Month: August 2018

12 Aug 2018

California may mandate a woman in the boardroom, but businesses are fighting it

California is moving toward becoming the first state to require companies to have women on their boards –assuming the idea could survive a likely court challenge.

Sparked by debates around fair pay, sexual harassment and workplace culture, two female state senators are spearheading a bill to promote greater gender representation in corporate decision-making. Of the 445 publicly traded companies in California, a quarter of them lack a single woman in their boardrooms.

SB 826, which won Senate approval with only Democratic votes and has until the end of August to clear the Assembly, would require publicly held companies headquartered in California to have at least one woman on their boards of directors by end of next year. By 2021, companies with boards of five directors must have at least two women, and companies with six-member boards must have at least three women. Firms failing to comply would face a fine.

“Gender diversity brings a variety of perspectives to the table that can help foster new and innovative ideas,” said Democratic Sen. Hannah-Beth Jackson of Santa Barbara, who is sponsoring the bill with Senate President Pro Tem Toni Atkins of San Diego.”It’s not only the right thing to do, it’s good for a company’s bottom line.”

Yet critics of the bill say it violates the federal and state constitutions. Business associations say the rule would require companies to discriminate against men wanting to serve on boards, as well as conflict with corporate law that says the internal affairs of a corporation should be governed by the state law in which it is incorporated. This bill would apply to companies headquartered in California.

Jennifer Barrera, senior vice president of policy at the California Chamber of Commerce, argued against the bill and said it only focuses “on one aspect of diversity” by singling out gender.

“This bill basically mandates that we hire the woman above anybody else who we may be fulfilling for purposes of diversity,” she said at a hearing.

Similarly, a legislative analysis of the bill cautioned that it could get challenged on equal protection grounds, and that it would be difficult to defend, requiring the state to prove a compelling government interest in such a quota system for a private corporation.

Five years ago, California was the first state to pass a resolution, authored by Jackson, calling on public companies to increase gender diversity. In response, about 20 percent of the companies headquartered in the state followed through with putting women on their boards, according to the research firm Board Governance Research. But the resolution was non-binding and expired in December 2016.

Other countries have been more proactive. Norway in 2007 was the first country to pass a law requiring 40 percent of corporate board seats be held by women, and Germany set a 30 percent requirement in 2015. Spain, France and Italy have also set quotas for public firms.

In California, smaller companies have fewer female directors. Out of 50 companies with the lowest revenues, 48 percent have no female directors, according to Board Governance Research. Only 8 percent of their board seats are held by women.

The 2017 study said larger companies did a better job of appointing women, with all 50 of the highest-revenue companies having at least one female director and 23 percent of board seats held by women.

“The main issue is still that a lot of companies headquartered here don’t have women on their boards,” said Annalisa Barrett, clinical professor of finance at the University of San Diego’s School of Business. “We quite often like to think of California as progressive and a leader on social issues, so that’s kind of disappointing.”

Barrett publishes an annual report of women on boards in California. Public companies are major employers in the state, and their financial performance has a big impact on public pension funds, mutual funds and investment portfolios. “Financial performance does really impact the broader community,” she said.

The National Association of Women Business Owners, sponsor of the bill, says an economy as big as California’s ought to “set an example globally for enlightened business practice.” In a letter of support, the association cites studies that suggest corporations with female directors perform better than those with no women on their boards.

One University of California, Davis study did find that companies with more women serving on their boards saw a higher return on assets and equity, but the author acknowledges this may not suggest a cause-and-effect.

12 Aug 2018

Understanding smartwatches

I was wrong. Several years ago I reviewed the first Garmin Fenix 3 smartwatch. This was before the release of the Apple Watch. That’s key to this story. I declared Garmin would have a hard time selling the Fenix 3. The Apple Watch would be better in every way, I pointed out. Therefore, there would be little reason to buy the Fenix 3.

But here I am, in the middle of the woods, wearing the fifth generation of the Garmin Fenix while my Apple Watch sits at home on my desk.

In some ways I was right. The Apple Watch is better by most measurable attributes: there are more apps, the screen is superior, there’s a vibrant accessory market, and it’s thinner, faster and cheaper.

The Garmin Fenix is big, clunky and the screen looks like it’s from a Kindle. It’s not a touchscreen nor does it have the number of apps or band options of the Apple Watch. I like it. To me, the Garmin Fenix is akin to a modern Casio G-Shock, and that’s what I want to wear right now.

Smartwatches are often reviewed like phones or vacuums. Specs are compared, and conclusions are drawn. Wearability is talked about, and functions are tested. If the watch has a swimming option, take it in a pool never mind the fact the reviewer hasn’t done a lap since high school.

I started out doing the same thing with this Garmin. I took it kayaking. I had kayaked twice in my life, and dear reader, I’m here to report the watch performed well on this kayak trip. The watch has topography maps that novel though not useful since the river. It has a cadence beat to help keep strokes consistent. I tried it all. I ended up drinking a lot of Michigan beer instead of tracking the performance of the watch. Sorry.

Still, performance matters to a point.

Here’s my OG review of the Garmin Fenix 5: The watch is significant even on my wrist. The screen is underwhelming though it’s always on and visibility improves in sunlight. The buttons have great tactical feedback. The watch is waterproof to the extent it survived a flipped kayak and hours in Lake Michigan. The battery lasts nearly a week. The watch does not know when it’s on or off the wrist, so notifications will cause it to buzz while it’s on your nightstand.

