, driven largely by technology companies and academic institutions. However, only through wide-scale education and collaboration outside of this group, will it truly hit full stride and make our processes, resources utilization and, ultimately, our lives, better.
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Barriers To Augmented Reality Are Holding Us Back From The Holodeck
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Justin Hendrix
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There is more money and talent invested in virtual and augmented reality than ever before. Indeed, more than $3.5 billion has been invested into virtual and augmented reality startups in the past two years. The industry is growing fast; Goldman Sachs suggests the combined hardware and software market for VR and AR will reach, on a base case, $80 billion by 2025, with a potential to reach more than $180 billion. Many experts believe that in the long run, augmented reality will represent the larger opportunity, as the ability to introduce all manner of information and experience into the natural environment transforms markets, and indeed the nature of our existence. Companies such as Magic Leap are attracting on such promise. But from a technical perspective, augmented reality is considered more difficult, as creating responsive media in the real environment is full of technical challenges. Recently, seven scientists from universities with leading research programs in virtual and augmented reality published the proceedings of discussions related to the technical challenges in realizing the AR opportunity. Co-authored by Christian Sandor, Martin Fuchs, Alvaro Cassinelli, Hao Li, Richard Newcombe, Goshiro Yamamoto and Steven Feiner, considers the main approaches to realizing augmented reality, as well as the technical and ethical challenges, in order to draw conclusions on what direction future development of AR might take. First, the researchers consider the four main approaches to achieving true augmented reality, which can be represented on a scale of “decreasing order of physicality” from “manipulating atoms” to “manipulating perception.” These four approaches include: Arguably the most technically challenging approach would be to manipulate or reconfigure atoms in order to change the physical environment. Think Star Trek Holodeck. While this may seem outlandish today, there is research in this direction. The researchers point to “displays that use magnetic fields to rapidly create shapes out of ferromagnetic fluid,” and another class of displays that “levitate solid objects in a field of overlaid ultrasonic or magnetic waves.” The challenges to realizing this approach include safety and energy requirements. The “next best thing to manipulating atoms is manipulating photons,” in order to make objects in the environment visually indistinguishable from physical reality. The researchers imagine environments replete with light-field displays that create very realistic visual effects. Haptics might be achieved by “stimulating the user’s skin through ultrasound waves.” The challenges to this approach include the immensity of the data processing required and the ability to achieve high resolution. Thus, technology for plenoptic displays remains “in its infancy,” even while light-field sensors have advanced. This approach revolves around displaying information only in the subset of the environment that a particular user is experiencing. Examples of this approach include some the most commonly known devices today, such as Google Glass and Microsoft’s HoloLens. Challenges to this approach include tracking at “sufficiently high update rates and low latency.” The researchers admit this may be the most “extreme” approach to achieving true augmented reality, but another option is not to manipulate the information sent to a user’s perceptual system, as in the prior three approaches, but rather to manipulate the perceptual system itself. This approach has a long history of being depicted in science fiction, including movies such as The Matrix and Total Recall. This approach may first become widespread as new technologies augment the experience of those with conditions such as blindness. Later, it may be applied to augment the reality of the healthy. Beyond the technical challenges to achieving true augmented reality, the researchers pause to consider ethics. Imagining such powerful technology, which may permit us to entirely manipulate the human experience of reality, raises big questions: Who will control its deployment? Who will ultimately be in control of its augmented content and for what purposes will it be used? Will individuals be freed or locked into purely commerce-driven experiences? Will augmented reality enhance our quality of life and promote better communication and deeper understanding, or “isolate and project us into a world of delusion?” Open questions. But as the desire to sate the human imagination has driven the development of other media throughout history, augmented reality will continue to emerge, as advances in disciplines beyond just “optics, computer graphics, and computer vision” converge to make the above approaches possible. While our experience of this world has in past included physical, biological, ethical and other practical limitations, the researchers note, augmented reality will free us from such boundaries. Market estimates, even in their billions, seem insignificant next to the scale of such ambition. Read NYC Media Lab’s special report, Exploring Future Reality, .
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Apple Files Motion To Vacate The Court Order To Force It To Unlock iPhone, Citing Constitutional Free Speech Rights
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Matthew Panzarino
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with Apple executives today, TechCrunch was informed that Apple had filed a motion to vacate in the case of the FBI compelling Apple to assist in unlocking an iPhone belonging to Syed Farook. The executive said that “within hours” Apple had provided the information requested by the government on December 6 and again on December 16, and that it cooperated again on January 22 (responded to on the 26). Apple says that it would have to create a ‘Government OS’ or GovtOS, for the FBI in order to cooperate with the FBI. It would also need to create an FBI forensics lab on site that Apple says could likely be used to unlock iPhones in the future, which law enforcement officials have already indicated in public statements. In the motion, Apple hinges its argument on the fact that the FBI is attempting to greatly expand the use of the All Writs Act: No court has ever granted the government power to force companies like Apple to weaken its security systems to facilitate the government’s access to private individuals’ information. The All Writs Act does not support such sweeping use of judicial power, and the First and Fifth Amendments to the Constitution forbid it. On February 16, Apple says that the FBI filed an order with the court that required Apple to create this software and within hours the court had granted the request. Apple re-stated that it had no warning or communication from the government before the order was published. “In order to comply with the Gov’t demands, Apple would need to create a new ‘GovtOS’ and FBI forensics lab on site that has the potential to be used on hundreds of phones now in law enforcements possession in conflict with existing law as well as the First and Fifth Amendment of the United States Constitution,” says Apple in the act. Apple also states that the request violates Apple’s constitutional rights. The demand violates Apple’s First Amendment rights against compelled speech and viewpoint discrimination. Apple wrote code for its operating system that reflects Apple’s strong view about consumer security and privacy. By forcing Apple to write software that would undermine those values, the government seeks to compel Apple’s speech and to force Apple to express the government’s viewpoint on security and privacy instead of its own. The government’s demand also violates Apple’s Fifth Amendment right to be free from arbitrary deprivation of its liberties in that it would conscript Apple to develop software that undermines the security mechanisms of its own products. that it will file an amicus brief with the courts to support Apple in its battle with the government. At a congressional hearing today, its Chief Legal Officer Brad Smith said that the case has implications for others. Apple says that it expects more companies to file amicus support for its efforts to oppose the order. Hearings on the order and rebuttal are set to be heard on March 22 at 1pm. Apple’s reasoning in the brief rests on three pillars. First, that forcing Apple to write code that weakens its devices and the security of its customers constitutes a violation of free speech as protected by the Constitution. Second, that the burden the FBI is putting on it by requesting that Apple write the software and assist in unlocking the device is too large. Apple argues that it would have to create the new version of iOS, called GovtOS, which requires coding, signing, verification and testing. It would then have to create an FBI forensics laboratory on site at its headquarters and staff it. The burden would then extend to what Apple views is the inevitable onslaught of additional devices that would follow after the precedent was set. In addition to free speech, Apple argues that the Fifth Amendment’s Due Process clause prohibits the government from compelling Apple to create the new version of iOS. Apple argues that there is court precedent for forcing a company to something new, like GovtOS. “But compelling minimal assistance to surveil or apprehend a criminal (as in most of the cases the government cites), or demanding testimony or production of things that already exist (akin to exercising subpoena power), is vastly different, and significantly less intrusive, than conscripting a private company to create something entirely new and dangerous. There is simply no parallel or precedent for it,” reads the filing. Apple argues that if it complies, a litany of requests (it says hundreds) would come in within “a matter of days.” It’s establishing that there is a precedent being set here, that this is not about an isolated case alone: “The government says: “Just this once” and “Just this phone.” But the government knows those statements are not true; indeed the government has filed multiple other applications for similar orders, some of which are pending in other courts. And as news of this Court’s order broke last week, state and local officials publicly declared their intent to use the proposed operating system to open hundreds of other seized devices—in cases having nothing to do with terrorism. If this order is permitted to stand, it will only be a matter of days before some other prosecutor, insome other important case, before some other judge, seeks a similar order using this case as precedent.” Here, Apple brings up the international angle while broadening the discussion to encryption. If it complies with the order, then U.S. encryption would be weakened, and encryption created by foreign companies would be utilized instead. This is a common defense used by proponents of strong encryption. Basically, if you outlaw good encryption, the only people that will suffer are the law-abiding. Everyone else, including bad actors, will be just fine. “Despite the context of this particular action, no legal principle would limit the use of this technology to domestic terrorism cases—but even if such limitations could be imposed, it would only drive our adversaries further underground, using encryption technology made by foreign companies that cannot be conscripted into U.S. government service. Indeed, the FBI’s repeated — leaving law-abiding individuals shouldering all of the burdens on liberty, without any offsetting benefit to public safety. Indeed, the FBI’s Repeated warnings that criminals and terrorists are able to “go dark” behind end-to-end encryption methods proves this very point.” Then, Apple goes into a lengthy description of what it would need to do in order to comply with the government’s demands. In short, it would need to fire up a whole team dedicated to creating what is essentially a brand-new version of iOS, maintain a lab on site and facilitate what would undoubtedly be hundreds of additional requests for unlocking. This is key to its “undue burden” defense. The compromised operating system that the government demands would require significant resources and effort to develop. Although it is difficult to estimate, because it has never been done before, the design, creation, validation, and deployment of the software likely would necessitate six to ten Apple engineers and employees dedicating a very substantial portion of their time for a minimum of two weeks, and likely as many as four weeks. Members of the team would include engineers from Apple’s core operating system group, a quality assurance engineer, a project manager, and either a document writer or a tool writer. No operating system currently exists that can accomplish what the government wants, and any effort to create one will require that Apple write new code, not just disable existing code functionality. Rather, Apple will need to design and implement untested functionality in order to allow the capability to enter passcodes into the device electronically in the manner that the government describes. In addition, Apple would need to either develop and prepare detailed documentation for the above protocol to enable the FBI to build a brute-force tool that is able to interface with the device to input passcode attempts, or design, develop and prepare documentation for such a tool itself. Further, if the tool is utilized remotely (rather than at a secure Apple facility), Apple will also have to develop procedures to encrypt, validate, and input into the device communications from the FBI. This entire development process would need to be logged and recorded in case Apple’s methodology is ever questioned, for example in court by a defense lawyer for anyone charged in relation to the crime. Once created, the operating system would need to go through Apple’s quality assurance and security testing process. Apple’s software ecosystem is incredibly complicated, and changing one feature of an operating system often has ancillary or unanticipated consequences. As a part of its Fifth Amendment defense, Apple argues that being forced to create a version of its software that weakens security is a gross expansion of the All Writs Act and is indeed counter to the Constitution. It argues that the legal case set out here has no practical limits, and could be used to force Apple (or another company) to essentially break any feature and cross any privacy line once a precedent was set. In addition, compelling Apple to create software in this case will set a dangerous precedent for conscripting Apple and other technology companies to develop technology to do the government’s bidding in untold future criminal investigations. If the government can invoke the All Writs Act to compel Apple to create a special operating system that undermines important security measures on the iPhone, it could argue in future cases that the courts should compel Apple to create a version to track the location of suspects, or secretly use the iPhone’s microphone and camera to record sound and video. Apple is in the case of a locked iPhone. The FBI wants Apple to build a special version of iOS that would weaken the device’s security and install it on the device. This version of iOS would allow the FBI to “brute force” the device’s pin code by trying it hundreds or thousands of times without delay or the device erasing itself. The FBI argues that this is a very specific request, for a specific device that is associated with Syed Farook, one of the shooters in the San Bernardino workplace violence incident which left 14 dead. The FBI has deemed Farook and his wife terrorists and says that it needs access to the device in order to pursue leads. Apple, for its part, argues that the FBI is using the All Writs Act, a 200-year-old law, too broadly in trying to get it to write code that would make the security of its devices worse. Apple plans to argue that the court’s order violates its free speech rights and CEO Tim Cook has given an extensive interview laying out how Apple looks at the case. In his remarks, he expounded on the points which Apple has been talking about to reporters, the most pointed of which is that this is not about just “one iPhone” and any ruling would be used to force Apple to unlock customer phones again and again. The implications of the case are wide-ranging. The security of customer data in the United States, as well as the millions of Apple devices around the world will hinge on how the court battle turns out. There are solid indications that if the FBI does gain access to the device, it will issue another order to then have Apple decrypt the device’s contents. Law enforcement officials have indicated that they have a long list of devices and would take advantage of a precedent set here to force Apple to unlock. Reports also indicate that Apple is making plans to improve iPhone and iCloud security to the point at which it will no longer be able to comply with government requests for information. These plans were hinted at in our , where we noted that “the executive also indicated that it was fair to anticipate that Apple would continue to harden iPhone security to protect users against this kind of cracking, whether by Apple or otherwise.” It’s worth noting that Apple has had a long history of cooperating with law enforcement requests for information. While it has not unlocked iPhones, it has extracted data from phones. Those other cases could include legislation or further orders that weaken or alter the ground rules for encryption on devices from phones to smart home units to pretty much anything with an internet connection. If you use any such device to communicate over the Internet, it is likely that it uses encryption. If advocates are able to pass legislation that weakens encryption by giving the U.S. government a “back door,” then it is a matter of time before foreign countries push for the same from companies that do business there — and before bad actors like hackers discover the door and use it for themselves. FBI Director James Comey and Apple General Counsel Bruce Sewell on encryption at a March 1 Congressional hearing. : The Justice Department has issued the following response to Apple’s filing. We’ve also updated the piece to reflect the hearing date: The Justice Department’s approach to investigating and prosecuting crimes has remained the same; the change has come in Apple’s recent decision to reverse its long-standing cooperation in complying with All Writs Act orders. Law enforcement has a longstanding practice of asking a court to require the assistance of a third-party in effectuating a search warrant. When such requests concern a technological device, we narrowly target our request to apply to the individual device. In each case, a judge must review the relevant information and agree that a third party’s assistance is both necessary and reasonable to ensure law enforcement can conduct a court-authorized search. Department attorneys are reviewing Apple’s filing and will respond appropriately in court. The motion to vacate is below:
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Meet Brain, The AI Engine That Wants To Replace Search
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Jonathan Shieber
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Fifteen miles away from where Larry Page and Sergey Brin worked out of their first office developing the technology that would become Google, a team of eleven engineers no older than 20 are hard at work on developing what they hope will be its replacement. Their adoptive home, for the moment, is the co-working space Tim Draper set up as part of his Draper University startup program, and they’ve been assembled their by Jerry Yue, a 24-year-old serial entrepreneur. Yue’s last startup, the Chinese food delivery service , raised $100 million at the end of last year and is on its way to joining the ranks of China’s unicorns. Now, with the help of his young team of engineers (including a cadre from China’s top engineering school in Beijing), Yue has moved to the U.S. to launch . The company’s goal is nothing short of replacing the way in which we consume information on the Internet. The engineers at Brain claim they have developed an advanced algorithm that serves up the most contextually relevant information to a user without the need to scour through search results. Already the company’s technology has been answering questions on Quora for would be advice seekers with an incredible degree of accuracy, Yue said. But that’s just the beginning. Ultimately Yue wants his technology and the algorithm that they’ve created to serve as a compliment to a users’ own brain. “At a high level… if Google is a search engine this is an ambition engine,” Yue told me. The young entrepreneur is looking to create a virtual assistant for each user by having users input not just a profile of who they are, but what they do, and what they want to do in the future. By creating this profile, Brain’s brain will send the information that’s most relevant to a user as they proceed toward any of their goals — matching the information to the dataset that the user created. Sample of a user profile created for Brain, LLC Eventually, Brain wants to combine its data set with a social platform to connect users who share similar interests. For now, the company is satisfied to have come up with a new tool that it claims anticipates its users’ needs to deliver the information that’s most relevant to them. It’s a problem that Yue, who grew up in Xi’an in Central China but moved to the U.S. for high school and college before dropping out to pursue a career as an entrepreneur, has been pondering for a long time. While he was building Benlai into an e-commerce powerhouse, the young entrepreneur spent his spare time tinkering with robotics and programming in much the same way he had since he was a child, Yue said. “I’ve been working on this algorithm for more than four years,” said Yue. In some ways, the work The Brain is doing sounds not very different from some of the now defunct tools like Zite or Prismatic that were serving up contextually relevant news. But Yue’s ambition is broader. His company’s mission is to serve up all the contextually relevant information a user may need in any situation. To do this he’s raised nearly $1.5 million from an influential Chinese investor. “We are feeding one more dimension to information,” said Yue. “Right now information is flat,” he says delivering a discrete data set at a specific moment in time. What Brain aims to do is continually deliver information to help a user progress toward their goals. Perhaps Yue puts it best himself in a recently penned blog post. “The time between a person’s need and the ability to satisfy it through the web is shrinking. The human brain and the internet are converging,” Yue wrote. And the post continues: Thinking “I want a cheeseburger” and getting one instantly is certainly as intuitive as it gets. But what if that cheeseburger is bad for you? What if you wanted to run the Boston marathon over the summer? What if you suffer from bad cholesterol? If the internet knew these things about you — your past history and your longterm goals — it could systematically feed you content about lowering your cholesterol; it could devise an ideal workout regimen for the marathon. It could go beyond intuitiveness and actually , providing you with revelatory content that solves your longterm problems. By giving the Brain perspectives, you are giving it access to these longterm problems. The content it then feeds you represent real, salient solutions to these problems. It is time for the internet to do more than satisfy the lower end of Maslow’s hierarchy; is time for it to satisfy your highest self. At , this is is our ultimate mission.
