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Josh Constine
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Palantir says it didn’t racially discriminate against Asian people
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Megan Rose Dickey
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Palantir Technologies has come out and said that it did not discriminate against Asian people, . This comes after the . According to the DOL’s suit, Palantir allegedly used a hiring process that discriminated against Asian applicants for software engineering roles, “routinely eliminated” qualified Asian applicants in the resume screening and telephone interview phases and hired a majority of people from its discriminatory employee referral system. In a 15-page filing, Palantir fired back at the DOL, saying that the allegations “were entirely unfounded and based solely on a flawed statistical analysis.” Palantir also said that the Office of Federal Contract Compliance Programs made a mistake in evaluating the quality of applicants. To strengthen its point, Palantir said that it has hired and retained Asian employees at “rates that exceed their presence in the relevant labor market.” The company noted that it has a workforce that is 25 percent Asian, with Asian people making up 37 percent of its product engineering team, according to Palantir’s filing. Because Palantir is a federal contractor, the company has a legal requirement to ensure that its hiring practices are free of discrimination. The federal government has contracted services from Palantir since January 2010. Those contracts are worth $340 million, according to the lawsuit. If the lawsuit moves forward, and Palantir does not comply with the requests from the DOL, it would lose its contracts with the FBI, the U.S. Special Operations Command and the Army. Palantir has raised more than . The case is currently pending.
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Applications are open for Hardware Battlefield at CES
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Samantha O'Keefe
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We’re back. Hardware Battlefield is TechCrunch’s premier hardware startup event and is returning to the world’s largest consumer electronic show. Applications are now open until November 3 at 9pm PT. Submit your application to compete for free demo space at CES, a $50,000 prize and the Metal Man trophy. Hardware Battlefield is part of TechCrunch’s Startup Battlefield series, but with a few small differences. Of course, there is the requirement that participating companies must have a hardware component to their product. That means everything from IoT devices to 3D printing, health wearables to drones are accepted. And, of course, robots. Hardware Battlefield takes places at CES in Las Vegas, Nevada. Battlefield contestants still have six minutes to pitch to our judging panel followed by six minutes of live Q/A. Judges include hardware investors like Rob Coneybeer, Highway1 and HAX, top designers like Yves Behar and product experts like Susan Paley of GM. Martha Stewart and 50 Cent have also been known to stop by. TechCrunch editor John Biggs shares a joke with Mr. Cent This year TechCrunch is going bigger. This year’s booth is located right at the Mezzanine of the Sands Expo outside of Eureka Park. Last year’s Hardware Battlefield batch was quite a group. Nima, a discreet, portable gluten tester and 2016’s winner, has raised $17.2 million and joined us onstage at Disrupt SF. Calliope Waterworks went through Highway1 with their smart water monitoring device. Other teams created custom insoles with 3D scanning, affordable and safe robotic arms, easy to carry drones and mouth guards that warn of possible concussions. Applying and participating in the Hardware Battlefield is entirely free and we welcome entries from across the globe. Startups must have a functional prototype to demo to the selection committee. TechCrunch will give preference to companies debuting a product to the public and press via the competition. So, looking for a way to stand out from the noise at CES? Want to get feedback from the biggest gadgets enthusiasts on the planet? to be a part of Hardware Battlefield!
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Salesforce’s shift into equality
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Megan Rose Dickey
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It’s important for tech companies to have at least one voice at the senior leadership table that advocates for issues around equality, diversity and inclusion. Unfortunately, that’s just not the case for many companies in the tech industry. Salesforce, a company that said a year ago that a ,” recently became an exception to the rule with the hiring of Tony Prophet, its first-ever chief equality officer. As the company’s first head of equality, Prophet has the flexibility to design parts of his role. Ultimately, he sees himself as being an advocate for issues pertaining to equality, including equal pay, equal advancement, equal opportunity and equal rights, Prophet told me. “Equality goes on top of having a diverse workforce and inclusive workforce,” Prophet said. “So [the role] needs to be built on a foundation of making sure we look like the communities in which we operate. We have work to do there, as does the whole tech industry, in ensuring that all feel welcome and their voices heard, and they feel respected and they can bring their authentic selves to work every day, and give their very best.” As Prophet noted, Salesforce does have a lot of work to do. Salesforce’s diversity numbers fall in line with the average Silicon Valley tech company, with a workforce that is 70 percent male, 67 percent white, 4 percent hispanic and 2 percent black, . On average, Prophet is in touch with Benioff once a day and expects to have one-on-one, face-to-face check-ins with him a couple of times a month. As the chief of equality, Prophet oversees efforts around diversity and inclusion, so he also has a tight connection with those on the human resources team. Prophet will have his own team, which won’t fully form until February. He says that it won’t be too big in size because he doesn’t think “building a very large team sends the right signals.” Instead, Prophet’s equality team will partner with some of the people from the system that’s already in place. Salesforce, for example, already has a recruiting program called that focuses on college campuses. “Recruiting is absolutely essential,” Prophet said. “You can’t get into a position of equality if you don’t have a broadly diverse organization.” Just like Salesforce is deliberate about the phrasing of the title and role Prophet now holds, Salesforce is also deliberate in the way it refers to its efforts around diversity and inclusion, which it does not refer to as affirmative action.
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Samsung’s Galaxy TabPro S upgrade gets a spec bump under a new gold coat of paint
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Brian Heater
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There’s going to come a time when not every mention of Samsung will elicit some snarky comment about . Now is not that time. And the is certainly not the product to serve as catalyst. In fact, it will probably be a little while before the company has an offering compelling enough to shift the public consciousness back to the next shiny object. After all, the Note 7 was supposed to be one of the company’s big holiday plays. The latest version of the company’s Surface/iPad Pro competitor is really more of a fancy new tier than full upgrade. That’s probably why the company just sort of snuck the announcement out by way of a press release on a fairly slow Friday. And besides, the original TabPro S is really only about half a year old at this point. As far as what’s new, your main upgrades to Samsung’s already well-received tablet are internal, doubling both the RAM and storage up to 8GB and 256GB respectively, helping solidify the tablet’s place as a full-on PC replacement. Otherwise things look largely the same as its predecessor. On the outside, the skinny two-in-one gets a shiny new gold finish, to let every know that you went all fancy and splurge on the higher-end model. Of course, such fanciness don’t come cheap. Samsung’s bumped the price of the TabPro S $200, making it just a penny under $1,000. It’s available now through Best Buy and Samsung’s site.
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U.S. Department of Transportation bans Galaxy Note 7 from all flights
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Darrell Etherington
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In the latest instalment of , the U.S. Department of Transportation has issued against bringing the Galaxy Note 7 on airplanes. The ban applies to all Note 7 devices, and covers both carry-on and checked baggage, as well as prohibiting anyone from carrying the phone onto a plane on their person. The ban will go into effect beginning October 15 at 12 PM ET. U.S. Secretary of Transportation Anthony Foxx issued the following statement in a press release announcing the ban: We recognize that banning these phones from airlines will inconvenience some passengers, but the safety of all those aboard an aircraft must take priority. We are taking this additional step because even one fire incident inflight poses a high risk of severe personal injury and puts many lives at risk. The Galaxy Note 7 has been officially recalled by the U.S. Consumer Product Safety Commission, so theoretically all Note 7 owners should be returning the phone anyway. But this new blanket ban means passengers can no longer even transport a Note 7 on a plane (perhaps to the place where they originally purchased it), and face the penalty of a potential fine if they attempt to do so, or even “criminal prosecution,” according to the DOT. Samsung will be fielding requests about how best to return Note 7s, the release notes, and customs can , or contact them directly via their customer support number at 1-844-365-6197 if the flight ban leaves them in a lurch. A flight ban is likely the only course of action that can guarantee incidents related to the Note 7 don’t occur in the future, given that the wasn’t even powered on when it began to smoke, and subsequently burned through the cabin’s carpeting. The blanket ban won’t do Samsung’s brand any favors, however, and it’s now more likely than ever that the Note sub-brand won’t survive this ongoing ordeal. A Samsung spokesperson provided the following statement to TechCrunch regarding the ban: Samsung, together with carriers, is working to communicate the U.S. Department of Transportation’s new order to ban all Galaxy Note7 devices in carry-on and checked baggage on flights. We have encouraged airlines to issue similar communications directly to their passengers. Any Galaxy Note7 owner should visit their carrier and retail store to participate in the U.S. Note7 Refund and Exchange Program now. We realize this is an inconvenience but your safety has to remain our top priority.
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Flexible e-paper display is full color but less than a micrometer thick
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Devin Coldewey
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Reflective displays like those found on e-readers are great for black-and-white text, but color has yet to make a compelling play on them. That may change with the serendipitous discovery of a full-color e-paper material that’s also flexible and power-efficient. Andreas Dahlin and grad student Kunli Xiong, of Chalmers University of Technology in Sweden, created the material while investigating combining conductive polymers with nanostructures. The tiny cells — plasmonic metasurfaces, you know — can be turned on and off with a tiny change in voltage, like an LCD subpixel. But like other reflective displays (and indeed regular paper), it doesn’t actually emit any light. This example of the material isn’t wired up, but does show some of the colors that can be reproduced. “It isn’t lit up like a standard display, but rather reflects the external light which illuminates it,” explained Dahlin in a . “Therefore it works very well where there is bright light, such as out in the sun, in contrast to standard LED displays that work best in darkness.” By changing the makeup of the… , the color it reflects can be adjusted, and so by putting them in formation — red, green, and blue — the display can produce the usual variety of in-between colors. Previous color e-paper displays have generally had a sort of washed-out look, and it’s hard to say whether this technology would avoid that trap. Dahlin is aware of it, however, and said they’re working on achieving the deepest colors they can. The refresh rate would only be a few times per second, but the resolution is potentially far greater than either LCD or existing e-paper. “We have not tested the resolution limit but it would definitely be high enough for any display, perhaps a few micrometers per pixel (10^4 dpi), which is much smaller than the human eye can resolve,” Dahlin told TechCrunch in an email. For reference, 10 to the 4th or 10,000 DPI is about an order of magnitude higher than an iPhone display (if my math is right, which is a big if). Of course, that doesn’t mean much if they can’t actually manufacture it — and that’s where a two-person team isn’t sufficient. “We are working at a fundamental level,” said Dahlin, “but even so, the step to manufacturing a product out of it shouldn’t be too far away. What we need now are engineers.” The material also uses gold and silver in its composition right now, which is obviously something you want to avoid to keep costs down in mass manufacturing. It’s the kind of think a company like E-Ink would love to get its hands on; this type of low-draw, high-color display is great for signage if it’s cheap enough, and for e-readers if it’s still a bit expensive. With luck we’ll have Dahlin’s displays in our hands in a few years. The pair’s research is published in the journal .
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Five considerations about accelerated learning for the next administration
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Liz Simon
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Our next president will take office during a period of seismic change across the education landscape. Policymakers, students and employers increasingly question the cost — and return — on a college degree, as a profusion of new pathways from education-to-employment emerge. Nearly 50 million adults in the U.S. have some kind of non-degree credential. And the relevance and number of non-degree credentials is only accelerating, as learners share what they know online and employers work to expand the talent pool and apply to find the right match. It is no surprise, then, that the Clinton campaign has made non-traditional education a focal point of its . But while the campaign’s platform presents some exciting developments for accelerated learning providers, it also raises important questions as students and policymakers navigate an unfamiliar landscape of new educational offerings: Public policy holds great potential to accelerate the scale and impact of new models — but presents big risks if the next administration doesn’t get it right. Here are five big issues for the next administration to consider. The Clinton campaign’s College Compact already includes $10 billion in federal funding for “promising new programs,” including accelerated learning. This proposal comes on the heels of recent efforts by the Obama Administration to pilot federal support for innovative educational models through initiatives like and . But expanding student aid eligibility isn’t the only way to expand access to non-traditional programs. The next administration would be well-served to consider whether direct subsidies or debt for students provides the best path to scale and impact for accelerated learning. What role should programs like the play? And is there a need for greater flexibility at the state and local level? Could tax reform allow working adults to make one-time, penalty-free deductions from retirement accounts for qualified educational expenditures? Or should we place greater emphasis on the role of employers, who might mitigate the risk to consumers and be in a better position to establish links between education, competencies and the demands of high-growth fields? Expanding student aid for accelerated learning has the potential to be a risky move. And in the recent past, big, well-intentioned bets on non-traditional providers, have backfired. The unchecked growth of online learning stemmed, in part, from the failure to hold for-profit colleges accountable for outcomes — and an over-reliance on input-based measures of quality. To assess the return on investments of non-traditional education programs, the next administration will need a better understanding of their outcomes. The good news is that, whereas traditional higher education has a broad economic and social mandate, the role of accelerated learning is often far more limited, making it simpler to quantify. How can policymakers get a better handle on the outcomes that providers claim? Can providers design more precise and verifiable measures of student outcomes and success? What role can accounting firms or other third-parties play in creating reliable, valid measures of student success? An explosion of jobs in high-growth fields could have unintended consequences when it comes to calcifying diversity gaps and even exacerbating wage inequality. For better or worse, accelerated learning programs have demonstrated a relatively deep — but narrow — impact. The Clinton campaign is already showing a strong commitment to addressing diversity and equity gaps in the workplace, with a promise to increase support for minority students and those from disadvantaged communities. The next administration should take a hard look at how well accelerated learning providers do when it comes to serving a diverse student population, and consider the complementary roles that next-generation assessments, skills-based hiring, bridge programs/on-ramps and other supportive services can play in realizing their vision. Achieving scale while maintaining quality will require a delicate balance of regulatory flexibility, provider capacity and employer demand. The federal government has a role to play, but it can’t do it alone. States and cities are laboratories for education innovation and, in most cases, ahead of the curve when it comes to regulating non-traditional education providers. State and local governments are also the most direct beneficiaries of including new providers in their education-employment ecosystem. For example, last year, California launched a task force (disclosure: I served on said task force) that took a close look at the regulation of high-tech training providers meeting critical workforce needs. States value the role of employers to judge the quality of providers and serve as a check on consumer protection. They’ve developed frameworks for providers to report outcomes. By examining the systems in place in these states, the next administration may identify models to replicate and areas to take a back seat where local government is leading the way. It will be critical for the administration to ensure that employers have a seat at the table in policy discussions, and to support strong relationships between companies and education providers. Employers today spend $590 billion annually on formal and informal training, and even more on recruiting. Competency-based learning and skills-based hiring is beginning to take the guesswork out of finding the right pathway for learners. But we have a long way to go to close the gap between educational opportunity and meaningful work. As technology continues to change the nature of our work, and employers grapple with increasing talent gaps, how do we think about the role of employers in the new landscape of educational providers? The Clinton campaign’s support for accelerated learning is promising. New models of education hold profound potential, and the federal government has a role (and responsibility) to play in stimulating both quality and access. If the next administration moves too quickly, and without taking into consideration both the limitations and the potential of the space, it could trigger unintended consequences that set the field back, and produce missed opportunities for students. If it gets it right, the economic and social impact will be profound — and just might help to make America great again.
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Instacart reverses course, re-introducing tips for shoppers
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Matthew Lynley
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Under pressure from shoppers complaining about , Instacart said it is re-introducing customer tipping. “After announcing this change, we heard a lot of feedback from our shopper community,” the company said in a blog post. “While our shoppers liked most of the changes, they did not like the fact that we were removing tips from our online platform. Taking that feedback into account, we have decided to continue to accept tips as part of this change.” CEO Apoorva Mehta stressed that the decision came from customers looking to continue tipping, rather than complaints from shoppers, which he called a small group that was “very vocal” about the change. However, following removing tips, Instacart received some backlash from shoppers who said they . The backlash went so far as to inspire a boycott among some shoppers, though again Mehta said that this was not the primary cause for returning tipping. “We have tens of thousands of shoppers,” Mehta said. “I think that a lot of times it’s the most vocal ones you hear from. A lot of times what ends up happening is that frankly we were over-communicative, we communicated for weeks before the chain before it happened. Genuinely, I think there’s always going to be the case that we can always do better, this is one of those cases where we can definitely do better. I hope the next time changes we carry out, we hope that we’re better at it now than we were before.” Originally, the company sought to raise the overall earnings payout per delivery while removing tips, which was an attempt to make earnings more reliable instead of burst-y as a result of tips. Top shoppers, however, accustomed to getting larger tips because of their performance were concerned that they would lose a significant portion of their earnings. The vocal minority, it seems, was loud enough — and perhaps so was the customer base — that Instacart had to reverse course. Despite all this, Mehta said the company was clearly communicating with the shopper base what the change would be. But he also said that Instacart, with the change, was “getting in the way” of customers tipping their shoppers, which would have to then rely on cash in order to give a tip for a good customer experience. One original argument for the change was that 20% of customers didn’t tip, but that other 80% comprised a significant portion of its shopper base’s income. Instacart has to remain competitive among other on-demand services that are looking to scoop up the same potential shopper base. In that sense, Instacart has to ensure that it provides a positive shopper experience as well as a customer experience, and changing a long-accustomed to model can incite a lot of backlash. In this case, it appears that the shopper base was content with the old model, and it certainly seems like the model was working well for shoppers despite more chaotic income rates. And as Instacart continues to expand, it’s going to have to not only rely on a good shopper experience and marketing, but also positive word of mouth from shoppers. If even a “vocal minority” ends up fighting back against changes, that’s going to cause a potential optics issue for the company’s attempts to attract new shoppers. “What we look at, from the shopper’s perspective, there is a market-clearing wage that we have for shoppers,” Mehta said. “What we benchmark is with other on-demand services and other jobs that are similar. We need to make sure we are paying competitive to those. That’s better than anyone else, this is a competitive market, if shoppers are not able to earn a competitive wage on Instacart they will defect to other platforms.” Customers will still pay a service fee at checkout. “This payment will be used to guarantee a higher commission to all shoppers,” the company said in a blog post. “Shoppers will no longer need to depend on tips for the majority of their compensation. This also means that customers no longer need to feel obligated to tip. However, if a customer wishes to recognize exceptional service, they will have the ability to tip their shopper directly on the platform.” This update launches on in Washington D.C., and the change comes to San Francisco and Instacart’s other markets on .
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Weekly Roundup: Galaxy Note 7 recalled, Amazon’s music service and Verizon/Yahoo sale troubles
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Anna Escher
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Things were pretty bleak for tech companies this week as the Samsung Galaxy Note 7 was officially recalled and Yahoo’s securities woes reportedly drove Verizon to request a $1 billion discount on its pending acquisition. Here are the top stories from around the tech universe to get you up to speed. More . The company is in the midst of finalizing its , but recent revelations about hacking and spying may be costing the company. Verizon reportedly wants a on what was supposed to be a $4.8 billion deal. Samsung’s Galaxy Note 7 was the best phone available when it was released in August. But two months later, the phone is dead, marking the most abrupt and spectacular fall for a major flagship of the smartphone era. , and and others like . Watch out, Slack. Workplace, Facebook’s enterprise-focused messaging and social networking service, Most iOS users are now switched over to iOS 10. According to Apple’s official figures, . – Mixpanel and Fiksu – report that iOS 10 was installed on roughly 66 percent of devices. Both data sets are based on apps that use the company’s SDK. Either way, this is the fastest adoption rate of any iOS iteration. Pinterest finally , up from the 100 million it announced in September 2015. However, as TechCrunch previously reported, Pinterest in 2015 was targeting that it would . What remains to be seen is if Pinterest will encounter a growth problem similar to Twitter, or more substantial growth like that of Facebook. Amazon . The new, on-demand streaming service offers access to tens of millions of songs and is available for $7.99 per month for Prime members, or $9.99 per month for non-Prime members. Amazon has also launched a “for Echo” subscription plan that lets you listen only on its connected speakers for just $3.99 per month. Facebook and Google partnered to , a new package manager for JavaScript. ISIS reportedly carried out its , using a commercially available drone to deliver explosives and kill two Kurdish fighters. This week’s attack marks the first time ISIS fighters have turned a diminutive hobby drone into a deadly weapon, the , and it has Pentagon officials racing to respond to the new threat. A maker of delivery drones called , through a partnership with the Rwandan government. Zipline is aiming to set up 20 distribution centers by the end of next year and to be operating in at least two more countries. Salesforce has been on a shopping spree, spending around $5-6 billion on 10 companies. But there’s , says vice chairman and COO Keith Block. We’ve heard that following its last $250 raise that valued it at $2 billion last year. BMW unveiled a futuristic motorcycle concept called the . The tech is supposed to be made up of a self-balancing system that can anticipate the road ahead – in fact it’s supposed to be so accident-averse that you don’t need to wear a helmet. BMW’s new motorcycle concept is so smart you won’t need a helmet to ride it http://tcrn.ch/2dLcF77 Posted by on Wednesday, October 12, 2016 PayPal has had a rocky relationship with the business of crowdfunding over the years, but this may be changing. , the crowdfunding site that lets people raise money for causes – potentially for a price above $1 billion.
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Salesforce officially walks away from Twitter acquisition for real this time
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Romain Dillet
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Salesforce wants to make things super clear for everyone — no, the company won’t buy Twitter. Salesforce CEO Marc Benioff gave an interview to the FT and said that the company . “In this case we’ve walked away. It wasn’t the right fit for us,” Benioff told the FT. If you were looking for an official confirmation, it can’t get more official than that. Two weeks ago, announced at the same time that they weren’t interested by Twitter after all. Google, Apple and Disney don’t want to buy Twitter anymore. Salesforce was the last remaining suitor. While the company could have used this opportunity to lower the acquisition price, it wasn’t the case. During an , Benioff already said that Twitter wasn’t the right fit for Salesforce. He even ended up saying “I wish Jack very well.” But many thought Benioff was quite excited about the idea of buying Twitter. So what happened exactly? Salesforce’s largest shareholder Fidelity Investments was . And given that Fidelity owns 14 percent of Salesforce, it would have been hard to buy Twitter with the board’s approval. This is probably the wisest decision for Benioff. Following the FT’s interview, Twitter shares are crashing once again. Shares are down 6.86 percent to $16.57. Twitter’s market cap is now $11.6 billion.
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Trust Disrupted: Bitcoin and the Blockchain episode 6 analyzes the future
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Rebecca Friedman
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The final episode of this six-part series explores the future implications of Bitcoin and blockchain technology. The episode describes the divide between Wall Street’s preferred closed use of the blockchain and Silicon Valley’s vision of an open system. Will the technology ever be integrated into our world’s mainstream economy? Whose vision will prevail, Wall Street or Silicon Valley? This is the final episode of the series; check out the first five episodes .
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Naspers sells Polish eBay rival Allegro to Permira consortium for $3.3B
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Ingrid Lunden
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Earlier this year, it was that Naspers, the media and internet holding company, was planning to sell off , its online auction business based in Poland, and today the deal finally came to pass. A consortium of private equity firms that includes Cinven, Permira and Mid Europa have bought the firm for $3.253 billion. The deal was made after earlier reports pegged as among those interested in buying Allegro. Allegro was founded in 1999, and is one of the most popular online shopping destinations in Poland, touting over 20 million registered users. Its marketplace, much like eBay’s, allows both individuals and companies to sell to consumers. The company reports it sells 850,000 items per day, and employs 1,275 people across five offices in Poznań, Warszawa, Toruń, Wrocław and Kraków. Though aimed at the Eastern European market, Allegro competes with local rivals, the Naspers-owned OLX.pl, as well as American firms like eBay and Amazon. Had either of the latter two acquired the site, it would have given them a foothold not only in Poland, but also in the wider Eastern European region. Included in the deal for the Allegro Group, was another site the company runs called Ceneo.pl, a comparison shopping business. The deal comes at a time when the Polish e-commerce market is growing. According to from this summer, the market is worth more than 32 billion zlotys ($8 billion) today and includes around 22,000 online shops. It’s expected the market will double in value by 2020 – growth than can be partially attributed to the Polish government’s plans not to levy online shopping in its new retail tax, Reuters noted. The transaction is still subject to antitrust clearance, Naspers says.
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PayPal mulled buying GoFundMe
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Matthew Lynley
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, the giant digital payments company that was , has had an up-and- relationship with the business of crowdfunding over the years, but there are some indications that this could change. We’ve been hearing that PayPal was interested in buying — the crowdfunding site that lets people raise money for both serious causes and lighter life events — potentially for a price above $1 billion. It’s not clear how far conversations proceeded between the two, or if they are still active. Both GoFundMe and PayPal said their companies do not comment on rumor or speculation; several investors and others we contacted also declined to comment. We believe conversations took place among a limited group of senior people. Co-founded by Andrew Ballester and Brad Damphousse in 2008 in San Diego, GoFundMe has been on a growth tear. In 2015, the startup — which sits alongside others like Kickstarter, Indiegogo and Tilt, all covering different kinds of crowdfunding — raised what appears to be its only significant external funding: an from a group of investors led by Accel and Technology Crossover Ventures (also including Iconiq Capital, Greylock and Meritech). A month later, it was revealed that in it, too. As part of that transaction, the investors took a majority stake in the business, buying out the two founders in the process; installing an Accel venture partner, Rob Solomon, as CEO; and valuing the business at around $600 million. At the time, GoFundMe was estimated to be processing $100 million per month in funding for the different campaigns using its platform, growing 300 percent year-over-year. For PayPal, a closer relationship or acquisition of a crowdfunding site would be an interesting — if surprising — turn of events. Earlier this year, PayPal for payments made on crowdfunding platforms. The company has had a rocky relationship with the crowdfunding community, with of freezing accounts. One of the problems for PayPal is risk management, and specifically whether it would be liable for chargebacks — that is, if a person contributing money decided that he/she wanted a refund. At GoFundMe, PayPal was removed as a payment option altogether some time ago, . The reason given by GoFundMe was that these two allowed people to pay directly with debit or credit cards on a campaign page, and gave GoFundMe more control over the payment experience. Earlier this month, GoFundMe took the issue of purchase protection into its own hands: it for donors and fundraisers, who respectively can claim up to $1,000 and $25,000 in the event of a campaign gone wrong. The guarantee for now is only applicable in the U.S. and Canada. However, there are reasons why PayPal might be interested in giving crowdfunding another chance, and perhaps getting involved in it in a deeper and more serious way. GoFundMe, which focuses on funding causes and events, may have had its share of , but it’s also been a strong platform for bringing out generosity and goodwill. It’s also been very popular: one source described it as “printing money”. A potential buyer could continue to operate GoFundMe as a separate entity. Or more strategically, the company would be a strong complement to PayPal’s existing business, which includes its ongoing relationship providing payments services to eBay, physical world point of sale, payments in third party apps through Braintree and P2P payments. Getting involved with a very popular crowdfunding platform would give PayPal another channel for driving transactions, and it would open the door potentially to a raft of new users. You probably have already seen plenty of campaigns for GoFundMe in your Facebook News Feed, some , maybe a few . Altogether, the company and has raised around $2 billion total. GoFundMe, like other commerce platforms, takes a 5% share of the total transaction volume, . Because the site basically operates on the principles of an online social network and (today) relies on outside payment providers, it has little overhead — meaning the gross margin for an operation like this is likely very high. And integrated with PayPal, GoFundMe could become even more valuable.
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Google added fact checking: Facebook, it’s your move now
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Sarah Perez
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Google yesterday announced it in order to display articles that contain factual information next to trending news items. Now it’s time for Facebook to take fact-checking more seriously, too. Facebook has stepped into the role of being today’s newspaper: that is, it’s a single destination where a large selection of news articles are displayed to those who visit its site. Yes, they appear amidst personal photos, videos, status updates, and ads, but Facebook is still the place get their news. Facebook has a responsibility to do better, then, when it comes to informing this audience what is actually news: what is fact-checked, reported, vetted, legitimate news, as opposed to a rumor, hoax or conspiracy theory. It’s not okay that Facebook in an effort to appear impartial, deferring only to its algorithms to inform readers what’s trending on the site. Since then, the site has repeatedly trended fake news stories, according to released earlier this week. The news organization tracked every news story that trended across four accounts during the workday from August 31 to September 22, and found that Facebook trended five stories that were either “indisputably fake” or “profoundly inaccurate.” It also regularly featured press releases, blog posts, and links to online stores, like iTunes – in other words, trends that didn’t point to news sites. that it would roll out technology that would combat fake stories in its Trending topics, but clearly that has not yet come to pass – or the technology isn’t up to the task at hand. In any event, Facebook needs to do better. It’s not enough for the company to merely – not when so much of the content that circulates on the site is posted by people – your friends and family – right on their profiles, which you visit directly. Plus, the more the items are shared, the more they have the potential to go viral. And viral news becomes Trending news, which is then presented all Facebook’s users in that region. This matters. Facebook has trended a story from that claimed involving planted bombs. It ran which falsely claimed she was fired. These aren’t mistakes: they are disinformation. Facebook has apologized for the above, but declined to comment to that fake news continues to be featured on the platform. In addition, not only does Facebook fail at vetting its Trending news links, it also has no way of flagging the links that fill its site. Outside of Trending, Facebook continues to be filled with inaccurate, poorly-sourced, or outright fake news stories, rumors and hoaxes. Maybe you’re seeing less of them in the News Feed, but there’s nothing to prevent a crazy friend from commenting on your post with a link to a well-known hoax site, as if it’s news. There’s no tag or label. They get to pretend they’re sharing facts. Meanwhile, there’s no way for your to turn off commenting on your own posts, even when the discussion devolves into something akin to “sexual assault victims are liars” (to reference a recent .) Because perish the thought that Facebook would turn of the one mechanism that triggers repeat visits to its site, even if that means it would rather trigger traumatic recollections on the parts of its users instead. There a difference between a post that’s based on fact-checked articles, and a post from a website funded by an advocacy group. There’s a difference between Politifact and some guy’s personal blog. Facebook displays them both equally, though: here’s a headline, a photo, some summary text. Of course, it would be a difficult job for a company that only wants to focus on social networking and selling ads to get into the media business – that’s why Except that it is one. It’s serving that role, whether it wants to or not. Google at least has stepped up to the plate and is trying to find a solution. Now it’s Facebook’s turn. Facebook may have only unintentionally become a media organization, but it is one. And it’s doing a terrible job.
