Thursday, February 27, 2014

Google’s Project Ara $50 Modular Smartphone Could Change The Way We Buy Phones Starting Next Year

Google’s Advanced Technology and Projects Division just announced its first developer event for Project Ara, a modular smarpthone, yesterday, and a new follow-up profile by TIME indicates we could see the device come to market by next year, with a $50 price tag to start. The key phrase there is “to start,” however, as this smartphone with swappable components could get a lot pricier, very quickly.

Ara is designed to offer consumers choice, with an open platform design that provides a basic chassis from Google with, the option to customize functionality using modular components sourced from third-party hardware developers. Users could buy sensors, additional storage, more battery capacity, better speakers and so on, slotting in and out components as needed. Including stupid ones, by the way: project lead and DARPA vet Paul Eremenko tells TIME an “incense burner” could be a module

Google wants to get the price point on the base Ara hardware to $50, but you wont’ get much in exchange for that â€" the only connectivity on board will be Wi-Fi at that price point. But the point is that users could build it up however they liked, rather than being stuck with whatever they got when they signed up. But that entails additional expense: Depending on what you want your phone to be able to do, it’s easy to see the price rising quickly.

This leads to a couple of different analogies about how this might work out in practice â€" it’s a little like a razor and blades setup, offering the potential for a continuing revenue stream from upgrade components. But it’s more akin to a freemium software model, since the modules aren’t expendable like razor blades, but rather optional add-ons that enhance the experience, but aren’t strictly necessary to it.

Ara’s aim isn’t to upsell, however, or at least that doesn’t seem to be the intent of the Ara founding team. Instead, it wants to bring full-featured devices to the world’s next 5 billion potential smartphone users, without forcing them to swallow a huge price tag as well. Of course, this will definitely appeal to hobbyists as well, including the same kind of people who liked the Handspring Visor and its Springboard, but with modern smartphone styling that ATAP says will keep overall device depth down to less than 10mm, with 4mm deep modules.

The TIME profile also sheds light on some of the fundamental mechanics of how Ara works. Modules are designed to slot in to each compartment on the basic chassis interchangeably, regardless of what each does. They’re also hot-swappable, so you don’t need to power down the phone to replace individual parts. Finally, the modules are secured to the device using hardware latches, which use magnets to lock stuff in place. That lock is released using an app of the phone, so that they won’t fall out when jostled or when the phone drops.

Ara is definitely an amazing innovation, and a project that it would be amazing to see come to fruition. It’s also massively ambitious, and not every experimental tech Google develops ends up as a proper shipping project. Modularity has a lot to potentially offer the smartphone market (and could also be very interesting when applied to tablets) but there’s a lot of ground to cover between here and selling these things in stores. Still, if anyone has the resources and runway to make it happen, Google is a pretty good candidate.

Wednesday, February 26, 2014

The Fingerprint Scanner On The Samsung Galaxy S5 Will Be Accessible By Developers

Samsung’s Galaxy S5 includes a fingerprint scanner embedded in the home button, and that hardware will be made available to third-party devs, the company announced today at a developer-focused event during MWC this year. That move is in stark contrast to Apple’s strategy with its own fingerprint sensor tech, which is specifically off-limits to third-party devs.

Apple went to great lengths to emphasize just how segmented its fingerprint scanner was from the rest of the hardware, and how isolated (read: protected from hackers) the data that it gathered was. Fingerprint information collected by the iPhone 5s scanner hardware built into Apple’s home button is held on a ‘secure enclave’ within the A7 system-on-a-chip, and communicated to other services only as an encrypted alias that conveys no sensitive data.

It’s not yet clear exactly how Samsung stores and transmits its own fingerprint information to apps and services, but even opening up use of the scanner itself and fingerprint activity to third-party devs already marks a considerable departure from Apple’s approach. Samsung already announced a partnership with PayPal to allow fingerprints to enable payment verification for making purchases, and even that offers a fundamentally different philosophical take on how to use biometric information.

Apple allows purchases within its own iTunes stores to be authorized via fingerprint, but that’s only because it controls the entire transaction, and can guarantee the integrity of any transmission that goes on. Cupertino was clearly highly sensitive to any suggestions that users or critics might have had about the security of their fingerprint-based tech, and went to great lengths to ensure that consumers would feel as safe as possible when using the system.

Samsung’s take appears to push the boundaries further, siding more with the possibilities that arise when you let developers have access to that hardware feature. So far, there doesn’t seem to be much in the way of consumer apprehension around how Samsung’s system differs from Apple, but it’s early yet and there are still a lot of unanswered questions around the tech behind the system that remain to be answered.

For devs, however, this is a key opportunity that they’ve likely been thinking about since at least Apple’s iPhone 5s announcement. Any new sensor is grounds for exploring new software opportunities and app design paradigms, but access to such a user-specific identifier has big implications for hot areas like mobile payments, authentication and consumer behavior tracking. Samsung’s documentation for the new Pass API (which uses the fingerprint sensor) says that developers can do all of the following, which makes it sound like the intended purpose is indeed for proof of identity:

  • Request fingerprint recognition
  • Cancel fingerprint recognition requests
  • Verify whether the fingerprint of the current user matches the fingerprint registered on the device
  • Register fingerprints through the Enroll screen

Other new API’s made available by Samsung in its Galaxy S5 SDK allow for access of remote sensors (like those found in the Gear 2 and Gear Fit), S Health access, accessory device connections and file transfers between those devices, motion and activity information sharing, and more. The fingerprint API could be the most influential of all of the above, however, and the one with the most far-reaching implications for consumers and developers.

Tuesday, February 25, 2014

HTC And Nokia Troll Samsung

As the classic saying goes, don’t hate the player, hate the game. But HTC and Nokia couldn’t help themselves yesterday during Samsung’s big Galaxy S5 reveal and took to Twitter for a bit of internet trolling.

HTC, again, reminded its followers about a big reveal on March 25th. The President of HTC America threw down as well, tweeting the image comparing the gold Galaxy S5 to a band-aide â€" because, you know they look similar.

Nokia also participated in the fun, noting that its Windows Phones are not the Samesung. Get it? Same-sung. Nokia really knows how to bring the lulz.

This has worked well for Nokia in the past. Following the launch of a the iPhone 5c, Nokia tweeted “Imitation is the best form of flattery”, which was retweeted 40,000 times. However, this time around, HTC’s and Nokia’s efforts didn’t make nearly as many waves likely because it wasn’t against Apple.

Of course Samsung will likely have the last laugh here. The Galaxy S4 was the best selling phone of 2013 and the Galaxy S5 will likely follow the same path to stardom.

Monday, February 24, 2014

Microsoft Cuts The Xbox One Price In The UK

The Xbox One will soon be a bit cheaper ‘cross the pond. Starting this Friday, the Xbox One will be £399.99 in the UK. That’s a drop of £30 from its launch price. While the cut will certainly make the console a bit more attractive, the PS4 is still less expensive and raking up impressive sales numbers.