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Opera CEO: Sale To Chinese Consortium Wasn’t Our Decision
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Frederic Lardinois
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After months of rumor, finally confirmed two weeks ago that its board had from a consortium of Chinese firms for the price of $1.2 billion. I had a chance to sit down this week at MWC with Lars Boilesen, the CEO of Opera, and Håkon Wium Lie, the company’s CTO and inventor of cascading style sheets (CSS). In this wide-ranging and candid interview, we touched upon everything from the recent acquisition to the company’s future product plans. Opera CEO Lars Boilesen The elephant in the room, though, was obviously the proposed sale. Boilesen and Wium Lie stressed multiple times during the interview that the sale hadn’t gone through yet, and I couldn’t help but get the impression that they wouldn’t be horribly disappointed if something would have happened to prevent it. Indeed, they both noted that the sale was the result of the board’s and shareholders’ wishes and not necessarily their own. “I have been working for Opera since ’99, Håkon ’98,” Boilesen said. “He’s No. 8; I’m No. 16. We’ve been with Opera for many years. We got listed on the Stockholm stock exchange in 2004. So basically, the shareholders — they decided to initiate this process. It was kind of their decision. It wasn’t our decision.” While the board clearly had a few options, it decided to go with a consortium that includes mobile game company , security and search firm , and Yonglian Investment. Opera CTO Håkon Wium Lie “If you are listed on the stock exchange, you have to be prepared for this kind of stuff. Anybody can buy you,” Wium Lie added. “We benefitted from that system and now… you know…” “We are not big shareholders,” Boilesen said. “We know what it’s like to be on the stock exchange, so basically we just started the process. We are the ones who have to work with the interested parties. […] We worked with them — that was kind of interesting. We kind of did that. There were all kinds of things there from private equity firms that want to get the cost down — but they would’ve closed down the firm in four years and we’re not super interested in that. We still want more people to use our software. That’s what we are passionate about.” Boilesen wouldn’t say how many suitors Opera had but did say there were “between two and 10.” Some of these knew more about the business than others, including the consortium that finally ended up getting the nod. Boilesen noted, though, that it was the shareholders who decided on the acquirer. For most Opera users, the sale came as a bit of a shock, not in the least because Qihoo 360 doesn’t necessarily have the best reputation. Boilesen and Wium Lie noted, though, that Qihoo is only the minority shareholder in this deal. Mobile games and apps firm Kunlun, which publishes Angry Birds in China, is the majority partner. “They have products we don’t have — and they have 500 million users in China, where we are not strong,” Boilesen said. “There are some synergies here. But the deal hasn’t happened yet — and if it doesn’t happen, we’re fine with that. If it happens — on the positive side — it’ll be interesting to be part of a bigger ecosystem […]. We’ll become part of a very big ecosystem if this happens — in markets where Opera is a leading Internet brand.” Wium Lie also noted that the Chinese Internet market is still a bit of a Wild West, so the business practices there may seem strange to most people outside of the country but are simply common practice there. “If you look at almost any Chinese company, you’ll find business practices that we are not familiar with,” Wium Lie said. “But we have to look forward. We believe the consortium is honest. This is not just a financial experiment for them. These are people who want to grow inside China, but more importantly outside — and they found a very good match, I think. I think we can reach 1 billion people here and that’s very motivating for our engineers, as well.” To grow, Opera believes it needs a strong partner in these markets where it still has a lot to grow — but that doesn’t mean the company is giving up on the U.S. market either. Indeed, both Boilesen and Wium Lie noted that they would love to get more market share in the U.S. and they revealed that Opera is working on a new browser specifically for this purpose. Boilesen noted that it was always Opera’s dream to succeed in the North American market and given that it’s profitable and able to reinvest its money into trying new things, it wants to give this another shot. The company previously showed its willingness to experiment with products like its , for example. While the team wouldn’t say much about what this new browser would look like, it seems the focus here will be on making browsing faster and more convenient on the desktop by making better use of the bigger screens and faster machines we all now use. Improved tab management also looks like one of the areas the team is looking at. The discussion also touched upon Opera Max, the company’s data compression and bandwidth savings tool for Android. There, the team didn’t want to discuss the future direction for the product in detail either, but it looks like the plan here is to add some security-centric features. Opera also recently acquired VPN service Surfeasy, so it would make sense to integrate this into the product soon, too. No matter how Boilesen and Wium Lie feel about the prospect of the acquisition closing soon (and their acquirers), it’s clear that they have lots of plans for the company’s future. Hopefully, the new owners will allow them to see them through to fruition.
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Pro-ISIS Hacker Group Video Threatens Twitter, Facebook CEOs Over Account Suspensions
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Natasha Lomas
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Twitter and Facebook have recently claimed to be stepping up their fights against extremist content being hosted on their platforms. Indeed, there is that certain tactics to counter extremists’ appropriation of mainstream social media platforms — such as Twitter deploying repeat account suspensions — is having an impact on the spread of extremist propaganda. Twitter blogged about stepping up its fight against “violent extremism” on its platform, saying it has increased the size of the teams reviewing reports of problem content and noting it had suspended more than 125,000 accounts for “threatening or promoting terrorist acts, primarily related to ISIS” since the middle of 2015 alone. However this more pro-active stance to try to drive ISIS off of mainstream platforms appears to have caught the attention of a group of ISIS supporters who have posted a video online which includes what looks to be a direct threat against Twitter CEO Jack Dorsey and Facebook CEO Mark Zuckerberg, showing their faces being riddled with bullet holes. The video was spotted by , a hybrid media and deep web analysis company, which has posted two screenshots from the video. TechCrunch was also able to find the video online and verify that it contains the threatening sequence. The majority of the video is given over to depicting a series of Facebook and Twitter accounts apparently hacked by the pro-ISIS group which made the video — and calls itself ‘sons of caliphate army’. The video also contains a message, written in English, specifically referencing the account bans: “You announce daily that you suspend many of our accounts, and to you we say: Is that all you can do? You are not in our league. If you close one account we will take 10 in return and soon your names will be erased after we delete your sites, Allah willing, and will know that we say is true.” It’s not the first time Twitter and its CEO have been targeted by ISIS supporters to trying to drive extremists off the platform. Back in a post cropped up online threatening Twitter employees and Dorsey specifically. According to Vocativ, the video was being hosted on messaging app Telegram. A conducted by an academic from George Washington University which looked at one group of ISIS supporters’ use of mainstream social media suggests Telegram is being favored as a back up for extremists who had been banned from Twitter. We’ve asked Telegram for a comment on the video being found on its app and will update this post with any response. We’ve also reached out to Twitter and Facebook — neither had responded at the time of writing. Telegram has made its own counter moves against ISIS propaganda, purging a series of pro-ISIS public channels which had been allowing extremists to broadcast pro-ISIS content. However, according to the George Washington University study pro-ISIS supporters have switched to using Telegram groups and supergroups to communicate en masse. Albeit these channels do not allow for unlimited public reach of their recruitment messages as public channels or mainstream social media platforms can.
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Mark Zuckerberg Asks Employees To Stop Crossing Out “Black Lives Matter” On Facebook’s Walls
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Megan Rose Dickey
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Facebook CEO Mark Zuckerberg is asking his employees to stop being ignorant and racist (my words, not his). In an , Zuckerberg said he was disappointed by the “several recent instances of people crossing out ‘black lives matter’ and writing ‘all lives matter’ on the walls at MPK.” MPK, one of Facebook’s buildings in Menlo Park, Calif., has a of Facebook for employees to write their thoughts. Here’s the memo, courtesy of : Facebook is a notoriously white place. In the U.S. last year, Facebook hired 36 black people and 73 Hispanic people, compared to 603 white people, . In total, only 2 percent of Facebook’s workforce is black, 3 percent of it is Hispanic and — no surprises here — 55 percent of Facebook is white. In addition to the fact that this is terrible, it’s especially effed-up timing given that it’s Black History Month given the fact that several African-American students from the San Francisco Bay Area are planning a trip to Facebook tomorrow. As Zuckerberg noted, Facebook is investigating the incidents and is encouraging employees to participate in an upcoming town hall at Facebook to learn what Black Lives Matter is all about. I’ve reached out to Facebook, but the company declined to comment further.
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Tablets Are Dead
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Romain Dillet
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were supposed to be the new hot thing. Apple released the first iPad, Samsung was working on the and countless others were about to flood the market with Android tablets. Six years later, there weren’t any tablets at Mobile World Congress in Barcelona. Companies and consumers have moved on. Tablets are dead. To be fair, if you looked hard enough, you could find an Android tablet or two hidden in a corner of the Fira Gran Via. And Apple, , doesn’t come to MWC. But it’s safe to say that tablets are not the future for the Samsungs and LGs of the consumer electronics world. In fact, Samsung, Sony, HTC and LG didn’t have any new tablet to announce. They didn’t even mention tablets during their conferences. It’s not just that people don’t care about tablets anymore — the big electronics companies themselves aren’t even trying to release new products for this market anymore. Sure, Lenovo , but it seems like nobody noticed. Huawei announced , but this isn’t technically a tablet — it’s a Surface Pro-like device running Windows 10 for laptops. And yet, it wasn’t always like that. Remember how people were excited about ? I’d have a hard time naming the most recent flagship Android tablets from some of the biggest tablet makers. After a bit of Internet searching, it looks like the , the and the are real things and were all released last year. Could I tell you which one is the best? Not a chance. There are a few reasons why tablets have become so unpopular. First, tablets are now a commodity. You can find of perfectly fine tablets for less than $200. And there’s no differentiating factor between Android tablets. As a result, companies are not making a profit on them. Second, chances are you already have a tablet at home and it’s working fine. There’s no reason why you should upgrade it — it probably runs Netflix, Facebook and the Kindle app. It has a browser and your emails. Long replacement cycles mean you don’t need to pay attention to the new and shiny tablets. Third, phones are getting bigger. The (5.3-inch display) and (5.1-inch display) are the two most interesting flagship phones that were announced at Mobile World Congress. The had a 5.3-inch display. At the time, we called it a phablet. Today, it would be an average phone. Big phones are the new normal, and everybody uses their phones constantly to interact with other people and do everything they’d do on a tablet. I find myself using my phone more even though my iPad is within arm’s reach. It’s just easier to deal with one device instead of two. I read more on my iPhone than on any other device. I’ve also written posts on my phone because I’m so used to the small keyboard. So it’s time to face the truth. Tablets had a good run, but won’t be around for much longer. The iPad is still selling well, but Apple is trying hard to from the iPhone, creating the next generation of laptops. Arguably, the iPad is a better tablet than any of the Android tablet I mentioned in this post. The is a good-looking tablet, but there aren’t many tablet-optimized apps on the Play Store. This is key to understanding the iPad’s appeal. Tablets can still make a comeback. They need to become good laptop replacements, or a digital canvas for artists, or something else. But something needs to change and soon. Current tablets prove that you should never bet against the smartphone.