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Ingrid Lunden
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AWS gets richer with VMware partnership
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Ron Miller
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signed deals with , and earlier this year as it has shifted firmly to , but it was that has had everybody talking. The cloud infrastructure market — and everybody else. Microsoft is the closest competitor with around 10 percent. While VMware has had deals in place with other major players, the one with AWS matters more because it gives AWS even greater advantage in the cloud market. The traditional vendors have taken a hybrid approach with Microsoft and IBM arguing that most large organizations, bogged down in legacy hardware and software, can’t afford to go whole hog into the cloud. It’s an argument that makes sense, especially for their customer bases. AWS on the other hand has argued that the future is the cloud, and while it welcomed any customers, it made its bet with the companies moving to the cloud or who were born there. That approach has clearly worked with the company . Meanwhile, in spite of those strategic deals with other larger IT vendors, VMware has struggled with the cloud market. It boasts almost 100 percent penetration inside the data center. It was and remains the go-to company for server virtualization, and while that worked fine in a data center-centric world, that world is changing rapidly. What VMware did was provide a way to make use of all the resources in a machine in a much more efficient way, letting you break down that single server into multiple virtual machines. That was great for its time in the early 2000s when servers were expensive and finding ways to use them as efficiently as possible was a prime objective for IT. The cloud changed all of that, moving the virtual machine to the cloud where you could spin up whatever resources you needed whenever you wanted and only pay for the resources you were actually using. If you needed more, you simply spun up more. If you needed less, you could take them down. That put the data center model — and VMware — at a distinct disadvantage. You couldn’t just go out and buy more servers every time your work loads demanded it. There was a procurement process and it took weeks or months, while the cloud let you satisfy your needs almost instantly. VMware starting with , which was supposed to work with Salesforce. It also began flirting with partnerships at around the same time with an to . It made another hybrid cloud attempt in 2013 . It even , the open source private cloud platform, which eventually became part of Pivotal, . None of these gained much traction for VMware, however as the company was competing with all of these other vendors including AWS, Google, Microsoft and IBM — and there was little to separate itself from the pack. That brings us to the present day where the company is taking a new stab at the hybrid model and partnering like crazy with its former competitors. Teaming with AWS is a different matter than the previous announcements because with AWS it gets the top player in the market, which could help salvage its cloud business (and indeed its entire business) after so many false starts. As for AWS, it gets to play in the hybrid playground where it has had limited access until now. That gives the cloud infrastructure giant a way to go after Microsoft and IBM right in their prime markets and possibly gain even more marketshare. People were talking because it was the biggest deal for VMware by far, and as for AWS, well it was a case of the rich getting richer. That has to have the competitors feeling pretty nervous today as AWS puts a stake in the ground right in their territory — and VMware gets to come along for the ride. [graphiq id=”kLdFTG0cAAZ” title=”Vmware, Inc. (VMW) Stock Price” width=”600″ height=”617″ url=”https://sw.graphiq.com/w/kLdFTG0cAAZ” link=”http://listings.findthecompany.com/l/7174298/Vmware-Inc-in-Palo-Alto-CA” link_text=”FindTheCompany | Graphiq” frozen=”true”]
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A new content distribution paradigm for VR and 360 video
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Devon Dolan
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Content distribution has been industrialized, scaling to a state of overabundance, tipping the balance of power into the hand holding the smartphone. With waning attention spans and lack of exercise comes the droning stalemate of digital encumbrance and content disposability. A paradox of choice. Media companies fight for our time. The social winners create open networks on top of the individual’s stream of shared written word, photo, and video; the legacy winners create closed channels from their slate of programed written word, photo, and video. In this era, we lose by segregating media into the distinct buckets of new/user-generated and traditional/studio-produced. Why? It is all just media. The de facto winner is the one that continually captures and owns the consumer’s time. Big media. Big brother. We are living in the oxymoron of an individualized society — the capitalization of our time. Virtual reality and the 360 video industry are faced with the chicken and egg problem of content and distribution. The problem is that we haven’t cracked the egg, nor has the chicken hatched. To get to that point, we must look through the consumer’s lens. Virtual reality and 360 video share an inherent flaw — the lack of consumption infrastructure. This has a direct correlation to viewership in that target users are presented too many choices and are far too limited on time. The chicken is choice; the egg is time. The interim answer to accelerating new user adoption in VR/360 is to eventize content through a centralized curated delivery module (“CCDM”). A CCDM is a premiere exhibition application that would partner with best in class content providers to enable distribution monetization. This is done in person at festivals, but it isn’t systematized to generate repeat usage at home. The current ideology of VR/360 is asymmetric. We must take a step back and look at a cable network (yes, seriously) to take two forward. The CCDM would function as a multi-party joint venture fueled by a consortium of specialty VR/360 studios, many of whom act as their own distributors, in which their content would be hosted in the CCDM’s standalone application across all the hardware (HMD) and mobile app stores. Otherwise, the first mover studios will become marginalized and bleed market share to the major technology companies (e.g. Facebook, Google, Samsung, Sony) and incoming entertainment companies (e.g. Amazon, Netflix, HBO, Hulu). It’s going to be an uphill battle regardless as the bulge bracket tech companies already control the device by which we consume VR/360 entertainment. They currently don’t own the content supply chain, but they’re developing their own channels and are primed to steamroll the competition. Given more time, they will capitalize on fragmentation. To acquire customers, convert them to DAUs then to MAUs, the boutique studios must formulate a distribution consolidation pact to effect the active engagement and retention of early adopters, and to impress upon them the incentivization of viewership through a monetized offering of multiple channels in a network. This will create organized fashion, ease of function, a true market. Sure, it’s an empirical prognostication, but it is what it is. As it stands, the distributor-exhibitor relationship in VR/360 has gone unmanaged and overlooked. By virtue of creating this hypothetical CCDM monopoly, an aggregated destination for the crème of the crème, the producers would benefit through an added install base leading to content monetization. This occurs when customers are convinced (through blitzkrieg marketing campaigns) that there is a valid reason to transact, whereby the CCDM would enact pay walls at certain windowing sequences of the VR/360 lifecycle. For the content to be eventized, cinematic experiences need to be wrapped in skinny bundles (ones that share a common thesis or owner) and premiered on mobile in pre-selected release dates/times for an exclusive CableVOD rental rate (the premiere window) with an enforceable viewing constraint. Another add-on option would be limiting the total amount of downloads to increase demand and/or waiving the viewing constraint to launch a more focused drive in traffic. (The skinny bundle is necessary because my belief is that consumers won’t bring themselves to pay upwards of $15, the cost of a movie ticket, for less than an hour’s worth of VR/360 content. This historical precedent has been ingrained into the consumer’s belief system.) The VR/360 studios could then efficiently develop and market themselves as a brand through their bundles. As the week’s progress, the economics of a sliding scale would take into effect, granting more revenue to the CCDM. This would mirror the distributor-exhibitor relationship in theatrical film splits. In an alternate license model, the CCDM could take a fixed percentage like we see in the App Store. This is digitized day-and-date distribution. As the CCDM’s skinny bundle exclusive window expires after say 30–60 days, the CCDM would manage a library of content and offer the experiences in InternetVOD (download-to-own or download-to-rent) formats. Eventually that window would expire and the content would be released for SubscriptionVOD, though Netflix and Amazon likely have ulterior strategies with their VR/360 strategy. On a different delivery platform, the content capsules could become programmed against advertisements when the content market becomes more robust. As the industry evolves, the skinny bundles, or channels, would inevitably fragment into their own free channels offerings — as they are now in the current VR/360 ecosystem. Once the CCDM amasses a user base, the one stop shop scenario proves beneficial in attracting and hosting live streams of performances and events. This would result in a flat pay-per-view rate like we see for boxing matches. Finally, the underlying software could be licensed to festival producers who are orchestrating in person event-based simulcasts. This gets even more interesting if the CCDM could utilize a geographic filter to restrict the simulcasts to certain regions and/or locales, but the technology doesn’t exist yet. Content creators are upending this nascent business by going directly to the consumer without strategy — spraying and praying — essentially establishing a growing oligopoly without margin. The majority of VR/360 creators are acting as studios with their own outlets being hosted on the app and HMD stores. The notion of going wide (for free!) on as many platforms as possible will be the industry’s own downfall. When the powers that be are combined, the value would be realized. Yes, this idea is counter-intuitive to the “how we want it, when we want it” era of consumer media demand, but a distribution umbrella is necessary to function as the engine to power further content creation through earned users. As it stands, the fact that a true market with recognizable ARPU hasn’t been created is severely concerning. Consumption patterns need to be established and monetized for cinematic VR/360 content to continue flowing. The overwhelming accessibility to VR/360 content is a problem because the consumer is given an à la carte menu that encompasses breakfast, lunch, dinner, drinks and desserts. It’s not that diners don’t want VR/360 content, it’s that they don’t know about the day’s special and where to find it. The chefs are cooking and serving in the restaurant, but there isn’t a waiter present to take orders and manage the delivery process. We need an intermediary to ask, “Would you like the chicken or the egg?”
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A win for InnoGames as MTG acquires Eight Roads Ventures stake for $100M
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Mike Butcher
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, the Hamburg-based developer and publisher of successful browser games such as Elvenar, Tribal Wars, The West, and Grepolis, is going to the next level. MTG ( ), the Swedish digital entertainment company, has acquired a 35% stake in the company for an estimated $100 million, valuing the company at $287 million. MTG also has the option to acquire a 51% stake in the future. InnoGames has over 150 million registered players, and half of new players come from mobile devices, with many more mobile titles planned. The move is a win for the London-based fund, as Fidelity Growth Partners. Davor Hebel, partner in Eight Roads, told TechCrunch the games company is on a tear, continuing on a path towards €1bn of revenue. It’s also clearly a big win for InnoGames which was bootstrapped until raising a B round from Eight Roads, and a win for Hamburg which is not so well-known on the European or Global tech scene as a hub. Hendrik Klindworth, InnoGames CEO and co-founder, said: “We have scored major success with our live games and are now focusing on the development of several new mobile first titles… MTG’s international presence, understanding of storytelling entertainment, and commitment to IP development and building engaged user communities will bring our games to even larger audiences around the world.” MTG is best known for its esports and MPN businesses (ESL and DreamHack), so this adds an extra arm to their business. InnoGames has 400 employees working on games like Elvenar, Tribal Wars 2, and Forge of Empires. Since none of these have a an esports element, you can expect MTG to begin looking at how that can be brought into the strategy. InnoGame’s roots go back to 2003, when founders Eike and Hendrik Klindworth and Michael Zillmer developed the browser game Tribal Wars. In 2007, they founded InnoGames and the rest, as they say, is history.
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Adtech isn’t dead, it just has a lot of dead weight
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Justin Choi
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map the constellations and clusters of the digital advertising universe. For many years, that universe, like our own, was ever-expanding. But also like our universe, there’s debate about whether it will continue to expand or end in a big crunch. I would argue the latter is happening — and happening now. It’s been difficult for small adtech firms to raise capital for a while, and we are beginning to see the inevitable consequences of that capital shortage. In this respect, the adtech sector is due for a correction; I’m hardly alone in predicting it. But contrary to what you may have heard, that’s not because adtech is dead or dying. The industry just needs to shed dead weight. Dead weight in the form of small , purveyors of point solutions and standalone tools for optimizing, verifying and measuring advertising. Undifferentiated companies with wide gaps between the narrative of what their tech does and the reality of the value that that tech provides. Dead weight in the form of companies founded within the last five years that are now burning through the last of their A rounds. That doesn’t mean the entire space of adtech is doomed, though. It’s just facing an important and overdue reckoning with the hard realities that face any business. Namely — you have to be a well-run business, you have to add real value, solve real problems and have a path to profit. That’s true of any startup, in any space. I’m constantly asked what I think of adtech’s terrible reputation within the investment community. My response is the same: There are bad and good companies in any investment category, and innovation is still happening in this space. That said, there are characteristics of adtech that make it harder to separate the good from the bad. Adtech over the past few years bears a resemblance to . Which is to say, a lack of transparency has contributed to an environment where a lot of people are throwing a lot of money around for short-term gain . Sooner or later, the truth emerges and all that cash gets vaporized. In the case of adtech, fraud has , and marketers have justly felt like they’ve often been throwing away money (because many of them have). In 2010, a marketer using a programmatic exchange would not expect to confirm that the ad would be seen by a human and not a bot (some two-thirds of them weren’t seen by humans), or be sure that the ad was actually viewable in the first place (about half of them were). We took those conditions for granted. Even Facebook, as savvy a customer as any, was fooled. The company bought video ad server LiveRail in 2014 for . , Facebook effectively shut the company down with the being that it couldn’t vouch for much of LiveRail’s traffic because it was rife with fraud. A market beset by such transparency issues was easy to exploit. You could put together an adtech startup without a great deal of tech — just a lot of salesmanship: hire a sales team, have limited tech, resell a mix of good and suspect inventory and make money. That strategy is much less tenable these days. Transparency is increasing. Advertising is now checked for viewability, screened for non-human traffic and tied to actual sales performance by an increasingly sophisticated suite of measurement tools that look well beyond the click. With digital advertising climbing out of the shadows, it will be harder for me-too players to growth-hack their way to success by manufacturing scale. And it’s going to expose a lot of dead weight for what it is. It is indeed time for these smaller players to fall by the wayside. The question becomes, then, what’s left in the wake of this correction? The answer is simple: fewer, but healthier adtech companies, poised for growth and worthy of investment. Not all adtech businesses fit this description, but plenty do. Enough, indeed, to make the adtech space a lively and promising one for those businesses built on solid foundations, as well as for the investors smart enough to spot them. and fit the bill. The latter just recently going public. As the company’s S-1 filing with the SEC outlines, The Trade Desk’s business is very healthy. In 2015, it posted $113.8 million in revenues, which was up 155.5 percent year-over-year. The company is also profitable, netting $39.2 million in EBITDA, which was up 589 percent. The company also has $37.6 million in cash on hand. Good adtech companies like Criteo and The Trade Desk meet a set of proven criteria. Good adtech companies derive their competitive advantage from three main areas: They own or enable unique supply, have unique data or own the advertiser relationships as a tech provider versus a service provider. Owning and enabling supply means having unique and/or enabling access to advertising inventory connected with the valuable audiences advertisers need to reach. Having unique data means providing the insight and intelligence to help advertisers target and optimize messages to those consumers. And having the advertiser relationships as a tech provider means providing the software and technology tools that advertisers need to create and deploy campaigns to those consumers. In contrast, a “badtech” company relies on arbitrage and, in effect, rents traffic rather than owning it. Many adtech companies buy their supply by making revenue commitments and guarantees to publishers, effectively making their reach a liability rather than an asset. The tech is primarily a new ad execution that can easily be replicated. Other instances of badtech take the form of new ad units designed to maximize short-term performance stats, gaming the measurement standards that still reward clicks and views instead of real engagement. Often these badtech tactics compromise the user experience and lead to ad blocking. The badtech might generate some impressive numbers, but really what it’s doing is prioritizing short-term gains at the expense of the long-term relationship between brands, publishers and consumers. Think back to 2002. In the hangover of the dot-com bust, squeamish investors were very skeptical about the entirety of “technology.” They’re the ones that missed out on Baidu (2005), Facebook (2004) and Twitter (founded in 2006). Meanwhile, the investors (like Jim Breyer), bankers (like Michael Grimes) and entrepreneurs (like Mark Zuckerberg) made their way through a no-nonsense environment and created some of the most valuable companies in the world. It may be a stretch to claim that our category will pull out a Facebook, but the lesson is clear: As many investors ran, the good investors and entrepreneurs kept innovating and reaped the huge benefits. Adtech is a massive category, and those paying attention know that change and innovation is happening in the space more so than ever. That innovation is creating real value and is separating the winners from the also-rans. The big crunch that is coming will leave the shining stars intact and help them shine even brighter. Just watch.
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Doctor Strange’s science consultant talks about consciousness and the multiverse
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Anthony Ha
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Why does need a science consultant? The Marvel Cinematic Universe isn’t exactly known for its scientific accuracy, and with his psychedelic, magic powers, the character of Doctor Strange (created by Steve Ditko and Stan Lee, and played in the film by Benedict Cumberbatch) goes even further into fantasy. Nonetheless, astrophysicist Adam Frank served as science consultant on the movie (due for release on November 4), and he told us about what his job actually involved. “The reason I think I was asked to come in is that I’m a scientist, but I had a long interest in human spirituality,” Frank said. “That’s how I know the director [Scott Derrickson], and the director asked me to sort of talk about the ways you could pull these together. And what I suggested was that really it’s about mind and matter. The big open frontier in science is the nature of consciousness. We don’t really have a science of consciousness.” Frank also said he helped the filmmakers developer their idea of a multiverse. “I think the movie does a beautiful representation of that idea,” he said — even though he’s not convinced that the multiverse exists in real life.
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Heading for a national healthcare wallet
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Ray Kingman
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Later this year, , will all argue their respective mergers don’t run afoul of antitrust laws. Aetna also announced it was of 538 of the 778 county health insurance exchanges in 2017 due to lack of profit potential. After a honeymoon period, corporate healthcare providers are measuring the Affordable Care Act’s (ACA) impact. consolidation is the top issue facing healthcare. The mandated expansion of coverage and cost control efforts have been through their first round of economic testing, and it appears consolidation — in one form or another — is the inevitable result. The economic theory behind the ACA was that better cost controls would come from fostering competition and ensuring consumers had enough leverage with insurers and healthcare providers. That market-driven theory’s logical conclusion is that the most efficient business model would have multiple insurance companies competing in a single, national market. You can attribute the ACA’s state-based solution, in part, to extreme partisan overreaction and historic preference for state-level regulation of insurance products. Currently, we have 50 markets and 51 regulators. Regardless of the culprit, the mechanism that also came with additional, and unnecessary, costs in the form of regulatory compliance and reporting. To be clear, there is a difference between a public option and nationalized healthcare. As , Congress could have fixed the ACA by deregulating across state lines. Others argue that we should skip a step and embrace the so-called public option. Both stir so much political anxiety that either course would likely mean starting back at square one. What’s gotten less attention is an idea that would actually fuse a national regulatory approach with a nationalized market-based solution. In effect, a healthcare wallet for all consumers, one that takes its cues on transparency and cost-cutting from some of tech’s biggest success stories. Primary care physicians manage every aspect of your health profile, and in many cases they are overqualified and not particularly invested in that workload. Routinely, our needs operate inside an entirely different dynamic. Most of the healthcare bundle today has more in common with calling a taxi than treating serious medical issues. Sprained ankles, common colds and other basic and intermediate issues are best addressed through on-demand, fully competent and affordable medical intermediaries. Much like how Uber creates a more efficient allocation for taxi capacity, a similar product — perhaps, “Uber for Urgent Care” — could disrupt the basic and intermediate care model. , Americans spend $1,000 per person per year on pharmaceuticals — 40 percent more than the next highest developed nation. Given the , Mylan’s quick decision to and reporting that shows just how , the law of supply and demand has minimal bearing on the market for pharmaceuticals. In fact, it’s not a market at all, given the wide disconnect between buyers and sellers. Americans are captive to the pharmaceutical industry, much like our past relationships with 20th century department stores. A national pharmaceutical distribution network resembling Amazon would rationalize the supply chain so that margins become less arbitrary and cost structures become market-driven based on a national scale. Transparency and, ultimately, more cross-border competition would result. Because we pay for a large portion of our pharmaceutical bill through our health insurance, a single market would erase the artificial lines that allow huge geographic price disparities. The Obamacare exchanges laid the groundwork for a consumer-centric healthcare model, but failed to adequately address the additional cost of increased patient load and compliance from the provider. If compliance was fixed to a single national standard and shifted to federal oversight, we’d likely see a larger version of Medicare. Unfortunately, Medicare is already burdened by excessive patient load because some providers don’t want to take on slow-paying and artificially discounted services that come from Medicare patients. If the system could rationalize the cost model on a national scale, the patient load across a broader range of service providers would likely stabilize, access would improve and increased competition would drive down costs. To accelerate this economic theory, also consider an eBay-style healthcare bidding system. If someone needs an appendectomy — . — they have few market options to research providers, price or efficacy. Through an eBay-style bidding system, insurance companies could give patients visibility into the services they purchase. Common procedures could be exposed to open market forces that set prices and allow patients to bid around those prices to achieve maximum value. Pricing and success metrics could be benchmarked by insurers that are in the unique position to understand the full cost of treatment for each procedure. Service levels would finally be scored, indexed and priced. Providers would earn better treatment (and payment) by the insurer based on delivering better service at a lower total cost of treatment. So, when do we get a national healthcare wallet? Venture capital recognizes the economic opportunity that exists in healthcare with the aging of baby boomers. They are aggressively . Eventually, the products and services we incubate around healthcare will organize themselves into something market-based and logical — a national healthcare wallet. Do we eliminate a fragmented state-by-state healthcare system, or do we continue to ignore it until it drains all of our discretionary assets and turns healthcare into a much larger national challenge?
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Confirmed: AT&T is buying Time Warner for $85.4B in cash and shares
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Ingrid Lunden
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After of speculation, the : AT&T is acquiring Time Warner for $85 billion in a mix of cash and shares, paving the way for another behemoth in the converged media horizon. The final acquisition price will be $107.50 per share, paid in half cash and half AT&T stock. This means that for each outstanding share of Time Warner stock investors will receive $53.75 in cash and $53.75 in AT&T stock. This price gives Time Warner a valuation of $85.4 billion – after the deal is finalized Time Warner shareholders will own between 14.4% and 15.7% of all outstanding AT&T shares. Time Warner will represent about 15% of the combined company’s revenues after the deal closes. AT&T will be financing the cash portion of the transaction – about $42.7 billion, with new debt as well as cash already on the company’s balance sheet. In terms of combined shareholder benefits, AT&T said the deal should result in $1 billion worth of annual cost synergies within 3 years of the deal closing. In a way, this deal harkens back to a very old trope in the tech/media/telecoms world: carriers have long worried about becoming dumb pipes and to counteract that need to develop interesting convergence plays. That’s in essence what AT&T is getting here. The deal will bring the carrier a huge trove of content producing properties, including HBO, CNN, and the Warner Bros. studio that will give it a leg up in its own video and content business. Specifically, the deal will give AT&T a new channel for accessing and using content from the properties it now owns on the services that it sells to consumers. Owning the content means not only better access, but better margins to tap into that content. There seems to be some kind of poetic symmetry in AT&T buying Time Warner. Its big carrier rival, Verizon, acquired AOL for in June, 2015. AOL and Time Warner, long ago, combined to form a single company, in what is considered by many to be the (which unsuprisingly eventually split). Just as Verizon has been snapping up companies to consolidate its position (it’s in the process of buying Yahoo, and it has also put billions into other businesses in other areas like IoT), AT&T has been acquiring more video service providers — including DirecTV and Charter Communications — to expand its footprint in the content delivery business. Now it’s filling out the first part of that moniker: the content. Senator Al Franken issed a statement on the deal, noting how it may end up being bad for consumers: “AT&T’s reported proposal to acquire Time Warner for more than $80 billion raises some immediate flags about consolidation in the media market, which is an area I’ve worked to address for years,” said Sen. Franken. “I’m skeptical of huge media mergers because they can lead to higher costs, fewer choices, and even worse service for consumers. And regulators often agree, like when Comcast unsuccessfully tried to buy Time Warner Cable, a deal that I fiercely opposed. In the coming days, I’m going to be pressing for further details about this reported deal and how it would affect the American consumer, who deserves access to the content they want and whose pocketbook continues to be squeezed by rising cable and internet costs.” – Senator Al Franken Both companies will be holding a joint call at 8:30am ET on Monday morning to discuss the transaction.
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The restaurant table(t) is getting crowded
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David Jegen
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Square to competitors. There are that IBM will buy Revel. For anyone following the changes in payments and the restaurant industry, these are interesting strategic moves. Many of us have tried new services, like online food ordering, subscription meals and signing with your finger on a tablet-based point-of-sale system; but the reality is that we are still in the early phases of restaurant industry disruption. I believe that’s about to change. In a few years we will look back on these announcements as a major shift in the pace of disruption and the time we started to “cross the chasm” into a chapter of rapid deployment, consolidation and breakaway winners. So what has been happening in the restaurant industry? We can separate the disruption into two categories: and . And if you eat , then perhaps you can add But let’s focus on software-based disruption. Venture investors have invested almost $3 billion in startups that change . Online ordering/delivery and meal subscription services have received 50 percent of the total, and are highly visible signs of change to consumers. They have even produced two unicorns: (NYSE: GRUB) and . More than 10 million people have used GrubHub or one of its competitors and 400,000 receive weekly meals by mail from Blue Apron, and others. While it’s too early to declare death to the home-cooked meal, clearly Americans like these options. These, however, are not the most disruptive changes. Replacing the restaurant point-of-sale (POS) system is the real game. The POS is becoming the restaurant’s central nervous system, changing not just , but how the restaurant runs its business. deserves much credit for leading the way to software-based POS systems; however, Square initially was more about electronifying cash for micro merchants than a new central nervous system. Other companies like , , and get more credit for focusing on the restaurant owner’s business needs — like menus, order routing and staffing — while embedding payments as a “mere” feature in their software. Collectively, these startups are fueling profound change. It starts with a device replacement and ends with a new industry order. First, like many other hardware devices that have been reduced to an app on your phone — fax machines, cameras, flashlights — the restaurant cash register is becoming an application on a phone or tablet. We are in a multi-year cycle of replacing proprietary POS systems from vendors like Oracle/Micros and NCR/Aloha with cloud-based, software applications that run on Android and iOS devices. As the POS system becomes software, payments and (many) restaurant functions can be delivered as SaaS applications, fundamentally changing the economics and distribution models. For starters, SaaS startups can sell directly and often bypass the costly VARs that have long provided sales, service and integration for proprietary POS vendors. They also can leverage their software expertise to embed payment functionality and usurp the traditional roles and revenue stream of ISOs and payment gateway providers. Both traditionally earned interchange (the ~2.5 percent restaurants give up when we pay with a credit card), but the software POS startups gain access to this potent source of revenue to supplement and/or reduce SaaS license fees. Finally, because these startups are writing to standardized hardware — especially in the case of Android — they can ride the falling cost curves and pass along the savings to customers. Over time, these startups will achieve the ultimate disruption of becoming the industry platforms on which other restaurant applications are built. How helpful are online orders from GrubHub or loyalty programs from if they don’t integrate closely with the POS. Some vendors, like , which acquired Clover in 2012, envision a full-on iTunes Store-like model and already sport ~200 in their store. Others, like Toast, see a NetSuite model, in which any developer can write to the platform, but some core applications are tightly integrated to ensure functionality. Either way, becoming a platform yields important strategic value for the vendor, as well as the industry, because more developers are free to create new applications. So why are the actions by Square and IBM so interesting? There comes a time when a new technology must cross the chasm from early adopters to early majority. We see the tornado first-hand through our investment in Toast. Software POS systems have penetrated less than 20 percent of restaurants in the U.S. That’s early-adopter territory, but that is quickly changing. Already, working in Cambridge, MA, I feel like POS tablets are ubiquitous, and that feeling is growing in cities across the country. Historically, restaurants have replaced their POS systems every five to seven years (~150,000 units per year), and you can be sure that few are buying proprietary systems this refresh cycle. And this leads to the predicted jockeying by established players. First Data’s acquisition of Clover was small — $56 million — but , one of the largest players in the space, then we have a clear sign of consolidation underway. Square’s move to open its platform is even more interesting and reminds me of the prescient moves by Amazon 15 years ago to leverage its e-commerce infrastructure to power third-party merchants. Square does not expect to beat every POS startup serving the restaurant sector, but it would like to sell them the lucrative services that leverage its scale, and virtuously reinforce its scale. Think payment processing, SMB financing and data analytics. New motto? “One Square to rule them all?” With the benefit of hindsight, the events that signal the start of true industry disruption are generally clear. I believe the actions by Square to open its POS platform to competitors and by IBM to consider acquiring Revel signal such a change for the restaurant industry. SaaS-based startups have turned payments and restaurant applications into a service and are now leveraging the ability to sell directly, monetize interchange revenue and ride the cost curves of industry-standard hardware. Entire categories of incumbent vendors are threatened, including VARs, ISOs and payment gateway providers. Through our investments in the space, we are seeing the tornado-like acceleration in deployments — and I for one am very excited to see this play out!
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Your experience is probably worth a lot less than you think
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Jon Evans
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Do you work in software? Do you have more than a decade of experience? You do? I’m sorry to hear that. That means there’s a strong possibility that much of what you know is already obsolete. Worse yet, there’s a good chance that you’re set in anachronistic ways, hidebound with habits which are now considered harmful. If you think your experience is automatically valuable, I warn you: think again. To be clear, I am not arguing in favor of , which is wrong, illegal, and stupid. (Some of the finest engineers I’ve ever known, who anyone would be happy to hire in a heartbeat, are in their 50s.) I , however, arguing that tech’s ever-accelerating pace of change means that people tend to greatly overestimate the value of their experience, the returns from which diminish every year. People say “the principles remain the same, you just apply them to different tools / in different environments” — but that’s, at best, a falsely comforting half-truth. Consider: back in the day, object-oriented development was the solution to all of our problems; now it’s a problem to which many solutions are proposed. Once upon a time, every web developer knew, axiomatically, that you never mixed HTML and JavaScript, because of ; but . The status quo isn’t going to stabilize any time soon. Around the world, veteran developers with “valuable” experience are already being asked, with honest bafflement: “Wait, why are you trying to write an algorithm for this? Why not just train a model in TensorFlow?” I don’t mean to imply that knowledge and experience becomes worthless. Some lessons, and some well-developed instincts, are indeed very nearly universal. Some platforms — Android, iOS, containers in the cloud, etc. — will be around long enough, and accumulate changes slowly enough, that their understanding will be valuable for a long while yet. But there has still been a significant sea change. The assumption for most of the twentieth century was that experience was assumed high-value unless proven otherwise. In technology, in software, this is no longer the case. Increasingly, instead, your experience beyond a certain point — say, 5-10 years, depending on many factors — is assumed low-value unless proven otherwise. This doesn’t only apply to hard technical skills. Managing people scattered across six time zones via Slack and Google Hangouts is very different from managing in person; managing in a high-growth startup is very different from managing in a large static company. Whether you’re a developer, DevOps, or a manager, you never get to stop having to constantly prove yourself. That is the nature of the tech beast. The most important skill, one that truly get old, is the meta-skill of constantly learning new things … and that meta-skill can rust and wither away, too, if it languishes unused. If you’ve been doing the very same thing at work for the last few years, without working on any side projects of your own, then I am sorry to report that your career is already rotting away from within, without you even knowing it. Don’t let that happen. “ .” That isn’t just good advice; these days, it’s an imperative.
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The Crunchies nominations close soon
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Matt Burns
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Stop procrastinating and nominate your favorite startup, founder or investor for a Crunchie. Nominations will close on Thursday, November 3, 2016. We’re looking for the input of the tech community. Who was the hottest new startup? Who launched the best new technology? Which company had the best launch video? There are 11 categories in all. This is the 10th anniversary of the Crunchies and we’re thrilled to put the show on again. Like last year, the winners will be decided by a large panel of experts. Called the Crunchies Board, this group includes TechCrunch editors, alongside entrepreneurs, investors and other tech notables, including speakers and judges who have appeared on the Disrupt stage. An independent third-party will administer and tally the ballots, as well as keep the results secret until the awards are announced onstage. Please and start candidates in the categories provided. Nominations will close on Thursday, November 3, 2016. General admission tickets will be available when the show is a bit closer. We’ll see you at the Crunchies! We’ll be releasing tickets for the 10th annual Crunchies in November. If you want to be notified, sign up for our newsletter . We hope to see you there.
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How massive DDoS attacks are undermining the Internet
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Michael DeCesare
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On Friday morning, I awoke to find that our company-wide single sign-on and cloud storage was disrupted due to the massive distributed denial of service (DDoS) attack . This attack was big, disrupting consumer services like Spotify and Netflix, all the way to enterprise-grade providers like Heroku and Zendesk. Once the dust has settled, it’s likely that this attack will have impacted more people, in more ways, than any other in memory. A DoS attack is an attempt to make something on the network unavailable to users, for example, a website. A distributed denial-of-service (DDoS) is when the attack is launched by many unique IP addresses—or, as in this case, devices—all aiming traffic at one or multiple targets. The target simply crumbles under the pressure of so much traffic. In the past few weeks, hackers have upped the DDoS stakes in a big way. Starting with and increasing in severity from there, hundreds of thousands of devices have been used to perpetrate these actions. A number that dwarfs previous attacks by orders of magnitude. While it isn’t yet confirmed, evidence points to the attack that we saw on Friday morning following this same playbook, but being perpetrated on a much larger scale, relying on Internet of Things (IoT) devices rather than computers and servers to carry out an attack. In fact, in all likelihood an army of surveillance cameras attacked Dyn. Why surveillance cameras? Because many of the security cameras used in homes and business around the world typically run the same or similar firmware produced by just a few companies. Courtesy of Getty Images/Frank Graessel / EyeEm This firmware is now known to contain a vulnerability that can easily be exploited, allowing the devices to have their sights trained on targets like Dyn. What’s more, many still operate with default credentials — making them a simple, but powerful target for hackers. Why is this significant? The ability to enslave these video cameras has made it easier and far cheaper to create botnets at a scale that the world has never seen before. If someone wants to launch a DDoS attack, they no longer have to purchase a botnet—they can create their own using a program that was just a few weeks ago. Moreover, DDoS attacks aren’t the only problem with vulnerable IoT devices: these devices can also be a pathway for hackers to get behind a company’s firewall. The other reason why this is so significant is that, by most accounts, we are extremely unprepared to secure our devices from being taken over. Early government and commercial efforts have focused on how manufacturers can build better security into devices. But this is problematic for a couple reasons, not the least of which is that IoT devices cannot run traditional cyber security software. As a result, there are fewer “tools in the shed” to protect the IoT than there are for computers that run traditional operating systems. Some IoT devices can be patched, others can’t. For the device that can be patched, this is a very manual process and not something that is routinely done. What’s the answer here? As with everything with cybersecurity, there is no silver bullet. Even when it comes to IoT, we have to remember one of the fundamental tenets of this field: defense in depth. Moving beyond the acknowledged need to be better at patching devices, we must then ask if devices are protected by a robust perimeter security solution and are continuously monitored for suspicious behavior. We can debate the merits of the different approaches but the point is that all of the necessary levels and approaches are being considered and that we do not have device tunnel vision. We do not need to reinvent the wheel when it comes to protecting networks from IoT. But we need to recognize that massive DDoS attacks utilizing IoT devices have the potential to undermine the reliability and availability of the internet. With the backbone of our economy relying on it, it’s time to get serious about fighting these hackers. The first thing we need is to prevent our devices from being used as ammunition.
