Year: 2018

The UK parliament has issued an impressive ultimatum to Facebook in a last-ditch attempt to get Mark Zuckerberg to take its questions: Come and give evidence voluntarily or next time you fly to the UK you’ll get a formal summons to appear.

“Following reports that he will be giving evidence to the European Parliament in May, we would like Mr Zuckerberg to come to London during his European trip. We would like the session here to place by 24 May,” the committee writes in its latest letter to the company, signed by its chair, Conservative MP Damian Collins.

“It is worth noting that, while Mr Zuckerberg does not normally come under the jurisdiction of the UK Parliament, he will do so the next time he enters the country,” he adds. “We hope that he will respond positively to our request, but if not the Committee will resolve to issue a formal summons for him to appear when he is next in the UK.”

Facebook has repeatedly ignored the DCMS committee‘s requests that its CEO and founder appear before it — preferring to send various minions to answer questions related to its enquiry into online disinformation and the role of social media in politics and democracy.

The most recent Zuckerberg alternative to appear before it was also the most senior: Facebook’s CTO, Mike Schroepfer, who claimed he had personally volunteered to make the trip to London to give evidence.

However for all Schroepfer’s sweating toil to try to stand in for the company’s chief exec, his answers failed to impress UK parliamentarians. And immediately following the hearing the committee issued a press release repeating their call for Zuckerberg to testify, noting that Schroepfer had failed to provide adequate answers to as many of 40 of its questions.

Schroepfer did sit through around five hours of grilling on a wide range of topics with the Cambridge Analytica data misuse scandal front and center — the story having morphed into a major global scandal for the company after fresh revelations were published by the Guardian in March (although the newspaper actually published its first story about Facebook data misuse by the company all the way back in December 2015) — though in last week’s hearing Schroepfer frequently fell back on claiming he didn’t know the answer and would have to “follow up”.

Yet the committee has been asking Facebook for straight answers for months. So you can see why it’s really mad now.

We reached out to Facebook to ask whether its CEO will now agree to personally testify in front of the committee by May 24, per its request, but the company declined to provide a public statement on the issue.

A company spokesperson did say it would be following up with the committee to answer any outstanding questions it had after Schroepfer’s session.

It’s fair to say Facebook has handled this issue exceptionally badly — leaving Collins to express public frustration about the lack of co-operation when, for example, he had asked it for help and information related to the UK’s Brexit referendum — turning what could have been a fairly easy to manage process into a major media circus-cum-PR nightmare.

Last week Schroepfer was on the sharp end of lots of awkward questions from visibly outraged committee members, with Collins pointing to what he dubbed a “pattern of behavior” by Facebook that he said suggested an “unwillingness to engage, and a desire to hold onto information and not disclose it”.

Committee members also interrogated Schroepfer about why another Facebook employee who appeared before it in February had not disclosed an existing agreement between Facebook and Cambridge Analytica .

“I remain to be convinced that your company has integrity,” he was told bluntly at one point during the hearing.

If Zuckerberg does agree to testify he’ll be in for an even bumpier ride. And, well, if he doesn’t it looks pretty clear the Facebook CEO won’t be making any personal trips to the UK for a while.

Hustle 20X’d its annual revenue run rate in 15 months by denying clients that contradict its political views. It’s a curious, controversial, yet successful strategy for the startup whose app lets activists and marketers text thousands of potential supporters or customers one at a time. Compared to generic email blasts and robocalls, Hustle gets much higher conversion rates because people like connecting with a real human who can answer their follow-up questions.

The whole business is built around those relationships, so campaigns, non-profits, and enterprises have to believe in Hustle’s brand. That’s why CEO Roddy Lindsay tells me “We don’t sell to republican candidates or committees. What it’s allowed us to do is build trust with the Democratic party and progressive organizations. We don’t have to worry about celebrating our clients’ success and offending other clients.”

Hustle execs from left: COO Ysiad Ferreiras, CEO Roddy Lindsay, CTO Tyler Brock

Investors agree. Tempted by Hustle’s remarkable growth to well over a $10 million run rate and 85 million conversations started, Insight Partners has led a $30 million Series B for the startup that’s joined by Google’s GV and Salesforce Ventures.