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Netflix Now Testing Autoplaying Trailers
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Sarah Perez
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Netflix is again testing how to best integrate teaser trailers into its user experience. At Mobile World Congress, a test of autoplaying video trailers that would begin to play when users hovered over a title. But the company is also quietly testing a different format of teaser trailer, as well. Some Netflix members are now seeing audio and video teasers as they navigate Netflix, including those that play when they on their television or when they view Netflix in a browser window. These trailers are different from what Netflix was discussing at Mobile World Congress, the company confirmed with us. “Some members in a limited test now see teasers with audio as they browse,” a spokesperson told TechCrunch. “We learn by testing and these features may or may not become part of the Netflix experience,” they said. To clarify, Netflix has shown a type of “motion billboard” teaser for some time as a way to promote a show or film it thinks a user might like. The differentiator here with the new test is that it also includes audio for some subscribers. For what it’s worth, not everyone is enjoying the experience of seeing video trailers on Netflix. Okay, WTF is going on with ? Every time I start the channel on my Roku the last few days, it screams a trailer at me. Annoying! — Michael Matson (@Meta_Pub) Dear : your “feature” of auto-playing trailers/featured stuff every time I use my Roku is awful. Let us disable that, please. — Michelle Sipics (@michellesipics) please stop automatically playing trailers on the roku app. It’s infuriating. — Dominic Vandelay (@DominicVFX) The tests are taking place globally, and are promoting the streaming service’s original content, including shows like “Fuller House” and “Love,” as well as content Netflix licenses from others. The trailers are often popping on connected media players, like the Roku. Netflix has not yet decided if it will make these teaser trailers an official part of the user experience, thankfully. News of the new audio and video trailers was first spotted by which referred to these teasers as “ads.” They are not ads in the traditional sense, but given that Netflix is testing trailers for licensed content, it could charge for those placements in the future. Netflix’s user base has been less than receptive to similar moves in the past, and post-roll ads, given that they pay for an ad-free experience. However, it makes sense that Netflix would be experimenting with other ways to showcase its content. After all, the company is now heavily investing in its original programming but needs a better way to introduce this content to its growing, global audience.
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Facebook Officially Launches Canvas Ads That Load Full-Screen Rich Media Pages In-App
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Josh Constine
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Instant Articles, meet Instant Ads. Facebook wants to give advertisers an immersive way to reach people without making them leave the social network. So today it for all advertisers. When users click a Facebook News Feed ad connected to Canvas, it opens a full-screen, rich media page inside of Facebook rather than forcing users to wait for a mobile website to load. Last year Facebook started testing . The impetus was that mobile sites have tripled in size since 2011, leading to five to ten second load times users don’t want to sit through to see an ad. The types of rich media marketing experiences that people actually remember load far too slow on mobile. So Facebook built the endpoint of ads into its own app so it can pre-load and show them in about one second. Canvas removes constraints that low-power mobile sites put on content. like animations, carousels, product catalogs, tilt-to-view images, and videos. Canvases appear linked to from News Feed ads on iOS and Android, and Facebook is evaluating how to expand this to other versions and apps such as Instagram. Brands can build Canvas ads with a self-serve tool. There’s no code required. Facebook’s design tool lets them just drag around images, GIFs, videos, and more, then set attributes and start showing their ad. Facebook ad exec Mark D’Arcy joked that “The only thing they can’t make, really, is excuses.” There’s no additional cost to build a canvas ad. Businesses just pay for the same News Feed ads as always, but get to build a better destination where they lead. Different versions of a Canvas can be targeted to different demographics just like normal Facebook ads. Facebook says Canvas won’t lead to more ads on Facebook. Users can identify Canvas ads by a little upwards arrow that denotes that the full-screen experience will unfold. Facebook says the early tests of Canvas have shown users actually want to stick around and experience the ads. 53% of users that open a Canvas view at least half of it, and the average view time is a stunning 31 seconds. The top Canvas ads can see more than 70 seconds of view time per user. In this Canvas campaign where Wendy’s deconstructed a cheeseburger and let people scroll, swipe, and see GIFs of different ingredients received 65 seconds of average view time. 2.9% of viewers even got all the way to the bottom and used the Wendy’s restaurant locator. Storytelling through ads has been a big push for Facebook recently as it tries to . Last year it launched the Creative Accelerator to teach brands how to build ads for slow mobile networks and feature phones, and launched a special Slideshow ad format that mimics video but loads quickly. But Canvas is the other end of the spectrum — high-bandwidth ads for the first world. By giving advertisers a richer format to market through, it can make sure viewers remember them. While lots of platforms are competing for ad dollars, none have innovated in the destination those ads lead to. And since Canvas doesn’t frustrate users with long load times or tempt them to leave Facebook through the browser, the social network can keep them rattling around and seeing more of its News Feed ads while they connect with friends.
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Turing Robotics Drops Android And Sets Up Shop In Finland Amid Global Security Concerns
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Dennis Mitzner
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California-based secure smartphone manufacturer announced that it will move manufacturing and its new global headquarter to the Finnish city of Salo. Turing’s decision is rooted in security concerns. “Finland’s Act on the Protection of Privacy in Electronic Communications which safeguards confidentiality and privacy in telecommunications was the main reason behind TRI’s move to Finland. To ensure complete data security and privacy for TRI’s Turing Phone owners, TRI moved its manufacturing operations to Salo, a city with an impeccable history in mobile phone production,” said Steve Chao, the CEO of Turing Robotics. TRI, the maker of the liquid-metal cypherphone, the Turing Phone, “the company foresaw the potential issues of data encryption and global government covert surveillance programs ever since mid-2013 and it made a decisive move to be established in Finland,” the company said in a statement. Accompanying the announcement, TRI is switching its OS from Android to Jolla’s Sailfish. “We can now confirm that TRI has chosen to drop Android and use Jolla’s . Sailfish is now running perfectly on the and we have started the final OS software testing phase,” the company announced on its . Surveillance and privacy concerns have become central themes among mobile users around the world, highlighted by the ongoing . Indeed, TRI’s decision to both use Jolla OS and manufacture in Finland is about the primacy of privacy. Considering Android’s intimate relationship with Google growing security concerns around mobile security, the move speaks volumes. In 2015, Jolla a partnership with Finland’s SSH Communications – a security solutions company – to offer another version of its platform with stronger security credentials, a version now used in the new Turing Phone. “It is evident that the world needs a secure, transparent and open mobile solution alternative, which is not controlled by any country or major industry player,” Jolla said in a press release during the announcement. Jolla is focusing on security in order to distinguish from fierce and better-known competition. “The next era in mobile will be very much focused on privacy and that’s what we are already feeling with our partners when we are discussing with governments and different device vendors,” during the announcement of its partnership with African OEM Mi-Fone. The new phone – expected to be released in April 2016 – will be made in Salo, a small city located between the capital Helsinki and the provincial capital Turku. “TRI will start production of the Turing Phone in Salo starting April 2016 and have plans implemented to build the world’s most robust mobile phone devices and Future Network products for the next decade and beyond in Salo. For every 1,000 phones to be produced TRI will be recruiting 10~20 local staffs to perform both software and hardware testing, flashing and assembly. TRI has plans to ramp up production of the Turing Phone series to over 300,000 units in the year 2016, “ Chao said. The city’s claim to fame is its past role as hosting a plant for Nokia. Salo is largely considered the original home town of Nokia phones. Turing Phone is TRI’s first smart phone and entirely crowdfunded. The phone is made of liquidmorphium, an “amorphous “liquid metal” alloy tougher than either titanium or steel”. Turing is not without competition in Finland. Oulu-based is the maker of Tough Mobile, a secure smartphone tailored for governmental and military use. the company announced a deal worth 2.8 million euros to provide a software upgrade for the Finnish Defence Forces’ Tactical Wireless IP Network system.
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Zumper Acquires PadMapper And Relaunches It With An Updated Interface
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Frederic Lardinois
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, the apartment rental platform that , has , the popular map-centric apartment rentals site that was once embroiled in a with Craigslist. The acquisition actually closed in January and the combined Zumper and PadMapper teams used the last few weeks to build updated versions of both PadMapper’s Android and iOS apps, as well as its desktop experience. Zumper is giving PadMapper’s logo a bit of a refresh, too. All of these updates are launching today. Zumper will run PadMapper as a subsidiary that will keep its own structure, but over time, the two products will share the same backend. The two companies declined to disclose the exact price of the acquisition, but Zumper co-founder and CEO tells me the price was under $10 million and included a mix of cash and stock. PadMapper never raised outside funding (it started as a student project that grew organically), so chances are company founder Eric DeMenthon still owns the majority share of it. DeMenthon and PadMapper CTO Rob Crowell have both joined Zumper. Zumper CEO Georgiades tells me that he sees apartment search as only the first step in his company’s vision. What he really wants to build is a platform that makes renting an apartment as easy as booking a hotel room. “The first couple of years, we just did the simple stuff,” he told me. That meant bringing the platform to the point where it could scale, for example. Acquiring PadMapper means the combined platforms will have huge reach, too. Zumper says it saw 4 million visits in January 2016 and expects to get to 9 million monthly visits for the combined platforms by this summer. At this growth rate, the company expects to be profitable by the end of the summer. With Zumper Pro, the company used to also push listings from its agents to other listing sites. “But with Zumper and PadMapper, we now have a closed loop and don’t need other,” Georgiades said. Georgiades stressed that there is also virtually no overlap between the PadMapper and Zumper audience. PadMapper’s audience tends to skew younger and toward millennials, for example, Zumper attracts an older audience (with more money). “Everybody who looks for an apartment will touch our platforms,” Georgiades said. The Zumper team tells me that the company has no interest in branching out to other real estate products that would compete with the likes of Zillow and Redfin, which mostly focus on home buying. Instead, Georgiades is mostly driven by the idea of making renting easier. The company already offers , which makes it easier to apply for an apartment, but Georgiades tells me the company is also currently running “a private beta of higher-touch model which allows renters to book apartments.”
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Microsoft Begins Making Progress On Nadella’s Broad Security Vision
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Ron Miller
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Last fall, Mr. Nadella came to Washington and in a comprehensive speech in the enterprise. Today, the company made a series of announcements from Microsoft Chief Information Security Officer Bret Arsenault that starts to bring that vision into clearer focus. It’s probably not a coincidence that the company is making these announcements ahead of the big next week in San Francisco. Nadella’s speech covered Microsoft’s overall philosophy around security and trust. He discussed the implications of failing to build that trust in an increasingly digital world and he offered some specifics about how Microsoft would attack the growing cyber security problem. As describing his speech: Speaking at the Microsoft Government Cloud Forum, he articulated the company security strategy. Key to this was not only finding ways to secure the key elements of the Microsoft ecosystem — Windows, Azure and Office 365 — but finding ways to secure the infrastructure, the personal mobile devices and the services a company uses, regardless of whether they were Microsoft’s or another vendors. With today’s announcements, it appears that company is making headway toward advancing some of the elements in Nadella’s speech. This involves a number of new tools and technologies aimed at making customers using Microsoft products and services safer and more secure. Nadella introduced the security graph concept during last fall’s speech. This creates a big picture view of an individual or company’s broader security profile in the same way a social graph gives you a big picture view of a person or company’s social activity. That involves finding a way to process and understand the myriad of signals coming into an enterprise on a daily basis, while taking advantage of the security data Microsoft has been collecting over the years. Finally it requires having tools to work this data to recognize when there is an anomaly that could indicate a security problem. To that end, the company announced three new products to help better process all of that data. For starters, it’s introducing Azure Active Directory Identity Protection, a tool that helps companies identify compromised credentials based on data Microsoft has accumulated on its 14 billion logons. Building on this information, Microsoft claims it can help individual companies identify when a credential has been undermined. This product goes into preview next week. In addition, Microsoft is introducing the Azure Security Center Advanced Threat detection, which builds on years of collecting crash data to help find compromised machines (which Microsofts says are sometimes linked to crashes). The idea is to protect virtual machines running on Azure and checking against crash data to assess possible threats related to those crashes. Finally, the company is introducing a new threat visualization tool that picks up when a server is communicating with a malicious IP address and lets companies visually track the attacker on their system. The other big step for Microsoft is incorporating technology , which gives security and visibility into SaaS applications, whether Microsoft Office 365 or another vendor like Salesforce, Box or ServiceNow. The company has renamed the Adallom technology Microsoft Cloud App Security. Using that same technology, Microsoft is beefing up Office 365 security to let IT admins see suspicious activity on Office 365, see any other cloud services employees may be using and allowing them to grant or revoke permission to any third party services connecting to Office 365. The company also announced several partnerships. In his speech last November, Nadella talked about how no one vendor can do this alone and the partner ecosystem is about extending the capabilities to cover as much ground as possible. “We live in a heterogeneous world. Most customers have bought technology from all sorts of different vendors. No one company can protect them from all of these attacks. We need a rich partner ecosystem where vendors defend different types of data,” Tim Rains, directory of security communications at Microsoft told TechCrunch. To that end Microsoft announced a few partnerships today too including Check Point, Cisco, Fortinet and Imperva. The products they are announcing today are in various stages of development with some in preview stage and some generally available or becoming generally available in the next couple of months. These tools and others announced today provide a starting point for the Microsoft security framework Nadella outlined in his November, 2015 speech. Think of today’s announcements as a step forward on a long journey. As Microsoft and all vendors selling security services surely know, security is not something that’s ever solved. It requires vendors to evolve continually in an ever-shifting security landscape, but these tools are designed to help Microsoft’s customers fight the good fight.
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In The Apple Encryption Debate, Can We Just Have The Facts Please?