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Sub Pop’s founder launched a fun music remixing app
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Brian Heater
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Okay, this is actually pretty cool. I’ve only been playing around with it a bit, but I can definitely see it becoming addicting — particularly if the service’s creators can bring more musicians on board. As it stands right now, collection of remix-able music is fairly limited — perhaps not surprising for a service that only launched out of beta today. I found a handful artists whose names (but not songs) I recognized and went to town. The service is the brainchild of Bruce Pavitt, who founded the ridiculously influential indie rock label Sub Pop in the mid-80s — and, his bio will happily inform you, helped discover both Nirvana and Soundgarden not too long after. 8Stem is an extremely slick mobile app for iOS that turns remixing into a simple drag and drop process. Find a song you like (Seattle-based Merge signee Telekinesis jumped out at me), click Remix This, and the app will lay it out, broken down into wave forms and sections. You can reorder song segments, record vocals, switch between mixes and add delays. Granted, it’s not a full editing suite by any stretch of the imagination, but the company has managed to jam a lot into the app, particularly given the limited real estate of the iPhone. You can save your mix for posterity and, once you’re done, upload it to the app’s built-in social network. I have to admit, I haven’t mastered the effects aspect of the system, but the straightforward real-time remixing bit is pretty fun and intuitive. Perhaps most interestingly of all, finished remixes can be uploaded to services like Spotify and Apple Music, with royalties from plays going to the artists. As most casual music fans are well aware at this point, streaming royalties generally amount to peanuts, but money’s money, I guess. And speaking of modest rewards, the service will also be opening up a contest tomorrow where the winning remixer will have their version of a song played on Seattle-based public radio station . The song selections are pretty limited (there’s only one in the Dubstep category for example), but if the app gains enough traction, it could manage to build up a pretty vibrant community. In the meantime, it’s a pretty fun little tool.
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Democracy in the age of the Internet of Things
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Giuseppe Porcaro
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With the release of in spring 2016, Tinder, the ultimate hook-up app, broke new ground in the United States by claiming to be able to match young voters with their dream-perfect presidential candidate. The matchmaking app tries to by employing to representative politics its same cut-to-the-chase dating method. Who wants to read up on candidates’ policies, attend rallies or even watch a debate? You just want to jump into the bed of democracy with the one who turns you on politically, right? Who would bother to vote in the future if a set of sophisticated algorithms just identified, by trawling your data mine, your ideal candidate? In the past two decades, we have observed how the web has evolved from an oddity to a tool used in different phases of electoral strategies. The first U.S. presidential campaign website, for example, went online in 1995. It was a modest website consisting of a few photos and statements, ordering instructions for campaign merchandise and an email link for interested voters to contact the campaign. The Democratic primary candidate Pat Paulsen made it, running against Bill Clinton. The use of the new technology did not particularly help the underdog candidate to rise up in the competition. In 2004, another Democratic candidate, Howard Dean, used the internet more effectively. He pioneered internet-based fundraising and grassroots organizing. The strategy was centered on mass appeal to small donors and was more cost-efficient than the more expensive method of contacting fewer potential larger donors. Dean also promoted active participatory democracy among the general public through online outreach. As was the case with the early rise of the internet, the emergence of the so-called Internet of Things is set to become a game changer. And young people are likely to be the main target audience, as is the case with the Tinder widget for the upcoming U.S. presidential elections. The basic idea behind the Internet of Things is that any device with an on-and-off switch can be connected to the internet. Forecasts indicate that 6.4 billion connected devices will be in use worldwide by the end of 2016, up 30 percent from 2015, and will reach 20.8 billion by 2020. These figures show how massive this technological change is going to be. Deeper changes will happen, however, for the entire political industry. The availability of a wealth of data will create a new ground for how decisions will be made by democratically accountable politicians. Electoral campaigns will look dramatically different in 10 or 20 years. We could, for example, imagine the institutionalization of apps that simplify citizens’ participation. The electorate might officially express opinions on policy issues on their own devices, swiping to register “likes” and “dislikes.” That would be the next level of “Tinderpolitics,” where the swipes would not just have an indicative value, but become binding. It would be interesting to be able to forecast what this would mean for policy making, and whether all policy issues would be reduced to these kinds of binary decisions. Going further, a set of sophisticated algorithms could automatically calculate, through data coming from our own objects and wearable devices, our supposed political preferences. These data could be sent to decision makers seamlessly, making voting obsolete. Such sets of algorithms could potentially even have unlimited access to the physical activity and the things that any given citizen would own. To complete this imaginary dystopian scenario, a massive big data processor could then calculate the optimal mix of policies ranked according to the behaviors and choices of people everyday. What would be governments’ reactions? Plausibly to dismiss all elected officials. Act via spokespersons with simple job descriptions. To announce daily the results of the calculations of the algorithm. To dispatch them to the director generals of ministries. To smile at cameras. To look good. Could this be the case of our governance systems in, let’s say, 20 years? This makes me think again about the early 1990s. We truly thought then, at some point, that we would have been flooded by MiniDiscs and Digital Compact Cassettes. But we weren’t. In the same fashion, many political analysts at that time were predicting an end of representative democracy caused by deliberative democracy through the internet. But we never really saw that happen. And it would be hard to predict or prove that this new wave of technological progress will lead to a dramatic change in political organization. The reasons for this go beyond technical matters. There are broader risks in having the general electorate involved in every political decision, as opposed to delegation, as well costs for the public related to obtaining enough information to constructively contribute to every decision — not to mention the risk of having ill-founded and populist decisions. However, some political formations have grown around this concept. The Five Stars Movement became the second largest group in Parliament in Italy after the national elections in 2013. The Pirate Party in Germany is promoting the concept of “liquid democracy,” with some success, as a hybrid system whereby an electorate vests voting power in delegates rather than in representatives. Young activists involved in these matters will have to keep these changes in mind in order to retain their influence over the way policies will be drafted, decided, implemented and evaluated in the future. They will have to cope with the tension between the risk of a technocratic and dystopian future, the promise of a dream-like utopia or tech-enhanced business as usual. Often reality has proven to lie in between. Dystopian futures could become real, even if humans keep control of policy making. We have seen dystopian societies run by men and not by machines many times in history. It is a reminder that politics is a human responsibility, without stigmatizing industrial and technological development. The society imagined by Samuel Butler in 1872 in “Erewhon” was no worse, in some aspects, even if it totally banned the machines for fear that they would take over following Darwinian evolution. In the case of the Industrial Internet, the political discourse and narratives will shape its further development and goals. Young activists play a pivotal role in shaping such discourse. The most important mission they have is to transmit such goals and discourses in an understandable way, in order to keep their fellow peers and all the citizens aware of the consequences of the changes that are happening so we can ultimately keep a transparent and democratic oversight over the future of society.
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Tim Cook ‘not sure’ Apple will meet iPhone 7 Plus demand by the end of the year
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Matthew Lynley
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Apple is working to match the demand for the iPhone 7 Plus as best as it can, but it might not meet all the demand by the end of the year, CEO Tim Cook said on the investor call discussing its fourth-quarter earnings. “It’s hard to say,” Cook said in response to an investor question about whether the iPhone would hit supply/demand equilibrium by the end of the next quarter. “I believe that on iPhone 7 we will, on iPhone 7 Plus I’m not sure. I wouldn’t say yes at this point because the underlying demand looks extremely strong on both products but particularly on the iPhone 7 Plus vs our forecast going into the product launch.” This is going to be a very big deal for Apple, which is looking for its first return to sales growth in the first quarter this year. The holiday quarter is critical for Apple, and in addition to that it has a huge window of opportunity given that the Galaxy Note 7 is basically dead in the water. “It’s very hard to gauge demand when you’re selling everything you’re making, so we’ll find out more through the quarter but we’re confident enough to give you guys guidance that we’re returning to growth this quarter, which obviously feels very good for us,” Cook said. Apple’s iPhone sales have not only been slowing, but declining, year-over-year in several quarters this year. That’s largely been attributed to an overall saturation of the smartphone ecosystem, especially since Apple largely targets a higher-end part of the market. Apple is also seeing a lot of competition from other manufacturers trying to beat it at a lower price point. “We are supply constrained on 7 and 7 Plus, when you talk about other competitors it’s not particularly relevant to us right now because we are selling everything we can produce,” Apple CFO Luca Maestri said. “When we look at all these things in its totality, we think for the total company, we believe revenue is gonna grow. We don’t get into specific product from a unit standpoint giving guidance. We feel very confident for the trajectory of iPhone going forward.” Already, the iPhone 7 Plus is seeing massive shipping delays because its demand has drastically outstripped its supply. If you try to go purchase an iPhone 7 Plus, the shipping delay may be as high as several weeks. Apple is frantically trying to make as many iPhone 7 Plus phones as it can, and it’s going to be critical that it finds a way to meet that demand. The exact question from the analyst was, “in terms of supply, do you think we’ll be at equilibrium by the end of the quarter?”
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Lending Club zooms into car refinancings in turnaround effort
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Connie Loizos
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Many Americans learned through that they can refinance their credit card debt online; now, the lending marketplace is hoping they’ll start refinancing their automotive loans using its platform, too. Indeed, though automotive lending is a massive market, car refinance is far smaller owing to a lack of awareness, suggests Lending Club CEO Scott Sanborn, with whom we spoke by phone earlier today. “People know they can refinance their home. But after their home, their car is their second-largest purchase, yet the car refinance market in the U.S. was about $40 billion last year.” In comparison, the overall U.S. auto loan debt market had grown to $1.103 trillion by this past June, according to the research firm . For Lending Club, it’s a prime opportunity (no pun intended), though it carries plenty of risk, as well. The publicly traded, San Francisco-based company has struggled throughout 2016, following the of its founder and CEO Renaud Laplanche in May over alleged conflicts of interest and a mishandled sale of loans to Jefferies Group. Laplanche’s departure shook investors’ faith that the platform was among the strongest in the world of online lending. It also prompted more investors to examine whether the platform had become overly reliant on Wall Street banks that were looking for yield but are notoriously fickle customers. Scott Sanborn, who took over as CEO and who’d served as the company’s chief operating officer prior, has taken drastic steps to get the company back on course, but none has had a meaningful impact just yet. For example, in addition to hiring a , a , a and a , Bloomberg reports that a separate new initiative hasn’t gone as well as hoped: via partnerships with Alibaba and Alphabet. Asked about that earlier today, Sanborn says that what “gives us confidence when I think about auto is that it’s not just leveraging our technical skills and learnings but also takes advantage of our marketing acquisition skills,” which he suggests Lending Club has been less able to do with its small loans program, given that it’s depending on partners for their distribution. Sanborn also argues that though Lending Club has plenty of competition, the large auto lenders aren’t among its worries, given the relationships they have with car dealers, who would “generally lose some of that revenue” if auto lenders offered their customers refinancing options, too. We’ll see soon enough whether Sanborn is right. Lending Club will begin refinancing car loans for California consumers with FICO scores above 640, and whose cars are less than 7 years old and have been driven fewer than 80,000 miles. Sanborn says that interest rates for California customers will range from 2.49 percent to 19.99 percent, and that the average borrower could save $1,350 over the life of their loan. Initially, the loans, which Sanborn says will range from $5,000 to $50,000, will be made off the company’s balance sheet. Eventually, he says, the program will be extended nationwide to a wider variety of borrowers, and it will be funded by the same sources of capital that currently provide personal loans to borrowers at Lending Club. Asked about the that those capital sources are largely Wall Street investors who’ve lost some of their appetite for Lending Club’s platform, Sanborn says that impression is wrong. “If you look at the mix of investors who are funding these loans, a large base are individuals — some of them regular everyday people but also high-net-worth individuals,” he says. Meanwhile, a “considerable portion of [our lenders] are regional and community banks that have been pushed out of consumer lending because it’s a business of scale.” As for Wall Street, he calls it a “minority” source of Lending Club’s overall funding. Sanborn also dismisses concerns over rising auto loan default rates that have prompted some banks to and for regulators to about deteriorating underwriting standards. Fitch Ratings underscored the issue in a that found that among subprime and deep subprime borrowers — meaning those with FICO scores of less than 600 — 4.6 percent are 60 days or more behind on their auto loan payments, a 17 percent increase from a year earlier. That data won’t apply to Lending Club borrowers, says Sanborn. “When you hear about where credit has been overextended, that’s deep subprime, and that’s not where we’re focusing at all,” he says, calling current default rates “well within historic norms, even if 2016 doesn’t look as good as 2015.”
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Sharalike tries to bring your slideshow into the virtual world
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Haje Jan Kamps
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Wait, wait, wait! Before your eyes glaze over at the word “slideshow,” stay with me for a moment. Yes, we’re all bored to tears with slideslows, but ‘s brand new VR app has been rubbing its medical paddles together to try to jolt some life into your old 2D photos by teleporting them into your VR headset. Exploring Sharalike photo slideshows in VR is a trippy experience. The company’s new app is available for , and , enabling you to create immersive slideshows. The company’s tech analyzes your images to try to find a theme before adding a suitable background video and some funky tunes. The experience of creating a VR slideshow is pretty intuitive and relatively easy to figure out, although actually learning to view a slideshow is a curious experience. It turns out that as a photographer, I have a well-established set of feelings around how I am expecting to consume slideshows. Moving that habit to VR is an experience that will take a bit of getting used to. The original Sharalike app was launched around 18 months ago and became a smash hit, with more than 1.3 million downloads and more than 30 million photos converted into smart slideshows, so the company does have a tremendous amount of success under its belt. On the VR side of things, the challenge the company is facing is one of resolution. We live in a world where we’re used to Retina displays for watching photographs in perfect, super-crisp resolutions. Even the best VR displays can’t match a reasonably good screen for resolution and picture-viewing experience, but it’s refreshing that there’s still hope for your old-fashioned photos, even in a 360° / VR world.
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Romain Dillet
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Challenges face former Cheezburger CEO joining Y Combinator’s New Cities project
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John Mannes
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Y Combinator’s ambitious New Cities project as Ben Huh, former CEO of The Cheezburger Network, joins the effort. The initiative, , aims to take a fresh, entrepreneurial approach, to city building. Details have been hard to come by, but the group was hiring researchers for a short time on the tail end of the summer. It appears YC is serious about leaving behind prior notions and best practices of urban development in their quest to disrupt. Huh, something of a meme mogul, is coming off a long term role as CEO of a company that facilitated the creation and sharing of internet memes. noting how much of a “marathon” the eight year effort had been. In today’s post, Huh connected While the aim of the New Cities effort was almost certainly to inspire, was , whose job is to manage land use and plan next generation infrastructure. In true startup fashion, the group for location referrals to potentially optimal locations for a new experimental metropolis. The form asks for information on zoning restrictions and immigration rules for the site. It also leaves room for a breakdown of costs if YC makes use of the location. Huh’s role is being described as that of an “explorer.” He is only set to be involved in the future cities project for the next six months, which seems like an awfully short time horizon for a problem Altman noted could take “a long time,” perhaps even “25 years,” to address. To critics, Huh’s post screams of a particular Silicon Valley savior ethos. The attitude can roughly be explained as a belief that private enterprise, unencumbered by the chains of bureaucracy, can execute public service better than the government itself. Sam Altman himself, President of the YC Group, donated $10 million that gave birth to the New Cities project in addition to work around openAI, basic income, and human advancement. In YC’s initial blog post, Altman and Adora Cheung, a YC Partner tasked with initiating New City efforts, included an almost comical footnote addressing this potential criticism head on. “We’re not interested in building “crazy libertarian utopias for techies,” the two clarified. However, today’s post from Huh remains quite focused on problems likely to be on the forefront of the minds of “techies” in places like San Francisco and New York City. “Housing prices in urban environments have skyrocketed due to poor policy decisions and NIMBY-ism,” noted Huh. There is a lot of nuance required when addressing NIMBY-ism and its part in today’s urban challenges. Huh is not explicitly wrong so much as narrow in addressing many of the challenges faced by cities not caught in the waves of economic prosperity. Detroit for example may have inclusivity issues, but blight and vacancy are what occupy the thoughts of residents on a daily basis. That isn’t to say starting from scratch is always bad — diversity of approach can and often does lead to positive unexpected outcomes. It is simply up to Y Combinator to disclose additional details on the exact end game of its efforts.
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Eero looks to help employee whose 10-year-old son was burned by peers
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Connie Loizos
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, a two-year-old, San Francisco-based maker of a smart wireless routing system, is asking employees to help one of their colleagues after his special-needs son was burned in a fire set by some of his same-age peers. According to a report in , the 10-year-old was placed in an induced coma earlier this month after being lured into a shack near his Kerrville, Texas home, doused with gasoline and set on fire. According to the boy’s own telling, says Fox, a child he knows enticed him to a field, where other children were waiting. The boys involved are reportedly ages 9, 10 and 11. Whether the act was intentional or accidental is under investigation. At a news conference a day after Fox published its report, the town’s fire chief that “based on the results of our preliminary investigation, it does not appear that this event was premeditated or that there was any intent to harm any of the juveniles present . . . We have not been able to produce any evidence to suggest that there was any intent to commit bodily injury to any of the four juveniles.” One of the boys was taken into custody nonetheless and charged with first-degree arson. , the child, Kayden Culp has come out of the coma in recent days and moved to a recovery center, where he can now “eat and drink on his own and is constantly smiling,” his father, Scott Culp, wrote in an email to Recode. Still, he remains in critical condition. Eero CEO Nick Weaver about the incident earlier this morning, asking people to please donate funds to the family of Culp, who is part of a 30-person customer support team based in Austin. Specifically, Weaver steered his followers (and employees) to a , where a $10,000 goal has already been surpassed. A for Kayden Culp has separately raised $261,000. The campaign could surely use much more attention. Burn care is the one of the of healthcare, given the long hospital stays, multiple operations and expensive equipment requirements involved. We were in touch with Weaver this evening. He says Eero’s Austin-based team learned about Culp’s son roughly two weeks ago, when the incident took place; the rest of Eero’s headquarters found out just today and Weaver says the company’s focus is now on “supporting Scott, Kayden, and their family in any way we can.”
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IrisVR raises $8M to bring virtual reality to architecture and design
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Anthony Ha
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New York City startup is announcing that it has raised $8 million in Series A funding. The company has built virtual reality tools for the architecture and design industries. allows customers to take their 3D plans and blueprints and turn them into VR experiences viewable on devices like Oculus Rift, HTC Vive, GearVR and Cardboard. , meanwhile, converts panoramic images into VR experiences for smartphones. The company is currently beta testing its products, with plans for an official launch before the end of the year. And even before then, IrisVR says it’s seen downloads from 108 countries. The round was led by , with the firm’s general partner Kevin Spain joining the board of directors. Indicator Ventures, Pritzker Group Venture Capital, Valar Ventures, Azure Capital Partners, Locke Mountain Ventures and Morningside Group also invested in the Series A, which brings the startup’s to $10 million. In the funding release, founder and CEO Shane Scranton said IrisVR will help the industry move beyond gimmicks. “There are real, industry-changing applications for this technology and IrisVR is building one of them,” Scranton said. “Simply put, we’re reinventing the canvas on which a vast, global industry communicates. For design and construction professionals, the vision is the core of every project. IrisVR brings that vision to life.”
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IBM Watson and Udacity want developers to learn AI online
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Lora Kolodny
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, the education platform focused on helping workers gain skills they need for great careers in tech, has partnered with , and to offer a new nanodegree in artificial intelligence, the companies announced today at the IBM World of Watson conference. IBM Watson is co-developing the curriculum of the course with Udacity. Chinese ride-hailing company Didi Chuxing intends to hire students who successfully complete the nanodegree, as does IBM. And Amazon Alexa is serving as an advisor to Udacity in developing the new AI nanodegree. According to Udacity’s founder Sebastian Thrun, who previously started Google’s innovation shop Google X and its self-driving car initiative, the new AI nanodegree will be for students who already have a level of mastery in software development. IBM’s Rob High, the Vice President & Chief Technology Officer of IBM Watson, wrote in a company blog post that the new nanodegree it is developing with Udacity should teach students to build apps or platforms using game playing and search, logic and planning, computer vision and natural language processing, among other things. Asked if this nanodegree would also include curriculum that covers ethical considerations in artificial intelligence, Thrun politely but adamantly said: “No. There’s a lot of fear mongering these days in the AI field. AI is not about to take over or destroy the world. Instead, it’s going to free us of repetitive mindless work. Say you are doing an office job and every day you do the same thing. At some point an AI watching you will make you one hundred times more efficient at your job, and it will free up a lot of your time. I think AI is to the human mind what the steam engine was to the human body…I see this as positive news for the world.” The is comprised of two, 13-week terms, the first of which will open in early 2017. The curriculum is still being developed. Yes, the AI nanodegree will be taught by humans. But no, Udacity hasn’t ruled out the development of artificially intelligent apps to help those teachers do their work, Thrun said. Udacity faces competition from the likes of EdX, Coursera and other edtech platforms that want to teach workers the skills they need for solid careers in a tech-driven economy.
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iPhone revenues and unit sales dip in Q4 with 45.5M devices sold
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Lucas Matney
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Apple is still selling a lot of iPhones, but the numbers are continuing to slide from 2015 numbers. The company reported Q4 2016 iPhones sales of 45.51 million units. This compares to 48 million units sold in the same quarter of last year. These numbers are largely in keeping, if not slightly better, than Wall Street expectations. Analysts were expecting Apple to ship 45 million iPhones this quarter. In a press release, Apple CEO Tim Cook voiced that the company was “thrilled with the customer response to iPhone 7, iPhone 7 Plus,” but it’s clear that there’s a bit of slowdown in the category. There was a 13 percent year-over-year revenue decline in iPhone sales in addition to the 5 percent decline in unit sales. In the earnings call, Cook interestingly said that the iPhone saw year-over-year growth in 33 of its top 40 markets, perhaps signaling that much of the revenue decline came from its largest markets. This quarter, overall revenues in the Americas fell 7 percent while revenues in Greater China tanked 30 percent. Conversely, Cook detailed that iPhone sales in India were up 50 percent in fiscal 2016 from the previous year. Due to supply constraints, Apple notably did not report launch-weekend sales of its iPhone 7 devices. Cook noted that with iPhone sales, “demand continues to outstrip supply.” Apple CFO Luca Maestri noted that the iPhone 7 Plus in particular was having trouble keeping up with demand. In an answer to an investor question, Cook said that he believed iPhone 7 production would catch up with demand by the end of the quarter but was skeptical whether iPhone 7 Plus would reach equilibrium by December.
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Facebook demos art-themed video filters, says it got 2M voters registered
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Josh Constine
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The two non-Zuck leaders of Facebook had a lot to show and tell onstage today at the conference, where they demoed potential products, labeled Facebook a tech company not a media company and touted the company’s success at voter registration. If you liked Prisma, you’re going to enjoy what Facebook’s cooking up. Facebook chief product officer Chris Cox an unlaunched prototype of Live video filters that make your footage look like it was painted by a famous fine artist like Vincent Van Gogh. Cox says the feature is based on a German academic paper about that employs convolutional neural nets to bring the style of artists like Monet or Rembrandt and apply it instantly to video. The feature is strikingly similar to , which applies art filters to . TechCrunch reported that Prisma’s European founder in Menlo Park, though we heard that was just a friendly visit rather than an M&A meeting. Cox said that the video filters aren’t attached to any of Facebook’s products, but the demo showed how they could work with Facebook Live broadcasts. Mark Zuckerberg is slated to share more about the video filters soon. However, Facebook says, “This is a real-time style transfer that’s happening on-device so styles can be applied to videos as they’re being taken.” Update 10/26: Today Mark Zuckerberg posted a video demo of the new style transfer video filters, saying “I took this impressionist video of Beast on my phone with a new AI technique called “style transfer”. The idea is you show the artificial intelligence a painting and then it draws your photos or videos in that style in real time. Looking forward to getting this in your hands soon!”
Live already has several to boost low light or turn videos black and white. But offering more powerful features that drastically change the footage could help users feel less shy and self-conscious about being on camera. Cox says Facebook predicts that in five years, 70 percent of all consumer internet traffic will be video. That’s why Facebook is building video deeper into sharing, publisher content in the News Feed and Messenger. Facebook Live already includes basic color filters During the talk, Cox and Facebook COO Sheryl Sandberg also discussed how Facebook sees itself as a technology company. Critics insist that its increasing need to make editorial decisions about what’s graphic or offensive but newsworthy makes it a media company. Facebook said Friday i it. Sandberg said Facebook must balance fighting off hate speech and offensive content with being an open “platform for all ideas”: “Facebook is a platform for all ideas. It’s really core to our mission that people can share what they care about on Facebook…We also want to be a really safe community. You know there’s no place for violence, terrorism, and hate on Facebook…But those two things can come into conflict because one person’s free expression can be another person’s hate. As we’ve evolved we know that people are sharing more newsworthy content on Facebook. That’s something we want to make sure we enable, and it can be hard. [Gives example of nude child from Vietnam in the famous Terror Of War photo that Facebook initially took down but later restored] We will make exceptions to our community standards. There could be no better or starker example than child nudity for the benefit of newsworthiness. We’re also evolving as a service. We started out as a college-only service, now we’ve got 1.7 billion people around the world, and so we’re in dialog, in particular right now with journalists and publishers, to really figure this out and continue to evolve so people can have free expression on Facebook but we also remain a safe community.” Meanwhile, Facebook is pushing to get more people to speak up for those ideas. Sandberg says its recent voter registration efforts, which include a banner atop Facebook urging people to register and notifications about deadlines, have pushed 2 million people to register, and notes that they’re evenly split between Democrats and Republicans.
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Apple could be developing its car OS in Canada
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Romain Dillet
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More details about Apple’s software team for its car project are emerging. According to , Apple has hired quite a few engineers in the Ottawa suburb of Kanata. The company also opened an office there and could be developing its car operating system from there. The reason why Kanata is so hot right now is because BlackBerry’s office also happens to be there. QNX is an operating system for cars and runs many infotainment systems in major car brands, such as Volkswagen, Audi, BMW, GM, Ford and nearly everyone else. Back in July, already indicated that QNX CEO Dan Dodge left the company to join Apple. Since then, around two dozen employees reportedly joined him, along with non-QNX employees. According to Bloomberg, the team is working on an operating system for cars — and I certainly hope Apple calls it carOS. But it’s unclear if the team is focusing on the infotainment aspect or the software layer that is going to run the entire car. Apple is now reportedly on autonomous driving technology and not a full-fledged car. The idea is that Apple could partner with existing car manufacturers to integrate Apple’s technologies. In addition to this strategy shift, Apple has yet to decide if the car project is viable. If Apple’s car team can’t build a promising demo before the end of 2017, the company could cancel the project. As you can see, there are a lot of rumors going different ways about Project Titan. Apple could be hiring but also firing, Apple could be opening a new office but also reducing the scope of the project… If the car project is real, there’s one thing for sure: Apple doesn’t really know what it wants to do.
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Apple signals a return to sales growth for the holidays in its fourth-quarter earnings
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Matthew Lynley
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All eyes are officially on the holiday season for Apple. Ahead of the Christmas retail season, Apple reported its fourth-quarter earnings that were directly in line with what Wall Street was expecting. Almost everything came as expected as the company stands in a basic holding pattern, waiting for the first full quarter of its next generation of iPhone sales to come in throughout the holiday season. It’s not super surprising, but it’s still kind of a breath of fresh air for the company, which has been on a rollercoaster for the past two quarters. Apple reported revenue of $46.9 billion and earnings of $1.67 per share. The company shipped 45.5 million iPhones, 9.3 million iPads and 4.9 million Macs. Wall Street was looking for earnings of $1.65 per share on revenue of $46.9 billion, with iPhone sales of 45 million. Wall Street was looking for iPad sales of 9.1 million. Now, everyone will be looking at the next quarter. Apple is forecasting revenue between $76 billion and $78 billion — basically in line with what Wall Street was expecting. Last year, Apple recorded $75.9 billion in revenue, so that forecast would signal a potential reversal of its revenue declines for the company, which has dogged it for several quarters. It’s a slight level of growth, but in an environment where the smartphone market has been largely saturated and with increasing competition on the low end, that’s a good sign for Apple. There’s going to be one big challenge for Apple: getting enough smartphones out to customers. If you try to buy the iPhone 7 Plus you’ll see there are weeks-long waits for shipping dates. With the Galaxy Note 7 fiasco, Apple needs to capitalize on the momentum it can gain on its core competitor, and that means it needs to make enough phones that people can buy on a whim. One important note in the report was that Apple’s average selling price for the iPhone — a metric that basically determines whether people are buying Apple’s most expensive, high-end phones — fell beneath Wall Street’s expectations. There’s always concern that lower-end phones are cannibalizing Apple’s high-end phones, especially with the highly priced Plus models coming out. Apple released the smaller iPhone SE earlier this year, which may be cutting into things. To be completely expected and an exclamation point on the whole thing: Apple shares fell about 2 percent in extended trading after swinging wildly in the third and second quarter reports this year. Here’s the full scorecard: Apple’s past two quarters have, primarily, shown that its smartphone business is starting to slow. The company released its new iPhones, the iPhone 7 and the iPhone 7 Plus, this quarter but we really aren’t going to see any kind of material impact. As expected, iPhone sales fell once again this quarter, with last year’s fourth-quarter sales coming in at 48.1 million. Earlier this year, Apple broke its extended streak of growing iPhone sales, and that trend continues. [graphiq id=”vgtP4BFO6x” title=”Apple Inc. (AAPL) Quarterly Revenue Last 8 Quarters” width=”600″ height=”525″ url=”https://sw.graphiq.com/w/vgtP4BFO6x” link=”http://listings.findthecompany.com/l/8500602/Apple-Inc-in-Cupertino-CA” link_text=”FindTheCompany | Graphiq” frozen=”true”] Going into the fourth quarter, Apple has one huge tailwind that it wasn’t expecting: the Galaxy Note 7 debacle. After a series of investigations showed that the Note 7 was prone to exploding, the company is pulling the plug on the Note 7 — which was basically one of the few phones that could place a significant dent on the iPhone 7 Plus. That’s going to be critical for Apple going forward. The company, while still in a holding pattern, is still going to need as much help as it can get. In an ironically Microsoft-y problem, Apple’s shares are largely unchanged in the past year, and in the past two years are only up around 12 percent. The company is continuing to ship new products, but as smartphone saturation kicks in and markets start to slow down, it needs to figure out how to roll out new products that will make the ecosystem more sticky as a whole and promote cross-device sales. [graphiq id=”20pUse7WuIB” title=”Apple Inc. (AAPL) Stock Price – 1 Year” width=”600″ height=”463″ url=”https://sw.graphiq.com/w/20pUse7WuIB” link=”http://listings.findthecompany.com/l/8500602/Apple-Inc-in-Cupertino-CA” link_text=”FindTheCompany | Graphiq” frozen=”true”]
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Pandora’s latest quarter disappoints investors
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Katie Roof
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In what has become a very competitive landscape for digital music, early pioneer Pandora is trying to remain a leader. The company reported third quarter earnings after the bell on Tuesday, giving a glimpse at the current health of their business. Pandora has seen its revenue grow to $351.9 million, up by 13% from the same period last year. Yet analysts had been expecting $366.1 million. Adjusted earnings per share also missed the mark, with a loss of 7 cents, instead of the 6 cents Wall Street was forecasting. The stock fell about 8% in the initial after hours trading. Advertising revenue came in at $273.7 million, up 7% year-over-year, but beneath the $286.9 million that analysts predicted. Ticketing service revenue was $22.1 million, an area that saw 25% growth, yet also fell slightly beneath Wall Street expectations. Listener count has been in decline, falling to 77.9 million compared to 78.1 million in the same period last year. If this continues to slip, Pandora may not have a wide enough funnel of free users to upsell to its new streaming products. The best opportunity for Pandora remains with Ticketfly, the concert ticketing company it acquired last year for $450 million. If it can occupy its own Pandora ad space with targeted promotions for Ticketfly tickets to concerts from the artists a user is currently listening to, it could earn much more than selling the ad inventory to other companies. “Pandora’s transformation continues with the launch of compelling new products and partnerships that open up significant revenue streams,” said Tim Westergren, founder and CEO of Pandora. Last month Pandora, launched its $5/month enhanced radio service that removes ads plus offers offline playback and more song skips. But it may be too little too late. Spotify has offered a free Internet radio service for years with unlimited skips, while $10/month not only removes ads and provides offline playback, but lets you listen to exactly what songs you want whenever you want. Pandora’s model simply hasn’t aged well. Traditional radio, where users had no control over what they heard beyond changing the station, was more a byproduct of technological limitations than a service tailored to user behavior. Pandora simply translated that model to the web with a little “thumbs up / thumbs down” personalization. But when people hear a song they love on the radio, they want to be able to listen to it over and over. Radio is becoming a feature of on-demand streaming services, limiting Pandora’s growth potential. Though it plans to launch a true on-demand service based on its acquisition and mercy killing of Rdio, competitors like Spotify, Apple Music, and YouTube may be too far ahead to catch. And since music is social, network effects come into play. People want to be on the same streaming service as their friends so they can share songs. They’re not going to find that with Pandora on-demand. Now concerns about competition have been impacting Pandora’s stock. Shares of the company have fallen about 14% in the past month, closing Tuesday at $12.18. The company has a market cap of $2.8 billion.