But most of that doesn’t matter. The Garmin Fenix 5 is exceptional, and I love wearing it.

Smartwatches need to be reviewed like ordinary watches. I need to explain more about how the watch feels rather than what it does or how it works. At this point, several years into smartwatches, it’s not notable if the smartwatch with a smartwatch. Of course, it tracks steps and heart rate and displays select notifications from my phone. If those items work then, they’re not important in a review.

Take a Citizen Skyhawk line. It packs a highly sophisticated complication that’s designed, so the maker says, for pilots. Ball makes a lovely line intended to provide accurate timekeeping for train conductors. There are watches for high magnetic fields, tactical operators, racer car drivers and, of course, countless for divers. Here’s my point: The vast majority of these watches are not used by divers or train conductors or fighter pilots.

This Garmin Fenix watch, much like the Apple Watch or Rolex diver, can be an aspirational item. It’s like the juicer in my kitchen or rowing machine in my basement. I got it because I wanted to be a person who woke up and juiced some veggies before my workout. I haven’t used either in months.

Smartwatches are different from smartphones and need to be reviewed as such. This Garmin Fenix watch has many modes I would never use, yet I love the watch. There’s a base jumping mode. I’m not jumping off a cliff. There’s a tactical mode and a golf mode and an open water mode, and I have no desire to be in situations where I need to track such activities. But I like the thought of having them available if I ever wanted to monitor my heartbeat while shooting targets.

The smartwatch industry is approaching a point where features are secondary to design. It’s expected that the watch will track steps and heartbeat while providing access to various features. It’s like the time and date of a regular watch. Past that, the watch needs to fit in a person’s aspirations.

Everyone is different, but to me, this is how it is laid out: The Apple Watch is for those looking for the top-tier experience regardless of the downsides of constant charging and delicate exterior. Android Watches are those looking for something similar but in a counter-culture way. The Samsung’s smartwatch is interesting and with the new Galaxy Watch, finally reaching maturity.

There are fashion smartwatches with fewer features but designs that make a statement. That’s where this Garmin watch lives and I’m okay with it. Fossil and Timex watches live here too. Using the Apple Watch as a standard, some of these fashion watches cost more, and some cost less, but they all say something an Apple Watch does not.

I’m bored with the Apple Watch, and right now I’m into thinking I live the type of life that needs a smartwatch that tracks every aspect of a triathlon. I don’t need all these features, but I like to think I do. I also don’t need to have a GMT watch with a third timezone, and I don’t need a watch with a hacking movement hand as if I need to synchronize my watch with other members of my special forces squad. But I have those watches along with dive watches and anti-magnetic watches. I’m not alone. The watch industry has long existed on selling lifestyles.

I was wrong before. The Apple Watch isn’t better than this Garmin or most other smartwatches— at least it’s not better for me right now. Maybe two weeks from now I’ll want to wear an Apple Watch and not because it’s better, but because it makes a different statement.

12 Aug 2018

Electric scooters are going worldwide

Despite regulatory hurdles on a city-by-city basis, electric scooter companies and their respective services are continuing to make their way to markets all over the world. Earlier this week, for example, Lime announced its entrance into Madrid, launching hundreds of electric scooters in the Spanish capital. About a week before that, competitor Bird launched in Paris and laid out its intentioned to bring electric scooters to Tel Aviv.

As Bird expands to international markets, it’s worth noting that competitor Lime has operated its bikes and scooters outside of the U.S. for quite some time. Last December, Lime brought its bikes to a number of European cities and in June, Lime brought its scooters to Paris. Lime also recently raised a $335 million round and teamed up with transportation behemoth Uber.

Nationwide, Bird, Lime, Spin, Goat and Skip have collectively deployed scooters in 33 cities. Outside of the U.S., you’ll find scooters from those companies in just three cities.

Bird and Lime are by no means the only companies working in this space, but they’re the two that have raised most the capital. Bird has raised $415 million in funding while Lime has raised $467 million. Bird and Lime are also the only two U.S.-based scooter companies that have gone international.

Over in the U.S., of course, the competitive landscape is an entirely different story. California is the main hot spot for scooters in the U.S., but they have also popped up in Texas, Washington D.C., North Carolina and other states throughout the country.

 

Unsurprisingly, regulation has proved to be an issue for many of these companies. In San Francisco, the Municipal Transportation Agency is currently reviewing permit applications from 12 electric scooter services — including ones from Lyft, Uber and Razor — looking to operate in the city. The permit process came as a result of Bird, Lime and Spin deploying their electric scooters without permission in the city in March. Fast forward to today and electric scooters are nowhere to be found on the streets of San Francisco.

The SFMTA initially said it expected to make a decision about which five, if any, companies would receive permits by the end of June. The SFMTA expects to finalize its recommendations and documentation “in the coming weeks,” the SFMTA wrote in a blog post last month. Once that’s done, the agency says it will work with companies to finalize and clarify the terms and conditions of the permit. The goal, according to the blog post, is to issue permits sometime in August.

As part of the 24-month pilot program, electric scooter companies selected to operate in the city will need to provide user education and insurance, share its detailed trip data with the city, have a privacy policy that protects user data, offer a low-income plan and operate in a to-be-approved service area. The city will allow no more than 2,500 electric scooters on the streets at any one time.