It’s unclear if the Xbox One will see similar price cuts in other markets.

Microsoft is currently locked in a price war with Sony. Even after this price cut, the base Playstation 4 retails for £50 less than the Xbox One. And Sony has the sales to back its strategy. Sony has sold over 5 million consoles worldwide and the system just went on sale in Sony’s home market of Japan. In the US Sony has sold twice the amount of systems than Microsoft. Price is one of the main issues.

Microsoft bundles the Kinect with its system. Sony has those who want motion controls buy them separately. And since not every gamer wants motion controls, this seems to be working in Sony’s favor.

This U.K. price drop signals Microsoft is at least re-evaluating its pricing scheme. However, since Microsoft treats each market differently, the system a U.S. or Asian price drop might not be imminent. But it’s coming.

Monday, February 17, 2014

Anonymous Messaging App Blink Arrives On Android

Blink, a mobile application that allows users to send each other self-destructing messages, has now arrived on Android. The app, which first debuted on iOS last spring, lets you share text, photos, videos, sketches, and even voice messages with your friends, though the company has found that the majority of its users are using Blink for “ephemeral” texting purposes.

The app competes with a growing number of anonymous and/or private messaging apps, like Snapchat, Frankly, Confide, Whisper, Secret, and others. Like many in this space, Blink doesn’t require that you use your “real” identity on its service â€" your username can be anything you choose.

Today, 65% of registered users on Blink are anonymous users, and 85% of messages sent on the app were sent by anonymous users. Plus, 69% of users return to the app after their first use, which is more than decent engagement.

The company behind Blink was founded by ex-Googler Kevin Stephens and Michelle Norgan, and was originally focused on a location-based social service called Kismet that grew in popularity around the time of SXSW 2012, when apps like Highlight and Banjo were all the rage. But Kismet never really took off, and as the location-based trend itself died down, the team decided to repurpose the technology for mobile messaging with Blink.

android3

“We want to let people be as anonymous, disconnected, and “off the grid” as they choose to be,” explains Stephens. “Whereas nearly all mobile messaging apps require a user to verify their phone number or confirm their identity in some way, the vast majority of our users prefer to remain anonymous,” he says.

To date, Blink has seen around 100,000 downloads, but what’s interesting are the app’s demographics. Though around 51% of the app’s user base is in the U.S., the next largest market Blink serves is the Middle East (15.4%), and nearly all of that group is from Saudi Arabia.

Blink’s traction in the Middle East makes sense, says Stephens, given how scarce privacy and anonymity are there. But he was also surprised that the service was taking off in that market, as it didn’t yet support Arabic.

“We believe a fair number of the anonymous users in the Middle East are ex-pats working overseas,” Stephens says.

Blink will now cater to this market in particular with localization to Arabic, and pro features that will be particularly relevant to businesses or ex-pats overseas who are concerned about anonymity and privacy. For instance, Blink will begin exploring more professional use cases â€" like wiping the messages off an employee or contractor’s phone when they’ve finished a job.

Demand for Blink on Android was higher than typical, Stephens adds. Invite referrals to non-iOS devices had been ranging between 3-4 times than of iOS referrals, which he believes reflects Blink’s popularity in markets like the Middle East where Android tends to dominate. 

The new app is now available for download here on Google Play, or here on iTunes.

Sunday, February 16, 2014

Google Acquires SlickLogin, The Sound-Based Password Alternative

SlickLogin has been acquired by Google, just five months after launching at TechCrunch Disrupt.

Word of the acquisition is confirmed by a notice on the company’s site, where they say that they’ll be joining Google in their efforts to “make the Internet safer for everyone”. We’ve also confirmed this news with Google.

Exact details of the deal are still under wraps. As always, we’re digging for more.

The idea behind SlickLogin was, at the very least, quite novel: to verify a user’s identity and log them in, a website would play a uniquely generated, nearly-silent sound through your computer’s speakers. An app running on your phone would pick up the sound, analyze it, and send the signal back to the site’s server confirming that you are who you say you are â€" or, at least, someone who has that person’s phone.

Or, to get slightly more wordy… here’s how I put it back when the company first launched:

As a user, you’d go to whatever SlickLogin-enabled site you’d like to log in to. Tap the login button, hold your phone up close to the laptop, and you’re in.

SlickLogin can use a bunch of protocols to start verifying your phone’s position: WiFi, Bluetooth, NFC, visual markers like QR codes, and of course, GPS. Their self-dubbed “secret sauce”, though, is their use of uniquely generated sounds intentionally made inaudible to the human ear. Your computer plays the sound through its speakers, while an app on your smartphone uses the device’s built-in microphone to pick up the audio.

The service was built to be used either as a password replacement, or as a secondary, Two-Factor authentication layer on top of a traditional password. The company rolled their product into a small, closed Beta after debuting it at Disrupt, and hadn’t yet opened it up to everyone when they were acquired.

So who are these guys? What about security â€" if you managed to record someone else’s login sound, could you login as them later? I answered all that and more back when the company first launched, so check out our original article for that.

Saturday, February 15, 2014

Is Tech Money Good For San Francisco’s Middle-Class? An Economist’s Perspective

The liberal wonderland of the San Francisco Bay Area has one of the highest concentration of wealth in the country. Twitter’s IPO, alone, created an estimated 1,600 millionaires. But, are local residents catching any of the dollar bills being shaken from post-IPO money trees?

It’s been hard to decipher the broader impacts of technology on the average San Franciscan because heart string-tugging anecdotes have clouded the narrative. Critics of tech companies make headlines by protesting Google’s private buses and indirectly linking their existence with the surge in housing evictions. ”There’s a war brewing in the streets of San Francisco,” wrote former San Francisco Mayor Willie Brown.

On the other hand, tech champions like to trot out small business owners who have benefited from re-locating tech HQ’s to blighted areas of the city’s historic Market district. So, to cut through the cherry-picked anecdotes, I asked San Francisco’s local economists what their take is and, as you’d imagine, they fall somewhere between the techno-utopian dreamspeak that you sometimes hear in the industry and the dire descriptions of the activists.

One thing is clear: they believe that the money flowing into SF is a good thing and is bolstering the local economy.

There is a “but” in the economic optimism, and its big enough to need two plane seats: skyrocketing rents are pricing many locals out of the city. Some have managed to fasten themselves to rent-controlled properties, but many have been forcibly evicted from their homes. On balance, tech money has built one of the sturdiest economic shelters from the ravages of recession, but those who get hit, well, they get hit hard.

Local Multipliers Makin’ It Rain

“Our analysis suggests the tech sector is responsible for the vast majority of the economic growth in San Francisco since 2010,” said San Francisco’s Chief Economist, Ted Eagen. “In 2010-2012, the latest year we have complete data, local inflation has been 2.6%, while wages for all workers have increased by 4.5%.” About 2/3rds of those approximately 40,000 new jobs do not require a computer science degree or a closet full of expensive sneakers.