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This is the new MacBook Pro with the Magic Toolbar mini display
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Romain Dillet
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Apple has leaked its own big announcement with two hidden images of its upcoming MacBook Pro in the macOS Sierra 12.1 update. MacRumors the images in the system files. Meet the new MacBook Pro. As , the MacBook Pro features a second mini display above the keyboard. It replaces the function row and should change depending on what you’re doing. In the example, you can see that the display (probably called the ) prompts the user to confirm the Apple Pay payment with the Touch ID sensor. As you can see, the function row is gone. On the one hand, I don’t remember the last time I used the F7 key. On the other hand, there’s no physical escape key anymore. On the photo, we can see that the left part of the display features a cancel button. So it’s more or less like hitting escape on your current keyboard — but it’s going to be harder compared to blindly hitting the top left key on your keyboard. These photos also show that there will be a Touch ID sensor in the new MacBook Pro. You can see on the second photo below that the Touch ID area is a bit darker. It’s not the same color as the rest of the display, so I think it’s not part of the display. But it doesn’t look like the home button on your iPhone or iPad. When you rest your finger on the home button of your iPhone, the metal ring senses your finger and triggers the Touch ID sensor. Surprisingly, there’s no ring around the Touch ID sensor. Something like 3D Touch could potentially render the metal ring useless though. Also worth noting, the keyboard looks an awful lot like the one on the 12-inch retina MacBook with larger keycaps. I don’t like the low key travel on the 12-inch retina MacBook. But it’s still unclear if this keyboard has deeper switches like on the external Magic Keyboard. As you can see in the top photo, the 13-inch MacBook Pro is going to have a slimmer bezel around the display and keyboard. And the speakers are now on each side of the keyboard instead of below the keyboard — this change in particular could indicate that the MacBook is slimmer. The hinge seems to be smaller; let’s hope that it’s still as strong as the one on existing MacBook Pro models. And that’s it for today! We don’t know the number of ports on this laptop. We don’t know the internal components, release date or price. Rumor has it that it’s going to ship with Intel Skylake processors and a bunch of USB Type-C ports. If you look at the current MacBook Pro, the USB and the MagSafe ports are a bottleneck when it comes to thickness. Switching all these ports to USB Type-C ports would make it much easier to make the laptop thinner. Apple will be holding . In addition to updated MacBook Pro models, the company should also update the 13-inch MacBook Air with a new design and better components. The iMac could receive a performance update. The Mac Pro and Mac Mini have been neglected for years, and it’s unclear if it’s about to change. Finally, while a new retina external display is probably coming soon, it might not be ready just yet. Apple could still announce the new display and ship it later.
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AT&T will offer $35 subscription with 100 channels and includes mobile streaming
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Sarah Buhr
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AT&T announced it will offer 100 channels and mobile streaming for $35 per month when it launches DirectTV in November. This is a different position for AT&T, which said it wouldn’t be taking on existing pay TV services and it comes right in time for another major content announcement with Time Warner. AT&T announced this last weekend it wants to buy Time Warner for $85 billion. The DirectTV deal was announced on stage at the Wall Street Journal Live conference today, where AT&T’s Randall Stephenson joined Time Warner’s Jeff Bewkes to talk all things merger. Stephenson was adamant the low-priced subscription plan wouldn’t be possible without the previous DirectTV deal and — despite the coming regulatory hurdles involved — seemed confident about the prospect of joining business hands with Bewkes, saying the goal is to drive pricing down even further. “Anyone who sees this as a way to raise prices is ignoring the basic premise,” Stephenson said, adding he is evangelical about how the deal with Time Warner would create a major cable competitor. He also vowed to protect the journalistic integrity of Time Warner’s subsidiaries, adding the brand would become a “launching pad of innovation.” But first, the two companies will have to overcome those upcoming regulatory obstacles. Though Stephenson and Bewkes see the merger as great for consumer choice, some worry this would give AT&T the power to drive up prices in an attempt to funnel consumers to its own platform instead. Interest group Public Knowledge has as much, saying the deal raises concerns around preferential treatment of its own programming pointing out AT&T, “has already announced that it plans to zero-rate its upcoming online video service.” Stephenson countered any notion of that, saying Time Warner would run independently of AT&T.
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The Guarantors makes it easier to rent an apartment in New York
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Fitz Tepper
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If you’ve rented an apartment in New York you know how much of a hassle the process is. First you need to find somewhere, then you need to meet the building or landlord’s strict approval process. But in New York (and a few other major cities) the approval threshold is so high that people aren’t able to get the apartment they want, even if they can actually afford it. This is because of crazy requirements imposed by New York buildings and landlords. These include frequently needing a credit score above 700 as well as annual income in excess of 35-45 times one month’s rent. And even if you do have your own guarantor like a parent, most New York landlords require them to be located in New York or surrounding states and have income of 80-100 times one month’s rent. Enter . The New York-based startup will act as your cosigner – allowing you to get into the apartment you want even if you don’t meet the strict requirements. The company has raised a seed round from Partech Ventures, Residence Ventures, White Star Capital and other angel investors. The platform is designed for students, international workers or anyone who would have trouble getting approved for an apartment they could otherwise afford. Once approved, the startup issues a Surety Bond to the landlord backed by The Hanover Insurance Group. If for some reason renters stop paying, landlords or building management can utilize this insurance policy to receive full rent payment as well as legal fees and holdovers. While the bond is provided by a third party, The Guarantors is responsible for all of the vetting and approval process – and that’s where technology comes in. Even though all applications are given a final “yes” or “no” by a human, the startup’s algorithms can successfully assess the quality of an applicant and their potential to make on time payments. The startup has already worked with notable landlords like Gotham Organization and Peter Cooper Village / Stuyvesant Town. There is no cost to the landlord, and in many cases they are happier to have the guarantee of a Surety Bond compared to just a regular guarantor. The service costs anywhere between 5-10% of annual rent, essentially making it a little less than a broker’s fee. But this is a small price to pay – especially since a landlord may let you renew a lease without using the service once they see a year of on-time payment history. It also lets renters potentially avoid having to put up a large security deposit or prepay months in advance, other things that landlords may require of someone without a guarantor. While the startup makes particular sense in New York City, Julien Bonneville, co-founder and CEO of the startup explained that there are around 10 cities in the world that historically have high barriers to rent like New York City. Plus, the startup eventually hopes to offer additional services to renters. One option is helping renters find an apartment – not only could the company then take a broker fee, but they could also specifically direct renters to apartments that permit the company to act as a guarantor.
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Iris AI drastically expedites research through the power of artificial intelligence
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Haje Jan Kamps
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There are more than 30 million research papers out there, and more than 3,000 papers are published every day. Put simply, you haven’t a chance in hell to read all of them. So what’s a poor researcher to do when set a challenge in a brand new field of research? Once the wave of blind panic and urge to drink copious amounts of gin has dissipated, you reach for a technology solution. believes it has just the thing. The company launched to show off its technology this week. “We’re of course really excited with the first results,” says Anita Schjøll Brede, the company’s CEO. “But to be honest we’re running a marathon here. Our ultimate goal is an AI Scientist and we’re not done until we get there!” The Iris AI cross-European team at 500 Nordics demo day. Anita Schjøll Brede, the company’s CEO, is third from the left. With a product aimed at people who read research papers on a regular basis, Iris is trying to help R&D departments in big corporations ingest, process and analyze huge sets of data. The argument is that, especially when doing research into new fields, even experienced researchers don’t necessarily know the appropriate keywords to be looking for. Iris takes that problem out of the equation by analyzing and summarizing information. “Our biggest competitor is Google Scholar,” says Brede, but points out that Scholar has a similar problem as most other research tools. “If you have dedicated your life to a niche field of study, you probably know everything that is happening in your field. If you need to draw information from adjacent fields of study or even a brand new field, it can be a daunting challenge to get an overview.” The tool is deceptively simple. By giving Iris a research paper to “read,” it reads the abstract, maps out the key concepts and presents the user with the most relevant articles from more than 30 million papers. The results are visualized, explorable and help to quickly create an overview of the field of study. From there, researchers can dive deeper.
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Duet Display adds pressure-sensitive input for Apple Pencil and iPad Pro
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Darrell Etherington
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is one of the most useful apps to come along in a while, letting users turn their iPad into a second screen for their Mac with virtually no latency via wired Lightning cable connection. Now, the app is getting an update and a that lets it act as a fully pressure sensitive display-integrated drawing tablet with iPad Pro and Apple Pencil. The update works sort of like Astropad for iOS, letting you use the Pencil as a pressure sensitive stylus for directly working in painting, drawing and other graphic apps including Photoshop and Illustrator. But Duet Display is actually more powerful, in that it acts very similar to what you’d expect from a Wacom tablet, giving you full use of an extended display as well as pressure sensitivity, palm rejection and both Mac and Windows support. Alongside the new features, there’s a new business model: Duet Display is going subscription-based, at least for those who want access to the professional features including pressure sensitivity. Unlocking those will cost $20 per year, and Duet founder Rahul Dewan tells me he believes that will be a much more sustainable business model, both for his app and for other developers working on iOS software. Sample doodle created with Duet Display, iPad Pro, Apple Pencil and Photoshop CC. I used the beta version of Duet Display’s update, and found it had more latency than the Wacom 13HD that I typically use for working with graphic applications, but it was still very usable and much better than working with a tablet that doesn’t have a built-in display. It’s definitely a feature I could see myself using consistently when I’m on the road, and the pressure features do indeed work well for doing things like shading or digital painting. Duet’s update is available now via the App Store, and as mentioned, the pressure sensitive features are part of the $20 per year subscription package, with a money-back guarantee if you don’t love the added features. The price of the app itself, which still has all the same features it offered before this update for a one-time purchase, is temporarily reduced to $10.
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Apps for planning your vacation
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Katie Roof
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Techstars’ David Cohen on fund strategy
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Harry Stebbings
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, , . These are just some of the incredible companies invested in with his first fund, Bullet Time Ventures. In our latest interview with , we reveal some of the strategies behind what is now considered to be one of the best performing funds in history. Although a commonly regarded principle of investing, the importance of this cannot be underestimated. As states, “it is all about shots on goal.” For with his $5 million fund, this meant cutting $50,000 cheques and ensuring his portfolio was as varied as possible. “Consistency is key,” according to and this rings true at the seed stage, with regards to cheque size. At this level of financing, there is no real data or metrics to suggest which are the home runs. Therefore, do not have a varied investment amount, have a consistent and rigid cheque size and stick to it. This will also allow co-investors to know how much of a round they should allocate to you. Techstars’ David Cohen Despite Sheryl Sandberg’s statement, “It does not matter where you sit as long as you have a seat on the rocketship,” valuation does matter. As illustrated, “we had to get in early at the low prices.” If you invest $50,000 in company Y at a $5 million valuation and the company exits for $500 million, you have returned the $5 million fund (dilution not included). However, if you invest $50,000 in Company X at a $10 million valuation and the company exits for $500 million, you have only returned half the fund. As a result, at the early stage, it is crucial to be investing early at low valuations. “I have done one and I will not be doing anymore,” said when asked his thoughts on uncapped notes. For Cohen, the numbers simply do not work out. Often the conversion discount and price caps in a note result in the company creating more liquidation preference than the amount of money the note holders have invested. For example, John loans company X $100,000 on a convertible note with a pre-money cap of $1 million or 20 percent discount. The company raises $1 million ($900,000 in new money, plus $100,000 for the note) at a pre-money valuation of $1 million (assume at $1 per share) — same as the pre-money cap in the note. What percent of the company should the note holder get on conversion? The answer is not 5 percent, as the $1 million pre-money valuation doesn’t trigger the cap because the share price, by using the discount, would be lower than the share price at the cap. The correct answer is that at a $1 million pre-money valuation, the discounted share price for the note holder would be $0.80. So the number of shares they could buy for $100,000 is 125,000. So the actual percentage would work out to 6.17 percent. It is this math that led to state that “uncapped notes lead to a huge multiple of worseness.” As an investor it is very easy to be swayed by market sentiment. However, this is not the optimal investing strategy. As suggests, “the hot deal is often the one that does not work.” Instead, prefers to focus on ‘big boring industries’ that have must-have products, rather than nice to have products. The early-stage investing landscape is a treacherous one. Surround yourself with experienced people who know the industry and its intricacies. As recognizes, “I was lucky to have amazing mentors like Brad Feld and Jason Mendelson.” However, not only can mentors provide advice and strategic guidance, but deal flow too. described the Uber deal, which came about because Ryan Graves was a mentor at Techstars Boulder.
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AP Sports is using “robot” reporters to cover Minor League Baseball
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Lora Kolodny
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The Associated Press on Thursday that it is now covering games nationally using artificial intelligence and software from , and data from (MLBAM), the official statistics provider for Minor League Baseball. Automatically generated stories cover games that AP Sports’ human writers weren’t reporting on or traveling to anyway, including: Triple-A, Double-A and Class A games, across 142 MLB-affiliated teams and 13 leagues. So if you’re worried that technology is “stealing jobs” from promising sports writers, rest easy. According to the AP’s deputy director of sports products, Barry Bedlan, the AP actually hired automation experts to develop, manage and integrate MiLB coverage. The move was not exactly unexpected, either. The news organization has been using artificial intelligence and software to cover earnings reports on the business and finance beat, using Zacks Investment Research data, since July 2014. When asked what the AP’s main concern was in expanding its use of so-called “robot” reporting, Bedlan said, “We have to make sure anything that moves on the wire is 100% accurate. But once you have properly configured the software then accuracy is not in question.” AP Sports spent a year testing out Automated Insights’ Wordsmith platform for MiLB coverage before making its stories available to AP Sports customers, namely local broadcasters and newspapers that syndicate coverage of the ballgames to their viewers and subscribers. It wasn’t technologically challenging to integrate, Bedlan said, but it took a year because top AP baseball editors and reporters were asked to contribute to quality checks of all the auto-generated baseball stories, critiquing and editing them. Since those people still had to be out covering Major League Baseball from spring training through the World Series, they weren’t always immediately available. The AP could clearly expand its use of software and AI to do sports coverage beyond baseball — if it could get hold of good data, and fast. Bedlan said, “There are so many possibilities but…if a sports organization cannot give us 100% stamp of approval on accuracy for hours or even days that does not work, it has lost its news value for a newspaper, broadcaster or website.” MLB and Automated Insights make MiLB game data available within minutes, he noted. Bedlan emphasized that the AP discloses clearly when a story has been automatically generated instead of human-generated. And he said the company uses automation with the goal of freeing up editors, writers and reporters to do bigger projects, including more investigative work. Associated Press is not alone in using automation, increasingly, to create and distribute the news. As Celeste LeCompte wrote in her September 2015 feature, for NiemanReports.org: “ProPublica, Forbes, The New York Times, Oregon Public Broadcasting, Yahoo, and others are using algorithms to help them tell stories about business and sports as well as education, inequality, public safety, and more. For most organizations, automating parts of reporting and publishing efforts is a way to both reduce reporters’ workloads and to take advantage of new data resources.” What remains to be seen is whether or not reporters and editors will experience once automation becomes more widespread.
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Your federal government drives innovation by investing in moonshots
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Mark Walsh
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Imagine a future where “moonshots” are part of our everyday reality. In this future, shipping no longer uses environmentally damaging Styrofoam but instead an organic mushroom-based material. Things like meat and leather can be created in a laboratory, limiting the need for environmentally harmful animal slaughterhouses, or tanning and garment factories that can endanger workers. In this future, astronauts in orbit 3D-print the materials they need while onboard their spacecraft. And imagine that funding for these innovations comes not from Silicon Valley venture capital, eccentric billionaires or maverick corporations, but instead from the United States government, which has already invested in these moonshot technologies and is helping to make them a reality. And that’s just the beginning. We work for the Office of Investment and Innovation at the U.S. Small Business Administration. Our office can lend up to $4 billion annually through the Small Business Investment Company (SBIC) program to support the venture capitalists, private equity funds and other vehicles that invest in America’s small, but scaling, businesses. The SBIC program have a strong record, including some stellar standouts. In 1978, through the SBIC program, federal money was invested in Apple when the company had just 63 employees and was making less than $50,000 per year! That’s a far cry from the more than 100,000 people Apple employs today and the more than $53 billion in profits it generated in 2015. In addition to SBICs, the government also fuels cutting-edge innovation through the Small Business Innovation Research (SBIR) program, also known as “America’s Seed Fund,” which distributes an additional $2.5 billion in non-dilutive capital to early-stage technology and research startups every year. SBIR grants have played a role in the growth of companies like , which received two SBIR grants in 2011 and 2012 for its promising technology to combat infectious diseases. Now, Inovio is putting its research into practical use, leading the way to develop a vaccine for the mosquito-borne Zika virus, which has the world on edge in the run-up to the 2016 Summer Olympic Games. Together these two programs have invested in, and provided critical early financing to, world-changing companies such as , , , Qualcomm, and countless others. Our research and early-stage investment programs often generate significant positive return for the taxpayer, both in direct financial returns and in overall economic benefits. However, unlike the professionally managed funds that are driven to maximize profit for their limited partners and investors, the government’s bottom line is not profit. That makes its work fundamentally different. Because of this difference, the federal government has for centuries been investing in moonshot ideas that have led to groundbreaking technological advancement, new market creation and significant improvements in the lives of ordinary Americans. Even better, government support has also acted as a signal to the private sector that eventually increases investment into high-value opportunities. Modern investments in new technologies, such as unmanned aerial vehicles (drones), additive manufacturing (including 3D printing), clean technologies and even virtual reality were initially supported by the federal government and are poised to shape the future of our economy. Several of these developments can be attributed to the SBIR program, which aims to give small businesses and labs engaging in cutting-edge research the opportunity to tackle federal agencies’ most complex technological challenges. This approach to research can have far-reaching implications that are often critical to the development of new consumer products that benefit the entire global economy. For example, two-thirds of the components inside your smartphone, including GPS and touchscreen, were the result of applied research funded by the U.S. government through the SBIR program. When the government and the private sector become collaborators in an effort to move technology forward, each helps play a critical role in advancing new products and establishing new markets that support job creation, drive economic growth and improve the quality of life for everyday Americans. As it has for decades, the SBIR program is actively fostering this kind of collaboration, helping fund critical research that addresses urgent needs and offers promising applications for both commercial purposes and the public good. If there is a tech bubble, and if it pops as some experts have predicted, investment dollars for “moonshot” ventures will become even more limited. This would only make the SBIR and SBIC programs, and others like them that fund early-stage technology and research-focused companies, even more important. So the next time you dig your phone out of your pocket, or marvel at the latest innovation, keep in mind that the U.S. government has played, and will continue to play, an integral role in turning big ideas into world-changing technologies.
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Jabra is all talk with its Halo Smart Bluetooth earbuds
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Brian Heater
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At $80, the is in a bit of a gray area. It’s hardly what the majority of users would call “cheap,” but it still comes in well below other wireless offerings from . They’re not fitness buds, nor are they focused on sound or comfort. Jabra, much to its credit, went a different route entirely, eschewing the focuses of most Bluetooth earbud makers for one specially tailored to the company’s strong suit: making and taking calls. The headphones are designed with business users in mind — or, perhaps, more accurately, those seeking the business-casual equivalent. The Halo Smart’s major architectural feature is a collar that sits on the back of the wearer’s neck, not entirely unlike an electric oxen yoke. It’s an attempt to solve a few of the issues currently plaguing Bluetooth buds. After all, going completely wireless means sacrificing both battery life and weight, due to the need to duplicate much of the electronics in each ear. There’s also the issue of what to do with them when not in use. Jabra’s solution is to just wear the things around your neck all day. After all, with a listed battery life of 17 hours, it’s not like you’re going spend much time sitting around the charging unit waiting for the battery to top off. The company’s even built magnets into the sides of the collar, so the earbuds don’t have to dangle from your sides like electronic pigtails. There are four buttons on-board. The one on the left mutes calls and loads your smartphone’s on-board voice assistant, while the trio on the right handle power and volume/track advance. The collar might work for some users. And heck, I guess it’s not so bad for an office environment. The Halo Smart certainly looks a fair deal less goofy than many of the other wireless headsets out there. That said, I felt a little dorky walking down the street with, essentially, a Bluetooth collar around my neck, and I’m not really sure whether snapping the earbuds up with the (somewhat weak) magnets made things better or worse. As advertised, the call quality is solid. Not the best I’ve experience on a headset by any stretch, but certainly clear, and it did a decent job helping mask some of the wind noise as I walked down the streets of Manhattan yelling “buy!” and “sell!” into my headset like a lunatic (I like to pretend I’m an important business person sometimes). And, even with the different tip sizes available, the Halo Smart doesn’t exactly offer the most comfortable fit. As for the headphones themselves, it’s pretty clear that the Halo Smart wasn’t designed for music first. There are plenty of much better sounding Bluetooth earbuds on the market — but if you’re eyeing Jabra, odds seem pretty good that listening to music isn’t your first priority. If it’s lower on your list, playback is perfectly serviceable. It’s not a bad little headset for $80, so long as you don’t mind rocking the collared look — and if music isn’t your first priority.
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The art of relationships for fundraising success
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Erik Benson
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With the incessant talk about unicorns, it’s easy to lose sight of the opposite end of the investment funnel. What feeds the industry is not unicorns, but first venture round companies. Yet raising investments from institutional venture capitalists is becoming increasingly difficult for early-stage entrepreneurs — and it likely won’t ease up through the remainder of 2016. There are three “best times” to raise capital in a calendar year: January through March, May and June, and mid-September through mid-November. You’ll be hard pressed to find many VCs making investment decisions mid-July through August this summer. Plus, given 2015’s Q2 and Q3 peak, and then the Q4 slowdown into Q1 of this year, many previously funded companies, including the unicorns, will come to market again in September 2016. September-November 2016 will be the absolute worst time to be raising capital for a company at any stage. Not only will the masses be going to market then, but we’ll be seeing the final chapter of the U.S. presidential race play out — which, historically, has been a distraction for private and public markets. As a venture capitalist for the last 18 years, and an entrepreneur prior to that, I’ve seen what’s worked well and what hasn’t when it comes to raising money. A necessary part of it, of course, is the science: evaluating the market opportunity and team, establishing a fair valuation, getting comfortable with this being an opportunity that can scale successfully to a valuable outcome. But the heart of successful fundraising is relationships. I learned very early on in this business the value of building open dialogue and authentic relationships. From my position as a VC — and often a company’s first VC board member — I only wield a certain amount of influence. I am a thought-partner, a mentor, a connector — never a boss. Founders and CEOs of our portfolio companies listen to me, but they don’t have to do what I say. When entrepreneurs understand that approach, it sparks an essential bond at the start of a relationship. Like all good relationships, the partnership formed early on with your investor will have good times and tough times — but if it’s the right partnership, it will be one built on trust, respect and transparency. Some of the best relationships may not start as a pitch. I’m reminded of Jonathan Evans, whose casual coffee with one of our partners turned into a pitch, an investment and a promising long-term partnership. Granted, the experience that Jonathan had certainly won’t be every entrepreneur’s reality. Jesse Proudman, founder of Blue Box and now CTO of , can testify to that. He says he will never forget his first meeting with Voyager. He got a “no,” but it wasn’t a traditional rejection — we gave him clear feedback as to why we were not going to invest at that point in time. We told him we liked his energy, but he needed a stronger team, more revenue and a clear product story. Jesse regrouped for the next year, worked on what we discussed, including hiring an executive leadership team with experience in VC-based startups, and came back to us with a vastly improved business plan. Jesse was tenacious and focused. We led his A round and actively participated through their exit to IBM. And it was a win-win for all of us. For effective relationship building, resist the temptation to cast too wide a net. An entrepreneur who speaks with 20 or 30 VCs right at the start hasn’t done his homework and risks looking like a rookie. You’re not going to shop on Tinder if you want to make a real connection. The same goes for fundraising: approaching VC partnerships as you would a hook-up on Tinder will get you nowhere fast. You’d think that we all know this intuitively, but too often, I see entrepreneurs give potential investors the impression of being heavily shopped. Don’t do it. Instead, narrowing the focus — approaching no more than five VCs at a time for a particular round — will produce a better outcome. Also, though it may sound counter-intuitive, start raising capital for your next round during your current round by meeting with other VCs who may not be interested until the next raise. It’s never too early to start developing relationships that will pay off in subsequent rounds of capital. For instance, when we syndicated the Series A round for back in May 2008, the company strategically approached five firms that offered the right mix of geographic diversity and domain expertise in the niche of commercial video infrastructure. Of those original five VCs, one co-invested with Voyager in the Series A round, another one led the Series B round and a third led the Series C round. Those relationships built in 2008 and nurtured throughout their growth continually paid off at each stage of the company’s funding requirements, right up to their to Amazon last year. Like Glengarry Glen Ross and the phrase we all know well — “Always be closing.” Always be fundraising. As a VC, I never stop fundraising, either. And like our portfolio companies, I live by relationships.
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What this year’s M&A activity tells us about media and entertainment
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Jacob Carlson
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Content is still king. With Dalian Wanda Group’s $3.5 billion acquisition of Legendary Entertainment in January, this year’s media and entertainment M&A activity kicked off with a bang that hasn’t slowed down. Comcast’s $3.8 billion acquisition of DreamWorks Animation just three months later continued the trend of content consolidation and IP aggregation. Both transactions have varying motivations, but the common denominator is access to franchises and content that can be leveraged across the parent companies’ various business units. Content and digital transformation strategies have driven M&A activity so far in 2016, with no signs of slowing down — and thus providing clues about where we’ll see activity during the rest of the year. One major trend that continues is Chinese investment flowing into the United States. Almost from foreign investors came from China in Q1, and media and entertainment is a significant driver of that figure. In addition to acquisitions, there were a number of investments in U.S. film studios, including Film Carnival’s investment in Dick Cook Studios and Perfect World Pictures’ investment in Universal Pictures’ upcoming film slate. China’s continued interest in gaining insight into how Hollywood works is paying off for both sides of these deals. This insight will continue to help them ramp up their own production capabilities and speed up their ability to compete with the current global content creators. As a result, Chinese investment and M&A in U.S. media and entertainment should continue throughout 2016. Wanda’s massive Legendary transaction allows it to vertically integrate content production with its exhibition business. Its announced acquisition of Carmike Cinemas in March for added more theatres to its current count, which already includes other global exhibitors. This news came days after Wanda announced plans for a theme park outside Paris. When viewed as a whole, this ecosystem of content and distribution outlets positions Wanda as a global media and entertainment leader for the foreseeable future. In China, Wanda also holds a trump card over the other major studios in that it is a Chinese-owned/operated business, allowing it to navigate and potentially circumnavigate the Chinese theatrical quota system. Wanda’s ability to leverage its insider position with future Legendary productions, as well as its own forthcoming Wanda Studios at Qingdao, should give Wanda a significant market share in the theatrical film industry going forward. Comcast’s acquisition of DreamWorks Animation gives it a wealth of content that it can use across its numerous lines of business, including its cable subscription service (Xfinity), theme parks (Universal Parks and Resorts), cable networks (USA, Syfy, Sprout), digital platforms (Watchable, Seeso) and production companies (Universal Pictures, Illumination Entertainment). The potential overlap in animation capabilities with Illumination Entertainment is complicated, but could help Universal compete against Disney’s formidable one-two punch of Pixar and Walt Disney Animation Studios (if managed correctly). Comcast and NBCU also now have access to AwesomenessTV’s target demographic, production capabilities and original IP. The key to this transaction will be the extent to which they successfully integrate their content cross-platform. Content strategy factored heavily in Warner Bros.’ move to acquire Korean Drama SVOD service DramaFever for an , which will help the studio broaden its digital presence. Korean dramas are big business around the world, and WB has made a bet on proven content to widen its market reach. FuboTV, a soccer-focused SVOD service, raised led by 21st Century Fox, and Turner led a round in Mashable. As the digital ecosystem expands, traditional studios are seeing an opportunity to diversify their tech and content strategies. Virtual reality/augmented reality (VR/AR) investment has ramped up in “the year of VR,” taking in $1.1 billion through February alone. Most of that investment was Magic Leap’s Series C round of funding at almost , but other companies involved included MindMaze with a round and Wevr with a round. While consumer products are still in the early phases, the overall excitement and wide-ranging applications for VR and AR are driving investment for those who want to get involved early. Following Baobab Studios’ round in December, Penrose Studios raised in March, highlighting a competitive race to become the go-to VR content creator for immersive animated content. Comcast Ventures recently led a investment in Felix & Paul Studios, producers of cinematic VR experiences. Investors see this industry as a tremendous growth opportunity, with projected industry potential revenue of $120 billion by 2020, according to . It doesn’t appear that investment and M&A will slow down anytime soon. Live streaming has had activity as well, with for a reported $130 million being the biggest transaction of 2016 so far. Twitter made a strategic decision to purchase the live-streaming digital rights for 10 games this year. The price tag was especially low, considering Yahoo paid a reported $15-$20 million for the rights to live-stream one game last year. This gives Twitter a way to flaunt its Periscope functionality, potentially acquire users, increase engagement and recoup some of its investment with a limited amount of ad inventory that it will retain. The NFL gets to broaden its distribution, experiment with alternative revenue streams, target a younger demographic and, ultimately, create more competition for the NFL’s overall rights when they expire in 2022. It is very possible that the future of NFL broadcasts may lie with a digital-first platform like Netflix, Amazon, Facebook, Google or Twitter, each of whom has deep enough pockets to bid for the opportunity to capture the most valuable must-see live content in the United States. Expect the other professional sports leagues to watch this development closely. Based on activity in 2016 thus far, it’s clear we haven’t seen the end of key transactions. Paramount Pictures is looking for a to build out its international and digital capabilities, which would provide key content and IP access to the investor (although this process has become very recently). Yahoo is fielding offers for its core business, and Anonymous Content, creators of Oscar darlings and as well as TV hits and , is reportedly looking for a . Another area that could see more investment is the e-sports industry. It is expected to be a industry by 2019, and traditional sports insiders are paying attention. Former Los Angeles Lakers basketball player Rick Fox bought his own e-sports team for a reported in December, while former and current athletes Shaquille O’Neal, Alex Rodriguez and Jimmy Rollins have recently invested an in e-sports team NRG. FaceIt, an online e-sports platform, raised in January. Brands and advertisers are beginning to spend money in e-sports as they take advantage of the massive viewership opportunities for targeted demographics. The rest of 2016 should continue to see plenty of activity across the media and entertainment space as companies brace for the future of mobile and digital consumption trends. Consolidation of content and the need for diversification in the digital environment will fuel interest from traditional players like telcos and major studios. Investment from China does not appear to be slowing anytime soon, so expect those eye-popping headlines to continue throughout 2016 as it plays the long game. VR will begin to consolidate around content and tech, allowing leaders in both areas to emerge by the end of the year. As e-sports continues to gain traction via mainstream coverage and traditional advertising opportunities, it won’t be long before we see e-sports live events vying for the same eyeballs as the current pro sports leagues and attracting additional investment dollars along with them.