Last month, Bird tried to launch its scooters in Boston but regulators quickly cracked down, saying it would impound any scooters it found. And let’s not forget the drama that unfolded in Santa Monica, where Bird first deployed its scooters.

In Austin, D.C. and Portland, Ore., it’s a slightly different scenario. Over in Austin, dockless electric scooter startup GOAT says it’s working with the city to ensure its service meets the criteria laid out by regulators. Moving forward, GOAT says it’s actively working with other cities to pursue additional operating permits. Skip, which is trying to differentiate itself by being more heavy-duty, worked with city officials and lawmakers to ensure it had the green light before launching. In Portland, both Skip and Bird have received permits to operate electric scooters in the city.

With the sheer volume of capital pouring into these companies, along with interest from ride-hailing giants Lyft and Uber, it’s clear these scooters are here to stay. Whether cities like them or not, scooters are going to roll up. It’s just a matter of when and how many.

12 Aug 2018

Spotify runs test in Australia, allowing users to skip ads at any time, potentially boosting targeting and revenues

If you want to test out a feature on a large, well-known, global, platform, there’s a very simple solution: Test it in Australia. At a population of 24 million and with a predominantly Western culture, it’s a large enough test bed and small enough market, so ideal for testing new features before (maybe) rolling them out globally. And that’s exactly what Spotify appears to be doing in testing out how it can tweak its advertising platform to take the fight to the likes of Pandora and other competitors.

Advertising Age reports today that it’s running a test in Australia which will let listeners skip audio and video adverts at any time while the ad is playing. This is instead of having a preset time limit to listen to or watch the advert which can’t be skipped. They’ll be able to do this any time they want, as often as they want, and the new feature will also let them jump straight back into the music.

The feature (well, it’s still a test feature after all) is called “Active Media.” In it, advertisers won’t have to pay for any ads that are skipped. It’s a high risk strategy because clearly Spotify may get less ad revenue in the short-term, while the algorithm is trained to serve ads that consumers will in fact listen to. But Australia’s smaller market means any lost revenue will be relatively small.

AdAge quote Danielle Lee, global head of partner solutions at Spotify, saying the move is about tailoring the ads to users’ tastes, so similar to Spotify’s “Discover Weekly” feature, which does the same for music.

It’s a smart move, since, by allowing users to spend longer on the ads they actually do like, Spotify will get better data on the ads which work best for that particular user, and thus sell better-targeted ads which, in turn, will have a higher premium.

“Our hypothesis is if we can use this to fuel our streaming intelligence, and deliver a more personalized experience and a more engaging audience to our advertisers, it will improve the outcomes that we can deliver for brands,” Lee said.

Plus, a user listening to a better-targeted advert in full is worth more than blasting adverts to consumers who may ultimately be put off the platform for being forced to listen to adverts. They’d also listen to fewer ads overall, thus keeping the platform ‘sticky’.

Spotify says advertisers won’t have to pay for any ads that are skipped. If things go well, it’s likely the feature will expand globally.

Spotify previously reported in July that it closed the second quarter of the year with 180 million monthly active users. This is up 30 percent year-over-year. It now have over 101 million ad-supported users in 65 markets globally. Total ad revenue has reached $158 million, up 20 percent. Automated ad sales are growing quickly and accounted for more than 20 percent of ad revenue, the company reported.

12 Aug 2018

24 hours left to apply to Startup Battlefield Latin America

The clock is ticking: only 24 hours left to submit your application to compete in the first TechCrunch Startup Battlefield Latin America on November 8, 2018, in São Paulo, Brazil. Is your startup one of Latin America’s best? If so, don’t waste another minute. Apply right here, right now before the 24-hour clock runs out. Don’t miss your chance to launch your early-stage startup on a global stage. Apply no later than August 13, 2018, at 5 p.m. PST.

The winning founders receive a $25,000 non-equity cash prize and a trip for two to the next TechCrunch Disrupt. While there, they can exhibit free of charge in the Startup Alley.

All Startup Battlefield competitors — win or lose — reap the benefits of broad exposure to the media outlets and investors sitting in the audience. Plus, we video all the Startup Battlefield sessions and post them on TechCrunch.com. That exposure lives on long after the competition ends.

All competing teams also become part of our Startup Battlefield alumni community. Since 2007, more than 750 companies have competed in Startup Battlefield. Those companies — including Mint, Dropbox, Yammer, Fitbit, Getaround and Cloudflare — have collectively raised more than $8 billion in funding and produced more than 100 exits.

Here’s how the competition works. TechCrunch editors will evaluate every eligible application and select 15 founders to compete in the Battlefield, which takes place at São Paulo’s Tomie Ohtake Institute. Founders receive intensive — and free — pitch coaching from TechCrunch editors and will be primed and ready to go come game day.

During three preliminary rounds, five startups per round will each have six minutes to pitch and present their demo before a panel of top investors and seasoned entrepreneurs. The judges have six minutes following each pitch for a thorough Q&A. Only five teams advance to the finals for another round of pitching and more probing questions. And only one team will emerge as the first Startup Battlefield Latin America champion.