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Jeff Kosseff
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I’m about to take a radical position in the encryption debate between Apple and the FBI: I’m undecided. As Apple and federal law enforcement continue to hurl rhetoric about encryption, one thing has become crystal clear: today’s encryption debate is neither healthy nor well-informed. Encryption’s role in privacy – and security – is too important for intractable opinions. A thoughtful debate is vital because Congress ultimately will need to decide whether to pass a law that provides the government with access to encrypted communications in extraordinary circumstances. Our Constitution leaves it to Congress to weigh the benefits and costs of legislation and ultimately make a policy judgment. The encryption debate, which has been simmering for more than a year, came to a head this month after the Federal Bureau of Investigation obtained a search warrant for the work iPhone of Syed Riswaan Farook, one of the San Bernardino shooters. Because the iPhone is encrypted, the FBI needs Farook’s PIN code to access the information. A federal magistrate judge granted the FBI’s request to order Apple to disable a feature that automatically wipes the data from an iPhone after 10 incorrect PIN attempts, effectively allowing the FBI to guess thousands of combinations until it identifies the correct PIN. The order has sparked some of the most passionate debates about technology policy ever. Unfortunately, both sides have shown little willingness to compromise, acknowledge weaknesses in their arguments, or present comprehensive facts about criminals’ use of encryption. That needs to change. For instance, Apple’s supporters have framed the FBI’s actions as “ .” The Apple dispute may be about a lot of things, but the Fourth Amendment isn’t one of them. Before even seeking the court order, the federal government had obtained a search warrant, supported by probable cause. That’s exactly what the Fourth Amendment requires. Moreover, the phone is owned by Farook’s employer, which has consented to the FBI accessing the phone. Supporters of strong encryption also argue that only a tiny fraction of encrypted communications are used by individuals with nefarious purposes. Moreover, they , even if encryption is regulated, the bad guys will circumvent those legal restrictions. Both claims sound eerily similar to the arguments against any government restrictions of firearm ownership. Even if 99.999 percent of all encrypted communications are harmless, we may have good reason to care about the remaining .001 percent. And should we live in a lawless society simply because we know some bad actors will break the law? Apple’s defenders must confront the possibility that it is, in fact, theoretically possible that terrorists or other criminals will use encrypted communications to launch a devastating national security attack. They then must demonstrate to the public and lawmakers that despite this possibility, it nonetheless is in our nation’s interests to protect privacy by not allowing any limits on encryption. Critics of strong encryption also must address the weaknesses of their arguments. After the 2014 of millions of federal employees’ background check applications at the Office of Personnel Management, it is understandable that many Americans would be concerned with the government having access to technology or keys that could reveal their encrypted communications. Law enforcement needs to demonstrate to the public that it is possible to allow the government to have limited and exceptional access without compromising the security of encrypted communications. The government obtained the Apple order under the , an arcane law that allows courts to “issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.” Law enforcement must reckon with the reality that this law – first passed in 1789 and signed into law by George Washington – is not a fair way to address one of the greatest technology policy challenges of our time. Instead, Congress must decide whether to pass a law allowing law enforcement to have limited access to encrypted communications. That is Congress’s job. To make an informed decision, Congress should hold hearings to gather facts about encryption. This month, Manhattan District Attorney Cyrus Vance that encryption is preventing his office from accessing 175 phones in criminal cases; such anecdotal data is a good first step, but comprehensive, nationwide information would be even more useful: How many crimes or acts of terrorism have been aided by encryption? Are there any arrangements that would allow law enforcement to have extraordinary access to encrypted communications without compromising security, such as by ensuring that any keys or software remain in the possession of the companies? Does law enforcement have methods of obtaining encrypted information without requiring assistance from the companies? Maintaining a thoughtful public debate about encryption will be difficult. Last year, after Deputy Attorney General Sally Quillian Yates and FBI Director James Comey told a Senate committee that encryption was making their jobs more difficult, they received massive backlash across the Internet, and a few months later, Comey told another congressional committee that the administration was no longer seeking a legislative remedy. Both sides should promote a robust discussion with the likes of officials such as Yates and Comey, technology executives such as Apple CEO Tim Cook, privacy advocates, and others who can provide facts that will inform this vital debate. It is encouraging to see some policymakers laying the groundwork for a thoughtful debate. Sen. Mark Warner, D-Va., and House Homeland Security Committee Chairman Michael McCaul, announced on Wednesday legislation that would create a 16-member commission to study digital security — including encryption — and make recommendations to Congress. This is exactly the sort of informed deliberation that we need for such an important issue. I don’t know whether I would support a law that provides limited access to encrypted communications. That’s because I don’t yet have enough facts to come to a final conclusion on the policy that is in the best interests of the United States. I hope other like-minded Americans will join me in my call for more facts and less blather as we answer many difficult and fundamentally important questions.
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YouTube Now Lets You Blur Random Objects In Videos
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Frederic Lardinois
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Back in 2012, YouTube added a new feature that allows you to automatically . Today, it’s going . You can now draw a rectangle around any object in a video, and YouTube will then blur it and automatically follow it as it moves through a scene. That means you can now easily blur any kind of sensitive information that you don’t want the whole world to see. That could be a person or a license plate number, for example. “While the use cases for this tool are vast, we built this feature with visual anonymity in mind. We wanted to give you a simple way to blur things like people, contact information or financial data without having to remove and re-upload your content,” Google says in today’s announcement. YouTube will always render a preview of the blurred video, so if something didn’t work quite right, you can always try again by placing the rectangle in a slightly different spot. Google says it is using “new innovative technology” for this tool that allows it to analyze videos to track objects “on the fly.” It’s a fair guess that the recent advances in machine vision have made this kind of tool possible now. We haven’t been able to put this new feature through its paces yet, though, so it remains to be seen how well it works in practices.
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New Levitating 3D Printing Technology Prints In Mid-Air
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John Biggs
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[youtube=https://youtu.be/xNUQ8EpHC-g] Imagine printing something with multiple print heads while the object in question was floating in space. Please. Imagine it because I have no idea what is going on here. A new “levitating” 3D printing technology pioneered by Boeing uses a central nugget of magnetic material. The nugget floats above another magnet (or via acoustic waves) and can be twisted and turned as necessary, allowing access to the object from all sides. Multiple 3D printing heads can then deposit material onto the object at once, creating a far faster solution. Weird, right? From the I suspect that Boeing is hiding exactly how the deposition happens because the current visualization – little balls that turn into smooth surfaces – makes no sense. All that is clear is that they’re using an additive system “in space” which seems to suggest that the print heads have to be closer to the object than they are in the video. That said I suspect this is truly a case of “Wow If True.” Patents rarely reflect the actual process in practice, especially when it comes to complex systems like this one, but to have multiple heads printing one object at the same time means far faster print speeds, better detail, and larger print sizes. This is some serious sci-fi stuff.
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Examining The Top 4 Fintech Predictions For This Year And Beyond
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David Klein
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Alongside “Unicorn” and “Grexit/Brexit,” “Fintech” was considered one of the But fintech isn’t a newcomer to this list — and for good reason. For a few years now, fintech companies have . They are building tech-enabled financial platforms that serve consumers better than traditional financial institutions, and consumers are responding. As the CEO and co-founder of CommonBond, a fintech lender that to date has focused on student lending, I’ve seen that evolution firsthand. And from my vantage point, I see a fundamental shift in finance happening right under everyone’s noses. Here are my top four predictions of where I think fintech is going this year (and beyond): Fintech companies that in the past year would have begun with a big idea, a few buzzwords and a PowerPoint deck will not get funded this year, or beyond. Capital will still be available, just not to everyone. Only the companies that have developed proven products and built brands that resonate with consumers will attract the capital they need. These are the companies with more proven platforms — the ones you’ve heard of. Of the emerging fintech lenders, the big ones will get stronger and the small ones will attach to the larger players or simply peter out. We’ll move from a world that thinks about the top 200 fintech lenders to a world that only cares about the top 20 — and the market will be healthier for it. I can’t tell you who it will be, but I can tell you that 2016 is about the right time for this to happen. Finance touches everyone’s life, technology in traditional finance has been slow to modernize and consumers are more open to tech solving their finance-related pain points than ever before. According to , 73 percent of millennials would be more excited about a new offering in financial services from companies such as Google, Amazon, Apple, PayPal or Square than from their own bank. Tech companies are looking for ways to grow and play an increasingly important role in their customers’ lives. Facebook has a ton of data on its users, as does Google. Apple has a ton of cash — more than $200 billion, to be exact. That’s enough capital to generate more than $2 trillion in assets through a lending business. To put this in perspective, JP Morgan Chase, the largest bank in America by assets, has $2.6 trillion in assets. Capital and data are the backbone of finance, and now big tech companies have them big time. They also have the technology, to boot. (Speaking of boots, if I were a bank, I’d probably be shaking in them a bit more this year.) That’s to be expected, but what might surprise some is that it’s all but inevitable now. As with the self-driving car, the technology is there, and the market forces are too strong for it not to happen. Millennials represent the largest generation in America, at more than 90 million people. They are young and have increasing purchasing power. Seventy-one percent of them would rather see their dentist than deal with their bank. Thirty-three percent of them expect never to use a bank, and instead expect that tech firms will be their financial saviors. And the market is responding. A new crop of companies across lending, wealth management and payments — think Prosper, Betterment, Affirm — are coming to market and gaining share quickly, most likely because these newer companies are more responsive to consumers’ needs than traditional financial companies. JP Morgan CEO Jamie Dimon also understands this especially well, as evidenced by the bank’s recent partnership with OnDeck Capital to better serve small business owners, and JP Morgan’s recent purchase of $1 billion of Lending Club loans to add to its balance sheet. One of my favorite comes from CB Insights and depicts a screenshot of the Wells Fargo homepage, with an overlay of the logos of various fintech companies that are disrupting different parts of traditional finance’s business — from student loans to wealth management to insurance. This is what has come to be known as the unbundling of banking, and we have seen this take shape over the past few years as fintech startups have emerged to disrupt banking. But I see this “great unbundling” transforming into the “great rebundling,” with technology playing an integral role. While fintech companies usually start by excelling in a single asset class or product, some of us have set out to serve the customer across many, if not all, of the customers’ financial needs. As fintech companies scale not just through market penetration in their existing products but by horizontal expansion into new products, we will see this rebundling — if executed well — serve customers better than traditional finance has been able to. And the reason for this in large part will be better technology that enables seamless experiences between products and services, as well as a strong focus on the customer. Fintech is moving fast, and the pace will only accelerate. This is the year that the best ones will get stronger — and the market, including consumers, will be better for it. Perhaps by the end of 2016, fintech will no longer be a buzzword at all.
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CREXi Brings Commercial Real Estate Dealmaking Online
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Anthony Ha
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It’s a familiar pitch — taking an industry that relies on outdated technology and rethinking it with modern, web-based tools. The industry in this case is commercial real estate, and the startup trying to rethink the process is , whose name stands for commercial real estate exchange. To be clear, it’s far from the only online marketplace for these kinds of properties — in fact, CEO Michael DeGiorgio and Chief Product Officer Luke Morris both worked for real estate site . DeGiorgio said that through that experience, they realized the deal-making process remains “antiquated and old-school in an odd sense.” “You have to use 15 different kinds of platforms,” he added. “There’s a lot of emails, a lot of fax machines, a lot of flying to meet somebody.” CREXi went live about three months ago, and the company says there are now nearly 200 properties listed on the site, adding up to almost $800 million in value. The Venice, Calif.-based startup has raised $4.3 million in funding from Lerer Hippeau Ventures, Freestyle Capital, TenOneTen Ventures, Founder Collective, Karlin Ventures, Leon Capital Group and others. The site can be used by property owners, buyers and brokers. Morris said it aims to be “very, very broker friendly” — it’s already being used by brokerages including CBRE, Marcus & Millichap and Cushman & Wakefield. Besides listing and searching for properties, CREXi also allows users to view due diligence documents, schedule in-person tours, see analytics around their listings and make offers. DeGiorgio said he’s also planning to add integration with DocuSign so that you can sign the deal documents electronically. But “the real secret sauce,” according to Morris, is the trading capability for “best and final offers.” For those of you (like me) who aren’t familiar with real estate lingo, it means that when several offers come in and the seller can’t decide between them, they can create a limited time window during which potential buyers are invited to compete against each other to offer more money and better deals. “If I’m the buyer, I can come and I can see the price is posted, and by seeing where I need to be with the offer, it gives me confidence [to make a better one],” Morris said. “Through transparency, you can get great competitiveness. It’s only human nature … That’s what we saw in our previous career.” While most CREXi properties are currently located in California, New York and Texas, DeGiorgio said it can be used by customers in any location.
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Sarah Perez
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New HTC Vive headsets with enhanced ‘design factor, performance’ are on the way
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Lucas Matney
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Though the HTC Vive has only been on sale for a few months, the company may be gearing up to show off an updated model of their Vive virtual reality headset. In a discussion regarding the company’s future virtual reality plans, Rikard Steiber, SVP of Virtual Reality at HTC, told TechCrunch that new Vive virtual reality headsets are on the way, ones that would likely see form factor updates. Steiber revealed that many of the experiences it is planning in regards to its will require enhanced arcade-style peripherals (e.g. steering wheels, weapons) but he also detailed that HTC would eventually be rolling out Vive headsets with enhanced “design factor” and “performance” at the locations. The executive was coy on details but seemed to infer that the whatever headset update came would be an iterative one, simply saying, “It’s going to evolve.” The HTC Vive was in April of this year for $799 after months of pre-orders and has received generally positive reception from the early adopter and developers within the VR community. HTC has been tight-lipped on units sold but an HTC executive last month that the unit sales “far exceeds” 140 thousand headsets. The PlayStation VR and Oculus Rift have both been released this year as well, but there has been little discussion regarding when the next wave of these higher-end VR headsets will hit the market. “This is year one as far as this set of virtual reality experiences go,” Steiber told me. “I think with the amount of innovation going on in the space and the amount of players coming into the space, I do think that innovation cycles will be sort of annual.”
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Crunch Report | GoPro Seriously Botches Earnings
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Khaled "Tito" Hamze
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Tito Hamze, John Mannes
Tito Hamze
Joe Zolnoski
Joe Zolnoski TechCrunch C/O Tito Hamze
410 Townsend street
Suite 100
San Francisco Ca. 94107
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How Yo inspired the Jonas Brothers to create apps
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Katie Roof
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Remember that silly app, Yo, where you could ping someone with just a tap? Well, Kevin Jonas does. At the Fast Company Innovation Festival in New York, the Jonas brothers talked about why they are creating apps. After seeing the Yo app , Kevin said it made launching startups look easy. “If they could do that, look what I can do,” said Kevin, about what motivated him to make the a few years back. That venture didn’t pan out, so Kevin devoted time to , a marketing company for “influencers.” And now he’s focused on a new a series of gaming apps that he’s working on with band manager, Phil McIntyre. Called PhilyMack Games, the team recently launched games centered around and also one inspired by “We wanted to be fun enough that the fans” use the apps, but also “have people who could just come in and play,” regardless of whether they follow the music, explained Kevin. It’s too early to tell if the games will have lasting success, but it wouldn’t be the first time that a superstar leveraged their brand and created a popular app. to launch a viral game. But McIntyre claims it’s not the possible financial windfall that’s motivating him in this venture. “Whenever I don’t focus on the money, I end up making the most amount of money.”