Partly thanks to the tech sector, the San Francisco Bay Area enjoys the 3rd lowest unemployment rate (4.8%) of California’s 58 counties. What accounts for this? Berkeley Economist Enrico Moretti argues that technologists have a special bond with the local economy.

“Anytime there is a job opening for a software engineer at Google In San Francisco, there’s an increase in the demand for local service workers,” he said. On average, Moretti says that every tech job creates five in other industries, as compared to just two from a manufacturing job. In part, because tech jobs just pay more there’s more disposable income to spend on maids, lawyers, and clothing.

“There must be someone who brings in the wealth,” said Moretti. Additionally, unlike the specialized needs of a manufacture, all the hair dresses, car washers, and tax pros that Google brings in for its workers are local. As a result, San Franciscans have seen their paychecks swell about 2x faster than inflation can eat it, (4.6% increase in wages vs. 2.6% inflation). From census data (below), San Francisco has fared slightly better than their surrounding California neighbors during the recession recovery. Screen Shot 2013-12-20 at 1.50.30 PM “So outside of the tech industry, workers have benefitted from increased employment opportunities and rising real wages,” Eagan concludes.

However, It’s not all rainbows and sunshine. I spoke to one local clothing store owner whose story is a microcosm of all the city’s changes. The owner, who preferred to stay anonymous, resides on San Francisco’s Valencia St., the super-hip drag that has become the dividing line between the poverty-stricken Mission St just a half-a-block East.

As chic restaurants with +$20 entrees began to swarm his business, it likewise brought with it new customers willing to shell out their ample recreational budgets on new forms of expensive Bay Area entertainment. “Burning Man, it’s like Christmas for me,” he jokes, referring to the popular drug-friendly arts festival held in the Nevada desert every Fall, especially popular among Googlers.

But, his long-time regular clients were forced to move into cheaper parts of the Bay. “Most of my customer, they drove away,” he notes with a hint of melancholy. Sky-high rents have eroded both his additional income, as well as the regulars that used to grace his store.

And, this is where the otherwise happy tale of tech money gets dark: housing prices.

Home Ownership As Housesitting For Rich People Not Yet Moved In

Technologists are fans of a non-zero sum world, but they have yet to discover an app that can physically expand San Francisco, seasteading notwithstanding. Scarcity in housing has led to a rent-hiking arms race.

San Francisco is burdened with the least affordable housing in the country. Just 14% of homes are affordable to the middle-class and two bedroom apartments are above $3,200 for families. According to real estate website, Redfin, San Francisco housing is more than 3x as pricey as it’s windy city peer to the East, Chicago ($177K vs. $599,000). chart_2 With sky-high purchasing prices and rents, housing costs are outstripping the pace of salary for some in San Francisco. “In 2012 average rents paid (as measured by the Census) grew over 7%, which is faster than the wage increases for most non-tech industries,” said Eagan.

However, “The vast majority of rental units in San Francisco are covered by rent control, so workers who did not move out of such units since 2010 will have seen wages growing much faster than their rents.”

Unfortunately, some landlords has found a way to evict long-time residents, and the resulting fight has made the tech industry the target. One local bookstore owner in the Mission District told me the rent hikes have challenged some of the good that the tech industry has brought.

“There’s less crime, which is good; rents are insane, which is very very very bad,” he said. Without rent control, he says, he wouldn’t be able to live in his current neighborhood.

Do We Need Affordable Housing Units? 

The mayor is calling for more cheaper units reserved for struggling middle-class families making less than the $72,947 median income (yes, that’s the median income in San Francisco, FML). But, it’s unclear how many are needed, if at all, since government assistance begets bureaucracy, and city bureaucracy tends to slow things to a grinding halt.

Berkeley Economist Enrico Moretti tells me that increased housing supply does relieve rents in “every spectrum” of income. He observed that after Seattle significantly increased construction, rent hikes slowed even during a jobs boon that outpaced San Francisco’s.

Most importantly, the impact is linear, meaning that every single new house affects the price of every other house. The faster we build, the faster rent gets cheaper, and faster techies stop battling locals for coveted rent-controlled units. Unfortunately, there is no plausible economic model under which prices go down, and homes are already beyond the reach of 86% of middle-income families.

Hong Kong, California

We love economists, but sometimes they discount the innumerable parts of life. San Francisco has a long history restricting housing to maintain the quaint Victorian look of the Bay.  ”Do we want San Francisco to look like Hong Kong?” asks San Francisco State University Professor and former city planner, Jasper Rubin. He says that the city has never really tried to quantify the demand, but describes it as “tantamount to infinite.”

With enough housing to accommodate the hundreds of thousands of tech workers and wanna be entrepreneurs, San Francisco would be reshaped into a wall of sky-scrappers. Indeed, the good folks at Firstcultural.com simulated what the South Bay’s sky-line would look like if it housed all of the major tech company’s workers. It’s Hong Kong-ish:

Googleplex Housing Aerial from East

Thank A Techie, But Help The Needy

For most San Franciscans, tech’s presence has brought reprieve from a recession that ravaged the rest of the country. But, economists deal in averages; those who fall to the left of the distribution curve are subject to a game of capitalism Russian roulette, where their house and community are left to the whims of wealthier buyers.

The defenseless ought not be discounted in our praise of the tech sector, but we should also not forget that without their presence, San Francisco would likely be much worse off. Illustration: Bryce Durbin

Friday, February 14, 2014

Lover.ly Now Lets Brides Upload Their Own Weddings

Lover.ly, the Pinterest for wedding planning, has been dominating the categorization and aggregation of awesome wedding content. Brides who visit the site are instantly able to search by vendor, color pattern, product type, theme, and most anything else. Except weddings.

Today, on the company’s second anniversary, all that changes. Lover.ly users can now upload photos of their wedding in a set, which is searchable. This way, users who see a dress they love can click through to see the entire wedding, as well as all the vendors that worked on that wedding from photographer to cake maker and back again.

“We’re taking what has traditionally been an offline, one-to-one experience and bringing it online,” said founder Kellee Khalil. “Brides are always calling up their friends and asking which vendor they used for the dress or the venue, and it ends up being a lot of work to track down all that information. With Real Weddings, users can share everything about their wedding with a single link.”

To deal with quality control, Lover.ly will let all brides upload their photos to a specific URL, but only approved photos and weddings will be made searchable.

The Real Weddings platform will launch with more than 4,800 real weddings right from the get-go.

Lover.ly has an e-commerce platform for brands that want to get in on the action, with a cost-per-click business model. That same platform will be tied in to the Real Weddings.