Here’s what you need to know about eligibility. Founders must meet these requirements:

  • Have an early-stage company in “launch” stage
  • Be headquartered in one of these countries: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, French Guiana, Guyana, Paraguay, Peru, Suriname, Uruguay, Venezuela; (Central America) Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Mexico, Panama; (Caribbean — including dependencies and constituent entities) Dominican Republic and Puerto Rico
  • Have a fully working product/beta reasonably close to, or in, production
  • Have received limited press or publicity to date
  • Have no known intellectual property conflicts
  • Apply by August 13, 2018, at 5 p.m. PST

TechCrunch Startup Battlefield Latin America takes place on November 8, 2018, in São Paulo, Brazil. You have everything to gain by applying, but time is running out: You only have 24 hours left to apply by the deadline of August 13, 2018, at 5 p.m. PST. Show us what you’ve got: Apply here right now.

12 Aug 2018

Voatz: a tale of a terrible, horrible, no-good, very bad idea

Let’s get the fish in the barrel out of the way. Voatz are a tech startup whose bright idea was to disrupt democracy by having people vote on their phone, and store the votes on, you guessed it, a blockchain. Does this sound like a bad idea? Welp.

It turned out that they seemed awfully casual about basic principles of software security, such as not hard-coding your AWS credentials. It turned out that their blockchain was an eight-node Hyperledger install, i.e. one phenomenologically not especially distinguishable from databases secured by passwords. They have been widely and justly chastised for these things. But they aren’t what’s important.

To their credit, their system is opt-in, and apparently generates real-time voter-verified paper ballots, the single most important thing about any voting system. But still. We need to step back and ask a question here: why are we trying to vote via an app and collate election results on any kind of centralized system at all? We don’t want to make voting more efficient. Efficiency is not the problem we are trying to solve with elections. The inefficiency of paper ballots and their handling and collation and tabulation is a feature, not a bug.

Just ask everyone at Def Con’s Vote Hacking Village, whose successes have been rampant this weekend, in the midst of the enmity of the National Association of Secretaries of State:

Voatz were approaching the wrong problem in the wrong way from the start. Even if your blockchain repository is verifiably write-once, which it isn’t, it only records the data sent to it via your app and servers. Voting cannot rely on apps and servers, no matter how allegedly secure they are claimed to be. It’s nice that you generate paper ballots for a post-election audit, but since we should not and cannot ever trust voting servers and software, and therefore will need to do a post-election paper ballot count every time — how about we skip the man-in-the-middle, and all of your software, and go straight to that part?

The other point is brought to us by XKCD, who responded to Voatz with this:

which in turn brought this response from Facebook’s (soon-to-be-former) CISO Alex Stamos:

which in turn brought this response from CFI and engineer Rob Russell, which a lot of the finest engineers I know have been sharing across social media:

There are valid points on all sides here. Stamos is right that most spheres, e.g. aviation, don’t have to deal with the constant threat of intelligent adversaries attacking the system in the same way that software does (although as they events at SeaTac yesterday show us, they are by no means devoid of such threats.)

But Russell brings up the very valid point that because software people are so fixated on adversaries, on hackers and not being hacked, their definition of “security” is often restricted to breaches and exploits and vulnerabilities, rather than systemic flaws, or sloppy development techniques, which hurt users’ security even if no external hacker is involved. In fairness, over the last few years the infosec community has been good at broadening its definition of “secure” beyond “external hacker resistant” … but it seems pretty apparent that much, much more work is needed.

11 Aug 2018

Blind loyalty

There is a secret behind every open office in Silicon Valley — and it isn’t the drain on productivity.

Tech companies have been the vanguards for pushing corporate culture forward toward “radical transparency.” Mark Zuckerberg works in a fully transparent four-walled glass office surrounded by the rest of Facebook. Valve got rid of managers and titles so everyone can be their own boss. Startup founders host weekly town halls, Friday all-hands, and AMAs. Companies go to painstaking lengths to signal that they trust their employees – to show that this is your company.

But while your company might adopt an open floor plan and give out free snacks so you can feel closer to your coworkers, they likely don’t want you knowing how much they make, who is affected by the impending layoffs, or whether executives are making the right decisions.

The open office has never been more closed, and tech companies are no different than old corporate America in their authoritarian approach to controlling how their employees should think about issues that matter in the workplace. In fact, it may even be more insidious because it’s tucked away behind the veneer of a cheerful, open office.

This is what makes social network Blind so fascinating. Raw and unfiltered, Blind is the antithesis to HR’s utopic vision of a manageable and orderly corporate culture. Instead, it operates outside the walled gardens of IT with no rules and no official corporate supervision.

With Blind, users are completely anonymous, but are required to submit a verified work email to join a company channel. Inside, they are able to freely ask, discuss, prod, and complain without fear of retribution or judgment.

In short, it’s HR’s worst nightmare, and it’s wildly successful.

Building a compelling social product

Blind’s engagement numbers are staggering. It has over 2 million users, including 43K at Microsoft, 28K at Amazon, and 10K at Google. In South Korea, half of all employees at companies over 200 people are active monthly. The typical monthly active user logs in three to four times per day and spends 35 minutes using the app. At the height of the Susan Fowler scandal, Uber employees were spending almost 3 hours a day on Blind. All that, and the entire company is 38 people.

At the heart of Blind’s magic is something universal to every person who has ever been employed — the duality between our personal selves and our “work” selves, and the human drive to be both intimate and in control of our relationships. There is no place more difficult to navigate this duality than the workplace, where we want to feel loved and understood, but also respected.