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Why a design mindset matters
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Gian Paolo Bassi
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Engineers become engineers because they like to figure out how things fit together, literally and figuratively. This is not always entirely true, but usually. The lines are blurring between traditional engineers who make designs real and the designers who can now “engineer.” Technology is now allowing anyone with a design mindset to engineer a solution. Organizations are trying to embrace design thinking, or some version of it, as they look to solve problems. Stanford’s d.school draws a continuously evolving circle that starts with empathy: empathize, define, ideate, prototype and test (and keep iterating, moving around that circle). My point is not to focus on design thinking methods specifically, but to realize that design is far more than engineering, or product development or marketing. Many organizations, from large corporations to government agencies, from startup businesses (and their venture capital backers) to schools from K-12 through the university level, are shifting to a design mindset. George Kemble, director and co-founder of the , is an entrepreneur and investor turned educator. In a TEDx SemesterAtSea talk, , he explains how in emergent systems there is no leader; how schools of fish or flocks of birds do not answer to any one creature. They respond based on observation and small changes. At the heart of his talk is design thinking, which forms the core of the method at the Hasso Plattner Institute of Design at Stanford (commonly called d.school). Before was a term, one of the world’s most innovative architects, Frank Gehry, was doing it. He designed the uniquely shaped in Seattle and the Sydney University of Technology “ ” business school building in Australia, to name a couple. Years ago, I went to see him. He invited me into his warehouse where he had cardboard blocks, wooden blocks, plastic and foam; he was inventing, prototyping, using real materials. But he told me that before he ever uses a software program, he needs to come up with his idea. The idea, or dozens of them, for Gehry came from thinking differently, but with some respect for order. He was showing me that the conceptual phase is not assisted by computers (at that time). Creating a model in cardboard takes a lot of time and there is no flexibility to be creative. You don’t get easy answers out of a cardboard model — like what is the square footage, what is the area, the volume, how many people can go there, can you simulate a hurricane or how do you illuminate it? So, you have to be able to move from physical to digital, and the reverse is true also. — Frank Gehry Many people believe that design only begins when you put pen to paper, make something out of cardboard or, more likely, when a digital model takes shape in 3D design software. These can all be important. But design really starts when we free peoples’ minds from the constraint of any program — when the software operates as an aid and not a hindrance so the user can move more thoughtfully through the creation process. When this type of freedom occurs, innovation is more likely to happen. Great design is possible when the digital tools are there to help, to assist (to aid) without getting in the way. John Maeda, design partner at venture firm, As d.school and design firms move in this direction of new ways to solve problems, companies are acknowledging that they also need a fresh way to address challenges. It does not matter what type of business you are part of, you must understand the problems people face and find creative ways to solve them. In this mobile-powered world we live in, design tools are like the clothing you wear — you don’t think about how they are made, you just put them on. Those blurring lines between engineering and design are possible now because of powerful technology tools, enabled by the cloud and mobile. Add in more elegant methods, such as design thinking, and you get a proverbial “future of design” tipping point. As John Maeda implies, a design mindset is possible no matter what university degree you have, technical or not. The future of design is about tools that are in the background, like the clothes you wear, so that you can think and create without boundaries.
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Watch the full series of “The Down Round”
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Anna Escher
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Silicon Valley is like no other place in the world right now. The Bay Area has been booming with ideas and innovation for the past decade. But in 2016, the IPO market wilted and unicorns suddenly had to prove their worth. Startups that had raised hundreds of millions of dollars began shuttering and investors are nervous. In “The Down Round” series, we talked to entrepreneurs and venture capitalists about what happened and what’s next for startups, real estate and Silicon Valley as a whole. Everyone wants to be the person who calls the next bubble. But is it a mistake to even label it a bubble? Maybe scarcity can be a good thing. Capital is stuck at companies when they don’t IPO, and the unicorn market has become selfish. Late-stage funding has changed dramatically, and some say Silicon Valley is the destination for the next gold rush. In this episode, we examine where venture capital comes from and where it goes. Why are companies staying private longer, and what does it mean to be overvalued? “You’re on a plane and it’s falling. And you’re trying to rebuild the engine as it’s falling, and you’re asking everyone to help you.” Layoffs, shutdowns and emotional roller coasters. Founders discuss what happens inside a startup when funding rounds tighten. Does Silicon Valley have an employment problem? As the market softens, so does the availability of jobs. Startups hired too aggressively at first and cutbacks are hitting the Valley hard. This episode explores what kind of jobs are in demand and other trends in tech hiring. Software may be eating the world, but technology is eating real estate. So what is it actually like to work and live in the most expensive city in the U.S.? This episode gets into how real estate affects tech companies and the rest of the Bay Area. If you have a well-paying job, you should be able to afford an acceptable apartment, right? Right?? If you don’t care about what you’re doing, no one else will. Silicon Valley has a risk-taking, experimental atmosphere where entrepreneurs sacrifice everything to build their own companies. This final episode explains why failure is necessary for success.
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Arcadia Power launches a solar energy service for renters across the U.S.
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Jonathan Shieber
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The renewable energy services company has just launched a new product that allows renters across the U.S. to buy renewable energy. It’s a significant step forward for the renewable energy project developer and operator, which had previously integrated with utilities as an offset provider and load management company. And it’s potentially a game changer for the renewable energy movement. I’m going to unpack that a bit because it gets a mite confusing. Before this announcement, Arcadia was offering services that would offset customers’ energy use with an equal investment in a renewable energy project (typically a wind farm). Now, because of the company’s partnerships with utilities and status as a project developer, it has amassed a small group of projects through which it’s offering renewable energy investment to folks across the country who would want to install solar, but can’t. Arcadia’s logic is simple. There are a number of renters or non-homeowners who would like to be able to invest in sustainable energy, but don’t have the means. “That’s one of the most important parts of what we’re doing,” said Kiran Bhatraju, the chief executive of Arcadia Power. “The vast majority of Americans can’t do rooftop solar. There’s only about 8% of Americans that can.” Those people are barred from such direct investments in a solar project because they live in multi-tenant houses, and can’t just throw up a solar panel anywhere they want. Using Arcadia, these environmentally minded consumers can invest in projects across the United States and reap the benefits of that energy generation as if it were coming from their own home. “We built technology over the last few years that allows us to push bill credits onto their utility bills,” said Bhatraju. “We can remotely connect you to a distributed generation asset. As that solar produces electricity we take the billed credits locally and that’s distributed onto the bill.” Arcadia’s current projects aren’t huge, but they do prove that commercial customers and governments are buying into their thesis — if you offer renewable energy generation to renters — they will come. The company posits that while there’s a will for renewable generation, consumers still don’t have a way that’s convenient enough for them to make the switch to solar power. Arcadia’s offering changes that. So far, the Arcadia Power has projects in Washington, DC, Massachusetts and California. “We source the project and we work with the customers to get the buy-in into the program.” For Bhatraju, the new offering is just the next step along the path that the company charted back in May when it raised $3.5 million from and . When the financing was announced in August, Arcadia had 10,000 customers on its premium offer, matching customer usage with renewable energy at 1.5 cents per kilowatt-hour. The company also launched a free 50 percent wind option to people who wanted to split their bill between traditional utility power generation (typically coal and natural gas) and wind power. The next product in the company’s pipeline is on-bill financing for energy-efficient products like smart thermostats and LED lighting, which Arcadia says can save customers between 10 percent and 30 percent of their annual energy costs. Today, the company is rolling out its service with about 250 kilowatts worth of projects (enough energy to power roughly 41 homes, according to estimates by the Solar Energy Industries Association). According to Bhatraju, there’s another 2.5 megawatts of power in the pipeline.
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On-demand birth control delivery startup Nurx raises $5.3 million from Union Square Ventures
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Sarah Buhr
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Out of the pill? is a web platform delivering birth control in less than a couple of hours, and it just raised $5.3 million in Series A financing from . The startup launched in 2014 to bridge the gap between running out of birth control and waiting to get a new prescription. It delivery of PrEP, an anti-HIV medication, to its services earlier this year and partnered with LabCorp to help patients get test results and a streamlined delivery process for needed HIV drugs. Getting the pill is pretty simple. You log onto the web app and input some info. then sends your info to one of its network of doctors who then write you up a quick prescription and Nurx readies your contraceptives for delivery. A friendly delivery person then brings the pills right to your door. No messing with the pharmacy or waiting in a doctor’s office necessary. Nurx falls in with other startups working on medical delivery like or . Another startup, , offers just what the name implies. But Nurx stands out in the contraceptives space. “We realized there were certain things people wanted done in healthcare rather than research them and birth control is certainly one of those,” co-founder Hans Gangeskar told TechCrunch. “Everyone we spoke with, friends of friends said friends called them with a birth control prescription emergency.” He also says Nurx has been growing at a steady pace, based on that focus, but it may be facing a recent uphill battle. A new uncovered the pill may be the source of depression for many women. But Nurx also offers pill alternatives like Nuva Ring or the patch, should that be your preference. Whichever option you go for, it’s a good business model and Nurx could easily expand on it to include other prescription medications — it’s already started there with PrEP. After all, people need prescriptions month after month and it’s much more convenient to get them delivered to you than it is to go pick them up somewhere.
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Planetary Resources mines Luxembourg for $28M in asteroid-hunting funds
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Devin Coldewey
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The aspiring asteroid miners at Planetary Resources have struck pay dirt in Luxembourg, the tiny (but wealthy) European country positioning itself as an ally to commercial space. The country is directly investing €12 million, with another €13 million coming from public investment bank SNCI. This investment doesn’t come out of the blue: the country and company signed an agreement in June soft-announcing a possible investment, though with scale and terms to be announced. Today it’s official: “The Grand Duchy of Luxembourg becoming a shareholder in Planetary Resources seals our partnership and lays the ground of the principles of our cooperation in the years to come,” said the country’s Deputy Prime Minister, Étienne Schneider, . This isn’t an investment in a specific site or technology, but in the company itself; forested, mountainous and about the size of Rhode Island, Luxembourg isn’t exactly suited for launches and large-scale research. (I recommend visiting, though; it’s beautiful.) Planetary Resources will be using the €25 million (about US$27.7 million) in pursuit of its planned 2020 launch of an asteroid prospecting system. The cash will join some $21 million (or what’s left of it) raised in May. Luxembourg is keeping its options open, though: The officials there , a competitor — or potential one, anyway, if either gets off the ground — but the details of the funding, if any, haven’t emerged just yet. You can keep close track of Luxembourg’s space partnerships, if you’re that interested, over at the country’s .
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Adobe’s Project VoCo lets you edit speech as easily as text
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Frederic Lardinois
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today showed off a new experimental tool, Project VoCo, at its annual in San Diego. Project VoCo lets you edit speech as easily as text — and you can’t just edit existing text, you can even use the same voice model to create completely new recordings, too. Here is how this works: Project VoCo needs about 20 minutes of voice samples from a given speaker. It then analyzes the speech, breaks it down into , transcribes it and creates the voice model. If you listen closely, you can hear when a word has changed, but it’s probably only a matter of time before you won’t be able to distinguish the actual recording and the edited (or completely fake) one. As Adobe noted in today’s demo during a small press event at MAX, the project isn’t based on traditional speech synthesis technology but on what Adobe calls “voice conversion.” What’s especially interesting here is that there’s almost no manual intervention necessary. You can always correct the auto-generated transcript to improve the synthesis, but there’s no need to set timestamps, for example. The algorithms can figure that out themselves. This technology raises all kinds of questions. What happens if you can’t even trust what sounds like a genuine recording of somebody’s speech anymore? From a purely technical standpoint, though, this is some pretty impressive stuff. At the same press event, Adobe also showed off two other new editing projects: Project Quick Layout for — as the name kind of implies — making it easier to edit print layouts, and Project Clover, a VR editing tool that works right inside of VR. As with all of these “Sneak Peeks,” Adobe won’t commit to ever shipping them, but over the years, many of the projects it has introduced this way have made their way into the company’s products.
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2016 Mercedes-Benz C350e soothes range anxiety
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Kristen Hall-Geisler
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The 2016 Mercedes-Benz C350e plug-in hybrid sedan is not a fighter. It’s not even much of a Chevy fighter. It is a very comfortable, very refined plug-in-hybrid mid-range Mercedes. So if that’s your jam, this is your car. The C350e has a 2-liter gasoline engine and a 60-kW electric motor, for a combined 275 hp and 443 lb-ft of torque, which means quick merging on the freeway. Mercedes is estimating fuel economy to be about 100 mpg, based on European ratings, but there’s no official word from the EPA here in the states yet, where the testing is tougher and the numbers are likely to be lower. If you want to dip a toe in ownership despite your range anxiety, the Mercedes does travel up to 20 miles on electric power only, depending on how you drive. Mash the accelerator, and you’ll drain the battery quickly. The engine will kick in then, and it will run in a more conventional hybrid mode. The battery fully charges in 2.5 hours at a 240-volt outlet, but it takes 8-plus hours at a regular 120-volt household plug. That’s pretty typical for an electric car, but Mercedes chose to put the plug at the back of the car. That means you either have to back into the garage or parking space or hope that the public charging station has a long enough cord to reach. You can also get quite a bit of energy back from the regen braking system. This was after ~5 miles of normal driving. The C350e will only be available (at least at first) in the that follow California’s lead on zero-emissions rules, including Oregon, where I tested this car. That’s unfortunate, because, it seems to me, people who drive in areas with less EV infrastructure and longer distances between destinations would benefit more from this technology. Use E-mode to run errands in town on electric power only, then use the hybrid mode to drive 200 miles to the next town. The test vehicle I had was loaded with every bell and whistle: leather upholstery and linden wood trim, head-up display, parking assist, sunroof and even a light fragrance dispersed throughout the cabin. Standard equipment already includes radar-based regenerative braking to recharge the battery, automatic headlights and windshield wipers and collision prevention technology. All told, the price as tested was $61,040. In related Mercedes news, Daimler AG is bringing its business to the United States. Mercedes-Benz Energy Americas will develop and sell vehicle-grade lithium-ion batteries for home and business use, similar to Tesla’s .