Lover.ly has been growing steadily since it’s launch on Valentines Day two years ago. The company has seen over 100,000 iPhone app downloads, 50 million images viewed each month, and have grown to show off over 2,500 brands and 250,000 SKUs. For some perspective, Lover.ly launched its ecommerce platform with only four brand partners, and has now become the largest online wedding shop in the world.

Also, Happy Valentine’s Day.

Thursday, February 13, 2014

Group Matchmaking Startup The Dating Ring Launches In San Francisco

I haven’t online dated in a while,* but everyone I know who does it laments the current state of matchmaking technology. When being able to swipe right to express interest in a person is a major technological achievement, you know something is broken.

Y Combinator alum The Dating Ring thinks it has a better way of getting people to meet one another and hopefully start dating, by matching up users in groups of six. After several months of operating in New York City, the startup has brought its group match making service to San Francisco.

The service works like this: Users do an initial consultation with one of the Dating Ring’s matchmakers, and then the company sets them up on a series of dates with five other single people. (For now, it’s three men and three women on each date.)

Initial matchmaking consultations are $25, and each date costs $20. After the specify dates and times available, The Dating Ring sends users invites to group dates. Those dates usually last about two hours at informal meeting places â€" like casual bars and restaurants â€" where people can get to know each other better.

The hope is that by having a larger group all meet each other, there’s a higher likelihood of two people hitting it off than there would have been with just two people. (Grouper, also a YC alum, does the same thing, but without the matchmaking.)

Once the dates are done, they give feedback on the other folks who were on the date, and let the company know if there were any attendees they were interested in.

According to co-founder Lauren Kay, the company chooses matchmakers based on their emotional intelligence and receptiveness. The belief is that they are better qualified to determine what users are like than those uses would be able to in some sort of self-reporting manner.

On the back end, The Dating Ring has algorithms that use information from its matchmakers to decide who to place on dates with each other. That data only gets better as it also receives feedback from other members of the dates.

Now that The Dating Ring is in San Francisco, it’s trying to determine where to go next. Kay said it’s looking at cities like Chicago, Los Angeles, Boston, and Washington, D.C. The hope is that by connecting more people with each other, it might make dating a little more bearable everywhere.

==
* See here for context

Wednesday, February 12, 2014

Meet Alphaworks, The New Crowdfunding-Inspired Investment Platform From betaworks

As crowdfunding swings into the mainstream, the folks at betaworks are dreaming up new and creative ways to leverage the power of the masses. A new venture called Alphaworks takes the traditional crowd-funding model, as made famous by Kickstarter and Indiegogo, and offers equity to backers instead of a product.

Here’s how it works:

Alphaworks will start out with three “sponsors,” (betaworks, SV Angel, and Lerer Ventures) who will structure venture deals as they normally would. But instead of gobbling up all those shares on their own, a chunk of the round will be left open.

This is where it gets interesting.

Let’s use See.Me, the pilot venture deal for Alphaworks, as an example. See.Me has an active user base of designers, photographers, filmmakers and creators who can share their work and earn money from it on See.Me’s platform. For now, See.Me generates revenue by taking a 5 percent transaction fee on tips and donations made from user to user, but eventually the company will get into postcard creation and distribution. After that, See.Me’s printing efforts will extend into T-shirts. (Wearables, FTW!)

The company is raising a $1.25 million Series B from betaworks, Founder Collective, OATV, Box Group, and potentially accredited investors on the brand new Alphaworks platform.

Of the $1.25 million, $1.1M has already been committed by the above investors, while $150K worth of shares has been left open to Alphaworks backers purchasing equity. A small number of shares will be reserved for non-investor types who are active on the See.Me platform, and will be offered in the form of a grant.

See.Me is using the Alphaworks site, the betaworks site, and its own website to promote the initiative.

For community-based products, like marketplaces, games, and social networks, this is the first time crowdfunding has been a viable way to raise capital.

“What excites me most is the potential for Alphaworks to be used by non-tech companies,” said See.Me founder William Etunde. “The local coffee shop or book store or band can stay alive and grow because they’re owned by their community and fans, and that’s something really special.”

Of course, there are obstacles.

“We’ll have the same challenge that a lot of platforms and services have in the earliest stage which is tracking your most passionate and best users, because they’re the basis of a community,” said SVAngel’s David Lee.

Though the JOBS act has opened up lanes for this type of financing, the law still requires that only accredited investors can purchase equity. To give you some perspective, Nick Chirls (who heads up investments at betaworks) has been closing deals for a few years now, but isn’t technically an accredited investor.

But betaworks expects legislation to change very soon, opening up the opportunity to purchase equity to even more people.

“It actually makes sense that only accredited investors would be allowed to by securities,” said Ken Lerer. “When it comes to investments, people should only move forward with both eyes wide open, and be able to afford the possibility that they might lose their money. As a person, and not as a professional investor, I would never want to have people invest in something when they can’t afford to lose the money.”

Alphaworks was built to simplify the legalese and complexities of trading securities officially, so that investors don’t need to worry about the fine print. They simply choose the number of shares they’re interested in, and pay through ACH.

betaworks, Lerer Ventures and SVAngel have invested $1.5 million in Alphaworks.

“Philosophically this is so consistent with what we do at betaworks,” said John Borthwick. “We are all users, and we love the businesses we build and invest in. With Alphaworks, we can open other users up to being owners.”

Tuesday, February 11, 2014

DigitalOcean Launches Its First Data Center In Asia, Prepares To Roll Out IPv6 Soon

DigitalOcean, the fast-growing SSD-based cloud hosting service, today announced the launch of its Singapore data center location. Hosted in Equinix’s Singapore 2 data center, Digital Ocean’s new location marks the company’s first expansion into Asia.

The service recently expanded to Europe with its first data center location in Amsterdam and the reason for going to Asia are the same as the ones that brought DigitalOcean to Europe. The company has seen large demand from potential users in the Asia-Pacific region, who want to use the service, but can’t stomach the increased latency that would come with hosting their services in DigitalOcean’s Europe or the U.S. data centers. At the same time, the company’s existing customers have increasingly shown interest in getting their services closer to their own customers in Asia, too.

According to DigitalOcean co-founder and CEO Ben Uretsky, the company decided to keep with its focus on simplicity, so despite the higher cost of operating in Singapore, it won’t change its pricing, which still remains at $5/month for its most basic servers. Uretsky stressed, though, that he has no doubts that the Singapore location will be profitable despite the margin loss. He also noted that he expects the new location to grow at a similar pace as its Amsterdam location.

In keeping with its focus on a lean operation, DigitalOcean won’t have its own staff on the ground in Singapore. Instead, now that its own team has set up the basic infrastructure, it will work with the data center personnel and system integrators to keep its service up and running.