Hierarchy, politics, and negative career impacts burden conversations about difficult topics, and so Blind tears these barriers down one employee at a time, affording a space for uninhibited dialogue. More importantly, Blind succeeds as a resource for questions not only company-related, but also around career, family, and life decisions.

Blind is in many ways an evolution of a long lineage of ideas in social networking. It’s unique achievement is the recombination of these different ideas to create a platform that is both a safe space for free and open conversation (via anonymity), along with a vetted, contextually relevant community (via workplace email authentication).

Let’s walk though each of these categories to understand Blind’s success.

Lack of Context (Anonymous + Individual/Personal) – Companies like Yik Yak, Secret, and Whisper pioneered the anonymous social network on the consumer side. However, they were beleaguered by cyberbullying, and served more as a digital exhaust pipe for teenage angst and trolling. Perhaps the most successful semi-anonymous social network today is Reddit, where legions of loyal community members cover every topic imaginable. However, what all of these anonymous communities lack is the critical element of shared context and circumstance.

Put another way, your fellow community members on Reddit may share your interest in ice fishing, but they likely will not understand who you are. As Blind cofounder Kyum Kim puts it, “it’s hard for someone to complain on Reddit about feeling poor while making $200K a year without fear of backlash, but on Blind, your coworkers are in the same income bracket, and likely similar education levels, neighborhoods, etc. They can empathize with your situation.” On Blind, there is a single community (your workplace) that spans multiple topics, and there’s a baseline, tacit understanding of each other’s life circumstances, allowing for deeper conversations.

Self-Promoting (Non-Anonymous + Individual/Personal) – LinkedIn and Quora are useful professional platforms, but because individuals and brands are the stars of these platforms, posturing and self-promotion can be quite frequent. When you ask a question on Quora, you are submitting your inquiry to a body of self-proclaimed experts. While many responses can be genuine, the ultimate currency that drives the platform is credibility and brand building, which inhibit authentic and vulnerable conversations from occurring.

Self-Censored (Non-Anonymous + Employee/Work) – On the enterprise side, Yammer, Jive, and recently Slack have attempted to upgrade the creaky company intranet into the enterprise social network. While these tools might make it easier to connect to your coworkers, the conversations happening on these platforms are no different than before – ultimately, these tools are designed to get work done, not for questioning, debating, or reflecting on how work should be. Conversations about sensitive subjects (e.g. how to deal with a bad manager) are unlikely to happen on a non-anonymous, corporate-sanctioned platform where that same bad manager might well be watching.

Finally, we have Blind. The platform strikes a balance between the freedom of anonymity and the context of a shared workplace. The result is a forum for surprisingly rich, relevant, and authentic conversations. While company channels are accessible only to insiders, a look at Blind’s public site (where you still need a verified work email, but you can chat with anyone outside your company) reveals a flavor for the types of conversations that are possible. An engineer at Amazon recently posted about how to deal with a mid-life crisis, with 42 responses of encouragement and advice. Another employee moving from India has a wife suffering from depression and is seeking help navigating the US healthcare system.

It turns out that where we work is a good proxy for who we are, and our coworkers have been an untapped community of wisdom.

Trust and safety

Catalin205 via Getty Images

Blind is by no means perfect. Like all online platforms and particularly anonymous ones, it invites its share of trolls. One look at the “Relationships” section on Blind’s public site and you’ll find questions about how to deal with one-night stands with coworkers and a poll asking guys how many girls they’ve slept with before marriage. While these questions could certainly have come from a genuine place, they are easy fodder for trolls, and the ensuing conversations can be alienating and provide an unnecessary megaphone for toxic bro culture.

Blind acknowledges that these issues exist, but claim that they happen less frequently inside company channels. Because users authenticate with their work emails, cofounders Sunguk and Kim believe that Blind users feel a greater sense of responsibility to each other because they are engaging a real community with shared context and goals.

The vast terrain of cyberspace might suffer from the tragedy of the commons and moral hazard, but within your workplace channel on Blind, your digital community maps onto a physical community – even though you are anonymous. This is evidenced by the successful self-policing on the platform, where 0.5% of all posts have been removed (higher than average for a social media platform), and all of these originated from user-generated flags.

A More Perfect Union

Blind’s success illuminates a reality that is often overlooked: corporations aren’t naturally democratic or transparent. While there are platforms to discuss our roles as individual working professionals (e.g. LinkedIn), there are very few places to gather and organize as employees of companies to collectively bargain for a better workplace.

This is by design. HR, the supposed watchdog of employee wellness, is neither elected nor truly representative, as they must balance the competing goals of being a third party resource for employees while also protecting the company against its employees.

Companies will always be incentivized to maintain an asymmetry of information. Friday all-hands and town halls are heavily scripted by companies. Rarely do we see anyone describing a healthy, transparent culture as a place where employees are freely conversing amongst themselves.

For companies with something to hide, the idea of a public square where conversations happen freely should be alarming. Blind has already been at the center of exposing two major scandals (e.g. the “nut rage” incident by a Korean Air executive and the news that Lyft was spying on its users.)

Blind picks up where labor unions left off and where HR has failed — to serve as a safeguard against corporate overreach, and to provide a protected space for employees to collaborate around solutions to improve the workplace.

A truly open office

For companies, Blind’s rise shouldn’t be seen as bad news. Blind can be a rich source of insight where HR software falls short. While employee engagement surveys have become popular in HR circles (and a crop of well-funded HR tech companies have consequently flooded the market), these practices suffer from the same issues of hosting a town hall. The company decides on the questions asked and interprets the answers given. With Blind, for the first time, HR and executives will have a pulse on employee sentiment that is both real-time and authentic. As Moon puts it, “no company is perfect, and if it was, Blind would not need to exist.”