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Why Google Capital deal could augur the reemergence of so-called PIPEs
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Connie Loizos
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Last Wednesday, ventured into the world of investing in publicly traded companies, announcing it has backed , a platform that connects people with caregivers which went public in early 2014. With Google Capital investing $46.35 million, it became Care.com’s single largest shareholder, . The deal also sent nine-year-old Care.com’s shares soaring. On the day of the announcement, Care.com was valued at $278 million; by the end of trading on Friday, the company’s market cap had reached $508 million. It might have seemed interesting, if unremarkable, to some industry watchers. Others, however, think the deal may well usher in a new era of private investment in publicly equities, or PIPE deals, despite their checkered history. Those who’ve been around for a boom and bust (or two) are already familiar with them. PIPE deals became increasingly attractive in the aftermath of the late 1990s tech bubble, when the public market shut for tech companies, stranding not only ambitious startups hoping to IPO but publicly traded outfits, too. Faced with few options, some of those cash-strapped companies turned to outside investors like venture investors and hedge funds. In return for capital, the companies typically provided their public shares at a discount — along with the promise that if their shares were to fall in value, these new investors would be provided more shares to make up for their losses. In some cases, things worked out well. Phil Sanderson, today a managing director at IDG Ventures, was working as a partner at Walden Venture Capital at the time and says he led two investments in publicly traded companies that provided quick, meaningful returns to the firm. One of those bets was on VitalStream, a content delivery network that was ; the other was the IT management company Niku, . Sanderson says the two companies produced a “3x to 5 x return in a two- to three-year period,” and he credits those returns with approaching both firms with a VC-like mentality. “I’d join the board, bring in sales, help recruit employees. I would also communicate to analysts I knew about the company, and I’d be out there talking with hedge funds, getting them to buy and build positions in the stock. It was a lot of work but it paid off.” Other companies weren’t so lucky. Recalls one late-stage venture investor, speaking not for attribution, “PIPEs started off in a positive way, but the sort of ‘amoral’ hedge funds moved in, investing in companies without even knowing what the company did because these deals were structured in a way that [the funds] wouldn’t lose money. It worked out for the them, but it was a deal with the devil for the companies.” Public market investors caught on, too, often punishing companies for such deals, sending their stocks lower and, conversely, boosting hedge funds’ ownership in the process. Sanderson calls them “spiral death deals. The hedge funds just wound up owning more and more of the assets, then just sold them.” Whether Google Capital can turn around investors’ perceptions of PIPEs remains to be seen, including because last week’s deal was unique in many ways. For example, Google paid a 24 percent premium for Care.com’s shares, rather than a discount. It also bought back 3.7 million shares from one of Care.com’s early backers, Matrix Partners. “I don’t know the underlying motivations,” says the late-stage investor of Google Capital. He notes that Care.com has had trouble growing as a publicly traded company and that there wasn’t enough “daily float” — meaning shares being traded — for Matrix to distribute its holdings to its limited partners. (Typically, once a venture firm releases shares to investors in a startup that has gone public, those LPs cash out of their holdings. In this case, they would have likely torpedoed Care.com’s stock price because its trading volume is so light.) Either way, what other investors are busily noting is the outcome: Care.com’s shares rose last week because Google is perceived as smart money. If Google Capital thinks there’s upside in this deal (the thinking seems to be), the shares might have been underpriced. The deal has “certainly signaled to the market that [Care.com] isn’t a dud,” says the late-stage investor. “Maybe it can remove the taint from PIPES.” Sandy Miller, a longtime general partner the late-stage firm Institutional Venture Partners, seems to think it’s possible. Though Miller notes that — unlike in the post dot.com era — it’s not nearly so difficult for most public companies to raise additional funding right, he also observes that the current market is “bifurcated,” with some “top tier companies that can easily money should they need to but other companies with good fundamentals that are trading at lower fundamentals. [They] could be very good candidates for the active reemergence of PIPEs.” It’s something “IVP would consider, definitely,” Miller says. IDG’s Sanderson says he’s suddenly thinking about PIPEs again, too. “I do think Care.com could open up opportunities for VC. You can [access] healthy companies at a better valuation [than in recent years], and most venture funds have the ability to do them. You just have to explain to your [LPs] that you’re applying a venture model. You aren’t just picking stocks.”
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What businesses need to understand about chatbots
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Liraz Margalit
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Welcome to the bot-centric future, which is set to make smartphone users — i.e. almost everyone in the Western hemisphere — navigate the internet in a chit-chat fashion with a virtual assistant. But “assistant” will soon become too impersonal… Alexa, Siri and others will cross the line from impersonal robots to entities that know our habits, routines, hobbies and interests just as well as, if not better than, our closest friends and relatives. What’s more, they’re always with you and there for you, available at the touch of a button. For companies, this is a winning formula: Smartphone users have proved they are only willing to download and spend time in a limited number of apps. As such, might be better off trying to connect with consumers in the apps where they are already spending plenty of time. And a bot can potentially provide greater convenience than apps and web searches because it can natural speech patterns — and provide the personal touch in an otherwise impersonal user interface. Such a process has profound psychological ramifications. When interacting with , our brain is led to believe that it is chatting with another human being. This happens as bots create a false mental perception of the interaction, encouraging the user to ascribe to the bot other human-like features they do not possess. This may seem alien, but this attribution of human characteristics to animals, events or even objects is a natural tendency known as anthropomorphism, and has been with us since prehistoric times. Computers have always been a favorite target for such anthropomorphic attributions. Since their advent, they have never been perceived as mere machines or simply the result of interaction between hardware and software. After all, computers have a memory and speak a language; they can contract viruses and act autonomously. In recent years, the personal characteristics element has been increasingly strengthened in an effort to present these inanimate objects as warm and humanoid. However, increased “humanization” of can trigger a crucial paradigm shift in human forms of interaction. This comes with risks — and the results may be anything but soft and fuzzy. As human beings, our brains have an inherent tendency to prefer simplification over complexity. Computer interaction fits this perfectly. Founded on the premise of minimal or constrained social cues, most of which can be summed up in an emoticon, it does not require much cognitive effort. A chatbot doesn’t the emotional involvement and interpretation of nonverbal cues required by humans, thus making our interaction with it much easier. This goes hand in hand with our brain’s tendency toward cognitive laziness. Repeated interactions with trigger the constructions of a new mental model that will inform these interactions. It will be experienced as a different state of mind from which we interpret social interactions. When a human being interacts with another human being — for example, a friend — we are driven by the desire to take part in a shared activity. Communication with a bot is different — the gratification derives from a change of mental state, a sort of detachment: You can achieve your goal (getting help, information, even a feeling of companionship) with no immediate “cost.” No investment is required: there’s no to be nice, to smile, be involved or be emotionally considerate. It sounds convenient — but the problem arises when we become addicted to this form of bot interaction and slowly start developing a preference for “easy communication.” This can lead to secondary problems. are plagued by our primitive needs and desires. Our basic urges derive from the lower-level areas of the brain, such as the limbic system, which is involved in emotions and motivation. Studies found that users expected an asymmetric relationship in which they were . There are power differences in many real-life relationships. Power refers to a capacity of influencing another’s behavior, making demands and having those demands met ( ). When interacting with bots, people expect to have more power than the other side, to feel they can control the interaction and lead the conversation to whatever places they feel like. Unconsciously this makes them feel better about themselves and gain back a sense of control over their lives. In other words, in order to boost our self-esteem, we have a hidden desire to hold at least one power-driven relationship in our life. There is no better candidate for this relationship than But in developing robots that are specifically designed to be companions, people experience artificial empathy as though it were the real thing. Unlike real humans, who can be self-centered and detached, have a dog-like loyalty and selflessness. They will always be there for you and will always have time for you. The combination of intelligence, loyalty and faithfulness is irresistible to the human mind. Being heard without having to listen to the other person is something we implicitly crave. The danger is that such interactions with could lead to a preference among some for relationships with artificial intelligence rather than with fallible and sometimes unreliable human beings. We’re designing technologies that will give us the illusion of companionship without the demands of . As a result, our social lives could be seriously impeded as we turn to technology to help us feel connected in ways we can comfortably control. Bots are undoubtedly useful, and can greatly assist us in the digital sphere. Moreover, fine-tuning technological processes with human psychological concepts helps us make leaps in our knowledge and business practices. However, it’s important to maintain barriers — for seasoned CEOs and particularly for the younger generation of business leaders. The tablet-addicted toddlers entertained by “nanny bots” may grow up to be moody teenagers who turn to crowd-pleasing cyber-buddies instead of resolving issues with real friends. In adulthood, no amount of technological prowess will teach them the most crucial, timeless and vital business practice of all: establishing a genuine, personal and sincere rapport with your clients and customers.
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The things any startup could be doing to get Fortune 500 customers
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Victor Belfor
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New-market disruption is a rare phenomenon and usually comes in waves in conjunction with some form of dramatic technological advance. Many disruptive companies (both new and existing) created new markets in periods following the introduction of PCs (Apple, Microsoft), mobile phones (Apple, Samsung) and cloud computing (Facebook, Airbnb). And this is exactly what we are seeing in the enterprise market today. Large companies have been slow to embrace mobility and cloud computing. But that is changing. A study of 1,600 large enterprises published by IDG showed that 69 percent of enterprises have either applications or infrastructure running in the cloud, up from 12 percent in 2012. That’s more than 5X growth in just two years. A 2015 survey of companies with more than 1,000 employees published by RightScale shows that number at 92 percent. This is an opportunity the likes of which we haven’t seen since the PC revolution of the late 1980s and early 1990s. And many startups are taking advantage of this opportunity right now. Only a couple of years ago, it would have been pretty hard for a startup like , for example, to sell its category-making advocate marketing platform to the likes of Intuit, HP and BMC. And it would have been nearly impossible for an enterprise e-learning startup like OpenSesame to close deals with 30 of the global Fortune 2000 in one year, including SAP, Siemens and Dish. Opportunities exist in every major category. Think of new markets and all the things that SMBs have been doing and large business have not. Think new generation of social marketing and marketing automation, mobile-first business apps, IP telephony, payments, etc. But also think about categories that are of interest specifically to larger companies, like cloud security, identity and access management, compliance, document and contract management, enterprise service bus (ESB) and other middle-layer technologies. Even if your startup is going after the low-end disruption methodology, you don’t have to position it as a product with a smaller feature set at a lower price. Position it as a product with a feature set (and perhaps a different value proposition, too). Yes, you do not have all the bells and whistles of some huge clunky ERP system, but you offer benefits that they can’t (support for mobile devices, distributed teams, millennial-friendly user experience, etc.). Finally, let’s talk about what you need to think about when building an enterprise cloud service from scratch, or re-tooling an SMB product to go upmarket (which is much harder than it sounds). The first is obviously the functionality, but we are going to mention a few less-obvious things. This is not even close to being a complete list, this is just food for thought. Large companies are notorious for being security-conscious. Most public cloud services like AWS and Azure actually meet a lot of those requirements, like SOC2, but they might ask for additional things like audit rights, password rotation, etc. This is perhaps the single-most challenging part of doing business with large companies. Have a contract attorney at your disposal. They will not sign your paper. Be prepared to negotiate theirs. They might ask for indemnification, IP in escrow, insurance and a number of other things. Have an answer for them (and it shouldn’t always be “we’ll do whatever you want”). In SMB, we often talk about frictionless transactions and self-service. This will not work in enterprise. You need a solid sales team; although, nowadays, this can be a team of inside sales reps who do not need to get on a plane for every deal. Enterprise business has completely different economics than SMB. Large companies sign multi-year contracts and pay for a full year up front. Your annual account churn should be in low single digits and your net dollar churn should actually be negative. Enterprises are not less price sensitive, so do not under price your service. Each department wants to spend 100 percent of their budget or they lose it next year. The business is highly seasonal. You might do four times more business in Q4 than Q1. Because of a different business dynamic, you need a different set of metrics and measurements. Simple back-of-the-napkin CAC and LTV calculations don’t work. With low single-digit account churn and negative dollar churn, LTV calculations must become more sophisticated. You need to adjust for marketing cycle, sales cycle, seasonality, account growth and net present value. In this environment, a startup going after Fortune 500 accounts can grow explosively. If you need a benchmark, top startups in the space grow 300 percent YoY. I believe that the next billion-dollar enterprise product will not come from today’s giants, but from a startup that’s only a couple of years old right now — and may be even one that hasn’t been founded yet.
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#Brexit + #fintech: What happens now?
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Shefali Roy
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The British public recently voted to leave the European Union. Only history will tell whether it was a good decision or not. The immediate issue is… what happens now? Those in financial services and technology firms will have to grapple with the unraveling of treaties that will have a direct impact on their business. But first… what happens next? The U.K. has to invoke . In essence, Article 50 — a version of which has only ever been invoked once, by Greenland in 1985 when they were part of the EU’s predecessor, the European Economic Area (EEA) — determines the process of a member country leaving the EU. Prime Minister David Cameron said in his resignation speech that he expects the new PM to be appointed next October at the Tory Party Conference, and that that PM will issue the Article 50 notice to the EU. However, there was that EU bureaucrats expect the British to invoke Article 50 sooner. Martin Schulz, President of the EU Parliament, . Jean-Claude Juncker, European Commission President, . Once notice is given, the U.K. will have two years to complete its removal from the EU. Two years seem like a long time, but as those who work in financial services know, EU directives take years to be drafted, consulted, transposed and implemented nationally in EU member states. It takes substantially longer than two years. To expect an entire nation — — to withdraw completely is ludicrous. However, it isn’t unrealistic for the EU to ask the British to start thinking about invoking Article 50 immediately so there is a swift, smooth transition out of the EU so as to manage and mitigate market volatility and prolonged uncertainty. Once notice is given, negotiations begins. The U.K. will have to do its utmost to try to retain the existing state it has: access to the single market, free movement of labor, equitable financial regulations, existing import-export trade-offs and a say in the formulation of broader policy. There are potentially three models the U.K. could end up with: It’s arguable at this stage which model is best suited for the U.K. The outcome of where the U.K. ends up will depend on the strength of the negotiators. One wonders whether having Boris Johnson/Michael Gove or Nigel Farage or Jeremy Corbyn at the helm will be to the U.K.’s advantage; consensus implies no. U.K. commentators suggest that the Norway model is the way to go; however, the recent rhetoric of the EU negotiators suggests that that option won’t be on the table. Given this, fintech firms may have to broadly think of the following issues, and formulate plans to combat them. (For the purposes of this essay, fintech here refers to those payment firms that are either regulated as eMoney Institutions (EMIs) or Payment Institutions (PIs) by the U.K.’s Financial Conduct Authority. Their core business could include payment processing, peer-to-peer payments, e-money, online wallets, crowdfunding, online lending, mass remittances and FX payments, to name a few.) The list is not exhaustive: London is privileged to have talented people from all over the EU working here. Because of the single market and free movement of labor, anyone in Europe can work here with minimal labor and employment law bureaucracy. With the growth of the fintech sector, what makes or breaks firms is talent. London will be at a competitive disadvantage if the non-EU country model is what the British end up with. To reduce that disadvantage, — and their people too. The fintech industry is vying and competing for engineers, software developers, cybersecurity analysts and advanced technological thinkers. , the industry here is looped out of a nearly 500 million-person labor pool that would enable them to remain competitive and, more importantly, current. Investment and venture capitalists’ access to fintech startups here will be severely impaired. In addition to the opportunities to pitch, and access to funds that have been affected by negative tax incentives, it is arguable that fintech firms would benefit more from U.S. VCs or China VCs than those in their own backyard. This would be part of the negotiation, but unless the Norway or Switzerland model is adopted, it’s likely that the U.K. will lose access to the EU and any innovative and forward-thinking digital market initiatives, including e-KYC, the security of internet payments, e-residency programs and e-corporations. For U.S. companies operating in the EU, the ending of the Trans-Atlantic Safe Harbor Treaty was a blow to their operations. The introduction of the new EU-U.S. Privacy Shield was a step in the right direction, but many Europeans argued it didn’t go far enough to protect the data, security and privacy of EU citizens. Now, not only will the U.K. need to negotiate new privacy/data protection and security terms with the EU, it will also have to do so with the U.S. U.K. firms wanting to operate in the EU will need to build in provisions for EU-specific requirements, and now, also look to the U.S. to engage in U.S.-specific obligations. Presently, there is a plethora of EU directives being negotiated at the EU level that will in due course need to be agreed upon, transposed and localized by national regulators in local jurisdictions. The directives, include for example, PSD2, 2EMD, MLD4, Security of Internet Payments and Interchange Charge Regulation. These will potentially grind to a halt until such time that the regulators of the affected member states know what the next steps are. Key amongst this for U.K. fintechs is they potentially will lose their ability to “passport” their services into the EU. This is a potentially disastrous blow for U.K. fintechs that want to scale operations into the EU. Which begs the question… which regulator next? U.K. fintechs have had the privilege of being regulated in the U.K. by the Financial Conduct Authority — a progressive, innovative, business-friendly regulator. They’re tough, but they are pragmatic, efficient and have enough clout amongst other national regulators to play a key role in shaping and implementing EU-wide regulations. These advantages of the FCA disappear after #Brexit. The most important question for U.K. fintechs now is: Where should they go to get regulated to allow them to continue to get the benefits of the single market? Some fintech startups have considered seeking regulatory licenses in Spain, Italy, Ireland or the Netherlands. The rationale is either that they already have operations in or familiarity with these countries, and it would be an easy marginal cost argument to continue to double down on these bets. However, Germany is probably the most commonsensical choice, for many reasons: While it is certain that there are still many unknowns yet to be ironed out after this disastrous turn of events for Britain, the unequivocal consensus is that almost no one knows… what happens now?
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After five years, Juno arrives in orbit around Jupiter
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Emily Calandrelli
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After traveling five years through the solar system, Juno has finally reached its destination and is currently in orbit around Jupiter, traveling nearly 250,000 kilometers per hour (150,000 mph). The most dangerous aspect of the $1.13 billion mission, which launched in 2011, occurred this evening at 11:18 pm ET when initiated its final approach procedures. In order to successfully insert itself into orbit around Jupiter (instead of flying right past the planet, or crashing into it), Juno needed to ignite its main engine for 35 minutes. Now that Juno has successfully completed this burn, it will begin its first of 37 orbits around Jupiter. Jupiter imaged by the Cassini spacecraft / Image courtesy of NASA During these orbits, Juno will repeatedly dive through Jupiter’s radiation belts, coming within 3,000 miles of Jupiter’s cloud tops at its closest approach. With a suite of , Juno will provide data to improve our understanding of Jupiter’s formation and evolution. “Juno’s study of Jupiter will help us to understand the history of our own solar system and provide new insight into how planetary systems form and develop in our galaxy and beyond.” – NASA Jet Propulsion Laboratory Juno, which was named after the Roman goddess who was Jupiter’s wife, will enable scientists to see below Jupiter’s dense cloud cover – something that’s never been done before. One of the reasons this is such a unique mission is because its destination is extremely dangerous. Of the eight known planets in the solar system, Jupiter has the largest magnetic field and the highest radiation. Because of this, Juno had to be specially designed to survive these extremes long enough to retrieve useful data from this mysterious planet. To put the extremes of Jupiter in perspective, the background radiation that we’re exposed to here on Earth is about 0.39 RAD. On Jupiter, Juno is expected to see 20,000,000 RAD over the course of its lifetime. In NASA’s trailer for the Juno mission, scientists describe Jupiter as an unforgiving, relentless monster. “It’s spinning around so fast that its gravity is like a giant slingshot slinging rocks and dust, electrons and whole comets. Anything that gets close to it becomes its weapon.” – NASA Juno Science Team Juno spacecraft size in relation to a basketball court / Image courtesy of NASA/JPL NASA’s needed a spacecraft strong enough to withstand this environment and their answer was Juno: a nearly 8,000 pound spacecraft with three different solar panels that stretch out to 9 meters in length. At the beginning of the Jupiter orbit insertion, Juno carried 1,232 kilograms of fuel. Now that the 35-minute insertion burn has been completed, there’s only 447 kilograms of fuel left on the spacecraft. Juno will use the remaining fuel to complete the next 36 orbits around Jupiter and ultimately de-orbit into the planet itself. The video above shows a peek of what the spacecraft saw as it neared its final approach. Captured with the JunoCam camera on June 29 , Jupiter along with four of its moons (Callisto, Ganymede, Europa, and Io) can be seen. All equipment on board, including the science instruments and JunoCam, were turned off on June 30 to prepare the spacecraft for the most dangerous part of its mission: the Jupiter orbit insertion. “The scariest thing to me about Juno are the unknowns. So much about the environment that it will have to withstand is unknown. Nothings really certain about what’s going to happen.” – NASA Juno Science Team There’s still a long, dangerous road ahead for Juno, but if everything else goes as planned, the mission will end with the spacecraft de-orbiting and crashing into Jupiter in 2018.
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Kate Conger
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Emerging markets’ challenge to Silicon Valley
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Keith Jones
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Silicon Valley leads the global technology innovation markets with the credentials and an ecosystem that is second to none. We have had contact with many of the leading technology accelerators operating out of Silicon Valley, and their opening line for the conversation is often: “How are you relevant to us?” However, those of us living in the rest of the planet, the “outsiders,” have quite a bit of FOMO and, while we want to be part of the party, we still have to ask the question: “When is Silicon Valley going to become relevant to us?” Africa is quite big, and we have quite a few challenges — probably more than our fair share. We have 1.2 billion people, 60 percent of the world’s uncultivated arable land and the most technologically underserved population on the planet. Emerging markets represent 60 percent of the world’s population, so while Africa is unique with its challenges, the emerging markets category, which we are part of, is going to be highly relevant in future markets. Africa and the emerging markets have a leading role to play in the future direction of the planet. If we are brought along for the ride, we all have a chance of a good future. However, if we are left behind, we all suffer the consequences. The evidence that this is already happening is becoming more apparent. Firstly, technology innovation is going to give us the data we so desperately need to understand how to solve the problems we face, and, secondly, will drive the cost-to-serve down to a point where we can address the problems effectively at the required scale. Technology innovation is everything to our future. The challenge we have for Silicon Valley is: “How are you going to be relevant to us?” Technology accelerators look at the region and either see what they can do to take the top candidates across to Silicon Valley, or, launch a program, do it once and leave. The process seems to resemble more of an A/B test than a customer or market validation exercise. Working with a lot of the VCs, locally and internationally, the most common questions are: “Have you got pipeline for us?” and “Do you think there is enough quality in the region to sustain the innovation market?” The response is, firstly: “What are you doing to develop your own pipeline?” and, secondly, “We have bucket loads of talent. However, it is not being leveraged right now because we are trying to emulate the Silicon Valley models, which don’t work here.” Our markets are different, that is the joy of the world in which we live. In a dysfunctional ecosystem, the challenge is the opportunity — there is nothing more exciting than creating new solutions. In the West, less than 30 percent of payments are from mobile devices, in emerging markets it is 60 percent. The West says “mobile first;” Africa is mobile , so the way we use mobile is very different. The West thinks “cloud/PC/tablet/mobile;” emerging markets think “mobile/bricks and mortar.” Our payment models are different: We need to service larger, more complex, multi-cultural user communities at a cost to serve that is a fraction of the West, off weaker infrastructure. In the remittance markets, both and have more than a million customers each. was first to market with mobile education solutions and content via MMS. has managed to scale with in-country transfers gaining a loyalty and reach with which banks cannot compete. In developed markets, what indicates success is the innovation itself and how you can scale. In emerging markets, how you create access to market is everything. In his book , Clayton Christensen covers three types of innovation: 1) true innovation, 2) incremental innovation and 3) sector innovation. What drives emerging markets is the fourth innovation, market access innovation. If you can innovate how you reach your market, the other innovations are not as relevant. figured this out and built a telco with more than 228 million subscribers across 22 countries in Africa and the Middle East. The innovation markets are business economies, like any other, so the fact that none of the Silicon Valley accelerators are actively engaging in emerging markets means one of three things: 1) there is easier money to be made somewhere else, 2) the business models they have don’t scale or aren’t relevant or 3) the businesses aren’t looking to scale as they are the legacy businesses described in Clayton Christensen’s book. The first is probably the most applicable. In global terms from a GDP point of view, emerging markets tend to be more of a rounding error than a strategic focus and, although all points mentioned have some relevance, the third probably has the least. Our markets are complex, and don’t work the same way as the Western markets; barriers to entry are relatively high and the learning curve for the Western marketers is not steep, it is nearly vertical. The markets take time to enter and understand. Our markets are defined by the “missing middle” in both the B2B and B2C sectors. The economies are fragmented and Western scale models tend to be built on scaling across a large enough homogenous customer base to reach liquidity. Scale is driven by having a market that is both accessible and addressable. In emerging markets, the communities are becoming accessible, and we are mobilizing very quickly — but addressability remains the challenge. Each sector needs to have its needs met. Niche extensibility drives the markets here — how to monetize a business off not one, but a number of smaller niche communities. If Silicon Valley can figure out how to access and scale in these markets, the rewards are a contribution to, and relevance in, the future global economy. The process to-date is taking the top 0.001 percent of African startups and moving them to Silicon Valley to be accelerated there. Many of the businesses stay there, close to their funders; some return. This model fits in with the Silicon Valley business model and, while we actively celebrate and support these individual wins, it does little to connect Silicon valley to the majority of the planet. Get over yourself, I hear you say. It is a hard commercial world out there, sort out your problem. And we are. We are all moving ahead and doing what we can, figuring things out. We started accelerating businesses three years ago and the market of today is a very different market. It is happening, but not in a way that is relevant to the Silicon Valley business models. Startup Rules 101 indicate that a business needs to be locally relevant to succeed. The product must be built to serve the needs of the customer in that market. Right now, the customer is the limited partner in the accelerator and the market is the U.S. Emerging market innovators represent deal flow for this machine. Until the emerging markets and their customers become the target, we are unlikely to have a meaningful relationship with Silicon Valley. Business dynamics must apply, so here is the opportunity. Businesses lift more slowly here but cash goes three times as far. The market is underfunded; perhaps some would describe it as more than a bit chaotic. However, chaos means opportunity, and the costs to lead a sector and get the network effect working are relatively low. It is more of a numbers game: quality is variable, so you need more chips on the table, but the cost of the chips is lower. The equity rewards will take longer to show, but the skills will not. It is a bit more like the Wild West than the West you know, but the opportunities are in line with the analogy. The skills developed will be an understanding of how to access the majority markets and learn how, when and where to scale. As the competition in the innovation markets heats up, the shifting focus of investors from footprint to revenue will play more strongly to our markets and skills. The emerging markets missed the vanity metrics bubble and the focus on footprint; however, the historic lack of funding means we tend to be more cash focused. It is easier to have a realistic conversation about break-even. Our mentor community is mobilizing quickly, as are the local funds, so there are more and more people with whom to connect and work. Africa is open for business, it’s beginning to happen. We are shifting from an innovators to an early adopters market. It is not for everyone, and as we say locally, “Africa is not for sissies.” We would love to lay an emerging markets challenge down to Silicon Valley. “When are you going to need the skills to understand how to access the majority of the planet?” If you do reach out, the question we would like to hear is: “How can we be relevant to you?” Is there anyone in Silicon Valley who is not a sissy?
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How our Founding Fathers raised a Series A
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John Mannes
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For some of us, hot dogs, patriotic songs and fireworks are enough. We here at TechCrunch expect more of our readers. Why be satisfied with fireworks when you could literally launch a Kickstarter into the sky. If you’re like me, you were likely quite disappointed to find out that wasn’t about an epic duel, I mean “syndicate,” between and . Somehow, before , our Founding Fathers must have gotten their startup fix. Here’s how they hit 10X. Ben Franklin He briefly considered founding Warby Franklin but ultimately decided not to profit off his invention. The bifocal idea was rapidly adopted by other founding fathers. Franklin must have understood that there is no better way to build up hype around a product than refusing to mass-distribute it and only letting celebrities get access to it. The first patent for soda water in the US . It took 22 years for soda to catch on despite already having a patent, not needing FDA approval, and maintaining an ultra-lean team of two. John Fitch took a play from Travis Kalanick and decided Steamboats were too expensive for the everyday seafarer. with spare parts and the help of a local clockmaker. The Continental Congress refused a term sheet and Fitch instead decided to increase the value of his company with . He bootstrapped until he was able to close an angel round from high net-worth individuals in Philadelphia. His Uber-for-boats never really caught on. Fitch took after taking bad investor advice to move into the economically volatile French market.
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Augmented reality has no clothes
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Bo Begole
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Augmented reality and virtual reality continue to buzz hotly as contenders for the next wave of computing. Tech-industry pundits predict enormous future markets reaching based on speculation that . The technology promising, but other smartphone killers haven’t panned out: Google Glass and smart watches. Perhaps the industry is again engaged in wishful thinking, declaring AR as the future emperor and dressing it in imaginary clothes. The story for VR makes sense. VR goggles provide a far more immersive and compelling display than any 3D display of the past — VR goggles consume your vision with stereo images of fantastic computer-rendered worlds. VR headsets will fly off the shelves as gamers sink into 3D nirvana. Then, while VR is being adopted for games, people will likely find it enhances other applications, too: 3D sports broadcasts, tourism, education and possibly even social networking, as Facebook’s Oculus hopes. 2016 will be the year for VR as several headsets are out now or coming before the end of the year. The story for AR is much less straightforward. First of all, although VR and AR technologies sound similar, AR is far more complex because it involves displaying and aligning digital content over the top of objects in the real world. Unlike VR, you cannot turn your phone into an AR headset with a piece of cardboard. Nevertheless, AR technology is progressing rapidly. I’ve recently tried a number of new AR headsets from , , and . Rather than the ghost-like images of just six months ago, the images in the new models are bright and clear, with crisp stereoscopic depth. The field of view is getting wider, though still not approaching the 150+ degrees of human eyes. The headsets are a little too big and heavy, but not terribly so, and they all exhibit attractive geek-chic designs, suitable for wearing in public. The underlying computer vision software is getting better at recognizing objects in the real world and aligning digital objects that match the lighting, transparency and occlusion of the real world. Still, there are a few problems that AR technology may never solve. First, no one really likes wearing glasses. We tolerate wearing them to correct our vision, but those of us who wear glasses would really rather not. Second, AR glasses are not completely transparent, and your view of the real world is somewhat dimmed by the translucent display optics. Third, there is no way to project “black” onto the glasses, meaning that the real world always shows up within dark areas of digital objects. Finally, there is a disparity in your eyes’ focus between projected images centimeters from your face and real-world objects that are meters away, causing eye fatigue, nausea and breaking the illusion of blended reality. Perhaps the technology limitations are minor. More critically, the applications and use cases for AR are simply not as compelling as gaming is for VR. Yes, there are some serious, industrial use cases that have some self-evident value under AR: guiding technicians in the assembly and repair of complex machines, assisting surgeons during operations, alerting pilots and drivers to navigation cues and objects in front of the vehicles and . On the other hand, even for these applications, the using simulated or artificially controlled situations. For the sake of argument, let’s assume the technology improves enough to be practical for those industrial applications — that’s still not enough to replace the smartphone. What are the applications where AR will stand out? The first thing in AR’s favor is that it is always on, so I don’t have to reach into my pocket, flip open the cover, turn on the phone, enter a passcode, launch an app, navigate the UI, enter a query, etc. AR will see what I’m seeing, hear what I’m hearing and infer what I need from cues in the environment. Maps will appear when I get in my car, reminders will appear over people, places and things that I encounter, notifications will wait till I’m not busy, search results will appear as I wonder aloud, foreign languages will be translated on-the-fly, currency converted, instructions provided, etc. Overall information access will be completely seamless. Nice! Then again, I can already do much of this with current and on my phone and devices connected to the cloud. So, hmm. Seamless information access may not be enough to drive us to wear AR glasses any more than the convenience of Bluetooth headsets has done away with speakers. We’ve seen the concept videos from Microsoft HoloLens that illustrate a few laudable applications in education, but many more marginal applications, like playing Minecraft on a coffee table, floating TVs and even a digital dog reminiscent of the . Like Bob, Microsoft’s HoloLens paradigm is wrongly using space for digital information management. Magic Leap is no better, putting a 3D email application into mid-air. Like the mechanical horse, these UIs are wrongly shoehorning the pre-digital-age information management that had to be based on spatial location because it was all physical. That’s a classic mistake. Digital information management is not constrained by physics — who wants to literally walk over to a coffee table to see the weather forecast. Ask for it. Some people understand AR in its fullness, though, and they give me hope. Recently, I was lucky enough to see a number of applications uniquely suited to AR developed (let me point out again, HCI conferences, and classes, are the single best place to go for ). My favorite among the Stanford projects was a piano tutor that showed scrolling bars atop the piano keyboard indicating which, when and how long to press the keys. Brilliant. There is no way a smartphone app could ever be as good at blending the instructions directly onto a physical piano. Similar, then, to the industrial AR apps, the killer app category for consumer AR will probably be training applications and how-to tutors for interacting with physical objects and materials in the real world. Is that too small of a niche for so much technology? Maybe not. Developed economies are increasingly based on human creativity and innovation. Ultimately, AR is just one of many ways that gives us all superpowers that enhance our sensing and mental abilities beyond what is humanly possible. I’d say the emperor’s clothes are in fact real… they’re maybe just a little bit skimpy.
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Zore X is a smart gun lock that raised almost $250K on Indiegogo
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Jordan Crook
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An unlocked gun can ruin more than one life. In fact, that toddlers shot an average of one person per week for the 2015 year, often injuring or killing themselves, because they were able to get on their hands on a gun. , like many new products on the market, aims to change all that. Zore is a Jerusalem-based startup that has built a smart gun lock. Through a connection to an app on your phone, the Zore X lets the user unlock the gun remotely, as well as monitor movement of the gun if it’s within Bluetooth range. However, in the case of an emergency, many of us don’t want to be fiddling with our smartphone just to unlock a gun, which is otherwise useless, when confronted with an attacker. That’s why Zore included a PIN dial right on the Zore lock. It’s rather similar to a locker lock, letting the user spin it back and forth a couple of times matching their unique PIN code. Even with a relatively long PIN code, users are able to unlock the gun within seconds. Zore even says that, with a little practice, users should be able to unlock their Zore-protected guns behind their backs or in the dark. Locking the gun is only possible using the physical Lock button on the Zore itself. For that aforementioned practice, Zore created the Zore trainer as a piece of the app, which surprises the user and tests how quickly they can unlock their gun. [youtube https://www.youtube.com/watch?v=f4gnnQViUMM&w=560&h=315] The company also sells the Zore Bridge, which can go in the home and monitor the gun at a much farther range than just the phone app. It uses a Bluetooth connection, just like the app itself, to monitor the movement of the gun and tell whether or not anyone is trying to break in. As a complement to that, for even more protection, users can purchase the Wi-Fi-based Zore WatchDog, which gives users constant watch over their gun and lock no matter where they are in the world. We’ve seen a handful of tech-based devices looking to make guns more secure, including one of our CES Hardware Battlefield companies, . Zore put the product up on Indiegogo in June and has received nearly from backers, well over the company’s $100,000 target. For the Fourth of July, the company is offering a discount deal: two Zore X, one Zore Bridge and one free Zore WatchDog for $209. You can check out Zore .