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Apartment List raises $30 million to find you a home
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Katie Roof
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GoPro shows its vulnerability after horrific Q3 earnings
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John Mannes
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Expectations were already incredibly low for GoPro this go around and yet somehow the company managed to eclipse even the worst fears of analysts. The company’s stock trading was halted prior to that missed revenue expectations by 23 percent and nearly $75 million. When trading began again, shares were down 22 percent. This means that, in a matter of minutes, the market cap of the company melted from $1.23 billion to $972 million — the spontaneous combustion of roughly $250 million in value. Prior to the actual release of , investors had been focused on one thing — projected sales for Q4. Today’s posted revenue of $240.56 million and a loss of $0.60 per share is so bad, however, that it’s likely to change the whole conversation. For reference, in advance of today’s release, the consensus among Wall Street analysts was that shareholders could expect a loss of $0.36 per share on revenues of $314.06 million. Shareholders had given up on the promise of a knockout third-quarter earnings report all the way back in early October. Over the course of a pessimistic 21 trading days, the stock tumbled nearly 30 percent, giving up the entirety of its gains from a relatively positive streak that stretched all the way back to May. [graphiq id=”cb8AY5dHAQB” title=”Gopro, Inc. (GPRO) Stock Price” width=”600″ height=”617″ url=”https://sw.graphiq.com/w/cb8AY5dHAQB” link=”http://listings.findthecompany.com/l/12123149/Gopro-Inc-in-San-Mateo-CA” link_text=”FindTheCompany | Graphiq” frozen=”true”] This news comes at a time when GoPro has been banking heavily on the sales performance of its and this holiday season. However, because both devices didn’t go on sale until October, neither are going to be accounted for in the traditional Q3 metrics that GoPro is reporting. The problem with pegging your company’s hope on the holiday season is that you run the risk of smashing head-on into supply chain issues. GoPro is calling its production “compromised” and it “anticipates difficulty in meeting forecasted demand.” The majority of these supply issues will impact the new , which is particularly bad because GoPro expects a majority of its revenue to come from rather than It’s still too early to tell if the company’s bet on drones and aerial capture will pay off in the long run. It’s going to be difficult for GoPro to repeat its action camera dominance with both and . The late start to addressing those growing markets shows a lack of direction from the company. This sentiment was echoed by investors on the earnings call that questioned CEO Nick Woodman’s thesis for the business. Earlier this year Woodman told TechCrunch that It seems those plans may have to be put on hold as the company told investors to expect “2017 to be more of an evolutionary year, rather than a revolutionary year.” GoPro is issuing Q4 guidance targeting revenue of $625 million with $25 million in wiggle room. This would mean that total revenue for 2016 would fall somewhere between $1.25 and $1.3 billion. For next year, the company wants to cut non-GAAP operating expenses down to $650 million and “return to profitability.” [graphiq id=”afn2JaH4qln” title=”Gopro, Inc. (GPRO) Annual Operating Expenses” width=”600″ height=”546″ url=”https://sw.graphiq.com/w/afn2JaH4qln” link=”http://listings.findthecompany.com/l/12123149/Gopro-Inc-in-San-Mateo-CA” link_text=”FindTheCompany | Graphiq” frozen=”true”]
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Connie Loizos
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Marketing and optimization startup Zarget raises $6M
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Anthony Ha
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announced that it has raised $6 million in Series A funding. Co-founder and CEO Arvind Parthiban said Zarget’s goal is to build a full suite of products for small businesses to track and optimize websites — one that could be used by “a tech-savvy marketer like me, without any coding skills.” The product’s capabilities include A/B testing, heatmaps, funnel analytics, user polls and feedback. There’s also that allows customers to access Zarget while viewing their website. Parthiban contrasted this with most existing solutions, where you need to buy an A/B testing product, a heatmap product and so on. He said Zarget has more than 1,000 customers. The round was led by Sequoia India, with participation from previous backers Accel and Matrix Partners. Future plans include adding support for mobile apps and for personalization.
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The ransomware dilemma
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Mahendra Ramsinghani
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More than 90 percent of all phishing emails are now ransomware. The average amount paid via ransomware has grown from $40 in 2009 to $1,000 in 2016. This amount will grow even faster as ransomware moves to enterprise. An LA-based hospital paid $17,000 and, according to FBI records, several small businesses have paid as much as $80,000. Many are embarrassed to admit it, so we may never know the real figures. According to , ransomware variant CryptoLocker generated $325 million for the hackers with of launch. At the Black Hat 2016 CISO Summit in Las Vegas, several industry experts projected a billion dollars will be paid in ransomware in 2016. Everyone. Individuals, enterprise, small businesses, schools, churches, public libraries — a sample of those exploited can be seen in the following table. When a church in Oregon was hit with ransomware, “My theology is…love my neighbor even if he steals from me. But I was angry at the moment. It felt like a faceless, nameless evil from the other side of the world descended on me and my church.” Pest control company, North Carolina $80,000 Insurance company, Pittsburgh, Pennsylvania $70,000 Restaurant, Florida $30,000 School district, South Carolina $10,000 Police department, Massachusetts $750 Church, Oregon $500 Aircraft manufacturer $50,000,000 Regional bank in northern Florida $7,000,000 Indian tribe, Washington $277,000 Materials company, Pennsylvania $198,000 Assisted living facility, Pennsylvania $190,800 Source: , Hackers are getting clever, and now offer Phishing-as-a-Service, which is enabling more than 50,000 cyber thieves. Security researchers at Fortinet a novel offering — Phishing-As-A-Service. An entity called Fake Game can help anyone become a phishing scam-artist. For just $3.50 /month (or $7.12 for three months) you could build a phishing campaign, steal passwords and break into accounts. For any wannabe phisher, the ROI is very simple: Invest less than 10 bucks and scam at least $500, possibly more. It can be a neat little side gig. Fake Game has 61,269 subscribers, or phishing artists in the making. Put it another way, Fake Game has upwards of $2 million ARR. Intel Security CTO has a somewhat scary yet plausible view of the future of ransomware. His team demonstrated a simple hack via which an adversary can gain control of your car (or home) and demand ransomware. Ransomware + connected cars is and has started to gain attention. “We need to raise awareness of building security in design and development phase — not as an afterthought,” Grobman says. The IoT world is fraught with security shortcomings. “We foresee rogue internet access points in public places stealing credentials, and ransomware creating low-level havoc on connected homes.” Ransomware + connected car = jackware. Source: Intel Security By some estimates, there are four million variants of malware — and they keep evolving fast. Ransomware Tracker has a depressing snapshot of the cat-and-mouse game of new variants. Ever-evolving world of malware. Source: Startups are taking two approaches to tackling this nightmare. PhishMe, IRONSCALES and KnowBe4 offer tools to educate employees/users. Others that help prevent spread of malware have broader offerings. Education Educate employees to identify phishing attacks , , Prevention Advance persistent threat mitigation, user behavior, endpoint protection , , The “education” approach is not your average “classroom” approach, but rather creates an enterprise-driven phishing campaign. The enterprise can send a mock phishing email, track employees who open these and educate them. This ensures that the phishing “open rate” drops over time. A CISO of a leading healthcare company told me their CEO wants to see the “open rate” and how it’s reducing over time. “We run a campaign once every 30-60 days and aim for lower open rate percentages.” PhishMe, a U.S.-based company that recently announced a Series C of $42 million, has grown to 200+ employees with offices in Asia and Europe. Closely following it is IRONSCALES, with offices in the U.S. and Israel and customers on three continents. Eyal Benishti, CEO of IRONSCALES, says that “the rapid pace at which ransomware is evolving means that it’s not sufficient to just train employees. We need to elevate intelligence to another level. The hackers are getting organized — we should up our game.” Indeed, managing open rates of phishing emails may be on approach. But it needs to be in conjunction with other security solutions. Barry Shteiman, director of threat research at , completed an and looked at more than 80 strains. “We need behavioral modeling and automated techniques to tackle this problem,” says Shteiman. Oren Falkowitz, CEO of , wants to preempt phishing attacks before they occur. “We are working with an organization which has 100,000 employees. Their CEO wants an ‘open rate,’ currently at 20 percent, to come down to 10 percent. But here is the point — 10 percent still means there are 10,000 entry points into the network. The hacker needs only one entry point.” Therein lies the conundrum of protecting ourselves. Hackers have evolved their game and today ransomware has no signatures, no beaconing/C2 activity. The programming logic is sufficient. For the startups/innovators, this creates a classic technological whack-a-mole dance. Besides that, entrepreneurs have to worry about attracting a good team, sustained differentiation marketplace, pricing and growth. Not too long ago, I met a self-proclaimed serial entrepreneur (or imposter) who kept screaming “the cold war is back on.” Variants of ransomware do not operate in some countries. These are Ukraine, Russia and Iran. It immediately uninstalls itself should it find itself running on a machine in these countries. Maybe that madman was right? The FBI has done phenomenal work in taking down CryptoLocker and DNS Changer, and even offered a $3 million award for the top hacker. The DOJ recently (Delaware) on what the agency plans to do about ransomware. If you read the questions posed by the senator, it reinstates hope that we have elected officials who know and care about these issues deeply. When most commercial solutions are weak, or make tall claims for solving the “security flavor of the day,” we continue to feel vulnerable. Besides expensive operational take-downs, do we have a proactive approach? Over drinks, some forward-thinking industry leaders suggested that the government can turn these hackers into allies by creating opportunities for them. It could “import the talent” via targeted recruiting into U.S.-based security companies. Or it could fund security companies to pull them out from the dark side. After all, these hackers are looking for a job and a decent lifestyle. America has all that and more. Now, if Trump gets elected, we may just need some more 400-pound gorillas.
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Underrepresented founders: Apply now for Include Office Hours with NEA
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Samantha O'Keefe
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TechCrunch Include are happening in SF on November 15th! Vanessa Larco, Pete Sonsini and Rick Yang of NEA will join TechCrunch to provide advice and feedback to startups. Launched in 2014, Include is TechCrunch’s diversity program, aimed at facilitating opportunities for underrepresented groups in tech to take their startups to the next level. The Office Hours program is part of that effort. Once monthly, TechCrunch works with VC partners to provide feedback and advice to early-stage companies. To be considered for a meeting in session with in SF, . Underrepresented groups in tech include, but are not limited to, Black, Latino, Native American, LGBT and female founders. Preference will be given to teams that can meet in person. Startups should at least have a functional prototype. Let’s learn more about our co-hosts. Pete joined NEA in 2005 and focuses on early-stage enterprise software, services and systems companies. He is the co-head of NEA’s enterprise software practice group, and serves on several boards for NEA portfolio companies. Past investments include Pentaho (acquired by Hitachi), Teracent (acquired by Google) and Xensource (acquired by Citrix Systems). Prior to NEA, Pete was Senior Director of Strategic Alliances at VMware where he struck the company’s initial OEM deals and grew annual sales through OEMs from $0 to $40 million in four years. Rick joined NEA in 2007 and is focused on consumer and fintech investments. He also co-manages NEA’s seed practice. Rick is currently on the board of Cape, Euclid, MasterClass, mNectar, Olio Devices, Plaid and TabbedOut. In addition, he works closely with Fyusion, GoEuro, Robinhood, Soraa and Stride Health. He was historically involved with Braintree (acquired by PayPal), Gaikai (acquired by Sony) and Pure Energies (acquired by NRG). Prior to joining NEA, Rick advised on and executed a number of strategic financing initiatives for leading public and private tech companies as part of the Credit Suisse Technology Group. Rick earned his bachelor’s degree in electrical engineering from Stanford University, where he was also a varsity swimmer. Vanessa brings nearly a decade of deep product expertise to NEA’s consumer and enterprise investing practices, garnered through roles at some of the world’s leading technology companies, including Box and Microsoft, and as co-founder of a mobile gaming startup. She most recently served as Box’s Director of Product Management for Mobile and Web, where she led a team supporting the company’s flagship web and mobile products. Prior to Box, she held positions at Playdom (acquired by Disney Interactive) and Microsoft, and co-founded FunLoop, a mobile entertainment platform for kids. If you’re interested in attending Office Hours with NEA, by Wednesday, November 9th at 9am PT.
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Inside Intel’s race to build a new reality
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Lucas Matney
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I n many ways, virtual reality is still a moonshot.