In short, Blind understands more about your employees than anything in your HR stack.

Where does Blind go from here? Moon and Kyum believe they’re just getting started. Today, Blind is only available in the U.S. and South Korea, and it has been focused on tech companies. Their push into more traditional industries is showing some early signs of success with Johnson & Johnson, Dow Chemical, Barclays, and the US Navy coming online recently. There is still work to do in cleaning up different communities to ensure that conversations are inclusive and not alienating. And of course, Blind has to find a path to becoming a sustainable, revenue-generating company without compromising its integrity with users.

But one can only imagine the potential for Blind if it continues on its path upwards — the anonymous social network that understands who you are, the pulse survey that is authentic and real-time, and the first truly safe and open office made for employees, by employees.

11 Aug 2018

Openbook is the latest dream of a digital life beyond Facebook

As tech’s social giants wrestle with antisocial demons that appear to be both an emergent property of their platform power, and a consequence of specific leadership and values failures (evident as they publicly fail to enforce even the standards they claim to have), there are still people dreaming of a better way. Of social networking beyond outrage-fuelled adtech giants like Facebook and Twitter.

There have been many such attempts to build a ‘better’ social network of course. Most have ended in the deadpool. A few are still around with varying degrees of success/usage (Snapchat, Ello and Mastodon are three that spring to mine). None has usurped Zuckerberg’s throne of course.

This is principally because Facebook acquired Instagram and WhatsApp. It has also bought and closed down smaller potential future rivals (tbh). So by hogging network power, and the resources that flow from that, Facebook the company continues to dominate the social space. But that doesn’t stop people imagining something better — a platform that could win friends and influence the mainstream by being better ethically and in terms of functionality.

And so meet the latest dreamer with a double-sided social mission: Openbook.

The idea (currently it’s just that; a small self-funded team; a manifesto; a prototype; a nearly spent Kickstarter campaign; and, well, a lot of hopeful ambition) is to build an open source platform that rethinks social networking to make it friendly and customizable, rather than sticky and creepy.

Their vision to protect privacy as a for-profit platform involves a business model that’s based on honest fees — and an on-platform digital currency — rather than ever watchful ads and trackers.

There’s nothing exactly new in any of their core ideas. But in the face of massive and flagrant data misuse by platform giants these are ideas that seem to sound increasingly like sense. So the element of timing is perhaps the most notable thing here — with Facebook facing greater scrutiny than ever before, and even taking some hits to user growth and to its perceived valuation as a result of ongoing failures of leadership and a management philosophy that’s been attacked by at least one of its outgoing senior execs as manipulative and ethically out of touch.

The Openbook vision of a better way belongs to Joel Hernández who has been dreaming for a couple of years, brainstorming ideas on the side of other projects, and gathering similarly minded people around him to collectively come up with an alternative social network manifesto — whose primary pledge is a commitment to be honest.

“And then the data scandals started happening and every time they would, they would give me hope. Hope that existing social networks were not a given and immutable thing, that they could be changed, improved, replaced,” he tells TechCrunch.

Rather ironically Hernández says it was overhearing the lunchtime conversation of a group of people sitting near him — complaining about a laundry list of social networking ills; “creepy ads, being spammed with messages and notifications all the time, constantly seeing the same kind of content in their newsfeed” — that gave him the final push to pick up the paper manifesto and have a go at actually building (or, well, trying to fund building… ) an alternative platform. 

At the time of writing Openbook’s Kickstarter crowdfunding campaign has a handful of days to go and is only around a third of the way to reaching its (modest) target of $115k, with just over 1,000 backers chipping in. So the funding challenge is looking tough.

The team behind Openbook includes crypto(graphy) royalty, Phil Zimmermann — aka the father of PGP — who is on board as an advisor initially but billed as its “chief cryptographer”, as that’s what he’d be building for the platform if/when the time came. 

Hernández worked with Zimmermann at the Dutch telecom KPN building security and privacy tools for internal usage — so called him up and invited him for a coffee to get his thoughts on the idea.

“As soon as I opened the website with the name Openbook, his face lit up like I had never seen before,” says Hernández. “You see, he wanted to use Facebook. He lives far away from his family and facebook was the way to stay in the loop with his family. But using it would also mean giving away his privacy and therefore accepting defeat on his life-long fight for it, so he never did. He was thrilled at the possibility of an actual alternative.”

On the Kickstarter page there’s a video of Zimmermann explaining the ills of the current landscape of for-profit social platforms, as he views it. “If you go back a century, Coca Cola had cocaine in it and we were giving it to children,” he says here. “It’s crazy what we were doing a century ago. I think there will come a time, some years in the future, when we’re going to look back on social networks today, and what we were doing to ourselves, the harm we were doing to ourselves with social networks.”

“We need an alternative to the social network work revenue model that we have today,” he adds. “The problem with having these deep machine learning neural nets that are monitoring our behaviour and pulling us into deeper and deeper engagement is they already seem to know that nothing drives engagement as much as outrage.

“And this outrage deepens the political divides in our culture, it creates attack vectors against democratic institutions, it undermines our elections, it makes people angry at each other and provides opportunities to divide us. And that’s in addition to the destruction of our privacy by revenue models that are all about exploiting our personal information. So we need some alternative to this.”