Singapore, Uretsky told me, is the first location where the company is rolling out the latest version of its software. This 1.5 release will enable the company to more quickly launch new features for its users, Uretsky promised. While DigitalOcean has long talked about bringing IPv6 and more 1-click installs for popular services and frameworks, for example, those rollouts have taken longer than expected. According to Uretsky, the company had a tough decision to make: does the team want to clean up some of the technical debt it incurred when it first started the service, or chase the market? In the end, the company decided on getting its internal code right so that it now has a better foundation on which it can build new services.

One early mistake DigitalOcean made, for example, was to use two different image formats: one for its smaller servers and one for its larger ones. That meant the team had to manage two systems and the conversions between them whenever a user wanted to upgrade or downgrade to a different machine. This also created some of the security issues DigitalOcean was faced with last year. In the new system, the company now uses a single image format.

With this release, DigitalOcean is also now ready to launch IPv6 support soon. While Uretsky didn’t say when exactly we can expect this launch, the company now has the foundation for this feature in place and will like launch it very soon.

Monday, February 10, 2014

Urb-E, The Fold-Up Electric Scooter, Goes Live On Indiegogo

Back at CES in January, among all the fun and interesting new projects we investigated, one gadget stood out among the rest. That gadget was Urb-E.

And today, almost a month later, the Urb-E scooter is live on Indiegogo. As part of the campaign, the company is launching two separate models to consumers.

The first is the Urb-E commuter, which has three wheels instead of two, making for a more reliable and smooth ride. The Urb-E GP, on the other hand, only has two wheels and can thus make sharper turns, though both models have the same speed and power specifications.

The Urb-E folds up to the size of a rollerboard suitcase for easy handling, and weighs just under 30 pounds making it an easy last-leg vehicle for urban commuters.

Topping out at 15mph, the Urb-E can last up to 20 miles on a single charge. And to top it all off, the Urb-E is easily customizable thanks to inserts that fit within the frame, giving the Urb-E a nice accent color alongside the metal.

Plus, Urb-E comes with a compartment to charge your phone and check in on the charge of your Urb-E through a dedicated Urb-E app.

According to creator Grant Delgatti, Indiegogo felt like a better fit than Kickstarter for this type of product, which he believes will be highly appreciated by the Indiegogo community.

The Urb-E campaign has just begun, with a goal of $150k in 40 days. The lowest price point to secure an actual Urb-E is $1,599, for ultra-early adopters. However, Delgatti says that the final price will be closer to $1,799, with shipments expected to go out at the end of this summer.

If you’re interested in participating in the e-vehicle revolution, head on over to the Indiegogo campaign and check it out.

Sunday, February 9, 2014

How Louis CK And The Hare Krishnas Can Make You A Better Entrepreneur With This One Trick

Editor’s note: James Altucher is an investor, programmer, author, and several-times entrepreneur. His latest book is “Choose Yourself!” (foreword by Dick Costolo, CEO of Twitter). Follow James on Twitter @jaltucher.

I once wanted to be a stand-up comedian but I was too afraid to even go on a stage. Then I wanted to do a TV show but kept getting rejected. So finally I switched industries and started an Internet business.

Louis CK is my favorite comedian. He is the high priest of understanding our culture. I watch him every day. I watch the same routine over and over. I can spend hours breaking down every line of his routines. I watch him before I give talks because I get to borrow his confidence. I used to watch him before dates. I even watch him before I hang out with my kids.

I first saw him perform live in 1995 or 1996 at the Aspen Comedy Festival. I went two years in a row. One time I bored Dave Chapelle to death. I kept talking and talking and finally he said, “Excuse me, I have to get out of here and find me a girl for tonight!”

Another time there I asked Al Franken if I could interview him. He looked me up and down and said, “No” and walked on. Fair enough. Now he’s a U.S. senator, and I just write random stuff on my Facebook wall.

They both said “no” and moved on. But I needed them to say “yes” and didn’t know how to get them to.

â€"

Louis CK did a bit in his last show that was sort of outrageous. It begins with killing kids and ends with justification for slavery. In it, to get laughs, he uses the exact same sales technique that has made the Hare Krishnas billions of dollars and should be used by everybody on a daily basis. He starts off saying “Children who have nut allergies need to be protected… of course, but maybe…if touching a nut kills you…you’re supposed to die.”

Everyone laughs and claps.

He has funny delivery. He says “Of course not, Of course not, but maybe, but maybe,” and then he holds his hand over his eyes and says “if we all do this for a year we’d be done with nut allergies forever.”

Everyone laughs. It’s funny. He has some compassion in it (“of course not, but“), so he’s forgiven. I forgive him. He makes it funny and we clap.

He does a few more. Then he says, “Of course… slavery was bad.” And suddenly he hit a third rail. Everyone stops for a second. They don’t know whether to clap or not. It’s against the rules!

But then he hits the entire point of the joke. The reason the joke is so funny. The entire reason Louis CK is an artist and has risen to the top of his profession. He goes up against that awkward pause from the audience. He then goes past it and brings them with him.

Society (parents, schools, colleagues, government, etc.) builds up walls. Evolution builds up walls. The walls are in our brain. Art bangs against them and forces us to go “OUCH!” or have some other reaction (laughter, creation, innovation, excitement).

When people stop laughing for a second at the word “slavery,” Louis CK stops his joke and unveils the real joke:

“Listen, listen, you all clapped for dead kids and the nuts.” He then mimicked the clapping. In every way he reminds them of how funny they thought kids dying of nut allergies was. And how ludicrous it is but they still laughed.

Then he points out the whole audience: “So you’re in this with me now, do you understand? You don’t get to cherry pick. Those kids did nothing to you.”

And now the audience was laughing again. Even louder than before. Some people were cheering. He was ready now for his joke on slavery.

This was what was funny. The reality is: they did have the right to cherry pick.

But he used a clever psychological technique to make them think they didn’t. And it’s the same trick Hare Krishnas have used to raise billions of dollars.

It’s a trick you need to be aware of if you want to succeed in life â€" to say “no” when you need to and to help others get to “yes” when you need them to.

When the Hare Krishnas first started preaching in airports they had nothing going for them. Nobody would listen to them.

They raised no money. They were failures. Who would give money to a strange-looking shaved guy dressed in robes with totally different beliefs who had his hand out?

Answer: Nobody.

Then everything changed and they became the fastest-growing religious movement in the United States in the 1970s. They raised billions of dollars.

What did they do? What changed?

Flowers.

daisy

The first thing they did when they met you was give you a 5-cent daisy. In fact, since so many people threw out the daisies, they often gave you a used daisy because they would fish them out of the garbage cans.

And yet, once you took that daisy, your brain flipped an evolutionary switch. You were on!

You would now have to listen and maybe even agree with the rest of their story and give them money.

There are two rules at work here:

1) The law of reciprocity. If someone does something for you, the brain feels obligated to return the favor. Evolution weeded out the people who would not do anything for you. People learned to cooperate like this so they would survive in the jungle.