The round comes just 10 months after Hustle’s $8M Series B when it was only doing $3 million in revenue. Lindsay says he was impressed with Insight’s experience with communication utilities like Cvent and non-profit tools like Ministry Brands. Its managing director Hillary Gosher who specializes in growing sales teams will join Hustle’s board, which is a great fit since Hustle is hiring like crazy.

Humanizing The Call To Action

Founded in late 2014, Hustle’s app lets organizers write MadLibs-style text message scripts and import contact lists. Their staffers or volunteers send out the messages one by one, with the blanks automatically filled in to personalize the calls to action. Recipients can respond directly with the sender ready with answers to assuage their fears until they’re ready to donate, buy, attend, or help. Meanwhile, organizers can track their conversions, optimize scripts, and reallocate assignments so they can reach huge audiences with an empathetic touch.

The Hustle admin script editor

The app claims to be 77X faster than making phone calls and 5.5X more engaging than email, which has won Hustle clients like LiveNation’s concert empire, NYU, and the Sierra Club. Clients pay $0.30 per contact uploaded into Hustle, with discounts for bigger operations. Now at $41 million in total funding, Hustle plans to push further beyond its core political and non-profit markets and deeper into driving alumni donations for universities, sales for enterprises, and attendance for event promoters.

Hustle will be doing that without one of its three co-founders, Perry Rosenstein, who left at the end of 2017. [Disclosure: I know Lindsay from college and once worked on a short-lived social meetup app with Rosenstein called Signal.] Lindsay says Rosenstein’s “real excellence was about early stage activities and problems”. Indeed, in my experience he was more attuned to underlying product-market fit than the chores of scaling a business. “It was Perry’s decision, it was a departure we celebrated, and he’s still involved as an informal adviser to me and the company” Lindsay concluded.

Hustle is growing so fast, this recent photo is already missing a third of the team

Hustle has over 100 other employees in SF, NYC, and DC to pick up the torch, though. That’s up from just 12 employees at the start of 2017. And it’s perhaps one of the most diverse larger startups around. Lindsay says his company is 51 percent women, 48 percent people of color, and 21 percent LGBT. This inclusive culture attracts top diverse talent. “We see this as a key differentiator for us. It allows us to hire incredible people” Lindsay says. “It’s something we took seriously from day one and the results show.”

Partisan On Purpose

What started as a favored tool of the Bernie Sanders campaign has blossomed into a new method of communicating at scale. “We’re massively humanizing the way these organizations communicate” Lindsay said. “Humans really matter, no matter if what you care about is getting lots of people to come to events, vote, or renew a season ticket package. Having a relationship with another person can cut through the noise. That’s different than your interactions with bots or email marketing campaigns or things where it’s dehumanized.”

Lindsay felt the frustration of weak relationships when after leaving Facebook where he worked for six years as one of its first data scientists, he volunteered for Mark Zuckerberg’s Fwd.us immigration reform organization. Its email got just a 1 percent conversion rate. He linked up with Obama’s former Nevada new media director Rosenstein and CTO Tyler Brock to fix that with Hustle.

Working with Bernie aligned with the team’s political sentiments, but they were quickly faced with whether they wanted to fuel both sides of the aisle — which would mean delivering fringe conservative campaign messages they couldn’t stomach. Hustle still has no formal policy about declining Republican money, and a spokesperson said they point potential clients to TechCrunch’s previous article mentioning the stance. Meanwhile, Hustle is growing its for-profit client base to make shunning the GOP feel like less of a loss. Having Salesforce as a strategic investor also creates a bridge to a potential exit option.

Focusing on the left is working for now. Over 25 state Democratic parties are clients. Hustle sent 2.5 million messages and reached over 700,000 voters — 1 in 5 total — during the Alabama special election, helping Democrat Doug Jones win the Senate seat.

“Let’s build this great business for the Democratic party. Let’s let someone else take the Republicans” Lindsay explains. A stealth startup called OpnSesame is doing just that, Lindsay mentions. But he says “we don’t actually see them as competitive. We see them as potential allies that advocate for the power of p2p texting in getting everyone included in our democracy.” Instead, Lindsay sees the potential for Hustle to lose its sense of purpose and drive as it rapidly hires as its biggest threat.