Hernández actually pinged TechCrunch’s tips line back in April — soon after the Cambridge Analytica Facebook scandal went global — saying “we’re building the first ever privacy and security first, open-source, social network”.

We’ve heard plenty of similar pitches before, of course. Yet Facebook has continued to harvest global eyeballs by the billions. And even now, after a string of massive data and ethics scandals, it’s all but impossible to imagine users leaving the site en masse. Such is the powerful lock-in of The Social Network effect.

Regulation could present a greater threat to Facebook, though others argue more rules will simply cement its current dominance.

Openbook’s challenger idea is to apply product innovation to try to unstick Zuckerberg. Aka “building functionality that could stand for itself”, as Hernández puts it.

“We openly recognise that privacy will never be enough to get any significant user share from existing social networks,” he says. “That’s why we want to create a more customisable, fun and overall social experience. We won’t follow the footsteps of existing social networks.”

Data portability is an important ingredient to even being able to dream this dream — getting people to switch from a dominant network is hard enough without having to ask them to leave all their stuff behind as well as their friends. Which means that “making the transition process as smooth as possible” is another project focus.

Hernández says they’re building data importers that can parse the archive users are able to request from their existing social networks — to “tell you what’s in there and allow you to select what you want to import into Openbook”.

These sorts of efforts are aided by updated regulations in Europe — which bolster portability requirements on controllers of personal data. “I wouldn’t say it made the project possible but… it provided us a with a unique opportunity no other initiative had before,” says Hernández of the EU’s GDPR.

“Whether it will play a significant role in the mass adoption of the network, we can’t tell for sure but it’s simply an opportunity too good to ignore.”

On the product front, he says they have lots of ideas — reeling off a list that includes the likes of “a topic-roulette for chats, embracing Internet challenges as another kind of content, widgets, profile avatars, AR chatrooms…” for starters.

“Some of these might sound silly but the idea is to break the status quo when it comes to the definition of what a social network can do,” he adds.

Asked why he believes other efforts to build ‘ethical’ alternatives to Facebook have failed he argues it’s usually because they’ve focused on technology rather than product.

“This is still the most predominant [reason for failure],” he suggests. “A project comes up offering a radical new way to do social networking behind the scenes. They focus all their efforts in building the brand new tech needed to do the very basic things a social network can already do. Next thing you know, years have passed. They’re still thousands of miles away from anything similar to the functionality of existing social networks and their core supporters have moved into yet another initiative making the same promises. And the cycle goes on.”

He also reckons disruptive efforts have fizzled out because they were too tightly focused on being just a solution to an existing platform problem and nothing more.

So, in other words, people were trying to build an ‘anti-Facebook’, rather than a distinctly interesting service in its own right. (The latter innovation, you could argue, is how Snap managed to carve out a space for itself in spite of Facebook sitting alongside it — even as Facebook has since sought to crush Snap’s creative market opportunity by cloning its products.)

“This one applies not only to social network initiatives but privacy-friendly products too,” argues Hernández. “The problem with that approach is that the problems they solve or claim to solve are most of the time not mainstream. Such as the lack of privacy.

“While these products might do okay with the people that understand the problems, at the end of the day that’s a very tiny percentage of the market. The solution these products often present to this issue is educating the population about the problems. This process takes too long. And in topics like privacy and security, it’s not easy to educate people. They are topics that require a knowledge level beyond the one required to use the technology and are hard to explain with examples without entering into the conspiracy theorist spectrum.”

So the Openbook team’s philosophy is to shake things up by getting people excited for alternative social networking features and opportunities, with merely the added benefit of not being hostile to privacy nor algorithmically chain-linked to stoking fires of human outrage.

The reliance on digital currency for the business model does present another challenge, though, as getting people to buy into this could be tricky. After all payments equal friction.

To begin with, Hernández says the digital currency component of the platform would be used to let users list secondhand items for sale. Down the line, the vision extends to being able to support a community of creators getting a sustainable income — thanks to the same baked in coin mechanism enabling other users to pay to access content or just appreciate it (via a tip).

So, the idea is, that creators on Openbook would be able to benefit from the social network effect via direct financial payments derived from the platform (instead of merely ad-based payments, such as are available to YouTube creators) — albeit, that’s assuming reaching the necessary critical usage mass. Which of course is the really, really tough bit.

“Lower cuts than any existing solution, great content creation tools, great administration and overview panels, fine-grained control over the view-ability of their content and more possibilities for making a stable and predictable income such as creating extra rewards for people that accept to donate for a fixed period of time such as five months instead of a month to month basis,” says Hernández, listing some of the ideas they have to stand out from existing creator platforms.

“Once we have such a platform and people start using tips for this purpose (which is not such a strange use of a digital token), we will start expanding on its capabilities,” he adds. (He’s also written the requisite Medium article discussing some other potential use cases for the digital currency portion of the plan.)

At this nascent prototype and still-not-actually-funded stage they haven’t made any firm technical decisions on this front either. And also don’t want to end up accidentally getting into bed with an unethical tech.

“Digital currency wise, we’re really concerned about the environmental impact and scalability of the blockchain,” he says — which could risk Openbook contradicting stated green aims in its manifesto and looking hypocritical, given its plan is to plough 30% of its revenues into ‘give-back’ projects, such as environmental and sustainability efforts and also education.