Robert Cialdini covers this rule in his book “Influence.” That said, I do not believe this rule is applicable here but a slightly different and more critical rule.

The law of reciprocity is really just a subset of the rule that governs almost every transaction and conversation in our lives.

2) Commitment bias. If you say “yes” to something small, your brain has already decided, “this is someone I can trust and say ‘yes’ to.”

For instance, in a study, if someone asks you “Would you be interested in hearing about causes that can help the environment?” (almost everyone says “yes” because that’s an easy “yes”) then you are about 50 percent more likely to donate when a donation is asked for than if you hadn’t been asked that simple first question.

Commitment bias works because you had to know who was reliable in the jungle 100,000 years ago. You had to know if someone was on your side or not. If they demonstrated it once, then chances are they are on your side and were trustworthy.

Do you want to know what the most popular article ever on my blog is? It’s the one where I say nobody should ever own a home again. People hate this article. They hate it because there’s probably nothing else in life with higher commitment bias.

If you just put $100,000 (or $10,000) down on a home and more on maintenance, taxes, etc., you don’t want anyone telling you you made a mistake. You have huge commitment bias as opposed to the second before you put any money down.

Louis CK made use of the second law (the first law is implicit â€" he is putting on a show for them so he is giving them something) in this joke.

He got them to laugh to a milder version of the joke (peanut allergies, where even he says, “of course not. I have a nephew with peanut allergies and I would be devastated if something were to happen to him, so he shows his compassion. He’s one of us.)

But now they are in. They took the flower. Now they have to hear the more extreme version of the joke (“slavery”) and they even have to laugh (like people would have to donate billions to the Hare Krishnas).

He knew this (“You’re all in this with me now” even though they weren’t really) and their brains were sucked in and, when you listen to the video, they are actually laughing even harder now.

When dealing with people in business or even in relationships, get them to “yes” on something simple. Then they are in.

This is why learning the “Power of No” is so important. It fights our evolutionary tendencies that were important for 500,000 years but are no longer as important.

I love this joke. I laughed. Because he also makes subtle reference to history.

Each major language in the world â€" English, Spanish, Han Chinese, and Arabic â€" are the languages of genocidal empires that at one point or another conquered the entire world.

So as much as you like to speak English, and as much as you like our culture and art and everything, it’s the result of centuries of conquest and killing and slavery. And we live in it and order take-out and watch “American Idol” and participate in the culture.

So you’re all in on this now. You can’t cherry pick your history.

Which is what Louis CK’s joke is really about without him explicitly saying it. It turns history upside down. It uses clever psychological tactics that are used (and often abused) in marketing, and he gets people to laugh all at the same time.

That’s why Louis CK is the master. That’s why I love him.

I’ve also lately been really enjoying CK, Daniel Tosh, Marina Franklin, Jim Norton and Anthony Jeselnik. If you have other favorites, please put them in the comments. I need new people to watch.

Saturday, February 8, 2014

In 3.5 Years, Most Africans Will Have Smartphones

I reckon it’s time to check in on one of my bolder predictions. Some 18 months ago, I wrote “In Five Years, Most Africans Will Have Smartphones.”

Let’s get this out of the way: most of the smart money thinks I’m wrong by at least three years. Worldwide, according to Gartner, smartphone sales exceeded feature phone sales in 2013, for the first time â€" but Africa remains a different story.

Informa UK’s terrific Africa Telecoms Outlook (PDF) projects 334 million African smartphone connections in 2017, maybe 30% of the continent’s population. IDC is more pessimistic yet; it figures smartphones are currently 18% of the African mobile phone market, but they expect their number to “merely” double in volume by 2017. CNN concludes: “feature phone penetration will continue to maintain its healthy lead.”

Worst of all is this Horace Dediu post at Asymco:

Smartphone saturation

because Horace is brilliant and data-driven and you dispute his analysis at your peril. (Although I do note that he specifically says his graphs assume slower growth rates in Africa, without quite explaining why.)

But wait, there may be worse news yet. The Economist last year argued that “the most dramatic, and disruptive, period of emerging-market growth the world has ever seen is coming to its close,” undercutting the increasing wealth which is the basis of smartphone adoption in the developing world. (That article is about the BRIC economies, but lower growth there â†' lower commodity prices â†' economic headwinds for sub-Saharan Africa.) And an Ericsson report (PDF) indicates that smartphone use and adoption in sub-Saharan Africa is still driven primarily by people under 30.

So why do I remain so bizarrely, stubbornly optimistic? Three reasons.

First, I’m still pretty comfortable with the argument in my original post: the available data seems to indicate that the penetration rate feature phones shot from 6% to 40% of the African market over a five-year period, and I still see no reason to believe that smartphones will do worse, and many to believe that they will move faster.

Second, when I look at the smartphone-sales numbers elsewhere in the developing world, my eyebrows shoot upwards almost of their own accord. IDC is talking about doubling African smartphone sales after four long years? In India, they more than doubled just last year, growing a whopping 229%. Granted, India is not Africa â€" but I grow increasingly suspicious of the all-too-common “Africa is a special basket case” narrative. That may have been true a decade ago; that may still be true in a few disaster-zone nations; but it is decreasingly true of the continent as a whole.

And finally, because (relatively) pessimistic predictions like “GSMA forecasts smartphones will constitute 20 percent of the Africa market by 2017 as devices priced at below $50 become a reality” are still being written â€" when, in fact, sub-$50 no-contract smartphones are already a reality today.

No, really. I give you the MTN Steppa. It’s a pretty bad smartphone: Android 2.3.5 Gingerbread, 2MP camera, single-core processor, 480×320 HVGA screen. But it’s a genuine smartphone nonetheless, with a 3G antenna, Google Maps, Gmail, Facebook, Opera, and YouTube. And it retails for less than fifty dollars (no contract.) What happens when competing manufacturers try to undercut that? I don’t pretend to know exactly; I but I do still believe that most people are underestimating the second derivative of smartphone adoption in Africa.

I confess I’m tempted to back away a little from my previous prophecy, and say that in 2017, smartphones will make up the majority of African sales, rather than the installed base. That sounds like a safe bet; but I still suspect things will change faster than that that. So for the record, with some trepidation, I stand by my prediction. See you in 2017.

Image credit: yours truly, from my last trip to sub-Saharan Africa. (I am loosely plotting another trip there, probably to Senegambia this time ’round, later this year.)

Friday, February 7, 2014

Hitlist, A Smart Flight Finder That Saves You Money By Telling You When To Fly, Exits Beta

Thanks to Google Now, other virtual assistants, and mobile applications that can tap into our location to feed us information at will, consumers are being conditioned to think of information-gathering as more of a passive process, these days. One company tapping into that larger trend is Hitlist, a mobile application that watches your favorite travel destinations and alerts you when fares become more affordable.