Long-term, Hustle hopes to propel the right side of history by sticking to the left. Lindsay concludes, “You can really just put on your business hat and see this is a good choice.”

Lime, the transportation company now formerly known as LimeBike, has partnered with Segway to launch its next generation of electric scooters. These scooters, which are set to debut mid-month in San Francisco, will supplement Lime’s existing fleet. Lime has also hit three million rides across its fleets of bikes and scooters.

For style-conscious consumers, there won’t be much of a need to worry about looking like a loser. These Lime scooters built in partnership with Segway look nothing like the style of Segway many of us have in our minds.

These Segway-powered Lime scooters are designed to be safer, longer-lasting via battery power and more durable for what the sharing economy requires, Lime CEO Toby Sun told TechCrunch. Now, instead of a maximum distance of 23 miles or so, Lime scooters can go up to 35 miles.

“A lot of the features in the past on scooters were made for the consumer market,” Sun said. “Not for the shared, heavy duty markets.”

On the safety side, Lime enhanced its night light on both the front and back of the scooter, and has additionally added a light to flash below the deck. Lime has also added an additional brake, to have one both the front and rear wheels.

Lime, along with its competitors Bird and Spin, all ultimately rely on Ninebot, a Chinese scooter company that has merged with Segway. Ninebot is backed by investors including Sequoia Capital, Xiaomi and ShunWei.

At this point, Lime’s partnership with Segway is an open one, Sun said. That means Segway could more explicitly partner with Bird and Spin if it wanted to.

The electric scooter space has been under scrutiny as of late — partly due to the fact that Bird, Spin and Lime deployed their respective scooters without explicit permission in San Francisco back in March.

As San Francisco and other markets look to regulate scooters, as well as bike-share programs, one topic of concern that comes up pertains to the docked versus dockless format. And within the conversation around the dockless format, there’s a debate between lock-to versus free-floating.

Lime scooters tipped over on the streets of SF. Photo via SF City Attorney Dennis Herrera

What Lime offers across both its bike and scooter share programs is a dockless, free-floating model. Although there have been issues with this free-floating model in China — resulting in a plethora of abandoned bikes — Sun believes this model is good for the long-term. What it comes down to, Sun said, are the limitations of the lock-to model.

“If we want to manage something at scale, if everything were lock-to, I think there would be infrastructural challenges,” Sun said.

That is, there are only so many bike racks and poles for people to lock their scooters and bikes. Still, there needs to be education around the free-floating model, Sun said.

“The biggest challenge in the future is people who are not familiar with the model,” Sun said.

Down the road, Lime envisions utilizing augmented reality to help people know where to park their bikes and scooters. For example, Sun said, the app could project a virtual box or poles on the ground to show where to place the bike or scooter.

“A virtual parking pole doesn’t require bike or scooter locked to that pole,” Sun said. “But by putting one or two poles to frame an area, that can help us guide people to that area.”

Additionally, this free-floating model ensures that Lime can deploy its scooters and bikes in traditionally underserved areas.

“We aspire to be a mobility platform that solves the first and last mile problem,” Sun said.

Late last year, US airlines united to announce a ban on the use of smart luggage, over battery combustion concerns. The new rules required that bags with built-in electronics have a removable battery, in case they needed to be checked. At the time, Bluesmart CEO Tomi Pierucci called the news “an absolute travesty” in a comment to TechCrunch, noting that his startup was “getting punished,” despite the fact that any number of consumer electronics faced similar issues.

This morning, the executive told TechCrunch that the ban has led the company to wind down operations and sell its remaining assets to Travelpro. Pierucci says the company simply couldn’t continue to exist as an independent entity in the wake of the new rules. “We believe that according the circumstances,  this was the best outcome for our clients, employees and investors,” he said in a statement.

According to a note posted to Bluesmart’s blog calling this an “irreversibly difficult financial and business situation,” Travelpro has acquired all of its tech, designs, brands and IP. Bluesmart has shuttered all manufacturers and sales, voiding all warranties and returns in the process. The company’s servers and apps will stay online for several months, and Bluesmart is still offering some semblance of support for customers.