The $2 billion by Facebook in 2014 lent the neo-futurist hobby a decidedly shortened timeline for consumer adoption. To the tech titans operating alongside it, the purchase was a signal. Mobile’s most prominent success story was setting its eyes on what could possibly be the next platform shift. To the companies that had been burned by mobile, this was a signal to act on virtual reality. It’s ironic, if not unsurprising, that so many of the companies investing heavily in VR and AR are the ones that screwed up the mobile revolution or lost control of it. HTC is actively positioning itself to turn VR into a core business as its handset sales collapse. Nokia, once the mobile phone market king, is building high-end virtual reality capture systems. Microsoft, which never seemed to strike a chord with Windows Mobile, is working heavily to build up Windows Holographic OS for headsets. Intel’s past decade has in many ways also been defined by its failure to capitalize on the demands and opportunities of the mobile platform shift. Decisions to cling to the past in terms of system architecture made it difficult for the company to keep up with companies like Qualcomm, Apple and Samsung. Earlier this year, the company announced plans to and kill development on some of its Atom mobile chipsets. Intel CEO Brian Krzanich will be the first to tell you that his company’s mobile woes are its own doing. He sees his company’s virtual reality initiatives as very early-stage projects that could end up becoming a critical business for the nearly 50-year-old Intel, where he’s worked since joining as an engineer in 1982. That year, VR was mostly a futuristic dream captured by movies like Tron. VR has arguably arrived in 2016, yet there’s still a growing cynicism that current VR efforts are nothing more than a host of PR stunts for many wayward companies to feign innovation with modest R&D dollars. All of this was on my mind as I traveled to Intel’s Santa Clara headquarters to take an exclusive first look at the company’s virtual reality lab where it’s researching how to virtually replicate our sensory experiences. This research into how we see, hear and feel the world is feeding into the company’s first major head-mounted display initiative, Project Alloy. It’s a wireless standalone VR headset optimized for its own brand of VR — something it calls “merged reality.” If Intel’s early tease of its Project Alloy wireless HMD brought gasps, the announcement that the headset would highlight a new type of interaction called “merged reality” ushered groans. When it comes to terminology, we already have virtual reality, augmented reality, mixed reality and, I think, real reality (though I’m growing less sure of that everyday). I’m not going to say that merged reality is a term that needs to be added to the dictionary, but the philosophy behind it is notable. Merged reality is basically a fusion of VR and computer vision that gives a virtual reality headset the ability to understand the context around it, including the people, places and things that are unique to the environment. The technology heavily relies on Intel’s RealSense computer vision camera arrays, which the company has also been using to power robots, drones and autonomous cars. When it comes to merged reality, RealSense enables the headset wearer to seemingly gaze through the display and see parts of the real world (like your body and other people) in a wholly virtual environment. Intel hopes that this technology will be able to let you seamlessly merge the impossible environments of VR with the physical complexities of reality. Intel’s Santa Clara campus is a machine at work. The mouse-clicking and mechanical keyboard-clacking of engineers offered a light hum as I marched down the hallways with a team of Intel execs and employees guiding me through increasingly strict levels of security access. The first thing I noticed on the first floor section of the lab was its emptiness. The lab was largely cleared of employees while I was there touring the facilities, and certain areas were cordoned off. The click-clack hum had also hushed; this section of the lab contained a state-of-the-art 3D sound chamber where Intel is studying dynamic audio for merged reality environments. The first friendly figure to greet me was a robotic arm encased in a sensor-adorned open cage. This is where Intel does much of its work related to studying hand movements and building the algorithms to let the company’s RealSense sensors track the gestures. While VR compatriots like Oculus, HTC and Sony have introduced motion-tracked controllers for interacting with VR content, Intel is hoping to bring its hand-tracking tech to a level of finesse that makes interaction seamless, though many experts see some major challenges ahead for building this as a primary input method. After waving goodbye to the tireless robo hand, I ventured up to an even emptier sixth floor where Intel was designing the inside-out tracking technologies that allow its Project Alloy headset to be completely wireless. Right now, most good VR is tethered, meaning that you have a very long cord running from the back of your headset off to an expensive computer pushing high-end graphics. These systems are also positionally tracked by external sensors so that the system knows exactly where you are as you move about. Conversely, Project Alloy relies on a pair of RealSense sensor arrays to track your position based on your relative proximity to objects within your environment. You don’t have to set anything up or drill anything into your walls; you just walk into a room and toss on the headset. Speaking of which… After spending a bit of time with an insanely creepy-looking misshapen robotic head with camera eyes that Intel uses to test head-tracking on RealSense, I was prepped for my exclusive demo with Project Alloy. I first got a few new details on the hardware specs that the first-generation headset is running. The kit positionally tracks its location with a pair of DS4 RealSense cameras and relies on a Skylake chipset for application processing with an Intel Atom tackling the computer vision. Though it’s still in development, the next generation (dubbed “Alloy 2”) will gain a new RealSense 400 camera and will see an upgrade to a Kaby Lake processor, but most interestingly the headset will ditch the Atom and move to a visual processing unit from Movidius, one of Intel’s . After a bit of geeking out, I resized the surprisingly comfortable headset and balanced it gently on my head. Though I played around with the headset for about 15 minutes, my impressions were immediate. Building headsets that need high-end PCs would seem like a fairly natural plan for a company that builds chipsets for high-end PCs. Certain things were very crude, others were very sharp but overall it felt like a decidedly different VR device, if not more of an aspirational concept. The inside-out tracking on the prototype certainly worked but the precision of the DS4 RealSense cameras left more than a bit to be desired. The next-generation model will thankfully see the resolution of the depth camera triple which will allow for more precise tracking, giving everything a considerably more crisp feel. Ultimately, the overall hardware experiences that arrive next year from OEMs will be the more critical take. Intel was quick to point out that consumer hardware isn’t really its forte; it’s focusing more on throwing something together to showcase the underlying tech. “At Intel we specialize in the hardware and experience, but we’re not by any stretch of the imagination best at building physical devices,” Intel exec Tim Parker told me as he walked me through the demo. Alloy 2 will ultimately still be a reference design, albeit one that Intel will team up with “Microsoft and other partners” to refine the build on. Intel isn’t planning to move into the consumer hardware business anytime soon, but Krzanich hopes that the headset can establish these Intel technologies into the DNA of next-gen VR devices. “By the middle of next year, we’ll have Alloy done, open-sourced. That’s really our goal, you know. You open source this thing and allow everyone to build on it, kind of like the old Microsoft PC business,” said Krzanich. What I remain very curious about is how Intel will choose to move its tech into tethered merged reality experiences. It’s important to note that Intel already boasts a strong connection to tethered virtual reality thanks to those fancy desktop chipsets that it seems to make a few of. Interestingly, the executives I spoke to largely seemed to downplay the wireless nature of Alloy. In fact, the conversation often seemed to drift back to tethered VR pretty organically. “We could unfree you of the cord because we can put all of the compute in [the headset] and we can do all of the mapping, but if you really want the low-latency, high-end gaming, then [tethered VR] is always going to be the leading-end system,” Krzanich said. A major decision for Intel will come down to deciding whether merged reality is important enough to make the investment in producing a VR-specific chipset. Otherwise, building headsets that need high-end PCs would seem like a fairly natural plan for a company that builds chipsets for high-end PCs. Parker did not directly comment on whether the company was currently looking at VR-focused chipsets. With the demo under my belt, the only thing I could think of was where Intel goes from here. Alloy is, at its heart, an internal development kit, but there are so many directions open for the company to take it thanks to RealSense and Movidius. Through the course of several sit-downs with RealSense and Movidius executives, it became clear that Intel may have the virtual/augmented reality space a bit more figured out than it’s letting on. In a slightly cramped room, Achin Bhowmilk, VP of Intel’s Perceptual Computing Lab, showed me an advanced demo of the company’s latest RealSense model in a merged reality setting. The sensor array was not just mapping the space but identifying the objects within the multi-room environment. A feed of the capture session ran as the sensor identified a table and four chairs within the space to varying percentages of certainty. “The idea behind this product was to build in the ability to sense and understand the world,” Bhowmilk told me. This system is a far cry from the RealSense tech I’ve used on PCs. RealSense’s first incarnations were a bit of a mess. What was dreamed up as a new method of human computer interaction was introduced to consumers in the form of a clunky, if not largely useless, PC input system that simply was not ready for primetime. With virtual reality, RealSense has earned a computing platform more deserving of its computer vision agility. Krzanich told me that one day he hopes to have this tech be able to identify people from your contacts for you while you’re strolling about and then bring up the appropriate notifications in your field-of-view. “RealSense was originally thought up in our labs; we were trying to think about how the keyboard and the mouse have been around for 20 years now—how it’s been the same way we interact with computers—and so we thought that maybe we could release peoples’ hands from them,” Krzanich said. “Then a bunch of us were just playing with virtual reality over the last year and started to realize that you were kind of limited by those setups.” At Intel we specialize in the hardware and experience, but we’re not by any stretch of the imagination best at building physical devices. RealSense gives spatial and contextual awareness to headsets, and Alloy gives hardware manufacturers a more accessible reference to integrate the tracking tech into their own products. The thing is, a great deal of these headset makers will already be using Intel tech, in the form of chips belonging to Intel’s soon-to-be-acquired Movidius. Movidius’s low-power Myriad 2 visual processing unit has become an industry standard amongst HMD manufacturers for its computer vision chops. Movidius was an early partner for Google’s Project Tango smartphone AR system and has announced partnerships with Lenovo to collaborate on VR devices. Myriad 2’s early ubiquity is certainly to Intel’s advantage as it looks to bring RealSense to more devices. RealSense and Movidius will undoubtedly be growing cozier, but Krzanich insists that Movidius will still be sold as a standalone product though it’s clear that both sides hope to see the products integrate quite closely. “We’ll continue to drive enhancements to the Movidius architecture, and what we’ll try to do moving forward is understand how that architecture can best be merged or connected to Intel architecture,” Krzanich said. Movidius CEO Remi El-Ouazzane also sees his product becoming more optimized for the RealSense platform, which he noted he’s been excited to closely integrate and “use the hell out of.” “Today, the truth is [the Movidius platform] is entirely agnostic,” the Movidius CEO told me. “I think that could change, I think we need to develop, with Intel, the competitive edge that makes the whole greater than the sum of the parts.” Many of the biggest proponents of virtual reality only see it as a holdover technology for augmented reality tech that will overlay digital images onto the world around us. Intel seems to be rather interested in observing how VR eventually morph into AR. Augmented reality is an exciting—if not suspiciously secretive—space. Developers have access to Microsoft’s HoloLens headset at the moment and the Meta 2 development kit will start shipping soon despite delays, but details are still scant regarding some of the other heavily hyped head-mounted display manufacturers. Magic Leap, which has raised nearly $1.4 billion from investors including Google and Alibaba, has yet to show off so much as a prototype of their upcoming headset. And though sources close to the company have told me that Apple is currently building multiple “mixed reality-type” headset prototypes based on different display technologies, there has been no official word from Cupertino regarding an actual product. Many of these headsets may have one item in common however, that being Movidius. “I’ll say very humbly that there is no big AR platform out there not using Movidius,” El-Ouazzane told me. He also detailed that Movidius technology was enabling its partners to miniaturize the head-worn glasses on many of these augmented reality systems by moving compute to pocket devices. He believes that inconspicuous form factors will help improve reception of the devices. “At the end of the day we should all have learned our lesson from the ‘glasshole syndrome.’ AR glasses will have to be devices that weigh 25 and 30 grams and will be fairly interesting devices to wear,” he detailed. “The vision, no pun intended, is to have as low electronics as possible so it will be a vision processor and a variety of components in terms of display with all the compute being taken care by what you have in your pocket which most likely will be your smartphone. That’s where all the AR engagement we have is.” There is no big AR platform out there not using Movidius. Though Krzanich stressed in our conversations that the industry is “a year or two away from getting the optics tech needed for augmented reality,” he hinted that Intel already has “all kinds of development” going on in the AR space currently. Merged reality is a fascinating venture into closing the gap between VR and AR. While Project Alloy is an early venture with apparent shortcomings, it’s clear that Intel is laying out plenty of runway for the company’s VR efforts. These efforts will continue to build out the computer vision and visual processing acuity necessary for more robust augmented reality devices and experiences. Intel is taking its time. Neither Movidius or RealSense are going entirely all-in on VR/AR headsets; each of them is also focusing its talents on other, more imminent, tech platforms as well, such as autonomous driving, security systems and drones. Project Alloy and merged reality give the company a clear product and product class to begin building up its efforts in the broader space across VR and AR. Predicting the next computing platform or distinguishing fad from future has never been an exact science, but Intel understands what’s at stake here with AR/VR and is setting itself up well to ensure that it doesn’t lose touch with these realities.
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Facebook video pays off
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Josh Constine
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to “put video first” is also putting money in Facebook’s pockets. The more organic videos Facebook users watch, the more high-priced video ads Facebook can slip into the feed. Now Facebook’s strategy around auto-play video, paying Live content producers and offering more creative tools is helping to propel its massive revenue growth. Facebook revealed yesterday during its that in the last year, Facebook’s average revenue per user grew 49.1 percent in the U.S. and Canada — Facebook’s home market where advertiser concentration, buying power and fast mobile networks make video and video ads popular. That’s compared to 35 percent growth worldwide. The U.S. and Canada’s ARPU grew 9.1 percent this quarter, faster than any other market. In terms of viewership, Facebook has declined to share a stat since it announced . But viewership has likely been growing dramatically, because as Mark Zuckerberg said on the earnings call: “W The rise in video viewership also comes thanks to sharper cameras, bigger screens to watch on, better video creation tools and professional and amateur creators getting the hang of the mobile format. Facebook’s begun adding Live video filters and effects, augmented reality selfie masks, overlaid graphics and more, built off of its acquisition of AR lens startup MSQRD. These are closing the feature gap between Facebook and its competitor, Snapchat. While many believed Snapchat would steal Facebook’s users, the percentage of Facebook’s monthly visitors who come back daily has actually increased slightly since the rise of Snapchat in 2014. Holding steady at two-thirds of its user base, this stickiness stat is impressive for a 12.5-year-old utility. Facebook is still sticky, with DAU/MAU holding strong Continued user count growth, engagement and the ability to earn more per user via video ads has contributed to Facebook’s $7.01 billion in revenues this quarter, up 59 percent year-over-year, and its $2.35 billion in profit. Essentially, Facebook’s soft pivot to video worked. Back in 2013, seeing video in the News Feed was rare. Uploading to Facebook was clumsy, and whether the clips were native or from YouTube, they took a click and some load time to start watching. That’s why people were about the whole idea of Facebook planning auto-play video ads. The Wall Street Journal trumpeted “ ,” delaying their roll-out. And rightfully so. Without much organic video content, video ads would have stuck out like sore thumbs.
Yet suddenly over the course of 2014, with the roll-out of auto-play and the rise of the ALS Ice Bucket Challenge video meme, organic videos became more and more prevalent in the feed. Meanwhile, advertisers started to get the hang of the format. They cut the intros and went straight to the action, adopting eye-catching visuals and subtitles to make up for the fact that they played silently unless tapped. Facebook COO Sheryl Sandberg said yesterday that “P&G is creating mobile video ads designed to grab attention in the first few seconds. He shared the example of Tide. In a typical TV ad, they start with a clean dress or shirt, then show it getting stained, and then cleaned with Tide. On mobile, they need to communicate the product value quickly, so they start by showing Tide cleaning a stained garment.”
Masked by the surrounding organic content and designed for Facebook instead of TV, video ads became a normal part of the News Feed. That gave Facebook the freedom to show more of them, both in the feed and as suggested videos after you watched another, without people getting too pissed off. Now Facebook is putting its connections with 4 million advertisers behind video. That includes big brands. As Sandberg said yesterday, “GM’s subsidiary Holden used Carousel Ads with video to maximize its sponsorship of Australia’s premier rugby tournament. Holden created a video series about their support of youth rugby. The ads generated an 8-point lift in brand favorability for the overall audience — and a 15-point lift amongst their target audience of women over 35.” Facebook is also bringing small businesses to the video format. Sandberg explained that “ Compared to less vivid text and photo posts, Facebook can charge more for video ads without using up more space. CFO David Wehner said yesterday that “ Video ads garner a higher CPM than other ad formats, so that will certainly help drive revenue growth…We’re seeing interest in these types of video ad formats from our install base of over 25,000 businesses that never would’ve bought TV ads.” Snapchat, Twitter and other services are also trying to cash in on video, where YouTube and Facebook have become dominant. Snapchat’s full-screen video ads compete with Facebook Snapchat’s vertical layout allows for full-screen ads that can feel more impactful and convenient than Facebook’s typically landscape videos. People also typically watch Snapchat with the sound turned on so videos automatically play with audio, unlike on Facebook. People purposefully visit YouTube to watch a specific video, so they’re willing to sit through pre-roll ads. And Twitter is becoming a home for premium video streams like the NFL and presidential debates, which draw advertisers. But Facebook has several advantages of its own. Its 1.79 billion user reach is appealing to TV advertisers seeking scale. Meanwhile, its success the last five years has financed a leading artificial intelligence research team that Facebook is applying to make sure videos and video ads reach the right people. Zuckerberg noted yesterday that “There’s a whole thread of work that we’re doing on visual understanding. Right, so understanding photos, what’s in photos, what’s in videos, what people are doing. There’s some deeper AI research that we’re doing…that can apply to things like ranking for News Feed and Search and ads and all of our systems more broadly.” Facebook gets paid when its video ads work, and AI will help them target the people they’re most likely to work on. When Facebook popularized the feed-based social network people browse to discover content, it became a home to colorful brand ads. As users first shifted to mobile, it attracted app install ads from developers desperate to rise out of the crowded app stores. Now as mobile data networks strengthen to support high-bandwidth content, Facebook has built a powerful distribution network that video advertisers want to join. As Sandberg concluded yesterday, “When we think about video ads and what platform they run on, we really believe that over time the dollars will shift with eyeballs and our goal is to be the best dollar and the best minute people spend measured across channels.” The numbers say those dollars have arrived.