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Natural Cycles gets $6M to convince more women to ditch the pill
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Natasha Lomas
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Can an app stop you from getting pregnant? In conjunction with daily input from a basal body thermometer, it can indeed. Or so says European startup , which also bills itself as a fertility tracking service, and is today announcing a $6 million Series A funding round, led by Bonnier Media Growth, the venture arm of the Swedish media business. Existing investors Sunstone and E-ventures also participated in the round. This follows a $1.5 million seed raised last year. Female-led health-focused startups, such as the likes of and , have been grabbing attention and funding in recent years by pioneering smart services that cater specifically to women — sometimes also underlining how male-dominated tech giants are in this area. , which was founded back in June 2013, is led by a wife and husband physicist duo, Dr. Elina Berglund and Dr. Raoul Scherwitzl. It expanded out of its Nordics home base in , adding the U.K. to its market roster and now claiming more than 100,000 active users across 161 countries. It’s a subscription-based service, with reported revenues of $2 million in 2015 — its first full year of trading. The science behind the app is based on the fact that a women’s body temperature rises after ovulation, so you’re able to accurately track body temperature, algorithmically correcting for fluctuations that might be caused by other factors, such as drinking alcohol, then in theory you’re able to identify when ovulation is occurring — and thus correctly pinpoint a women’s fertile window (coupled with factoring in sperm survival rates). Although it should be noted that many factors can affect body temperature. And there are of using basal body temperature for natural family planning. On the outside endorsement front, Natural Cycles notes that Kristina Gemzell, a Swedish researcher in the field of contraception, sits on the company’s advisory board and works with it on conducting clinical studies. : In an email to TechCrunch Gemzell confirmed she has been involved in an analysis of the database “showing a real life efficacy” that is in line with the pill but added there is currently “no study with a direct comparison available”. Natural Cycles uses a simple red or green color-code system to inform app users whether there may be a risk of them getting pregnant on a given day if they have unprotected sex, or whether there is lower risk. Users do have to manually input their temperature data. A prior plan to develop a wireless thermometer to simplify that part of the system has so far been put on hold, co-founder Scherwitzl tells TechCrunch, in favor of funding research to quantify accuracy rates. At this point the team has conducted one large-scale study, involving 4,000 women, to investigate failure rates for the app — which he says pegs the accuracy as about the same as using the contraceptive pill. Using the , which is based on typical usage — so accounting for human error — seven out of 100 women using the system would get pregnant versus nine out of 100 using the pill. While on a perfect use basis, where you take human error out of the equation, the study indicated Natural Cycles would have a failure rate of five out of 1,000 women versus three out of 1,000 women for the pill. Conducting more research to underpin the product is part of the plan for the new funding — including what Scherwitzl dubs a “gold standard” study of usage versus using the contraceptive pill. “One large study we want to do is… a randomized control study,” he says. “Right now we use women using our product in real life and see how many get pregnant. Now we want to make a randomized control study against the contraceptive pill. So 1,000 women will use our product for one year, 1,000 women will use the pill for a year and when they come to the clinic first they will not know what they will get for a year… It will be very interesting to see how women experience different birth controls.” The team also intends to perform other clinical studies to investigate factors that can affect fertility. “It’s very interesting now that we have all this data on fertility. You can really understand what affects fertility. That has been studied in the literature but we have a really large data-set now, very high quality data — so that will be very interesting to just dig into it and see what we find,” adds Scherwitzl. Simplifying natural contraception via an easy to use app plus digital subscription service in order to widen access to non-pharmaceutical contraception is the core business proposition — and one with a massive potential market size if enough women can be convinced of the method’s reliability. And convinced enough to ditch the pill. So far Natural Cycles has done especially well in its home market of Sweden, managing to capture four percent of the local contraception market within 18 months, according to Scherwitzl. But their ambition scales far beyond home turf — with the new funding to be funneled into expanding the team and backing a big push in the U.S. market. “We’re really planning to build a very large company. The vision is really to increase choice in contraception and accelerate time to pregnancy — a world where every pregnancy’s wanted,” says Scherwitzl. “We want to provide the best possible product and services related to that.” “One of the biggest problems in contraception is the lack of innovation,” he adds, discussing the competitive landscape. “Pharmaceuticals have retracted their funding from that area, not completely but dramatically — so there’s not many new things in the pipeline… so I think the more that work on it, the better it will be for society. And for women and men to have more to be able to choose from. It’s something you want to decide what fits best for you and not just from a set of three, four, options. “Pharmaceuticals is an interesting one because they are protecting their market. That’s important to watch what they do — how they react to this new wave of apps, digital companies coming in to the market. That’s new territory and also that’s new territory for them.” While there are very many digital apps/products focused on fertility, and specifically on serving couples that are trying to get pregnant, Natural Cycles’ early positioning as a contraception app helped the startup stand out in a crowded space. But Scherwitzl notes that many of the women who have used it for contraception have also used it for getting pregnant. So it’s now doing more to emphasize the fertility use case, too. “We got a lot of natural influx of women using it for getting pregnant and that’s something now that we’ve started to develop further,” he says, claiming use of the app can help women get pregnant faster by telling them when their fertile window is. “This is is a new study that we’re working on that will come out soon,” he adds.
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Novelist Eliot Peper talks about fiction as a foreign country
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John Biggs
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This week on the I talked to , the author of the cyberpunk novel Cumulus. Peper talked about the value of science fiction as travel for the mind. He has been an entrepreneur and VC and finds that those industries are often more about checking off boxes in a spreadsheet rather than true exploration. By writing – and reading – speculative fiction Peper thinks we get some of the best assessments of our present. You can and check out his other books on Amazon. I think you’ll find that you’ll find online anywhere. Download the and subscribe .
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You’re doing DevOps wrong
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Andy Vitus
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Gone are the days of the quarterly product release cycle. To meet the evolving expectations of today’s end user, software must continuously adapt. As a result, hyper-automation of the software development process has become the thing on which companies, regardless of industry, compete. From fledgling startups to enterprise heavyweights, business leaders are realizing that they need to figure out how to embrace ideas like to keep up. As an engineer and investor in the infrastructure space, I see where the breakdown happens with in theory and in practice. Progressive companies get the value of agile development, but the approach is often misguided, primarily because of the fact that comes into play too late in the game: Too often, startups only go back to layer in automation and test scripts once they’ve run into problems scaling. Enterprise giants face a similar challenge as they grapple with weaving into legacy infrastructure and processes. It doesn’t have to be like this. There’s an old saying that an ounce of prevention is worth a gallon of cure. Baking in from the start is the key to running a lean and agile team that can scale quickly and adapt easily. Whether ’ just starting out or ’ part of an established organization that wants to make the shift, here are three guiding principles for right. Building in automation and testing from the beginning is your linchpin for success. Here’s why. Taking the idea of the minimum viable product to an almost stupid degree, companies of all sizes are getting crushed by mountains of technical debt. It’s common to see companies write code for a product or service and find themselves trapped a couple of years later because they didn’t think about what would happen at scale. So they frantically hire engineers whose sole purpose is to fix what’s broken and rewrite the code base to build in automation, instead of focusing on creating new product features. Meanwhile, customers wonder why they aren’t seeing new features, and often move on to more innovative competitors. Similarly, test-driven development is a concept that’s touted as best practice, but, in reality, very few companies actually follow this practice. People don’t test from the start for the same reason they don’t floss their teeth: It’s unpleasant. But then one day find yourself getting a root canal. There is a common perception that building testing into the development process slows things down, because the amount of code for testing can sometimes be two or three times what is needed to build a product. I find this thinking nearsighted. There’s an easy way to avoid this issue — build in automation and test-driven development from the very earliest phase of a company (or product). Spending the extra time up front, rather than waiting for things to break, will save time (and a huge headache) down the line. The entire software development and operations process used to be (and for many companies still is) manual. Thanks to a newly defined stack, comprised of tools purpose-built to simplify and automate each step of the development and operations process, taking advantage of can actually be quite simple. Companies like provide a repository for writing and controlling the initial source code. and make continuous integration easy by automating testing. Companies like provide an end-to-end solution for storing and managing binary code, allowing developers to have full control over the software release flow — from development to distribution. And then there are companies like that automate the next phase of taking that data into production. Sitting above all of this are containers like and , which accelerate delivery and enable continuous deployment. Companies that take advantage of these tools find themselves able to make changes to software as quickly as developers can write the code, without any down time. In addition to the tools and moving to a mentality of building for scale, need a leader with a strong vision and commitment to making the organizational changes required. Nike, Facebook and Netflix are great examples of success stories — largely credited to their leadership. Having an executive-level advocate — likely a CIO or VP of Engineering — who believes in a meritocracy across development, operations and testing and prioritizing agile development processes, is a key factor for success. The CIO must be willing to challenge the status quo and change the mindset of how developers and operations teams work together. While enterprises have traditionally relied on a massive, hierarchical IT organization to oversee operations and testing, requires decentralizing IT and empowering developers to create agile, scalable and innovative teams. Startups have an opportunity to adopt this approach from inception, but for legacy companies, the shift is happening more organically — one project or application at a time, rather than across an entire organization at once. Embracing is essential for companies to stay nimble and competitive. But the fact of the matter is that failing to have the discipline to do it the right way is holding them back. Taking the time up-front to bake in best practices, leveraging the latest tools for innovation and a willingness to dive in and reorganize your IT organization with in mind are the keys to deriving the most value from agile development.
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Trump tweets at “dishonest media” in Star of David kerfuffle
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Sarah Buhr
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Happy American Independence Day, TechCrunchers. Today those of us in the U.S. celebrate the original Brexit with hot dogs, and fireworks. Americans are also in the middle of a very weird presidential election, as you may know, and Republican presumptive nominee Donald J. Trump has taken to Twitter once again today to explain why he’s not a racist — or anti-Semite, in this case. Dishonest media is trying their absolute best to depict a star in a tweet as the Star of David rather than a Sheriff's Star, or plain star! — Donald J. Trump (@realDonaldTrump) It’s not him, it’s the media, apparently. But take a look and decide for yourself. Here’s an image of the original tweet, which has since been deleted by Trump: Notice the obvious Star of David image next to Hillary Clinton’s picture emblazoned with the words, “Most corrupt candidate ever.” This is a six-pointed symbol of Israel and the Jewish religion that Hitler forced the Jews to wear to identify themselves. Trump says the image is actually a sheriff’s badge, which is odd because, as first pointed out, the image in Trump’s tweet had actually appeared in, I can’t even try to make this stuff up, a frequented by white supremacist groups. Trump supporters may think the orange one has a point — sometimes a sheriff’s badge has six points as well. But the difference between a sheriff’s star and the Star of David is sheriff’s badges always have circles on the edges, whether it’s a five-point star or a six-point star. Note the circles on these sheriff stars: Trump has since replaced the original tweet with another one showing a circle instead of the Star of David. Crooked Hillary — Makes History! — Donald J. Trump (@realDonaldTrump) But hey, it’s all just part of we, the “dishonest media” trying to destroy his plan to “Make America hate again.”
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Family-photo-sharing platform Togethera shutters after low growth numbers
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Mike Butcher
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London-based , a startup that allowed families to share photo albums privately, is to shutter after failing to raise beyond its initial £250,000 seed round from 2014. The startup managed to garner 65,000 users for its web/mobile platform for private photos. But it would appear the audience is continuing to use other platforms, such as Apple albums or Facebook, and it struggled to raise further capital with those low user numbers. The key difference between Togethera and other apps was that a user could only be invited to a group by someone who already had their email address. They also had a side-project app called where photos between friends on a night out would automatically delete a week later. Co-founder and CEO Sokratis Papafloratos started the site with Matt Dempsey, formerly of Facebook. Papafloratos told me via email: “Unfortunately we couldn’t raise further funding this year or build a business out of the product, so we have decided to shut down Togethera and Upshot and wind down the company. We took on a big, ambitious goal and built a product that was beautiful, private and put your needs as a user first. Many of our 65,000 users loved it, but the space proved to be too difficult to crack. Obviously, we’re saddened by the outcome, but don’t regret going for it for a second. We built a product we’re proud of, we brought joy to thousands of families across the world and created an amazing team. We’re now speaking to a few people about next steps and opportunities and I’m confident we’re going to find a good home for the team.” The site sent out an email this afternoon to users telling them that the service will shut down on August 4th, with instructions on how to download their photos: “Unfortunately we’re not generating enough revenue to cover our costs, and our user base isn’t growing fast enough to suggest our revenue issues might be solvable soon. We were also unable to secure further funding to keep the company going, despite our best efforts.” Around three days after Togethera shuts down users will receive an email to download archives of their groups’ photos, videos and comments. The startup had previously raised seed financing from a group of influential European and SF-based angels/entrepreneurs. These were: Mosow-based Kirill Makharinsky (co-founder of ostrovok), SF-based Andy McLoughlin (co-founder of Huddle) and, from London, Andrew Bredon (London co-founder of dealchecker), Nic Brisbourne (partner at Forward Partners), Alexios Vratskides (Persado and Upstream), Chris Burke (ex CTO of Vodafone and previous investor in TrustedPlaces) and HOWZAT Partners (previous investors in TrustedPlaces and Trivago).
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Opinion: Brexit is a tragedy, but it could be the making of UK Fintech
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Damian Kimmelman
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Let there be no doubt – Brexit is a tragedy. Instead of taking on challenges with its European partners, Britain is taking precisely the wrong course, injecting needless uncertainty and negativity into the economy. Tech will particularly suffer. The UK’s start-up scene, nurtured by international venture capital and skilled workers’ willingness to move here, was – and thousands of well-paid jobs. Development will now stall as companies struggle to find the staff and cash they need to scale. of London’s forthcoming tech decline are now ten-a-penny. And for , forecasts are particularly bleak, with banks and start-ups alike seen for more welcoming climes in Dublin, Paris, Stockholm or Frankfurt. However, these fears are overblown. Indeed, Brexit could be the making of the UK’s fintech sector – and even the trigger point that transforms some British companies into world leaders. The reasoning is simple. London is the financial centre of the world, based on its banking hegemony, its role as the global hub for foreign exchange, and passporting rights – which allow international financial firms to operate across EU member countries. With that position under threat, to other European financial centres. However, financial institutions are hugely cumbersome, both in terms of their back office technology and their armies of well-renumerated staff. For a big bank, moving any function out of London takes considerable time, energy, and money. In contrast, fintech companies are infinitely more agile. With minimal sunk costs and far smaller numbers of staff, start-ups can pivot quickly and solve the new problems created for companies by Brexit – meeting evolving compliance requirements, finding new suppliers and customers and making data-driven decisions. And although the potential end of passporting rights does significantly impede the UK financial sector, it has far less impact on fintech than for banks. Most fintech companies plan to expand not by becoming regulated entities in every country, but by working with institutions in other countries who can sell, trade or clear their products – a strategy that won’t be seriously affected by a regulatory change. So while slow-moving banks are bound in regulatory red tape, fintech companies can navigate past it – allowing them to take a larger slice of banks’ profit margins. Start-ups will look to fill lending gaps created by institutional inertia, and this pattern will be replicated across fintech as nimbler companies outmanoeuvre incumbents. Fintech companies won’t have it easy. There are substantial challenges ahead, from data protection alignment between countries and companies, to London potentially losing the right to clear euro-denominated securities – a disaster for money transfer firms. Some start-ups will fail as their paths to profit stop making sense. However, London is still a financial technology capital – all the financial institutions operate here, and it is a vast market regulated by forward-thinking, business-friendly bodies. I also believe that many skilled EU workers still want to work for market-leading companies and live in one of the world’s great cities. Investors in this space understand this, and are prepared to cope with short-term turbulence. Fintech returns on investment are sizeable, but long-term. VCs will be patient and with strong business ideas and a clear path to market – so well-managed firms will find the funding they need to scale. The real impact of Brexit on fintech will be twofold. First, there will be a flight to quality, as investors focus on more established companies at the expense of riskier start-ups. This will squeeze some air out of the fintech bubble, but not burst it. Second, firms will end their London-centricism and focus on international growth. Companies can no longer develop a UK financial services product, before slowly rolling it out elsewhere. Businesses will look abroad much more quickly – a strategic shift that actually favours fintech companies, whose businesses are based on commodities like information and data, which can easily move across borders. Ultimately, Brexit could create opacity in the markets and a regulatory quagmire. This is unfortunate for the UK and the economy, but it also creates precisely the right environment for fintech firms to thrive. UK startups will act where the financial institutions can’t and provide innovative solutions to new problems, helping consumers and businesses use their money more wisely. That’s why I believe that Brexit will be the making of UK fintech – if not, overall, good for Britain.
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Network Locum bags $7M to grow its doctor-staffing platform
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Natasha Lomas
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London-based healthcare startup , which has built a staffing platform and workplace management software targeting the U.K.’s National Health Service (NHS), has closed a £5.3 million ($7M) Series B funding round, led by U.K. fund . The startup was founded by a former McKinsey and NHS consultant, Melissa Morris, back in 2011 after she saw an opportunity to undercut fees being charged by recruitment agencies via a matching platform to help fill temporary staffing vacancies. Network Locum is both workplace management SaaS and a marketplace of locum staff. It also handles payment for temporary staff, remitting locums fortnightly for completed shifts. “We give them a software to manage their own staff (SaaS) and then fill empty slots via access to our marketplace,” explains Morris. “We also manage time sheets, payroll and expedited payment to doctors.” The platform uses several criteria to match locums with vacancies, according to Morris, including their location, whether a particular doctor has worked at a particular hospital/GP surgery before and the doctor’s searching intent — so things like the type of work they were searching for. Other preferences they have expressed to Network Locum’s onboarding team may also be factored in, she says. “The NHS spends 75 percent of its costs on staff, it’s one of the biggest employers in the world. There are huge amounts of manual work that goes into staffing, using agencies and also via full-time employees who work within hospitals and GP practices acting like in-house recruiters. Most of this work can be automated and when you add a layer of intelligence you can match clinical staff with shifts quickly, cheaply and fill substantially more shifts,” adds Morris. While there is an element of automation about how Network Locum plugs NHS staffing gaps, she says hospitals do have “the final say” on hiring people they don’t work with regularly. Locums on the platform are also fully vetted by Network Locum, and there’s a two-way feedback process built in. At this point the platform has 5,000 locums actively using it, and a total of 40,000 registered. The team has been using social media, such as a Facebook advice-sharing forum it created, to recruit many of the doctors on its platform so far. “Now it’s a lot through referrals, with 70 percent of new doctors being referred by a friend,” she adds. On the paying customers front Network Locum has around 1,200 at this point. Morris says it started its sales push with GP surgeries owing to shorter sales cycles but it’s now aiming to ramp up its focus on hospitals. Currently it’s providing services to “several” hospitals in London, Manchester and Birmingham — and says it’s expecting to sign contracts with “several major NHS hospitals and local authorities later this year.” The business model is to charge hospitals and GP practices based on a percentage of the locum hours booked, rather than for usage of the SaaS staff-management platform. Morris isn’t breaking out the exact fee structure at this point, saying it’s about to launch a new SaaS-based fee structure, so its current pricing will be out of date soon, but she adds: “We charge a fraction of the cost of an agency, much of the functionality is free. A GP practice saves about £20K a year and an urgent care center saves £120K a year.” It will be using the new funding to increase its salesforce and make a big push into the hospital sector, noting it is currently tendering for major government contracts. The funding will also be used to improve features on its mobile app, which lets clinical staff manage their hours. The startup previously raised £3.2 million from investors, including Piton Capital, a marketplace specialist investor.
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Echobox raises $3.4M to let publishers intelligently share content to Twitter and Facebook
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Steve O'Hear
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Now calling itself an artificial intelligence (AI) service for the online publishing industry — because, why not? — , which has developed tech to help publishers share content on the likes of Twitter and Facebook in a , has closed $3.4 million in new funding. The new round is led by Mangrove Capital Partners, with participation from Saul and Robin Klein’s LocalGlobe. “We will use our capital to innovate further and build an even better AI technology. We’re also expanding our sales and marketing efforts to ensure more online publishers can benefit from our technology,” Echobox founder and CEO Antoine Amann tells TechCrunch. Boasting clients such as Le Monde, Le Figaro, Axel Springer and San Jose Mercury News, the London-based startup enables publishers to essentially “outsource” an element of their data science activity, specifically relating to the timing of sharing content on social media. Dubbed Echobox AI, the tech claims to accurately predict the virality of any article, and precisely when to post a particular story in order to get the maximum uplift in traffic. Unlike similar social media optimization/sharing services, Echobox taps into a publisher’s own analytics and data to further optimize its AI on a more bespoke basis. “From a tech perspective, we’ve made major progress with our AI,” says Amann. “It’s significantly more effective in increasing traffic from social and on average we double traffic coming from social media. We’ve also developed a “breaking news detection engine” that can algorithmically detect whether an article is breaking news. This might sound trivial but it’s innovations like these that have a considerable impact on performance.” The Echobox CEO also says that Facebook’s very recent change to its newsfeed, which places rather than from brands (including content from publishers), is exactly the reason why a solution like Echobox is needed. “Facebook puts a lot of effort in ensuring the best possible experience for its users, but it’s clear that changes to its newsfeed can be disruptive for media companies,” he says. “It’s one of the reasons why publishers are not well equipped to optimize content distribution online. It’s a massive and constantly evolving data science problem. This is where Echobox comes in.”
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Tesla says it informed government of crash involving Autopilot before its huge stock sale
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Connie Loizos
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Tesla says it told regulators about the May 7th involving one of its electric cars in self-driving Autopilot mode nine days after the incident, adding that there was nothing unusual in either the delay or its decision to keep quiet about the incident before a federal investigation was publicly announced last Thursday. Tesla says the company was informed of the accident “shortly” after it took place. Tesla’s statement, issued late this afternoon, seems to be a direct response to a article published that notes the that Tesla announced on May 18. When Fortune sought comment from Musk, he first replied that he didn’t think the fact of the crash was “material to the value of Tesla” and therefore did not need to be disclosed at the time of Tesla’s stock sale. He reportedly continued, via email to Fortune: In this afternoon’s statement, Tesla said it had disclosed the incident to the government by May 16. why Tesla didn’t also disclose the accident to the public before that share sale, the company sent the outlet the following statement: It remains to be seen whether Brown’s family will ultimately sue Tesla over the accident, which took place in Williston, Fla., when the roof of Brown’s black 2015 Tesla Model S was torn off after a tractor-trailer turned at an intersection; Brown’s car passed under its trailer. In its public disclosure last Thursday, the company offered its condolences to Brown’s family without naming him, that: In another challenging development for the company, Tesla also revealed that it has missed its delivery and production goals for the second quarter in a row.
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Crunch Report | Largest Radio Telescope Ever Built
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Khaled "Tito" Hamze
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Tito Hamze
Tito Hamze
Joe Zolnoski
Joe Zolnoski
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Drivers are warming up to autonomous cars. Mostly.
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Kristen Hall-Geisler
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The results of two new studies — one big, one really big — on what consumers want in autonomous cars have been released recently. The answer of both is, in a nutshell, we want to be able to let a car drive on its own when driving is monotonous or annoying, like during the daily commute. But we also definitely want to have the ability to take control of the car if something goes wrong. Or if we just want to drive the fun parts. is a leader in the autonomous car race, with 100 autonomous-capable vehicles being deployed to customers in Sweden next year in its Drive Me program and ADAS of varying degrees of assistance in its vehicles currently for sale. It released the results of its “Future of Driving Consumer Survey,” which gathered responses from 50,000 people around the world. It turns out that 72 percent of drivers want to “preserve the art of driving,” according to the report. That would be the majority who still want to take on the twisty bits of road themselves. Some early adopters are ready to let vehicles take over completely, as it seems happened in the recent of a Tesla in autonomous mode. has made it clear that its autonomous driving mode is a and that drivers must be ready to assume control — and responsibility — in the event of a crash. Volvo has taken the opposite tack, saying that if one of their vehicles is involved in a crash while in autonomous mode, liability rests with the company. This conviction is borne out by Volvo’s survey, where 79 percent of respondents expect the manufacturer to assume that liability. It’s interesting to note that Volvo also found that in California, long the land of cars — and gridlock — drivers were less likely to want to drive the car themselves and more likely to see driving as a waste of time. On the other side of the country, more than 8 in 10 New Yorkers said they’d commute daily in an autonomous vehicle, which isn’t surprising in a city where the majority of households don’t even own a vehicle, preferring instead public transportation, taxis or ride-hailing services. The other, smaller by AlixPartners, asked 1,517 people in June about driverless vehicles. Nearly three-quarters of respondents said they’d want a driverless car to do all the driving, and 90 percent said they’d let an autonomous vehicle do the daily commute driving if the human could take over sometimes. People seem to be able to imagine tricky emergency situations where an algorithm might not cut it; so far, they aren’t mistaken. This is the thought process that has led to other surveys to conclude that .
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Bulgaria now requires (some) government software to be open source
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Devin Coldewey
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Fans of free and open-source software are rejoicing today at the news that Bulgaria will now require all software written for the government must be FOSS. But while this is a promising advance, don’t expect a major change in the way things work. The new law took the form of one of several to the country’s Electronic Governance Act — amendments lobbied for by developer and government adviser Bozhidar Bozhanov, who announced the changes on his blog with the air of a proud father. Specifically, contracts to create software for the government must be developed publicly, meet stated open-source definitions and be provided free for use without limitations. “It means that whatever custom software the government procures will be visible and accessible to everyone,” . “After all, it’s paid by tax-payers money and they should both be able to see it and benefit from it.” Bulgaria’s awesome coat of arms. It’s hard to argue with that — and there are plenty of other pluses that open-source software offers. However, the law only affects government-commissioned software, and existing license agreements are still intact. This isn’t going to trigger a mass migration to Ubuntu or LibreOffice. And while it’s a pleasant thought that this kind of law might make situations like shady Diebold voting machines obsolete, that’s probably not how it will work out. For one thing, the government can just choose to buy a turnkey solution if they think it’ll be cheaper or easier than developing one from scratch and putting it out there as open source. And for another, can you picture any government open-sourcing code for a new fighter jet or nuclear facility? (Security and intelligence agencies are not subject to Bulgaria’s law.) The list of exceptions must be quite long, and it may be that what will actually be put in these open-source libraries is highly mundane and only related to projects for which privately developed software is unavailable or impractical. I like seeing free and open-source software inching closer to being a global standard rather than a niche, but the cynic in me suspects that even if this law were to be enacted in dozens of countries, we’d still have the same problems when it comes to government software. Still, it’s a step in the right direction and Bulgaria’s example is one worth following and learning from. We’re not totally behind the times on this, by the way: the U.S. Chief Information Officer Council has some , and tons of government data is already . Transparency is a process we improve over decades, not something that can be dictated — but it can’t hurt to have a law like this one on the books.
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Five days of Etsy payment processing outages have merchants flipping
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John Mannes
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***Update to this post can be found . Those hoping to snag some and might have woken up to an empty stomach and sunburn after a serious payment processing outage on e-commerce site Etsy. Over the last five days, a large number of Etsy transactions have been disrupted by “third party” payment processing outages. As of 6pm PST July 5th, After the Direct Checkout outage, many merchants were left with their hands in their laps explaining delays to buyers. The outage is especially tough for sellers who have to face angry customers. It’s all too easy for an unhappy buyer to blame the seller in a negative review for an outage out of their control. Etsy’s first response came two hours after the first report on their forum. The company confirmed the outage but didn’t provide any details. The issues seem to have started just after 2pm on July 1. Twitter have been active with users’ complaints. This is the third time this year the company has struggled with payment processing infrastructure. I have been following the forum thread in bugs, but no update from admin as to when this will be resolved, customers expect orders — Gallery Antiques (@galleryantiques) https://twitter.com/TwoStoriesGifts/status/750407132873392129 I understand but it's still not fixed and it's days later. This is stopping cash flow and me sending orders out — . (@Highforshay) The company’s last official communication occurred at 2pm on July 5th. Etsy is struggling to catch up with previously delayed payments and new orders are still being impacted. “We recommend that you wait until these orders are confirmed to ship your item,” said Bill Massie, an engineer on the Payments Team in the most recent forum post. Some angry users have . Braintree, , has not reported a Worldpay outage in July. The outage doesn’t seem to be affecting anyone who used PayPal for payment processing. We have reached out to Etsy and Worldpay for comment. This post will be updated as more information comes in.
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Homee raises $5M from Founders Fund and Tinder CEO to help you furnish your place
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John Mannes
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Let’s face it, you’re never going to win the . My family has entered the maximum number of times for the last decade and has nothing to show for it. At some point every millennial has to take responsibility for the fact that their bedroom looks like a government records building. is jumping into the conversational commerce trend to keep the design process fun for the Pinterest-obsessed and remove the pain for the rest of us. Homee wants to put a personal design-guru into the hands of everyone with a smartphone. The company is announcing a $5 million Series A today, funded by Peter Thiel’s and a personal investment from , CEO of Tinder, and other angels, to bring total fundraising to $7.2 million. The app also comes out of beta today. Designers hand-curate a selection of furniture and can match any design preference, even if you don’t know your own preferences. When users first install the app, they work with a bot to answer a basic survey about interior design preferences. A human then picks up the conversation and fills in gaps from the survey. Customers can play a big or small part in the design process, depending on their preferences. “Once you begin the concept board iteration process you can revise or start over,” said Beatrice Fischel-Bock, CEO of Homee. “The process normally takes two revisions to get to a point where the client is happy.” Homee makes money when users buy furniture. This aligns incentives for designers to produce the best quality interior design plans. Users can buy an entire room design or opt for a single piece of furniture. “We have a very high conversion rate, the only times we miss someone the second time is if they’re not vocal enough,” added Fischel-Bock. Fischel-Bock previously started Zoom Interiors before pivoting into Homee. Zoom Interiors was pitched on Shark Tank as a web-based service where users paid up-front. Barbara Corcoran initially offered to invest but ultimately did not close a deal with the team after the taping of the show ended. Fischel-Bock did take away valuable insights and connections from her two minutes of fame. She wouldn’t realize the full value of her time on Shark Tank for a few days when Tinder CEO Sean Rad cold emailed her. Rad wanted in and was She hadn’t, and a partnership was formed. Rad invested as an angel and joined the Homee board. A Series A emerged after Rad introduced Fischel-Bock to some friends at Founders Fund. “This is my second angel investment,” said Rad. “I wouldn’t call myself an angel, I don’t have time to do it well. For me it was more about feeling the pain myself.” Peter Thiel of Founders Fund has invested in furniture before. His Valar Ventures played a big part in Brazilian startup back in 2012. The company is all-hands-on-deck to ramp up for new users. One of the biggest challenges for a company like Homee is the human capital bottleneck. The company needs to maintain a sufficient supply of knowledgeable designers to keep up with demand while managing rapid technical platform growth. Fischel-Bock said that she is focused on improving the efficiency of her platform. Designers manage a workflow of 5-10 designs at once. She believes this number could hit 50 to 100 with proper backend support so designers can better manage multiple consultations. Right now the company has 30 employees with half working as designers. Not every design consultant has a design background. Homee trains all designers before they begin engaging with customers. A few early users complained in App Store reviews about long wait lines to access the service. Homee offered a “Skip the line” feature for $9.99 to get rapid service. Version 1.0 went live on the app store on November 19, 2015. Homee wants to be able to deliver a first iteration of design renderings within 24 hours. According to Fischel-Bock, revenue for the company has grown more than 700 percent in the last 10 weeks. Eventually Homee wants to have a hand in the entire interior decorating process, from design to implementation, including same-day delivery.