The service emerged as a pivot from TripCommon, a group travel-focused company Gillian Morris and Timo de Winter founded together back in 2012. While de Winter has since dialed back his involvement to part-time, Hitlist’s third co-founder Luka Kladaric, joined the team in July 2013 just ahead of the initial beta release of the Hitlist application.

The problem, explains Morris, is that traditional flight search sites are too time-consuming to use. “A leisure trip is inherently flexible,” she says, but on places like Kayak.com, you have to enter in specific dates. “In reality, a lot of people would be a lot more flexible.”

hitlist-iphone

You might want to go to Austin at “some point,” for example, or are interested in just going somewhere cool you’ve never been before while taking time off for Memorial Day. Hitlist, she explains, allows people to register travel intent, and further down the line, the service could help to allocate that more efficiently, allowing airlines to fill empty seats.

Of course, many airlines today offer last-minute “getaway” fares, but these typically come through email blasts and are not all that targeted. Hitlist, instead, would have some knowledge of people’s preferred travel destinations, and their likelihood of buying a ticket.

The app itself offers a Tinder-like interface for swiping “yes” or “no” when presented with details about a destination. Cities are shown to you with a photo and a baseline price, indicating the cheapest fare you’d see from your home airport. Through Hitlist’s Facebook integration, it can also tell you which friends live there or have been there. And if you have friends on the service, it can also tell you who else wants to go there, too.

But Morris notes they’re working to add another login option now, as the backlash against having a Facebook-only login has been fairly brutal, especially in App Store comments.

Hitlist users, on average, save around 41 cities thanks to Hitlist’s addicting interface, and spend more than 5 minutes in the application. Price drops are sent out via email, where their open rate has been 62%, we’re told.

Screen Shot 2014-02-07 at 9.51.44 AMUnlike some price drop tools or deal finders on the market, Hitlist doesn’t force you to configure a price range you’re willing pay, but instead just lumps fare drops into three broader categories: “good,” “great” and “spectacular,” which are roughly within 25%, 15% and 5% of the lowest price, respectively.

The idea for tracking low airlines fares is not a new one, of course, as Hitlist recalls earlier efforts in the space, like Farecast, which sold to Microsoft in 2008 for $115 million, or services like Priceline’s “name your price” tools. Plus, all major flight search sites tend to offer a checkbox where you can indicate your dates are flexible, but, as noted above, this involves more work on your part. Hitlist, meanwhile, hasn’t so much invented the concept rather than re-imagined it for the mobile age, with “lean-back” search in mind.

Today’s release is notable because, now, Hitlist lets you configure your home airport, and view your alerts within the app, too. The company works with Skyscanner on the backend, so when you’re ready to buy, you’re directed to its site. Longer-term, Hitlist could offer in-app booking, but that will require more work and time, says Morris.

Hitlist is live on both iOS and Android. The company has a small amount of friends and family funding, but is currently raising a seed round of around $500,000.

Thursday, February 6, 2014

CoolaData Takes Its Behavior-Focused Analytics Platform Out Of Beta

Israeli startup CoolaData is taking its mobile and web analytics platform out of beta testing today and launching it in general availability.

CEO Tomer Ben Moshe pitched the service as a way “to answer complex business questions with the language that analysts can relate to” â€" in particular, to make it easy for e-commerce and gaming companies to get the very specific data that they might need.

“We believe that online businesses should change the way they analyze data,” Ben Moshe said, “They need to move to a behavioral-based model … They will need both real-time and predictive capabilities, and not based on the regular [questions of] ‘What is your age? How much you spend?’ and so on.”

There are other analytics tools offering behavioral data, of course, but Ben Moshe emphasized that behavior is really at the center of how CoolaData organizes its data, and that it allows customers to examine data in very granular ways. For example, he said the platform allows customers to find “the most popular session of a song streamed twice, leading to a purchase of more than $5,” or to “target users by city who purchased, then had another session but didn’t purchase again over time.”

CoolaData says it can bring together a customer’s data as well as external data sources. That data can then be queried using the CoolaSQL, the company’s extension of the SQL programming language â€" but you don’t actually need to know SQL to use the product. The company has built widgets on top of CoolaSQL for asking questions in regular English (you can see some sample widgets below), and it’s hoping other developers will build widgets too.

cooladata query

The final result of those queries is an analytical document, which can be stored, accessed, and embedded via Google Drive.

“CoolaData’s service helps us find answers to deep business questions, even questions which are clearly specific to our specialized service,” said mySupermarket CEO Allon Bloch in the launch release.

CoolaData raised a $7.4 million Series A last year.

Wednesday, February 5, 2014

Google Ads SVP Susan Wojcicki Takes Over At YouTube

Senior management at Google is being shifted around, with SVP of Ads & Commerce Susan Wojcicki taking over at YouTube. With that appointment, which was reported by The Information and Re/code, current YouTube boss Salar Kamangar, is expected to move into another role at Google.

The L-Team, as it’s known, is a collection of senior executives leading Google’s key strategic initiatives, all of whom report directly to CEO Larry Page. When Page took control of Google a few years ago, he reorganized the company’s management structure along product lines, appointing a key lieutenant for each.

Members of the L-Team have come and gone since then, shuffling around within Google based on how they align with the company’s product plans and strategic initiatives. Last spring, Page reorganized the management structure again, demoting Android boss Andy Rubin and maps executive Jeff Huber and promoting Ads & Commerce SVP Sridhar Ramaswamy in their place.

With the Ads piece split, it made sense for Wojcicki to shift to another important piece of Google’s business. Wojcicki, after all, has been a key member of the Google team practically since it was founded. By many, she’s considered the most important woman at Google â€" and for good reason.

She’s been with Google basically from the start: It was Wojcicki’s garage that Page and Sergey Brin began working out of the same month that Google was incorporated in 1998. She was their 16th hire, and was their first marketing manager. Wojcicki was also a key player in the development of AdSense, as well as the acquisitions of YouTube and DoubleClick.

Now she’ll try her hand at running YouTube, which reportedly generated up to $5.6 billion in ad revenue last year. There’s no doubt that Google thinks that could be bigger, especially given the global TV ad market, and it’ll be her job to help drive that growth.

Tuesday, February 4, 2014

Orchestrate Replaces Multiple NoSQL Databases With A Single API

The days when developers built their applications on a single database are long over. Many services today use a variety of databases â€" and especially NoSQL databases â€" to power the different aspects of their applications. That adds a lot of complexity, points of failure and cost. At the same time, developers are also getting accustomed to the Amazon Web Services (AWS) model, where you can easily go from 1,000 queries per second to 10,000 without hitting the limits of what your local on-premise database could handle.

Orchestrate, which is launching out of beta today after raising a $3 million seed round last year, aims to make all of this complexity a thing of the past. It offers developers a single REST API for working with their data. The company takes your data, uses the most appropriate NoSQL database like MongoDB or CouchDB for it and you just access it through the Orchestrate API.