“This represents a very unfortunate outcome for everyone involved, and we are all very sorry for this unexpected turn of events,” the company writes. “For five years, our team worked tirelessly to create great products and bring true innovation to travelers around of the world.”

The new rules went into effect earlier this year on American, Delta, United, Alaska and Southwest Airlines.

It has emerged that Cambridge Analytica, the political consultancy firm at the center of a data misuse storm involving Facebook user data, has also been banned from advertising on Twitter’s platform.

Facebook suspended the company’s account in March after fresh revelations were published about how user data had been passed to the company by a developer on its platform — although the Guardian newspaper originally linked the firm to Facebook data in a story published in December 2015.

A Twitter spokesperson confirmed to us what the company describes as a “policy decision to off-board advertising from all accounts owned and operated by Cambridge Analytica on advertising”, adding the decision was taken “weeks” ago.

“This decision is based on our determination that Cambridge Analytica operates using a business model that inherently conflicts with acceptable Twitter Ads business practices. Cambridge Analytica may remain an organic user on our platform, in accordance with the Twitter Rules,” the company spokesperson added.

The move is unrelated to reports yesterday that Twitter had sold public user data to Dr Aleksandr Kogan — the Cambridge University academic who sold Facebook data to Cambridge Analytica in 2014, after harvesting it via an app that drew on Facebook’s APIs to pull information on users and their friends.

Last month Kogan told a UK parliamentary committee he had subsequently used some of the money Cambridge Analytica had paid him for gathering and processing the Facebook data to buy some Twitter data, though he said he had intended to use that for his own purposes, not for selling to others.

On this, Twitter’s spokesperson also told us: “Based on the recent reports, we conducted our own internal review and did not find any access to any private data about people who use Twitter.  Unlike many other services, Twitter is public by its nature. People come to Twitter to speak publicly, and public Tweets are viewable and searchable by anyone. In 2015, GSR [Kogan’s comapny] did have one-time API access to a random sample of public Tweets from a five-month period from December 2014 to April 2015.”

Cambridge Analytica has also denied undertaking a project with Kogan’s company that used Twitter data.

Although the company has also continued to deny it received Facebook data — despite the existence of a 2014 contract between the company and Kogan to gather data; and despite Kogan’s own insistences that his app harvested Facebook user data.

Facebook has also said as many as 87 million users could have had some of their information harvested by Kogan and passed to Cambridge Analytica.

In a blog post late last month Twitter reiterated some of the policies it has in place to limit access to public Twitter data — even when a developer is paying for it, as Kogan was.

“We prohibit developers from inferring or deriving sensitive information like race or political affiliation, or attempts to match a user’s Twitter information with other personal identifiers in unexpected ways,” it wrote, flagging the Restricted Uses page for more info on types of behaviors it said are not tolerated, and adding: “Developers who are found to be in violation of our policies are subject to enforcement actions, including immediate termination.”

Despite barring Cambridge Analytica from running ads on its platform, Twitter has not suspended the company’s verified Twitter account — which the company continues to use to tweet denials related to the Facebook data misuse scandal.

After announcing his departure from Facebook yesterday, the parent company filed an SEC document stating that former WhatsApp CEO Jan Koum will not stand for re-election to Facebook’s board of directors. That confirms the Washington Post‘s report that Koum would exit Facebook’s board.

“On April 30, 2018, in connection with his resignation from his position as Chief Executive Officer of WhatsApp Inc., Jan Koum informed Facebook, Inc. (the “Company”) that he will not stand for re-election to the Board of Directors of the Company at the Company’s 2018 Annual Meeting of Stockholders (the “2018 Annual Meeting”). The Company will file a supplement to its proxy statement for the 2018 Annual Meeting to reflect the changes described in this Current Report on Form 8-K.”

Facebook’s remaining board members are CEO Mark Zuckerberg, COO Sheryl Sandberg, Andreessen Horowitz’s Marc Andreessen, Founders Fund’s Peter Thiel, General Catalyst’s Kenneth I. Chenault, University of North Carolina’s Erskine B. Bowles, University of California – San Francisco’s Susan D. Desmond-Hellmann, and Netflix’s Reed Hastings.