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Students’ 3D-printed fungarium and Martian mini-farm win NASA ‘Star Trek Replicator Challenge’
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Devin Coldewey
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NASA believes the children are our future. Why else would it ask them for ideas about how to feed astronauts in 2050? The nationwide that began in February has spawned hundreds of 3D printable ideas, and : a housing for radiation-loving fungi and a tiny farm for Martian pioneers. The challenge was to “design a non-edible, food related object for astronauts to 3D print in the year 2050,” fitting in a 6″ cube, single feedstock, and no crazy sci-fi stuff either. Kids also had to consider the on printing — NASA isn’t messing around here. 405 submissions from 30 states were evaluated by a panel of judges from NASA, Made in Space, and the American Society of Mechanical Engineers. The winners are remarkably sophisticated. Kyle Corrette, from Desert Vista High School in Phoenix, designed a (yes, that’s a word, and I must say a good one) made to hold “melanized” fungi, which uses ionizing radiation (that’s the bad kind) for energy, rather like how plants use sunlight. This enclosure would protect and irrigate the fungi growing on the three rods while still exposing them to nutritious cosmic radiation. The three-sided part on the left there detaches and fits over the growth area. Eagle Ridge Middle School’s Sreyesh Sola made a pint-size for use on Mars. A lens is printed right on top to gather and concentrate the meager sunlight that graces the Martian surface. A pump keeps atmospheric pressure at about 1/10th of Earth’s, just enough to let plants grow (a valve prevents it from getting too high). The silica needed to print it could even be harvested from the soil on Mars, Sola suggested. Six other projects were finalists, including a clever mug, a small zero-G hydroponic setup and two Spirulina farms. All (including the winners) will receive a Makerbot Replicator Mini for their school and a PancakeBot for home. In addition, the two winners get to visit New York for a tour of Space Shuttle Enterprise with retired astronaut Mike Massimino.
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Cybersecurity startup Darktrace intercepts $65M in fresh funding at a valuation of over $400M
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Steve O'Hear
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, the U.K. cybersecurity startup whose backers include Autonomy founder Mike Lynch’s , has closed $65 million in fresh funding. The new round was led by global investment firm KKR, with participation from existing investor Summit Partners and new investors TenEleven Ventures and SoftBank. I understand the new investment gives the 2013-founded company a valuation of more than $400 million, while in a call Lynch told me the new backing was a typical growth round and will be used for further international expansion and for R&D. In particular, he said is developing technology to help companies respond to not only human-written cyberattacks but also the pending threat of machine-learning-based attacks that, in classic sci-fi-comes-true-fashion, will increasingly see AI battling it out with AI on behalf of the good and bad folks, respectively. But let’s step back and take a look at what Darktrace offers today. The startup’s “Enterprise Immune System” consists of a box that sits on a company’s network and listens to what’s going on, combined with software that makes sense of that traffic. It then alerts IT managers when there is suspicious behavior. Or, if needed, takes immediate action to snuff out or slow down an attack, say for example by throttling the network speed to buy human eyes more time to work out what the heck is going on. More broadly, explains Lynch, is that Darktrace is based on the premise that all major company networks are likely already compromised, in the literal sense, or are wide open to compromise. That’s the nature of the networked landscape we operate in, with companies having to interface with suppliers and customers and its own sprawling workforce online. So instead of presuming cyberthreats are stopped purely by building bigger and better “walls,” Darktrace claims to mimic the human immune system by accepting that bad stuff will get in but, powered by the company’s “advanced mathematics and machine learning techniques,” the resulting harm can be stopped in its tracks. At a basic level this means Darktrace has to be able to not only monitor all the traffic going through a company’s network but distinguish between normal and malicious activity. Lynch says that rapid cyberattacks are easier to spot, in that they are suspicious by nature, but have to be acted on extremely fast, which is why Darktrace’s box has a degree of automation. However, stealthy or temporarily dormant nefarious activity is trickier and it’s here where the startup’s machine learning technology claims to come into its own. And whilst it’s almost impossible for a generalist tech reporter like me to truly validate any cybersecurity startup’s tech claims, I’m told that Darktrace is growing at a clip. In fact, Lynch says Darktrace is the fastest-growing company he’s either founded or invested in. That’s something echoed by Hussein Kanji of Hoxton Ventures, . Specifically, Darktrace claims more than 1,000 customer deployments, including global “financial institutions, telecommunications networks, legal firms, retailers, technology companies, government organizations, and critical national infrastructure facilities.” Revenue, we’re told, has grown more than 600 percent in the last year. I understand this translates to millions per month. One reason for this growth, says Lynch, appears to be timing. Cyberattacks have never been more in the news and companies are way more willing to install a box on their network from a third-party than even before, especially if they can see immediate results. The beauty of its “Enterprise Immune System” is that after a week of crunching network activity, all is laid bare. I asked Lynch if this is sometimes to the embarrassment of IT managers or a company’s Chief Security Officer. “A good question,” he says, before answering that in some cases the answer is yes. However, he also says the culture is changing and company boards are starting to understand the new reality: cyberattacks will happen and the war is ongoing. A war that Darktrace looks set to cash in on.
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Twilio now helps AWS send texts
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Frederic Lardinois
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today a new collaboration with Amazon’s AWS platform. The company says it is “helping AWS provide the delivery of SMS messages through the ” and notes that SNS users will now benefit from Twilio’s experience in sending bulk messages. What exactly does that mean? We weren’t sure either, so we asked the company. Here is what a Twilio spokesperson told us: “We can’t discuss the specific details of the relationship, but can say that Amazon SNS leverages the benefits of ’s Super Network, which enables SMS delivery around the world to over 200 countries.” As far as we can tell then, the SNS messaging service now at least partially relies on Twilio’s network to send messages for some of its users. It’s sadly unclear which messages exactly will get routed through Twilio’s network. The SNS service already supported , so most users probably won’t see any major changes right away. It’s worth noting that Amazon’s SNS doesn’t currently offer a number of advanced features, like short codes (or long codes), for example, and that SNS uses a pool of codes to send messages out, meaning that recipients won’t always see the same number from a single company that uses SNS. Twilio (and more), so hopefully this collaboration also means that SNS will soon get more advanced SMS features, too. “With this latest collaboration, we’re strengthening the communications ecosystem with scalable, efficient tools that ensure the best option for delivering a message is available,” Twilio CEO and co-founder Jeff Lawson says in today’s announcement — without giving away any details either, of course. It’s worth noting that Amazon invested in before the company went public and that Twilio makes extensive use of AWS’s cloud computing services, too. We asked Amazon for more details about this collaboration and will update this post once we hear back.
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FBI recommends no charges for Hillary Clinton over use of personal email servers
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Lucia Maffei
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While noting that Hillary Clinton and her staff were “extremely careless” in using a series of personal e-mail servers during her time as Secretary of State, the FBI recommended the Department of Justice bring no formal charges against the presumptive Democratic nominee, FBI Director James Comey today in a press conference. During its investigation, , involved some combination of intentional mishandling of classified information, indications of disloyalty to the United States, or efforts to obstruct justice. “We do not see those things here,” Comey said, referring to Clinton’s use of a personal e-mail system to exchange sensitive information. Ultimately, the lack of evidence that Clinton or her colleagues intended to violate laws was at the core of the FBI’s recommendation not to prosecute the case. However, the head of FBI noted: “This is not to suggest that in similar circumstances, a person who engaged in this activity would face no consequences. To the contrary, those individuals are often subject to security or administrative sanctions.” “Although we did not find clear evidence that Secretary Clinton or her colleagues intended to violate laws governing the handling of classified information, there is evidence that they were extremely careless in their handling of very sensitive, highly classified information,” Comey added. From a group of 30,000 e-mails examined by the FBI, the State Department and the U.S. agencies that “owned” the information, 110 e-mails in 52 e-mail chains have been determined to contain classified information at the time they were sent or received, Comey said. Eight of those chains contained information that was Top Secret at the time they were sent. An additional 36 chains contained information considered Secret at the time, and another eight included information deemed Confidential. Trump noted that General David Petraeus –the former CIA director who pleaded guilty last year to mishandling classified information — “got in trouble for far less.” The system is rigged. General Petraeus got in trouble for far less. Very very unfair! As usual, bad judgment. — Donald J. Trump (@realDonaldTrump) FBI director said Crooked Hillary compromised our national security. No charges. Wow! — Donald J. Trump (@realDonaldTrump)
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New transmission
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Darrell Etherington
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car you remember wanting? Was it a reasonably priced mid-sized sedan with ample leg room for passengers in the back? Was it a small, well-equipped compact SUV with room for all the kids’ bags and all-wheel drive for better control in adverse conditions? Was it even a two-door sports car with exaggerated curves and more power than any public road could ever need? Chances are, it was none of the above. More likely, it was a dinosaur wearing a saddle. Or a robot space horse. Or the Enterprise’s shuttle. Or an Incom T-16 Skyhopper. Or the Batmobile. The point is that the “car” that likely first filled you with wonder bears no resemblance to the first one you ever rode in. Instead, your first vehicular experience was probably far more down to earth. Rather than a space-age conveyance, it was probably a station wagon or a van, or perhaps a bus or a taxi. And what’s more disappointing still is that, compared to that first car you ever rode in, the cars of today seem, on balance, little changed. For the most part, cars today still depend on small controlled explosions to propel them, for instance. There’s not a single one that’s powered by magic, which is totally at odds with the cars of my childhood dreams. Even more down-to-earth alternatives, like electric vehicles, remain mostly toys of the elite or experiments for outliers. Even leaving aside the question of what makes cars go, there’s a lot about the rest of the experience that also remains depressingly similar to what we had 10, 15 or even 20 years ago. This is almost identical to the Plymouth Acclaim that my parents owned when I was growing up. It had a lot of the same features offered by my current, four year-old Nissan Rogue. We can now summon cars to ferry us wherever we want to go, giving form to thought using our connected pocket supercomputers. But the car you’ll get isn’t that much different from the one your parents used to drive you around to get you to sleep when you were a wailing baby. Bryson Gardner, founder of Pearl Automation, encapsulated some of the barriers car tech faces in terms of its investment and innovation cycle, when speaking with TechCrunch’s Matthew Lynley about his company’s recent . “One of the reasons for that is it’s expensive to make a car platform and it takes that long to recover the cost of everything associated with the car,” Gardner told Lynley. “You have this extended timeline in the beginning; once that tech appears in the car it’s really just in the subset of it, higher end and luxury cars. It can take 10 to 20 years to fan out. ” I’m sure some of you have been protesting the premise of this article from the beginning; ‘My BMW can park itself,’ you might say. ‘Could your 1996 Ford Windstar do that?” But that’s exactly what Gardner’s talking about; innovation may be apparent in the sliver-thin spear tip of the market, but for the vast majority of car drivers, the everyday experience of owning and driving a car has been in near-static for decades. Pearl Automation’s rear-view camera is a great example of how startups can innovate around the edges of the industry. But there’s also good reason for stagnation, or, put more charitably, for taking things slowly. The automotive industry is highly regulated, highly scrutinized by lawmakers and highly vulnerable to legal action, often at significant cost to car makers and other corporate interests. One recent, chilling example of the risks associated with making changes to how cars work at a basic level is the . The crash involved Tesla’s Autopilot system, which is what’s classified as a “Level 2” automation system for vehicles. That means that it’s intended to be fully driver-assisted, but in this case the driver is reported to possibly have been while it was in use. It’s a chilling example of how the interim steps between fully driverless vehicles and fully driver-controlled cars are fraught with potential danger. Another fresh example of why many move slowly when making changes to how we get around: The recall that Chrysler issued for Jeep Cherokee, Dodge Charger and Chrysler 300 models, which addresses an issue implicated in the recent death of Star Trek actor Anton Yelchin. As The Verge’s Nilay Patel points out, the problem was an example of how a small but significant change in the way a user interacts with a car resulted in a – and again the cost may have been human life. There are very good reasons to go slowly with car tech innovation. A friend who works in the legal department at one of the major North American carmakers constantly reminds me that tech companies and startups looking to enter the space might not realize just how onerous and limiting the regulatory requirements can be. Making a car, he says (and this is a fairly common refrain across industry incumbents), involves longer development cycles, greater risk and less reward than creating the next big social app, or even the next must-have consumer gadget. All that friction in making significant change among cars is bound to have a chilling effect on any entrepreneur or investor who looks at the problem closely. And they don’t have to look very far for an object lesson in what can go wrong in a heavily regulated industry when a startup comes in looking to shake up the status quo. Like Theranos. To me, the name of the company always carried comic-book villain connotations, but now the startup community at large probably shares my reptilian response of misgivings when they hear the word, owing to its very . Many of the ‘I told you sos’ regarding Theranos’s spectacular failure include a reminder that healthcare is not to be trifled with; health startups can’t just launch an MVP and then fill in the gaps as they go. As Harvard Business School fellow Bill George put in a about the challenges faced by Theranos, Valeant and others, “[i]n health care, there are no shortcuts and no quick paths to market.” The recent spate of messy implosions in healthcare startups won’t make it easier for car tech companies to move fast and break things. The same sentiment could easily be applied to the automotive industry. While the experience of driving a car hasn’t changed that much in the past few decades, the risks associated with it have, thanks to carefully tested, rigorously deployed improvements in safety-focused technologies like seat belts, air bags and anti-lock brakes. Deaths related to motor vehicles peaked in in the U.S. in 1972, when nearly 55,000 people died. In 2014, that number was down to 32,675, despite it also being the second-highest year on record for total miles travelled since the advent of cars. The steady improvement in vehicle safety is evident, but the progress has been the result of the slow and steady mitigation of risk, thanks to features implemented only after years of lab tests, small-scale field trials and gradual large-scale deployment with a host of checks and balances at each and every stage. Case-in-point: The first ever back-up camera was introduced in a 1956 concept car. The tech then initially rolled out to production vehicles only in 1991, and only came to North American beginning in the early 2000s. As of 2018, all car makers will finally be required by law to include backup camera in new vehicles. Pearl Automation introduced its smartphone-connected, aftermarket innovation on this technology (now 60 years old for those keeping count) just this month. The 1956 Buick Centurion car actually had a rear-view backup camera in place of a mirror. ( under a CC BY 2.0 license) Even with the glacial pace of automotive tech development to date, there are signs that we’re in the midst of a turning point in car innovation. Tesla, Uber and Google are actively developing self-driving car technology, among other car-related projects, and Apple is also rumored to be making a play in the market at some point in the future. and trucks are already on public roads for testing in some cases. Legacy players like Ford are making a lot of noise about their reinvention as technology-driven companies, too. Ford has a Silicon Valley-based division that will help shepherd and benefit from transportation-focused startups. Toyota invested in Uber, GM invests in Lyft and Volkswagen invested in Gett. , a self-driving car startup that was only founded in 2013, making it a mewling newborn baby in car industry terms. Legacy companies are in an arms race to at least appear cutting-edge. The tension of both of these aspects of the automotive industry – an abundance of caution and fear of regulation on the one side, and a desperate need to appear vital and keep pace with hungry, deep-pocketed tech industry interlopers on the other – is what will make cars a topic of intense interest from a technology standpoint in the next few years. I still want Dino-Riders to be a real thing, for the record. It’s a world that I’m excited to learn more about, and whose history and future I look forward to exploring here at TechCrunch. There are few things that hold more promise, more danger and more excitement than the open road, and the road has never been more open than it is now. The cars we wanted as kids might not be the cars we get tomorrow, but chances are better than ever that they’ll be something dramatically different than what’s come before.
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Twitter adds former Facebook CTO Bret Taylor to its board
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Anthony Ha
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Twitter today that Bret Taylor is joining its board of directors. Taylor is best-known as one of the founders of social networking startup FriendFeed — and then as the chief technology officer of Facebook, which in 2009. After , he became co-founder and CEO at . News!: is joining the Twitter Board! Bret brings world class experience, insight, & thoughtfulness around building social services. — Jack (@jack) “Bret brings to our Board a great mind for consumer products and technologies that will be invaluable to the company as we execute our plans for 2016 and beyond,” said board chairman . “His skills also complement those of our other recent Board additions, who bring expertise in finance, media, and entrepreneurship.” As alluded to in Kordestani’s statement, Twitter has added a number of new board members since last year. (Kordestani himself .) British Internet entrepreneur Martha Lane Fox and Pepsi CFO Hugh Johnston were , followed by BET CEO Debra Lee . Excited to join 's board. Twitter is one of the most important services in the world, and I'm thrilled to be able to work with — Bret Taylor (@btaylor)
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Bose’s QuietComfort headphones go wireless without missing a beat
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Brian Heater
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damn time. Announced among a trio of new products, is the product Bose fans have been waiting for. Not the QuietControl 30 earbuds or the Jaybird-like SoundSport. The 35s are the Boseist of the bunch, a Bluetooth update to the company’s iconic line of airplane ubiquitous over the ear headphones, a wireless take on the popular QuietComfort 25. While a number of eager travelers have no doubt jumped ship for faster-to-market companies like JBL and Samsung, diehard Boseheads will be happy they waited assuming, of course, they don’t balk at the $349 price tag. Bose’s first wireless noise-cancelling headphones (last year’s SoundLink did the wireless thing without the noise-cancelling bit) look, well, familiar to anyone who’s ever spotted a pair of the company’s headphones dangling from a rock at one of their local airport’s 45 Hudson News locations. And that’s not a bad thing. Beats and innumerable other companies have you covered if you’re looking for something flashy. Bose’s QC line is designed to look equally appropriate with a business suit or the pair of flannel pajamas you wore to the airport in anticipation of a redeye flight. The QC35 ships in either black or silver – the company sent us the former, the even more understated of the two. The ear cups are large and offer a healthy amount of cushioning that should sit comfortably around most ears. They’re connected to the headband with a hinge that pivots more than 90 degrees, both to assure a better fit and to help the headphones collapse down to fit into their compact carrying case. All of the buttons are positioned on the right cup, including a power switch on the side and volume up and down flanking play/pause button on the bottom. Bose opted not to go with the touch functionality favored by companies like Parrot, and while it feels a bit more old fashioned perhaps, there’s a lot less likelihood of triggering a function by accident. Just below the trio of buttons are two lights displaying the status of Bluetooth connectivity and battery life. Below that is the microUSB charging port, with an auxiliary input jack in the same spot on the other cup for when the battery runs out – or you find yourself needing to plug in to a system without wireless transmission (like, say, your in-flight entertainment system). At 10.9 ounces, the QC35 comes in at four ounces more than its wired predecessor, owing at least in part to the addition of Bluetooth radios. Even so, the headphones are fairly lightweight, and all said, quite comfortable, more than living up to their name. It’s easy to imagine donning them for a cross-country flight without thinking twice. Bose reached out before sending along the review unit to explain, in part, what took so long for the QuietComfort to go wireless. The answer, in part, comes down to the limitations of Bluetooth technology. While the wireless technology isn’t quite up to its tethered counterpart, it still sounds pretty darn good – enough so that the majority of listeners likely won’t detect much difference. The result is a really good sounding headset worthy of the company’s stamp of approval – and worth the wait. The headphones are crisp and clear, even at high volumes and Bose does an admirable job servicing both the high and low end. Some reviewers have encountered distortion at top volumes, but things sounded clear and warm to me throughout. The company has, of course, mastered the art of noise canceling. The active technology, coupled with the seal formed with the ear cups does a great job filtering out ambient noise from the outside world. Here in the office, it’s completely removed the hum of the air conditioning and will no doubt do wonders on a passenger jet engine. It doesn’t drown out the outside world completely, of course. I can still hear the thuds of the construction outside, though it would still be nice if the headphones let you toggle between noise cancelling levels for additional situational awareness. Pairing is a cinch. You can either do it through the standard methods or using the Bose Connect app, which exists for the sole purpose of connecting the company’s headphones and swapping between devices. As for battery, the company has it rated at 20 hours. Unlike past QuietComfort models, this one is rechargeable. That’s mostly good news, as you won’t be dealing with the pain, cost, and environmental fallout of cycling through AAAs. The downside in the recharge every couple of days – and the fact that you can’t swap out batteries yourself. But there’s plenty of juice on-board. I would, say, be able to get from here to Hong Kong without running out of charge. And, if I did, there’s good news on that front, too – you can just plug the headphones in and listen that way after the battery peters out. At $349, the QuietComfort 35 runs $50 more than its predecessor. They’re not exactly cheap, but between the good sound quality, excellent noise canceling, extreme comfort and long battery life, these are exactly the pair of headphones fans have been waiting for Bose to deliver.
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LzLabs launches product to move mainframe COBOL code to Linux cloud
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Ron Miller
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Somewhere in a world full of advanced technology that we write about regularly here on TechCrunch, there exists an ancient realm where mainframe computers are still running programs written in COBOL. This is a programming language, mind you, that was developed in the late 1950s, and used widely in the ’60s and ’70s and even into the ’80s, but it’s never really gone away. You might think it would have been mostly eradicated from modern business by now, but you would be wrong. As we march along, however, the pool of people who actually know how to maintain these COBOL programs grows ever smaller by the year, and companies looking to move the data (and even the archaic programs) to a more modern platform could be stuck without personnel to help guide them through the transition. That’s clearly a problem and , a Swiss startup, saw a huge opportunity here. “The skill shortage in terms of maintaining the code that runs on the legacy mainframes has become acute. It’s become a huge problem finding the people to keep these going,” LzLabs CEO Mark Cresswell told TechCrunch. To help solve that problem, Lz has come up with a remarkable solution called Gotthard that helps these companies tease out the various bits of data, executables, configuration files and so forth from the hornet’s nest of code written all those years ago. It then places these various pieces in a container and moves them lock, stock and barrel to a cloud platform running Red Hat Enterprise Linux (RHEL). It’s not a coincidence that today’s announcement comes after another one last winter at the CeBIT Technology Fair in Germany, where the company launched what it calls the first software defined mainframe and announced partnerships with Red Hat and Microsoft (who themselves around the same time to bring RHEL to Azure). The company is not claiming their tools will allow some sort of instant solution. It’s going to be a long-haul type of job. They hope to partner with third-party systems integrators who can work with their customers to do the grunt work required to prepare the content for transfer. Today’s announcement is about building on that original announcement and providing tools for these companies running legacy mainframe applications to ease that transition to the extent possible. It’s still likely to be long and painful process regardless, but at least there are some tools now to help ease that journey.
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Suiteness wants you to stay in suites instead of regular hotel rooms
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Fitz Tepper
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Suites are a weird thing within the hotel industry. While there are hundreds of thousands of suites around the world, most are only occupied about 20 percent of the time and sit empty the rest of the year. Plus, the nicest ones aren’t listed or even available to book on hotel’s websites. Brands are afraid to showcase their unique inventory, and assume that the suites will be filled by loyal VIPs who wouldn’t book online anyways. The result is hotels (and booking services) missing out on tons of potential revenue. Enter , part of Y Combinator’s Summer 2016 class. Available in Las Vegas, New York, Los Angeles, Miami, London and soon San Francisco, the booking site gives guests access to book thousands of suites online. These range from a typical suite that is slightly larger than a standard room to ultra-luxe suites that can run upwards of tens of thousands a night. While the platform sounds niche, Robbie Bhathal and Kyle Killion, co-founders of Suiteness, explained that suites can actually be more practical than traditional hotel accommodations. For example, many families need multiple bedrooms, but want to stay together and share a common area. This is reinforced by the fact that over 60 percent of Airbnb listings are now entire houses with multiple bedrooms. Suites can serve as a logical option for these guests, especially the ones who don’t feel comfortable staying in someones home and want the extra amenities and customer service that is provided by a hotel. They can even be cost-effective – it often costs thousands of dollars a night to rent a house on Airbnb to accommodate 10+ guests, and a luxury suite could be equal in price. So how exactly does the platform work? Suiteness works with hotels to list their suites, with a special focus on adding tons of details and photos of each suite. While this sounds simple, it’s a huge break from the norm – most hotel booking platforms were just designed to handle either a king or queen designation, and even if they did list suites there would be little to no details or photos of the actual room you’d be staying in. Comparatively, Suiteness’ photos are so great that browsing suites on the site is almost an experience in itself. Rooms on Suiteness are either available to instantly be booked, or be booked via a request to the hotel. This is because some hotels still want to manually approve guests before letting them stay in their high-priced suites. For the referral, Suiteness receives a cut of the booking, plus data from customers interested in booking suites. This data is letting the platform develop a system to help hotels understand what demand for suites is like, which is something that was never previously available to hotels. Understanding suite demand can help with dynamic pricing algorithms – something standard in the airline industry, but still not totally prevalent within hotels – especially when it comes to suites. Suiteness also offers a concierge program, helping guests book experiences and events – a feature that lets them maintain a relationship with customers even after they are done with the Suiteness platform.
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The worth of your professional profile, network and personal data
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Rafael Laguna
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created the web in 1989. Twenty- he’s asking for a . The web has made life easier, but it has also introduced challenges and ethical questions pertaining to , access to information and privacy. Berners-Lee laments that the web has morphed into a surveillance filled with corporate hackers and government spooks with the tools to troll every keystroke and mine . Cue Microsoft’s of LinkedIn, a merger that unites two corporate internet behemoths that own or have a direct line to massive amounts of our and information. The leading cloud company and the leading now have access to the majority of our online lives, . To many, this feels like the exact . How much further can we go down this road before crossing the line between convenience and forfeiting privacy completely? Some are saying the is purely about the — $26.2 billion of to be exact ( for each of the 433 million members). The two companies have framed the acquisition as a win for their users, heralding it as an integration between productivity suite and business networking platform to form the paragon of productivity. The question is: Who is controlling how our sensitive information is being used and shared? Who should own this responsibility? Ideally, the answer would be the consumers who use these platforms, along with the companies that own and have access to their . However, the recent has made it difficult to trust these giants. Consumers should be wary of the distinction between free sites like Google and Facebook versus product and service providers such as Apple. Apple creates revenue through selling hardware and services, so there’s no immediate need to monetize consumer . The Facebooks and LinkedIns of the world are more prone to exploit to create revenue because they don’t provide product, or at least not on the same scale as Apple. In short, the dissolution of the need to create revenue by using consumer makes Apple the more trustworthy business model. Many consumers are hesitant to give up the convenience of on-demand information. “Just Google it,” right? When you buy or search for something online, you are expressing intent that can and most likely will be used to make recommendations or provide relevant search results. This is a great support tool for consumers and information seekers. However, this does not require tracking of the user wherever they go on the internet and stockpiling of information ad infinitum. There are several alternatives to these Google-style -gobblers. Search engines like are privacy concerned non-tracking search engines that provide comparable results. Non-tracking search engines do not record every click, swipe and purchase, keeping safe from blind exploitation. The convenience of Cortana anticipating the information you need for next meeting comes at a cost. Where is the line between the bliss of extreme convenience and the sacrifice of privacy? The current social climate expects, even demands, constant social sharing and the need for an ever-increasing speed and agility in information handling. The gluttony of shared information places a responsibility on the sharer that is two-fold: Check privacy policies to see how much a company is allowed to store. Ideally it would be a feature of the service to not store everything they get from you. Don’t store what you don’t need. that isn’t there cannot be lost, stolen or taken advantage of. If we fail to set limits on how much we share and remain ignorant of privacy policies, the web becomes a free-for-all — a constantly growing pot of , private information that serves the needs of entities we have no intention of serving. The web created endless potential for learning and connecting with others. Unfortunately, it also created a virtual cloak for those who hope to collect and use it for their own gain. Although the web is distributed, huge amounts of are amassed by very few companies, re-centralizing it to very few companies owned by very few people. Berners-Lee, a passionate supporter of decentralization, touts peer-to-peer services that store with the person who owns the information, not with a singular company. Products like , and allow users to build decentralized services ensuring full ownership and privacy. Unless ownership is returned to the user, people will continue to be the product. The Microsofts of this generation want — and they can pay for it. Be warned.
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Theranos faces congressional inquiry over faulty blood tests
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Sarah Buhr
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The U.S. House of Representatives recently sent a to troubled blood analysis startup Theranos asking for an explanation of the company’s failure to offer accurate results to patients using its proprietary blood test technology. Theranos developed a technique using its proprietary ‘Edison’ machine it claimed could detect hundreds of diseases using just one drop of blood. However, government and regulatory agencies have questioned those results and the company now faces an onslaught of class-action lawsuits from patients. The company has also suffered a dramatic , had to void two years worth of blood test results, founder Elizabeth Holmes was threatened with a possible ousting from her own company and a potential barring from the industry, as well as faces a potential criminal investigation, and Theranos main partner Walgreens recently pulled out. House Democrats Frank Pallone, Gene Green and Diana DeGette sent the letter, dated June 30, asking founder Elizabeth Holmes to explain what went wrong, what steps her company is taking to help medical professionals and patients who might have been affected by the results and how Theranos plans to comply with regulators. “Given Theranos’ disregard for patient safety and its failure to immediately address concerns by federal regulators, we write to request more information about how company policies permitted systemic violations of federal law,” reads the letter. Theranos says it looks forward to clearing things up for these lawmakers. “Patient safety and clinical quality are our top priorities,” Theranos said in a statement. It also said it was, “committed to the highest standards of excellence across all our labs.” “Patient safety and clinical quality are our top priorities,” Theranos said in a statement. It also said it was, “committed to the highest standards of excellence across all our labs.” Theranos has continued to say it plans to reveal information about its technology. And Holmes is scheduled to speak at the on August 1st. However, House Democrats are asking for a response from Theranos by July 14.
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China invests in the hunt for aliens with world’s largest radio telescope
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Emily Calandrelli
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The last of 4,450 triangular panels was installed to complete the world’s largest single-aperture radio telescope, located in China’s Guizhou Province. A monument of China’s dedication to the field of astronomy, the telescope will be used to study pulsars and search for alien life in the universe. The 500-meter Aperture Spherical Telescope (FAST) is a $185 million project that began in 2011 and is designed to listen for radio waves up to 1,000 light-years away and search for intelligent extraterrestrial life. FAST will overtake the 305-meter diameter Arecibo Observatory in Puerto Rico as the largest telescope of its kind. In radio astronomy, the larger the dish size, the better. A larger aperture gives scientists a more sensitive ear on the universe, enabling them to detect weaker radio signals at farther distances. Combined photos show installation process of world's largest FAST in : — People's Daily,China (@PDChina) By measuring radio waves, astronomers can study phenomena like pulsars, black holes, and quasars – all of which naturally emit radio waves. Pulsars are of particular interest to the FAST team. Yue Youling, an associate researcher for the National Astronomical Observatories, told that the astronomy community has discovered 2,500 pulsars to date, but with FAST they hope to double that number. “We have found more than 2,500 pulsars. We hope we can find at least double that number with this gigantic radio telescope. For example, very small or very big pulsars. Understanding the fundamental physics of pulsars will help us understand the Big Bang.” Yue Youling, associate researcher at the National Astronomical Observatories But perhaps even more interesting is the potential for sources of radio waves, like technology created by aliens. Searching for radio wave-emitting technology is the most common way to search for extraterrestrial intelligent life in the universe, a field of science known as SETI. China isn’t the only one ramping up their SETI research. Last year, billionaire investor Yuri Milner committed to SETI efforts through the project . The money is distributed to programs around the world already dedicated to SETI efforts, but require money to reserve telescope time to listen for radio signals. We may not know what form other intelligent life would take on other worlds, but a common strategy is to search for life that would fit our definition of “intelligent.” For humans, intelligent life requires the ability to create technology, and much of our technology emit radio waves out into space, waiting to be detected by other civilizations. While most of these technologies don’t send out radio waves into space, they do bounce around, can’t be contained within the atmosphere, and ultimately end up flying out into the universe at the speed of light. In fact, humans have been “leaking” radio waves from our planet and into the cosmos for over 80 years. If an alien civilization within 1,000-light years had their version of FAST pointing toward Earth, they’d likely be able to detect evidence of an intelligent civilization. It’s precisely because our technology creates radio waves that 9,000 Chinese residents had to be from the Guizhou Province area to create a radio-quiet zone for the telescope. All families within a 3.1 mile radius of FAST had to be relocated in order to avoid terrestrial electromagnetic wave interference with the telescope. Because commonly used technologies such as cellphones and garage doors operate using radio-waves, mandated radio-quiet zones are common in areas with radio-telescopes. This prevents terrestrial electromagnetic signals from interfering with signals from outer space collected onto a radio telescope dish. Illustration of completed FAST telescope / Image courtesy of FAST / Chinese Academy of Sciences With FAST, China has proven that they are invested in becoming a world leader in radio astronomy and the search for alien life. Now that the final FAST piece is in place, astronomers will work to debug the proper configuration of the telescope. One of the challenges ahead will include the precise positioning of the receiver that hangs above the dish, collecting signals at a focal point. According to CCTV, the FAST team plans for the telescope to be completed and ready for operational testing in September.