“We want a decentralised currency but we don’t want to rush into decisions without some in-depth research. Currently, we’re going through IOTA’s whitepapers,” he adds.

They do also believe in decentralizing the platform — or at least parts of it — though that would not be their first focus on account of the strategic decision to prioritize product. So they’re not going to win fans from the (other) crypto community. Though that’s hardly a big deal given their target user-base is far more mainstream.

“Initially it will be built on a centralised manner. This will allow us to focus in innovating in regards to the user experience and functionality product rather than coming up with a brand new behind the scenes technology,” he says. “In the future, we’re looking into decentralisation from very specific angles and for different things. Application wise, resiliency and data ownership.”

“A project we’re keeping an eye on and that shares some of our vision on this is Tim Berners Lee’s MIT Solid project. It’s all about decoupling applications from the data they use,” he adds.

So that’s the dream. And the dream sounds good and right. The problem is finding enough funding and wider support — call it ‘belief equity’ — in a market so denuded of competitive possibility as a result of monopolistic platform power that few can even dream an alternative digital reality is possible.

In early April, Hernández posted a link to a basic website with details of Openbook to a few online privacy and tech communities asking for feedback. The response was predictably discouraging. “Some 90% of the replies were a mix between critiques and plain discouraging responses such as “keep dreaming”, “it will never happen”, “don’t you have anything better to do”,” he says.

(Asked this April by US lawmakers whether he thinks he has a monopoly, Zuckerberg paused and then quipped: “It certainly doesn’t feel like that to me!”)

Still, Hernández stuck with it, working on a prototype and launching the Kickstarter. He’s got that far — and wants to build so much more — but getting enough people to believe that a better, fairer social network is even possible might be the biggest challenge of all. 

For now, though, Hernández doesn’t want to stop dreaming.

“We are committed to make Openbook happen,” he says. “Our back-up plan involves grants and impact investment capital. Nothing will be as good as getting our first version through Kickstarter though. Kickstarter funding translates to absolute freedom for innovation, no strings attached.”

You can check out the Openbook crowdfunding pitch here.

11 Aug 2018

Supergiant VC rounds aren’t just raised in China

In the venture capital market, big is in. Firms are raising significant sums to finance a growing number of large startup funding rounds.

In July, there were 55 venture rounds, worldwide, which topped out at $100 million or more, totaling just over $15 billion raised in nine and 10-figure mega-rounds alone. This set a record for venture dealmaking.

We’ve already identified approximately when the uptick in huge VC rounds began: toward the tail end of 2013. But where in the world are all the companies raising these supergiant venture capital rounds?

In response to coverage of July’s record-breaking numbers, many commenters were quick to point out that startups based in China raised six of the top 10 largest rounds from last month.

Indeed, on a recent episode of the Equity podcast discussing the supergiant round phenomenon, Chinese startups’ position in the market was a hot topic of conversation. Someone suggested that a series of large venture rounds in China may have preceded the run-up in supergiant rounds being raised by U.S. startups.

At least in the realm of nine and 10-figure venture rounds, that doesn’t appear to be the case. The chart below breaks down the monthly count of supergiant rounds by the company’s country of origin.

Here is what this data suggests:

  • The first major run-up in nine-figure dealmaking took place in the U.S. around Q1 2014, whereas in China that first run-up didn’t occur until Q4 2014.
  • Especially in the last 24 months or so, supergiant round volume in China and the U.S. is highly correlated, perhaps implying competition in the market.
  • We can see, very clearly, the mini-crash in the U.S. through the second half of 2015. For its part though, China hasn’t yet had a serious “crash” in supergiant rounds during this cycle.
  • Startups outside the U.S. and China are beginning to raise supergiant rounds at a faster rate, although the uptick is significantly less dramatic.

What’s less obvious in the chart above is just how quickly China became a mega-round powerhouse. The chart below plots the same data as above, except this format shows what percent of mega-rounds originated in each market. Additionally, rather than displaying somewhat noisy monthly amounts, we aggregated data in six-month increments.

After the start of 2013, it only took a couple of years for Chinese companies to consistently account for roughly 30 to 40 percent of the $100 million-plus VC rounds raised in any given six-month period.

This also reinforces a trend shown in the prior chart: since the beginning of 2017, Chinese startups and U.S. startups are raising roughly the same number of supergiant venture rounds as one another. That number has risen fairly consistently over time.

Before concluding, it’s worth mentioning that our definition of “supergiant” is ultimately arbitrary. Indeed, $100 million is just a tidy, round-numbered threshold to measure against. Our findings would be similar (if somewhat less dramatic) if we counted, say, the set of rounds raising $50 million or more.

The important underlying trend is that round sizes are getting larger on average. And a supergiant wave of money ultimately lifts all rounds, at least a little bit.

Stay up to date with recent funding rounds, acquisitions and more with the Crunchbase Daily.
11 Aug 2018

Samsung Galaxy Note 9: an AR Emojireview

Hi, I wrote a 3K word review of the new Samsung Galaxy Note 9. But you’re busy and it’s the weekend. I get it. For the sake of saving time, here’s a distilled version, narrated by the magic of the company’s deeply troubling AR Emoji version of me.

Design

Battery

Camera

Audio/Visual

Bixby

Price

Anyway, just read the damn review. I promise there’s only one of these creepy things in it.