Now the question turns to Koum’s successor. Facebook’s board will be able to select a replacement for Koum’s seat. As for the WhatsApp CEO title, the role might go to a long-time WhatsApp employee who was there since before Facebook acquired the company in 2014. A strong candidate is Neeraj Arora, who a source described as WhatsApp’s #4 in command.

It seems unlikely that Facebook will try to formally roll WhatsApp under David Marcus, who leads the Facebook Messenger division. Keeping the brands separate, as Facebook does with Instagram, has long been a company strategy. It gives people less of a feeling like they’re using a product from a domineering empire, and limits the spread of backlash if there’s a big problem at one of the subsidiaries.

Daily deals and local commerce site Groupon has announced an acquisition to ramp up its operations in discount offers and specifically those tied to loyalty programs. The company has acquired Bristol, UK-based Cloud Savings Company, the owner of Vouchercloud and Giftcloud, in a deal that Groupon said has an enterprise value of $65 million.

The deal will give Groupon a boost in two areas: via Giftcloud, building out loyalty programs for brands and retailers who are already using the Groupon platform; and via Vouchercloud, tapping into an extensive network of discount codes — and people who hunt for and use these — to complement and amplify the direct offers that Groupon already offers on its platform today.

Vouchercloud is active in 11 countries and Groupon says its biggest market is the UK, where it has over 5 million subscribers and 12,000 top retailers and brands using its platform. The mobile app is also popular and has clocked up 10 million downloads globally.

Cloud Savings Company was already profitable.

“We’re pleased to add two great, profitable brands and very talented teams to the Groupon family,” said Groupon CEO Rich Williams in a statement. “In Vouchercloud, we’re acquiring one of the most innovative brands in the online discount codes space, which we believe will accelerate our own efforts — particularly in International — and broaden our marketplace for consumers. In Giftcloud, we see interesting long-term potential in creating attractive customer loyalty programs with some of the biggest names in retail, as well as with great local merchants.”

Groupon has been somewhat quiet on the acquisition front lately after a spate of purchases several years ago to help the company move deeper into commerce solutions and working more directly with local merchants, and then a subsequent contraction of the business that saw Groupon move out of some of these newer areas (for example selling off its point-of-sale business) close and sell a number of international operations, and lay off staff.

This acquisition is notable because it’s a turn away from that strategy, focusing instead on offers that can apply irrespective of your specific city location. (Groupon’s core service and daily offers remain banked around a specific city or other location.)

On the side of Cloud Savings Company, the business has been in a transition of its own: gift cards have mainly been designed as physical objects, resembling credit or other payment cards, but as retailers work on ways of both bringing down those costs and better tracking who is buying what, in order to capitalize better on that purchasing history, “cards” are becoming virtual cards in mobile wallets. That is something that Giftcloud is also developing, and plans to continue with Groupon (which has built out its service in part by way of a popular mobile app).

“We’re very excited for Vouchercloud and Giftcloud to join the Groupon family. We recognize the potential in combining our expertise in the coupon sector to enhance our offerings for consumers in the UK and beyond,” said Greg Le Tocq, co-founder and director of Cloud Savings Company, in a statement. “In joining together, we can create even more — and more effective — ways for customers to save and businesses to grow. We equally look forward to working with Groupon to grow the Giftcloud business, as we continue to be at the forefront of innovation while the gift card industry moves from plastic to digital.”

Groupon will be bringing on Cloud Savings’ 100 employees and keeping them based out of their current offices in Bristol. It said that it expects the deal to contribute $5 million to $6 million in Adjusted EBITDA in 2018.

Along with the higher price that Amazon is introducing to Prime this month, the company is also bringing another first to its membership service: physical books. The company now has a new product called Prime Book Box, a subscription service for children’s hardback books, selected by Amazon editors, sold as part of its Prime membership tier. You can register now for an invite for when it starts to ship later this year, starting in the U.S.

Pricing is $22.99 per box, which Amazon says works out to 35 percent below the cumulative list price for the books, and you can subscribe for books to come in one-, two- or three-month intervals. Books are divided up by age groups of baby-two years, three-five years, six-eight years and nine-12 years, with sample titles including If Animals Kissed Good Night, A Sick Day for Amos McGee, The Willoughbys, and Arlo Finch in the Valley of Fire.