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On-demand staffing startup HourlyNerd lands $22 million Series C
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Ron Miller
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, a Boston-based startup, aspires to be more than an on-demand staffing service for skilled employees. It wants to be a full-service platform for large companies to change the way they think about employees. “If you think about a company today, it’s structured in the same way as 100 years ago,” says company co-CEO and co-founder Rob Biederman. HourlyNerd sees a future where companies make increasing use of on-demand workers. That’s partly because it meets the needs of the company, who might not require a full time employee to complete a project, and partly for the workers, who might prefer the flexibility that project work brings. To that end, HourlyNerd is in the process of updating the platform to include analytics and other services to help customers not only hire people on-demand, but manage their time, their work product and the customer staffing requirements over time. At its heart today, HourlyNerd can provide customers with programming and other skilled staff for a short-term need without having to recruit and hire the talent themselves. The idea, especially with the transition to enterprise clients, appears to be gaining some traction as the company announced a $22 million Series C round today led by General Catalyst Partners with participation from Highland Capital Partners, GE Ventures, Mark Cuban, Greylock Partners and Bob Doris of Accanto Partners. This represents a hefty round for the firm, which prior to this had raised around $12 million in total. The investors seemed intrigued by the idea of taking the on-demand employee market to another level and they saw enough market potential here with a platform play, that it warranted a significant increase in investment to carry out the new vision. It’s an idea that has merit. At last March, there was a lot of discussion about the changing way people will work in the future, and the impact this was having on infrastructure we’ve set up around work over the last 100 years. Speakers describe a changing economy in terms that sounded very much like HourlyNerd’s vision — where skilled workers move from project to project, rather than working for one company for a period of years. That requires a whole new way of interacting with these employees including how to manage them, measure performance and incentivize these people. The company, which currently has 65 employees, claims around 10 percent of the Fortune 500 as customers, so they are beginning to attract the very type of clients they hope to serve more broadly in the future. These include Pfizer and GE, which helped finance the round through its GE Ventures.
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The role of telepresence robotics in workforce inclusion
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Peter Hirst
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Earlier this year, MIT and the world lost the brilliant mathematician, computer scientist, inventor, author and “father” of artificial intelligence — the legendary . Among his myriad scientific pursuits, Minsky was interested in robotics, and, specifically, “teleoperated robots.” He coined the term “telepresence” in , a science and science fiction magazine. In the essay, Minsky posited that, “Telepresence offers a freer market for human skills, rendering each worker less vulnerable to the moods and fortunes of one employer.” What a prescient insight into the rise of remote and distributed teams so many organizations use today. In the same essay, Minsky acknowledged that not everyone would welcome this “remote-controlled economy” and instead some might see it as a path to massive unemployment. Twenty-six years later, similar points are being argued in the media, academia and popular culture. Let’s pause on the robots-are-taking-over-our-jobs panic for a minute and take a look at how some robots — telepresence robots, specifically — could be used to give access not only to jobs but to meaningful and rewarding careers for a historically overlooked and excluded population — people with disabilities. The team at MIT Sloan School of Management Office of Executive Education had been using telepresence robots for the past two years quite successfully as part of our . Encouraged by our own experience, we have started to think of other ways to use this technology beyond meetings and presentations. Opening up our classrooms to telepresence-robot-enabled participants seemed like a logical next step. We knew that a novel model like this would require an adjustment from everyone, including faculty, staff and program participants who would be attending in person. To make this experience worth everyone’s time and effort, we decided to offer access to select programs for participants who may not consider enrolling otherwise — even though they and everyone in the room would benefit from their participation. This line of thinking led us to our fearless test pilot Thomas Hershey, an entertainment-industry executive based in Los Angeles. Geographic distance was not the only reason that made Tom an ideal candidate for us. Tom uses an electric wheelchair and traveling across the country would present its own set of unique challenges for him. With help from our staff, Tom had a great experience in the program and gave us plenty of improvement ideas for the future. Tom’s experience also made us think about the larger implications that telepresence robotics could have in the classroom and workplace for people with disabilities. validate what we all have always known intuitively — a diverse executive pool not only makes sense, it is also good for business. Corporations are devising and implementing strategies to open their leadership ranks to women and people of color. More and more employers are becoming aware of hiring and promotion biases and are making systemic efforts to change for the better. We are still quite far from complete gender and race equity in the workplace, but the topic is widely discussed in tactical rather than aspirational terms, and there has been some progress. Now, what can organizations do to extend the same type of thinking toward people with disabilities? Lack of candidates has been a common argument in gender-biased hiring and promotion decisions. How can women be promoted when they don’t raise a hand? Other under-represented groups, like people with disabilities, face similar treatment. Federal, state and regional organizations are working hard to educate employers on issues surrounding the diverse talent pool that persons with disabilities can provide, yet widely adopted hiring and promotion practices are yet to manifest. The United States Census reports that nearly lives with some type of disability — physical or mental, temporary or permanent, partial or severe, apparent or non-apparent. The spectrum is wide and highly varied, but the lack of professional opportunity is sadly common. According to the year-to-date data published by the , only 19.9 percent of people with disabilities are participating in the labor force (compared to 68.6 percent of people without disabilities). Certainly, there are many factors that contribute to these statistics, but the general attitude is to put the onus on the people with disabilities and not on the professional environments and corporate structures that exclude them. of 1990 made it illegal for employers to discriminate against people with disabilities and aimed to “ensure equal opportunity for persons with disabilities in employment, state and local government services, public accommodations, commercial facilities, and transportation.” Twenty years later, the law was revised to include intended to make public, residential and commercial spaces and transportation more accessible. In addition to raising diversity awareness, a logical step would be to make the workplace environment accessible to more people, both with disabilities and without. Mobility challenges are one of the typical reasons employers cite to explain the dismally low numbers of employees with disabilities. You have to be somewhere in person to perform the required tasks. That may be true for a number of occupations, but in this day and age, the more valuable — and lucrative — jobs are knowledge-based. Your brain needs to be engaged to do to the job, not necessarily your body. If employers were to remove this co-location requirement, their talent pool would immediately widen and become more diverse. Telepresence robots let people do exactly that. These seemingly simple and definitely non-threatening devices allow people to be “present” in a business meeting, “walk” down a hallway with a colleague, join a group at a conference room table or give a presentation on a conference stage. The technology doesn’t approximate a “human experience” in the sense of being able to shake hands with someone, for example, or hold a door. Rather, it enables the remote participant to engage fully with co-located colleagues — much more so than the traditional tele- or video-conferencing tools do. Our Digital Learning Consultant at MIT Sloan Executive Education, Paul McDonagh-Smith, describes this technology as “a human enabler, which doesn’t just help us replicate physical things but, in some cases, to exceed physical limits and to do things in new ways.” In this context, using telepresence robots as assistive technology is very much in the spirit of — a wide range of concepts intended to create buildings, products and environments that everyone can access regardless of physical ability. Also called “inclusive design,” “accessible design” or “human-centered design,” UD originally sprung from architecture in the 1960s, and the idea spread to many other areas of human activity. For example, is a movement that aims to apply UD principles to education, so that all individuals can have equal opportunities to learn. What if people with mobility challenges had easy access to telepresence robots to attend school or go to the office? Why can’t these robots work the same way as bike rentals in many cities around the world where people can check them out by the hour for sightseeing or for commuting? Add a strong citywide wireless network and a whole new swath of population has access to employment, education and entertainment. “If you think about the individuals who have mobility challenges or who are geographically in different places, it seems surprising to me that we don’t use these types of technologies more to bridge humanity and geography more effectively,” Paul observes. There are plenty of examples of that already. are taking advantage of telepresence robotics to make their exhibitions accessible for people with disabilities. use telepresence robots to connect doctors with remote patients in need of care. help students keep up with the curriculum and even go on field trips when they are out of the classroom because of sickness or lengthy recovery. What is stopping us as a society to support and expand these initiatives until they are no longer a novelty? Professor Steven Eppinger, who teaches the executive education program Tom attended via a telepresence robot, made an interesting point about perception. He noted that had Tom not mentioned the fact that he had a physical disability, no one in the room would be the wiser. Regardless, Tom was greeted with excitement about his novel mode of participation and not with awkwardness — which people without disabilities sometimes feel when meeting someone who is visibly different. Changing mindsets is no easy task, and it won’t happen overnight. Around the world, governments and advocacy organizations have made considerable progress to raise awareness, develop strategies and build tangible solutions to address the myriad challenges that people with disabilities face every day. In the United States, the ADA has been in place for more than 20 years and is now considered the norm. The law and its revisions have given employers practical tools to continue expanding and diversifying their talent resources. The Council of Europe issued an that includes universal design recommendations because of its power to “add principles like ‘the same entrance for all’ or ‘the same opportunity for all’ to accessibility, in order to ensure participation and integration in a more equal manner.” While these laws and initiatives are a big step forward in society’s acceptance of people with disabilities, true inclusion — professionally and otherwise — remains a dream for many. At MIT Sloan Executive Education, we are planning the next phase of telepresence-enabled inclusion in our classrooms. To help us think carefully and strategically about next steps, we are continuing our partnership with a consultancy that advises organizations on diversity, equality and inclusion initiatives. Its founder, the disability diversity expert Sean Driscoll, helped us find Tom Hershey, and we have worked with Sean before in the context of our involvement with , a statewide network that aims to increase employment among individuals with disabilities in Massachusetts. Together, we are striving to expand our reach to larger, national networks in search of more candidates for our executive education programs. The road ahead is long. For all of us to succeed in making the workforce more inclusive we need to start looking at people with disabilities as people first, and design experiences and environments that are accessible to everyone.
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Spotify > YouTube as audio streaming surpasses music videos
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Josh Constine
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Audio didn’t quite kill the video star, but it’s making a comeback. Americans are now on-demand streaming more songs as audio than they’re consuming through music videos. The shift highlights the importance of music in the battle for mobile profits, plus it could help artists get paid more. Analytics provider tells TechCrunch that since the start of 2016, Americans purposefully played 114 billion audio streams on apps like Spotify, Tidal, and Apple Music, versus watching 95 billion music video streams on apps like YouTube. This represents a big resurgence for pure listening since the rise of MTV. On-demand Audio streaming was up 107.8 percent in the US compared to the first half of 2015, while video streaming grew 23 percent. On-demand streaming as a whole rose 58.3 percent, and these numbers don’t count online radio streaming like Pandora. A sizable amount of on-demand music streaming is coming from paid subscription services like Spotify and Apple Music than can charge $9.99 for unlimited access. While YouTube recently launched its own ad-free subscription service, most users watch for free but endure ads. Royalties from subscription music services pull in more revenue than ads on videos, earning musicians more per listen. With royalties taking up so much of what Spotify earns, it’s waging a tough war against a deep-pocketed opponent. Apple launched its on-demand streaming service in June 2015, bringing its enormous horde of cash earned from iPhone sales to the competition. This money helps it recruit new listeners through ads and secure exclusives like the early release of Drake’s new album “Views”, which BuzzAngle says was the year’s top album. If Apple can gain a loyal audience for its Music app, it might have better luck getting those people to buy more of its pricey hardware. Spotify meanwhile just raised $1 billion in debt with dirty terms to fuel the battle. It has to hope its free ad-supported tier can more effectively recruit listeners and convert them to paid subscribers than Apple Music’s three-month free trial. Music sales continue to decline, with digital song sales down 24.2 percent and album sales down 17.7 percent. Despite vinyl popularity amongst hipster increasing old-school record sales by 17 percent, physical CD sales dropped 9% pulling down all physical album sales down 7% from the first half of 2015. Streaming Royalties still aren’t replacing what artists made from records at the peak of the $16.99 CD era. But transitioning more fans to paid subscription services could lessen the gap. The convenience and portability of audio streaming lets listeners immerse themselves in an artist’s albums, not just their popular single that has a video. Rather than flitting from artist to artist watching music videos, streaming apps like Spotify make it easier to dive into a musician’s whole catalog. The MTV age meant musicians couldn’t just make music any more. They had to be actors too. Now media is undergoing another shift. Any artist solely focusing on their recorded music sales and streaming royalties isn’t adapting. To earn a good living, musicians must become merchandise designers, live performers, social networkers, TV commercial soundtrack composers, and more. Today, musicians don’t sell music. They need to sell a connection between them and their fans by every method available.
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Technology will change where we live
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Dan Laufer
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Governor Jerry Brown recently proposed that would streamline the path for large-scale development across California. It could have a huge impact on growing housing supply in San Francisco, specifically, which suffers from and a lengthy, local review process for building developers. The additional supply spurred by the legislation will help abate the rising housing costs — and is a good thing. But in the end, it may not matter much. Within about five years a new technology revolution will create a massive shift in where people choose to live and, as a pleasant byproduct, will solve San Francisco’s real estate crisis, independent of any legislation. Let’s start with some historical context. In 1900, 30 percent of Americans lived in cities; by 2010, that figure had grown to 81 percent. Follow the jobs — in 1900, farmers made up nearly 40 percent of the labor force; today it’s roughly 2 percent. Clearly, jobs have moved to cities, which has created a cycle of needing more people to serve people already in those cities (think: cashiers, waiters, etc.). And people like to live close to where they work. The challenge is there’s only so much of San Francisco to go around. But if you could enjoy all the benefits of living in San Francisco wake up in a beachfront property pay half the rent of living in the city, that would seem like a no-brainer for most people. No, it’s not a Craigslist scam. And no, I can’t offer it to you just yet. But pretty soon that’s exactly the option we’ll all have. Three technologies will completely change how we view real estate and make this ideal scenario possible: self-driving cars, the Hyperloop and virtual reality. Self-driving cars are coming — and fast. Every major auto manufacturer has committed to having a commercially available self-driving car by 2020. And Tesla and Google each expect to deliver well before then. We can quibble on the adoption curve, but I for one would much rather be carted around on-demand and simultaneously spend less money than me driving myself everywhere I need to go. I’m guessing I’m not alone. There are two notable consequences of self-driving cars becoming widespread: 1) Parking spaces can be largely eliminated and repurposed for more functional uses, and 2) Traffic can essentially be eliminated as “drivers” become more efficient, eliminating log jams and accidents as there are fewer cars on the road. Parking is estimated to account for at least in most American cities. Not all of this space can be used for new development — and, of course, new development takes time, so won’t have an instant impact. But even if just a quarter of that space becomes available within a few years, it will be a . More critically is the elimination of traffic. The definition of a “convenient” location as it relates to getting to school, work or social functions expands dramatically compared to what it is today. Half Moon Bay, for example, is a delightful place that few people working in Silicon Valley seriously consider because the commute would be untenable. But if it was 30 minutes door-to-door, and you could read or watch a TV show, then yeah, that would be different. Virtually any place within 40 miles of your desired hub becomes a perfectly reasonable place to consider. This spreads the demand over a much wider region, likely increasing the price of outlying areas (like Half Moon Bay and Napa), but reducing pricing pressure on the central core of San Francisco/Silicon Valley. The next technological breakthrough to consider is the Hyperloop. If you’re unfamiliar, it’s like the vacuum tube you use at the bank drive-thru, but life-size, and is expected to move people at up to 700 miles/hour. If successful, you’ll be able to go from San Francisco to LA in about 30 minutes. There are many hurdles remaining, but recently Hyperloop One, one of the nascent players attempting to build out the technology, completed a proof of concept outside of Las Vegas and has the stated goal of transporting people by 2021. Combined with a fleet of self-driving cars available at your beck and call, you can now reasonably work in Silicon Valley and extend your range of “convenient” locations even farther. It’s no longer a 40-mile radius of your desired hub, but 40 miles from Hyperloop station that can get you to your hub. You could practically live anywhere along the Pacific coastline and have a door-to-door commute using the Hyperloop and self-driving cars that would be shorter than the typical drive from San Francisco to San Jose — and you could be engaged in other activities the entire time. You could live in charming, sea-side Encinitas for 60 percent of the typical rent in San Francisco. Or Del Mar for about half as much. Heck, live in posh La Jolla and pay the same thing and your commute to Silicon Valley is still less stressful than it is today. Finally, we have virtual reality coming in to totally upend things, perhaps rendering the commute obsolete altogether. There’s a reason Facebook bought Oculus for $2 billion. Facebook sees the future of social interaction as happening through VR. Microsoft has already shown of people in completely different places physically, interacting seamlessly almost hologram-like in a way that’s both creepy and awesome (they appropriately call it Holoportation). According to , in 1995, 9 percent of workers telecommuted for work at least occasionally; by 2015 it grew to 37 percent. But for all of our current technology, telecommuting has drawbacks — it’s generally not as good as being in the same room as a colleague. VR is changing that. And with it, the rate of telecommuters will grow dramatically. Perhaps there are some lingering expectations of people being in the office part-time to build camaraderie (drinking virtual beer together isn’t as fun after all), but the five-day-a-week commute will be undesirable to employees — and to employers who want a recruiting advantage and prefer more workable hours for their employees and can offer it by eliminating their commute. Instead of having a few densely populated pockets like we do today, people are going to disperse because technology will make it easier to do so and it’ll be much cheaper to live. Real estate prices will shift — not just in San Francisco, but in every major city. And places that hold universal appeal (e.g. beachfront/close to mountains) will draw more people as a result. So in regards to Jerry Brown’s legislation: Yes, go for it. More housing is a good thing; who really knows how the future will play out and affordable housing is needed sooner rather than later. But I’m betting in a decade we’ll look back and say it didn’t really matter in the end.
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The Pro Football Hall of Fame goes 4D
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Mark Lelinwalla
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For everyone
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Devin Coldewey
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thing, and what it creates may in fact be powerful beyond our imagining. That was certainly the case with Sir Tim Berners-Lee and the World Wide Web, the creation of which is documented in a new short film, “ ,” which was directed by Jessica Yu and is currently showing at the Seattle International Film Festival. I sat down ahead of the film’s debut with Yu and Berners-Lee, who, in his inimitable manner, held forth on topics from encryption and social media to the need to, as he called it, “re-decentralize the web.” The film traces the story of the web from its prehistory as a twinkle in Berners-Lee’s eye to the various dangers it faces today: surveillance, the loss of net neutrality and an excess of commercialization and centralization. It should be absorbing for anyone not aware of this history, and it’s a good refresher for those of us who are. “I thought that it’s crazy many of us don’t think about where the web came from and what a miracle it is that it exists in the form it does,” Yu said in introducing the film, which would premiere an hour later. That was his reply when I asked what he perceived the imminent threats to the web to be. The use of old exploits to get at low-hanging XP systems notwithstanding, future threats to the web will require a little ingenuity to figure out — not least of which because the stakes are so high, Berners-Lee said. “Because of the nature of a medium that’s used by pretty much everybody and pretty much everything, to be able to control it is just ridiculously powerful.” And not in simple terms, either. Censorship or fast lanes, for example, are minor threats compared to that of pervasive surveillance. “There are countries in the Middle East where they love you to go to the opposition website. It’s just that when you do, you and your friends are marked and you’ll disappear in the middle of the night,” said Berners-Lee. “The ability to understand which people are veering in which particular direction is a tremendously powerful tool.” Positions of leverage, in the guise of (and perhaps even in the spirit of) philanthropy also constitute danger. “Maybe it’s a social network that decides it’s going to go to India — and it’s going to be the entire web for everyone in India — but end up leaving the whole country beholden to one particular commercial concern for their news, and the selection of what they do every day.” The real threat is not in the possibility of a specific kind of authoritarian control, but the subtler, more insidious manners of control can create outcomes as bad or worse as the rest. “As a journalist,” he said, pointing in my direction (perhaps he thought he saw a journalist behind me), “spotting these things is part of your job, but also having the imagination to realize what new threats there could be.” I asked Berners-Lee whether he felt that the titans of the tech industry exert an undue influence on the way the web functions — whether they were, simply by the scale of their operations, a problem for the open web. “You’re talking about the age-old story of capitalism and monopoly,” he began. “If you have a system that rewards people for gaining market share, when they get a very large portion of the market share, then to a certain extent everybody suffers because innovation drops off.” So far, so ordinary, at least for the last century or so. “The monopoly we’re concerned about can switch very quickly.” “But people were very worried about Netscape,” Berners-Lee pointed out. “And then suddenly they stopped worrying about Netscape, and they started worrying about Microsoft — because it controls the operating system as well as the browser. Then they decided the browser doesn’t matter. It was actually about the search engine people used. And then they realized that, actually, the search engine doesn’t matter because people only use it to go to one social network, and people are spending all their time there.” The pattern is clear: “It’s reasonable to worry about monopolies when they happen, because they’re an impediment to innovation and fun and creativity. But also notice that the monopoly we’re concerned about can switch very quickly.” It’s hard to imagine thinking of the Google or Facebook monopolies (or however you’d like to call them) as quaint five or 10 years from now, but by that time we may be worrying about VR agents and IoT viruses literally tracking our every move inside our homes. The internet and the web are evolving fast, and locked into co-evolution with them are the bad actors who have infested, dominated and ultimately improved them. The question of encryption is as close to a settled one as it gets in the tech community. You couldn’t ban it if you tried, and legislation to do so has been so wrong-headed as to be risible even among the frequently ignorant ranks of Congress. But knowing what we need is not the same as creating the systems by which those needs can be delivered. “This is something we have to get right,” Berners-Lee said. “Yes, in America, no government can get away with preventing people from sending encrypted messages.” But as with surveillance and censorship, the high-handed tactics of the Burrs and Feinsteins of the world are not the ones we need to watch out for. Outlawing encryption outright may be impossible, but by abstracting the question a bit, you find plenty of ways to get similar results without raising those pesky human rights questions. “In China, you used to have to get a license to have a modem,” he said. “Or, for instance, you could make owning encryption software illegal,” substituting state-sponsored (and, naturally, backdoored) systems as a free service to the people. Berners-Lee is sympathetic to the needs of authorities, but fighting crime is a red herring, he suggested. “We do have to talk about the powers we give law enforcement, and we do have to give them the power to fight serious crime. But the more important discussion is, who guards the guards? Who is looking? Who are they responsible to? “Building those structures is complicated,” he said. “Figuring out how to build the structures which will give us freedom as well as giving us the rule of law.” To entertain Yu and Berners-Lee, I showed them the book “ ,” a sort of cross-listed almanac and micro-encyclopedia that is credited as being one of the inspirational documents for the web’s hyperlinked structure. I asked whether there was something out there that might perform a similar role for the next phase of the web — something new and strange like bitcoin, for instance. “The people who are interested in decentralized ledgers, they’re motivated by a concern that the web has ended up looking centralized,” said Berners-Lee, “which is kind of weird, because it was designed to be decentralized. “They’re not really social networks, they’re silos.” “Now people feel very disempowered,” he continued, “because the end result is that they’re telling their computer who their friends are, and who’s in the photographs, and planning things and designing things — and those plans and designs and friendships are sucked up and held by these social networks. And they’re not really social networks, they’re silos. “If you want to share your Flickr photos with your Facebook friends or your LinkedIn colleagues, those are three different silos, unless someone has built a specific bridge between the networks. Suppose we flip that around.” Berners-Lee and others at MIT are working on a project called Solid, a “linked-data” platform that acts rather like a file system with the web as its interface. “Right now we have the worst of both worlds, in which people not only cannot control their data, but also can’t really use it,” Berners-Lee said last year. “Our goal is to develop a web architecture that gives users ownership over their data.” Part of that is turning computers back into servers, removing DNS authorities, doing hash-based document identification and key-based identity. “It’s early days, very researchy,” he told me. “But it’s driven by this common idea that a lot of people have to take back the decentralized web. There are people across the world who are thinking that we do actually need another revolution in the architecture, a little one, to make the web work again in the way it was intended. I call it ‘re-decentralizing the web.’” Re-decentralization is a long and complicated process, however, and in the meantime the more important problem is one of access. “Being on the web is still a minority thing,” he said. “The digital divide has become massive, because there’s this assumption that it’s everywhere. The common goal we must have is to get the cost of real open internet access down so everybody can afford it. Right now the people to watch and talk to are the ones working on getting that affordability — of the data, of the device. And suddenly you’ll find that we actually have a majority of people online. It’s really exciting times.” You can follow Berners-Lee’s work at or on . For details on the film, visit .
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How AWS came to be
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Ron Miller
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There are , but this much we know: 10 years ago, , the cloud Infrastructure as a Service arm of Amazon.com, was launched with little fanfare as a side business for Amazon.com. Today, it’s a highly successful company in its own right, . In fact, , in the decade since its launch, AWS has grown into the most successful cloud infrastructure company on the planet, garnering more than 30 percent of the market. (and by a fair margin). What you may not know is that the roots for the idea of AWS go back to the 2000 timeframe when Amazon was a far different company than it is today — simply an e-commerce company struggling with scale problems. Those issues forced the company to build some solid internal systems to deal with the hyper growth it was experiencing — and that laid the foundation for what would become AWS. Speaking recently , AWS CEO Andy Jassy, who has been there from the beginning, explained how these core systems developed out of need over a three-year period beginning in 2000, and, before they knew it, without any real planning, they had the makings of a business that would become AWS. It began way back in the 2000 timeframe when the company wanted to launch an e-commerce service called Merchant.com to help third-party merchants like Target or Marks & Spencer build online shopping sites on top of Amazon’s e-commerce engine. It turned out to be a lot harder than they thought to build an external development platform, because, like many startups, when it launched in 1994, it didn’t really plan well for future requirements. Instead of an organized development environment, they had unknowingly created a jumbled mess. That made it a huge challenge to separate the various services to make a centralized development platform that would be useful for third parties. At that point, the company took its first step toward building the AWS business by untangling that mess into a set of well-documented APIs. While it drove the smoother development of Merchant.com, it also served the internal developer audience well, too, and it set the stage for a much more organized and disciplined way of developing tools internally going forward. “We expected all the teams internally from that point on to build in a decoupled, API-access fashion, and then all of the internal teams inside of Amazon expected to be able to consume their peer internal development team services in that way. So very quietly around 2000, we became a services company with really no fanfare,” Jassy said. At about the same time, the company was growing quickly and hiring new software engineers, yet they were still finding, in spite of the additional people, they weren’t building applications any faster. When Jassy, who was Amazon CEO Jeff Bezos’ chief of staff at the time, dug into the problem, he found a running complaint. The executive team expected a project to take three months, but it was taking three months just to build the database, compute or storage component. Everyone was building their own resources for an individual project, with no thought to scale or reuse. (I think you can guess where this is going.) The internal teams at Amazon required a set of common infrastructure services everyone could access without reinventing the wheel every time, and that’s precisely what Amazon set out to build — and that’s when they began to realize they might have something bigger. Jassy tells of an executive retreat at Jeff Bezos’ house in 2003. It was there that the executive team conducted an exercise identifying the company’s core competencies — an exercise they expected to last 30 minutes, but ended up going on a fair bit longer. Of course, they knew they had skills to offer a broad selection of products, and they were good at fulfilling and shipping orders, but when they started to dig they realized they had these other skills they hadn’t considered. As the team worked, Jassy recalled, they realized they had also become quite good at running infrastructure services like compute, storage and database (due to those previously articulated internal requirements). What’s more, they had become highly skilled at running reliable, scalable, cost-effective data centers out of need. As a low-margin business like Amazon, they had to be as lean and efficient as possible. It was at that point, without even fully articulating it, that they started to formulate the idea of what AWS could be, and they began to wonder if they had an additional business providing infrastructure services to developers. “In retrospect it seems fairly obvious, but at the time I don’t think we had ever really internalized that,” Jassy explained. They didn’t exactly have an “aha” moment, but they did begin to build on the initial nugget of an idea that began at the retreat — and in the Summer of 2003, they started to think of this set of services as an operating system of sorts for the internet. Remember, this is still three years before they launched AWS, so it was an idea that would take time to bake. “If you believe companies will build applications from scratch on top of the infrastructure services if the right selection [of services] existed, and we believed they would if the right selection existed, then the operating system becomes the internet, which is really different from what had been the case for the [previous] 30 years,” Jassy said. That led to a new discussion about the components of this operating system, and how Amazon could help build them. As they explored further, by the Fall of 2003 they concluded that this was a green field where all the components required to run the internet OS had yet to be built — at which point I’m imagining their eyes lit up. “We realized we could contribute all of those key components of that internet operating system, and with that we went to pursue this much broader mission, which is AWS today, which is really to allow any organization or company or any developer to run their technology applications on top of our technology infrastructure platform.” Then they set out to do just that — and the rest, as they say, is history. A few years later the company launched their Infrastructure as a Service (a term that probably didn’t exist until later). It took time for the idea to take hold, but today it’s a highly lucrative business. AWS was first to market with a modern cloud infrastructure service when it launched . Surprisingly, it took several years before a competitor responded. As such, they control a vast amount of market share, at least for now. Rest assured, some very well-heeled competitors like Microsoft, Google, IBM and others are gunning for them. When asked if he ever foresaw the success they’ve achieved, Jassy was humble, saying, “I don’t think any of us had the audacity to predict it would grow as big or as fast as it has.” But given how the company carefully laid the groundwork for what would become AWS, you have to think that they saw something here that nobody else did, an idea that they believed could be huge. As it turned out, what they saw was nothing less than the future of computing.
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A brief history of cryptocurrency drama, or, what could possibly DAO wrong?
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Jon Evans
| 2,016
| 7
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It makes look like and yet it’s a documentary. Yes, it’s , the show! You already know it’s been the hit of the last half-decade in extreme-nerd, get-rich-quick and/or libertarian-conspiracist circles. But the story so far may seem incredibly… well… cryptic. So if you’re just tuning in, here’s a timeline to catch you up before the new season begins: Meanwhile, however, much of the early Bitcoin community is using Mt. Gox, the Magic: the Gathering trading-card site turned Bitcoin exchange coded in PHP by developers of extremely dubious technical ability. This division makes it impossible to ignore the fact that the supposedly permissionless and decentralized cryptocurrency is by a handful of mining pools and a tiny coterie of developers. Previously the community has dealt with this inconvenient truth by loudly singing “la la la!” while studiously looking away. To analogize, Bitcoin offers its developers a knife with which to stab themselves; Ethereum offers them the entire arsenal of the United States military with which to destroy everything that they have ever loved, but makes them pay by the second to use it. Like Bitcoin, Ethereum is both technically fascinating and generally awesome. And, again like Bitcoin, it promptly attracts a coterie of dollar-sign-eyed enthusiasts who are … shall we say … somewhat less awesome. irrefutable computer code … reviewed by the best security audit company in the world … self-governing and not influenced by outside forces: its software operates on its own, with its by-laws immutably written on the blockchain, not controlled by its creators … A few like, er, me (and pretty much everyone I know) “What most concerns me about the Ethereum project is security. … Ethereum offers a vastly larger attack surface than Bitcoin … this applies not just to the network itself, but to individual Ethereum contracts.” DAO enthusiasts are angered by us. A “ ” to ensure the attacker can’t make away with the drained funds is proposed, as is a much more drastic “hard fork” to return the funds to investors. Someone purporting to be the attacker appears in the DAO slack channel claiming they’ll bribe miners to oppose the soft fork. Needless to say, one way or another, .
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Man behind web’s biggest illegal film site arrested following (legal) iTunes purchase
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Jon Russell
| 2,016
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| 20
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Here’s a dose of irony for you this fine day: the internet just lost its most prolific source of illegal movies after its founder was nabbed after buying something legally, on iTunes. KickassTorrents (KAT), a torrent website that has surpassed The Pirate Bay as the place to go for unofficial copies of movies and TV shows, appears to be in jeopardy today. that Artem Vaulin, a 30-year-old from Ukraine who allegedly runs the site, was arrested in Poland. after he was located after using the same IP address to make a purchase, presumably legally, on iTunes and then log into the KAT Facebook page. Vaulin has been charged with conspiracy to commit criminal copyright infringement, conspiracy to commit money laundering and two counts of criminal copyright infringement. The attorney general suggested in a statement that KAT had “stole[n] more than $1 billion in profits from the U.S. entertainment industry.” The website itself appears to be down right now, and, with Vaulin’s case pending, it is hard to see it resurfacing. Interestingly, TorrentFreak said that as part of its investigation into KAT, U.S. authorities had posed as an advertiser to the site, which helped get Vaulin’s bank details. In another critical part of its efforts, Apple provided authorities Vaulin’s personal details following that iTunes purchase, according to court documents. “In an effort to evade law enforcement, Vaulin allegedly relied on servers located in countries around the world and moved his domains due to repeated seizures and civil lawsuits. His arrest in Poland, however, demonstrates again that cybercriminals can run, but they cannot hide from justice,” Assistant Attorney General Leslie R. Caldwell said in a statement that you can only really describe as triumphant. (Ok, not such a fine day if you were a KAT user.)
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Website-building platform Brandcast raises $13.9M
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Anthony Ha
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, a startup allowing marketers and designers build mobile-friendly websites without having to write code, today that it has raised $13.9 million in Series A funding. The round was led by Shasta Ventures with participation from Salesforce CEO Marc Benioff and Correlation Ventures. (Brandcast co-founder and chief strategy officer Hayes Metzger previously worked at Salesforce, and .) A platform like this is particularly important for brands that need to launch and maintain a large number of websites. ( enterprises have an average of more than 268 customer-facing websites.) Brandcast says it has been used by organizations including Lowe’s, Colliers and New York Fashion Week. Brandcast has now raised a total of $19.4 million.
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