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In Labdoor, Floodgate sees an e-commerce giant in disguise
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Connie Loizos
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Fish oil. Protein shakes. Vitamin D pills. The packages look alike. Does it matter which you buy? It certainly does, according to , a four-year-old, South San Francisco-based startup that tests about 50 supplements and energy drinks each month that it buys off retail shelves, then ranks for consumers. What it finds might intrigue you. Vitamin C degrades in water, for example, so any water-based Vitamin C tablets are basically worthless. More than a quarter of fish oil products are rancid on the shelves, even when their expiration date may be two years out. Many protein powders don’t live up to their claims, either. Some are largely composed of rather than the 100 percent whey protein isolate advertised on the label. Others contain so much sodium that consumers confuse bloating for muscle mass. Why are these things allowed? FDA loopholes, says Labdoor founder and CEO Neil Thanedar, who says that in the case of protein powders, for example, manufacturers need only test the nitrogen content of their product. And to a nitrogen test, amino acids and why protein isolate look the same. Thanedar, who studied chemistry and molecular biology at the University of Michigan, seems almost destined to be taking on the $36 billion-dollar-per-year supplements industry. He says his father, Shri, ran testing labs his entire life, and he was intrigued from a young age in the science behind the labs. In fact, though his father had retired by the time Thanedar was graduating from college, he pulled him back into the business. “I decided I wanted to start a lab instead of get a job, so I kind of wrangled him in and we ran it together for three years and now he runs independently” in Michigan, says Thanedar. The reason he left to start Labdoor, he says, centers on the work the lab did for supplement companies, many of which looked to sabotage their competitors by sending competing products for testing. “They’d ship stuff and ask what’s wrong with it. We’d see energy drinks with caffeine levels that featured well over 200 milligrams per each two-once shot, or protein products with lead, or fish oil with half as much omega-3 [fatty acids] as companies were claiming.” While lucrative, Thanedar saw an opportunity to cater to customers and let them know what, exactly, it is that they’re ingesting. Investors are gobbling it up, too. Labdoor just closed on $3.4 million in Series A funding led by Floodgate, with participation from Correlation Ventures, Fyrfly, Zeno Ventures, Heroic VC, and Seabed VC. The company has now raised $6.6 million altogether, including from seed investors Mark Cuban, Rock Health, and Y Combinator. (Labdoor passed through Rock Health and Y Combinator’s accelerator programs in 2012 and 2015, respectively.) What they see is a big opportunity beyond affiliate marketing, which is how Labdoor has been making money until recently. Now, in addition to sending visitors to Amazon to buy that top-rated multivitamin (and sending Amazon a healthy percentage of its revenue), Labdoor has begun experimenting with direct sales, fulfilling orders itself or else sending them directly to the products’ manufacturers, which it aims to do more of. “Part of the issue is routine quality control. We want to make sure your fish oil is fresh,” Thanedar says. It also wants to start testing — and directly selling — cosmetics, personal care products like sunscreens, and baby food — “anything that people buy based on brand loyalty versus the actual content of the products,” says Thanedar. Like Amazon itself, it wants you to start buying these things on a subscription basis, too. But first things first. Thanedar says his 13-person company plans to use its new funding to open up its own dedicated lab in Northern California. (Currently, it outsources its work to a handful of regional, FDA-registered labs.) That shouldn’t be as hard as it sounds. The company is already operating out of a 9,000-square-foot warehouse and plans to carve out 2,000 square feet for its tests. It also wants to get to 30 employees, the number of people who Thanedar projects the company will need to begin testing up to 100 different products each month. Not last, Labdoor is aiming to bolster its users, including, largely through SEO and by creating more original content. Thanedar says that roughly five million people have visited the site to date to either research a product or buy it directly, producing around $1 million in revenue so far in this year. If he has his way, that number should be increasingly dramatically soon, too.
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Amazon’s private label brands are taking over market share
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Sarah Perez
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Amazon’s investment in has been paying off, according to a new report out today. The retailer now competes with vendors via its own products in over a dozen categories, including computer accessories, home goods, pet supplies, grocery items, and more. In some categories, Amazon has even established itself as the online category leader, the report indicates. The findings come from data analytics platform , whose Market Insights team looked at sales trends from September 2015 to August 2016, specifically focusing on three key categories: batteries, speakers, and baby wipes. The Amazon Echo data was most interesting in terms of Amazon’s entry into the emerging voice-based computing market, given how little the retailer shares about its sales figures. The report indicated that the Amazon Echo brand now holds a 45 percent market share among the top 10 brands, based on dollars sold, and the Echo speaker itself is the most popular of all those sold online. Its sales have also grown by 67 percent year-over-year. Amazon as a destination, too, is best poised to take advantage of consumers’ interest in the space, given that its site accounts for 89 percent of total online speaker sales – an estimated $1 billion market, says 1010data’s report. Meanwhile, the retailer has also made headway in other categories, too. Its AmazonBasics brand, for example, now accounts for around one-third of online battery sales and is seeing 93 percent year-over-year growth. And again, the majority (94%) of these online battery sales – a $113 million market – are taking place on Amazon.com. The third category the report delved into was baby wipes. Of course, Amazon has catered to the needs of new parents for years, including with its Amazon Family program for Prime members (previously, “), which offers discounts on baby needs, like diapers. It also runs Diapers.com, which . In late 2014, Amazon launched its own private label household items with , which focuses on baby wipe sales, after its diaper line in early 2015, citing design flaws. (Diapers are set to return under .) But even though today, Amazon Elements products are only available to Prime members, it has already gained a 16 percent market share in terms of dollars sold, among the top 10 brands of baby wipes. That puts it just behind Huggies (33%) and Pampers (26%). In addition, Amazon Elements wipes have seen 266 percent year-over-year growth, and customers who view Amazon’s product are three times more likely to purchase than the category average, the new report states. While these new findings only focused on a handful of categories, it’s a good glimpse into the power than Amazon.com has when it comes to marketing and selling its own products at scale. And the retailer has much larger plans for its private label items going forward. detailed Amazon’s expansion of its own brands, with new launches in the categories of Happy Belly, Wickedly Prime, Presto!, and the above-mentioned Mama Bear, for example. now offers food items, like nuts, trail mix, tea, , and cooking oil. Wickedly Prime will be snack foods. (Currently, i in Google search results, but there are no products listed.) Meanwhile, Mama Bear offers only a few items today, like . (see above) Its Presto! line of household products, on the other hand, currently has top billing in the Amazon mobile app, where Amazon’s new detergent line is being promoted with a banner ad in the “Prime” section of the app. Outside of consumer products, Amazon has also invested in fashion, , including Franklin & Freeman, Franklin Tailored, James & Erin, Lark & Ro, North Eleven, Scout + Ro, and Society New York. “Amazon is leveraging its dominance to sell their own private-label brands which compete with traditional suppliers,” said Jed Alpert, Senior Vice President of Marketing at 1010data, in a statement about the firm’s new report. “Reasons for Amazon’s success across different markets vary. In batteries, they have a price competitive product in a largely commoditized market with little brand loyalty. In speakers, they’ve developed truly innovative products that are redefining the market. The bottom line for brands is they can no longer view Amazon as solely a channel and need to acknowledge them as a competitor,” he added.
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Sen. Al Franken asks Uber and Lyft about alleged racial discrimination against passengers
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Megan Rose Dickey
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Senator Al Franken has some questions for Uber and Lyft about racial discrimination following the that says some of those companies’ respective drivers racially discriminate against passengers. The study, , found that black people have to wait longer for rides in Seattle. In Boston, the study revealed that Uber drivers were more than twice as likely to cancel on people with “black-sounding” names. In light of the NBER’s study and its proposed changes, such as removing names to identify passengers, Franken has why it’s necessary to include names and photos of passengers requesting rides, what steps Uber and Lyft can take to dissuade drivers from canceling rides on people with “black-sounding” names and engaging in other discriminatory behavior, and what current policies Uber and Lyft respectively have in place to detect discriminatory behavior. Franken wants them to respond by Dec. 16, 2016. He specifically asks Kalanick and Green: “Regrettably, African Americans and other racial minorities have long experienced discrimination when attempting to hail a taxi directly from the curb, with cabs either driving past African-American customers or refusing to accept passengers traveling to certain neighborhoods,” Franken to Kalanick and Green. “Ride-hailing apps like Uber and Lyft have the potential to offer consumers relief from discrimination and destination bias, and have already shown great promise by increasing travel options within underserved neighborhoods. But as app-based driving services reshape the transportation industry, it is essential that companies ensure technology does not give cover to bias, whether intentional or unconscious.”
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Facebook Messenger is testing “Instant Games” like this one from King
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Josh Constine
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Facebook Messenger is preparing to launch a new “Instant Games” platform that will let people play lightweight games against friends. Candy Crush maker King.com is already testing one of these Instant Games called “Shuffle Cats Mini” in New Zealand, TechCrunch has discovered. And other studios including Big Viking also appear to be prepping for the Instant Games launch. [Update 11/29/16: ] Facebook Page for King.com’s Instant Game “Shuffle Cats Mini” Facebook has been largely shut out of the native mobile gaming world by Apple’s iOS and Google’s Android. But by building games into Messenger by using it as a portal to mobile web apps, Facebook could create a new platform that drives Messenger engagement. Users could come to Messenger to play Instant Games, challenge friends via Facebook Messages, and potentially earn Facebook a cut of in-game purchases. Facebook did not immediately respond to a request for comment. Earlier today, reported that Facebook is building the Instant Games platform for asynchronous games that you can take turns playing with friends, not necessarily at the same time. Instant Games expands on the success of the chess, , and mini-games Facebook itself built for Messenger earlier this year by allowing third-party developers to build them too. Facebook plans to release a development kit or tool later this month, though developers haven’t been told if they’ll be able to charge for in-game purchases. The Information wrote that Facebook is already privately testing Instant Games, though it didn’t name any studios. TechCrunch has discovered casual gaming giant King.com already has a game that it refers to as “a slick card-flicking Instant Game from King”. The Page is actively allowing users in certain regions like New Zealand to play, but those in the US get an error message when they try to load it on mobile. Shuffle Cats Mini seems to partially load on the web, revealing a game where you fling cards at targets in a little shooting gallery, but you can’t finish a game or share your score to compete with friends — which would mirror how Messenger’s basketball and soccer games worked. Shuffle Cats Mini is restricted to certain regions but here’s a preview of the gameplay After some more digging, we found that earlier this week, a startup called Big Viking announced it’d raised over $21 million to build “HTML5 instant games”, according to . When I asked Big Viking CEO Albert Lai today about the company’s plans, he told me “HTML5 is a technology that basically allows us to embed our games into anything and everything as well as inside messenger platforms with bots. In any messenger platform, [people] can play our game. This completely shifts the power in the distribution system. Anywhere there’s a messenger we can deliver our games instantaneously.” Yet when I asked if that meant Big Viking’s title could be Facebook Instant Games, he suddenly got cagey and told me “I can’t speak to anything related to what we may or may not be doing on Facebook.” That makes it sound like Facebook forbid him from discussing it. On messaging app Kik, GalatronVS is served through a chatbot, which could hint at how Instant Games for Facebook Messenger might work On , you can play a preview of , a vertically-scrolling arcade spaceship shooter game with a messaging twist. You receive in-game challenges like trying to score 10,000 points via messages from a computer-controlled character. The game is already available via messaging app Kik’s game store. There, you chat with a bot who recruits you to “Galatron Space Academy”. After some banter, you’re given a link to play the HTML5 game. You can compete in tournaments that display the ‘ghosts’ of other players alongside your spaceship as you play. This fits with the idea of Instant Games being asynchronous. Your friend on Facebook Messenger could perhaps play, then challenge you, and you’d see the echo of their run as you play yours. Galatron looks especially impressive for an HTML5 game, with sharp graphics and responsive controls. It shows that HTML5 may have finally matured to the point that the mobile web standard is worthy of competing with native mobile games. Once upon a time circa 2009, Facebook built a massively popular gaming platform on its desktop site in partnership with developers like Zynga and EA. But as users shifted to mobile, Facebook’s games couldn’t follow. iOS and Android became the home for mobile and social gaming, and Facebook stopped earning its 30% taxes on in-game purchases. In 2011, Facebook tried to launch an HTML5 gaming platform codenamed . The problem was that they HTML5 standard was still weak and developers hadn’t figured out how to push its performance limits. Studios weren’t able to make games that stood up against native iOS and Android games, and the platform quickly flopped and was scrapped. Facebook’s 2011 attempt at an HTML5 game platform codenamed Project Spartan failed and was shut down At the end of its desktop era in Q4 2012, Facebook earned $256 million in payments, largely from games, off its 1.06 billion users. Since then, Facebook has grown to 1.79 billion users, yet payment revenue has declined to $196 million. But now Facebook is making another big push into gaming. This week it officially announced , a desktop PC gaming platform similar to Steam but more focused on casual gaming. Meanwhile it’s preparing a mobile assault. Instant Games is the culmination of years of groundwork. Facebook launched the for content and utility apps in April 2015, and called Doodle Draw appeared but never grew popular. Then this April Messenger launched its . Both were designed to allow users to do more than just chat inside the app, from calling an Uber or editing photos to receiving news and shopping. Facebook built its own prototype Messenger games earlier this year, which became wildly popular Gaming could expand Messenger’s capabilities while naturally leveraging Facebook’s social graph. Compared to deeper native mobile games, the beauty of lightweight HTML5 games like Shuffle Cats Mini or Galatron VS is that you don’t need much instruction or experience and can play during short breaks in your day. That makes them convenient, accessible to the mainstream, and viral. What these lightweight games lack is solo replayability. That’s where friends come in. You might not want to fling cards or shoot little space ships over and over on your own. But if you’re working to beat your best friend’s new high score, you might keep coming back to Facebook Messenger.
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