Prime already has a reading service called Prime Reading, but it is focused around Kindle e-books, along with selected digital magazines and travel guides.

The idea of bringing out a physical book service specifically for children is notable. Parents are more likely to buy (and get gifted) physical picture books and young adult novels rather than e-books as presents, and so kids often build up libraries of these. It also could be a helpful fillip to those of us out there who are trying to figure out engaging ways of reducing screen time for offspring.

“We want to help Prime members discover great children’s books that will inspire a love of reading,” a spokesperson told TechCrunch. 

It’s also a clever way of introducing younger people to using Amazon, and also for Amazon to start developing reading profiles for others in your household besides you the Amazon account holder.

This is not an insignificant data play in that regard: today, Amazon can only make approximations about which books and products are for whom in a household, and even can only vaguely guess as to who else lives at your address and orders using your account. This is a way for the company to start building more specific profiles, and of course the company will be developing much more extensive algorithms about what other kinds of products a reader of, say, Madeline L’Engle, might also like to be recommended.

For now, though, a more immediate impression I have here also is that Amazon is not quite giving up on physical books just yet.

Some details that you might not see on the landing page but are notable for how this will work: customers will be able to review each box before it ships and tailor it by swapping books from a curated list, which is one way of avoiding duplicates of books you might already have.

Although books are a very common gift for children, currently you won’t be able to gift Prime Book Box subscriptions, “but we’re always innovating on behalf of customers,” the spokesperson said, so this could be something the company plans to explore down the line.

OfferUp, the mobile marketplace for buying and selling locally, is expanding its sights beyond your neighborhood. Today, the company is announcing an expansion of its service that will now allow sellers to ship their items nationwide to interested buyers, potentially netting them a larger audience than if trying to sell only within their local community.

The feature to browse the items outside your area will appear in a separate “shipping” tab in the new version of the OfferUp app for iOS and Android, arriving today.

When sellers list an item, they’ll have the option to toggle on a switch to “sell & ship” nationwide. They then pick the item’s weight from the options that appear (up to 20 lbs). Items must also be under $500, and are shipped via USPS. Buyers are kept up-to-date on the item’s status through the app, as well.

Listing items for nationwide shipping is free. Sellers are paid after the item is sold, less a 7.9 percent fee, which goes to OfferUp. (This is less than eBay’s standard 10%).

The transaction fee represents a new revenue stream for OfferUp, which before had offered paid tools to promote items for sale, but not a cut of transactions.

The company declines to say how much it makes from its existing paid offerings and ads, or if it’s turning a profit. Likely it needs to enter into transactions like this, to grow its revenue and justify its $220 million in VC investment.

The move will also pit OfferUp in more direct competition with eBay, which it already outranks in the App Store’s Top Charts where it’s No. 3 to eBay’s No. 8 in the Shopping category. While eBay still has a much larger user base – 171 million globally active buyers, as of its most recent earnings for example – OfferUp has managed to grow to over 42 million uniques during the past 12 months, just here in the U.S.

The company claims to reach buyers and sellers across the country, and not just in urban metros. And it claims its buyers are interested in a range of products, as opposed to favoring those in a single category or two.

“I think that’s why people come back so often,” says OfferUp co-founder and CEO Nick Huzar, when explaining why users will return to the app, on average, 2 or 3 times per day. While furniture is popular because it’s a local marketplace, he adds, OfferUp users browse all kinds of things – from electronics to clothing to baby needs and even cars.

“It’s not like Amazon where it’s very intent-based – where you know what you want. OfferUp is more discovery-based. You go in there and you kind of look around and you find that thing you didn’t think you wanted that you end up buying,” Huzar says.

The app has also grown in popularity because of its systems to make transactions more trusted than those on Craigslist, which has been one of OfferUp’s bigger competitors to date, along with Facebook’s Buy/Sell Groups. Users on OfferUp can optionally verify their identity with Driver’s License uploads, and/or by confirming their phone number, Facebook or email. Users can also rate transactions, and see sellers’ response rate to questions, among other things.

The shipping feature has been in testing for a few months prior to today’s nationwide launch across the 48 contiguous U.S. states. To gain access to the option, you’ll need to update to the latest version of the OfferUp app on iOS or Android.