Right now, the company’s co-founder and CEO Antony Falco told me, most of the Orchestrate infrastructure runs on AWS. Over time, though, the plan is to use multiple clouds and offer support for data centers in Europe and Asia as well. This, Falco noted, will allow a company to maybe host its data on Amazon on the East Coast and Softlayer in Europe, and to replicate data between different clouds as needed. Orchestrate is also looking at allowing developers who have special security concerns to run its service on-premise.

Falco said there are still a few features the company wants to add post-launch, including support for old-school SQL databases and geo-spatial data. Everybody tends to have a different definition of what geo-data actually means, he stressed, so the plan is to see what customers will ask for and then build a product that fits its users’ needs.

Falco previously co-founded and was the COO of Basho, the company behind the very successful Riak NoSQL database and cloud-storage service. Orchestrate currently has 12 employees. Most work out of its headquarters in Portland, Ore., but the company also has a fair share of remote employees.

Orchestrate’s pricing, too, aims for simplicity. The company offers a free tier for developers who need fewer than 1 million query operations per month. Paid tiers for users who need more start at $39 per month and offer 10 million operations and an additional $2 for every 1 million operations above that limit. Orchestrate does not charge for storage. All of these tiers include monitoring, support, usage reports and daily backups to a location of the customer’s choosing (say S3, for example). By having these backups in place, there is virtually no lock-in, as all the data is stored as JSON objects.

orchestrate_io_interface

Monday, February 3, 2014

YC Alum Asseta, A Marketplace For Used Manufacturing Equipment, Raises $535K

Asseta, the B2B marketplace for used manufacturing equipment which was sort of the odd one out in Y Combinator’s summer 2013 program last year, has now scored a seed round of $535,000. Investors included Ace & Company, Beenos Partners, Matt Huang, and others, as well as help from the WeFunder and AngelList crowdfunding platforms. The latter two were responsible for $271,000 of the funding.

The founders say they didn’t plan to raise most of the round via crowdfunding, but it worked out because of their “unsexy” marketplace concept. “Today, most software-focused VCs don’t have insight into the unique challenges in hardware markets,” says CEO Anton Brevde. ”It’s kind of ironic because we’re disrupting the industry that gave venture capital its start,”

He also tells TechCrunch that almost all of the company’s investors had a connection to manufacturing and had first-hand experience with the problem Asseta is solving, describing them as “people that had seen a room full of equipment thrown out because the owner had no use for it.”

asseta-homepage

The company, for background, launched an online marketplace last August aimed at eliminating the middleman in transactions involving the buying and selling of used manufacturing equipment, primarily semiconductor equipment to start. Three of the four founders at Asseta have a background in this industry, and spotted the potential there to change how things were usually done â€" that is, through equipment brokers whose sales’ process is far less than transparent.

The company notes this $100 billion industry has been stagnant for over 20 years, operating through these middlemen and traditional auctions.

With Asseta, sellers can instead create their own equipment listings with the make, model, year, description, etc., and Asseta will even go on site to take photographs, if need be. The company also handles the payment, shipment and fulfillment, taking only a 5-10% transaction fee, which Brevde says is lower than the industry standard of 50%.

Since its launch, Asseta has talked with fellow Y Combinator alum Soylent about the difficulty in finding affordable manufacturing equipment, and hopes to expand to support more hardware startups in the future, too. For now, the company is taking a vertical-by-vertical approach, beginning with the semiconductor industry, then moving on to high-tech industries, and, eventually, all used industrial equipment.

To date, Asseta has added over 200,000 listings to its site and is growing at 50% month-over-month. Brevde declined to discuss the number of transactions Asseta has handled or revenue, however.

The new funding will be primarily used to grow the engineering and sales teams, Brevde says.

Sunday, February 2, 2014

What We Talk About When We Talk About Economies Of Scale In Tech

Editor’s note: Ben Bajarin is a principal at Creative Strategies where he focuses his analysis and research on the consumer technology industry and consumer technology products. Follow him on Twitter @BenBajarin.

When I joined the Industry Analyst community in 2000 the industry was much smaller. For those in the business and analyst community who were in the field decades prior it was even smaller still. Early in my career as an analyst I was studying the semiconductor industry as it related to markets like PCs, mobile phones (not smartphones), digital home and a few other consumer-facing segments.

In those days, the PC was the talk of the town. It was on a steady growth stream and the only question we would debate internally is how much the industry would grow in the next few years and how many more PCs we would sell in the years to come. The PC crossed the 100 million in annual shipments mark in 1999 then crossed the 200 million annual shipment mark in 2004. I recall discussions with many of the PC vendors and major suppliers of semiconductors and there was so much excitement that the industry would sell 200 millions PCs every year from here on out. The big question was when would we get to 300 million?

Well, that happened in 2009 and shipments have never gotten over 400 million since.

During those days, the industry felt larger than ever. Hundreds of millions of PCs were being shipped each year and exciting growth in computing was taking place. Now, today, when I give industry presentations and keynotes at events, my language has shifted from hundreds of millions to billions and trillions as I talk about the industry going forward.

The economies of scale of the global technology industry are often lost and under-appreciated by many industry commentators. Several things have happened in a short amount of time, which has led to the remarkable economies of scale we are now talking about in the technology industry.

The first is that the industry itself has matured. When you see more evolution than revolution coming from leading companies, then you know a segment has reached a nadir of sorts. This does not mean revolution isn’t possible or still doesn’t happen â€" only that it is less frequent. Think about the automotive industry for example. This is one of the most mature industries and do we see revolutionary products frequently? No, and this is why it can no longer be expected to be a frequent thing in the technology industry.

Mature industries act differently once they have matured and then march on toward post-maturity. You can look at consumer electronics, packaged goods, automotive and even all the way back to railways and shipping industries. The markets that make up industries when they mature act differently as well. Primarily when an industry matures the consumer of the products of those industries understand more about what they want from the product or service and start searching out things that serve their unique needs, wants, or desires. This is what opens the door for broader competition and segmentation, and it is when this happens that the competitive dynamics within a market often change.

The second is that the tech industry has gone global. Thanks to the industry being mature we can now bring nearly every class of consumer technology product to the masses at a variety of price points. The power of local manufacturing in China, and the growing capabilities of India, Latin America and other countries are accelerating the pace of the industries growth and bringing with it challenging implications for foreign brands.

Case in point, a company I love to study based in China named Xiaomi recently unseated Samsung and Apple to take the top smartphone sales spot in the month of December, according to Kantar. This is quite remarkable for a local Chinese upstart fewer than four years old.

The result of the industry maturing and going global is the foundation of why we are no longer talking about millions but billions of annual device shipments and billions of connected devices in use in the marketplace.

My firm estimates that by the end of 2014 there will be over 4 billion PCs, smartphones, and tablets in use. I forecast that by the end of 2018 the annual sales of smartphones will be approximately 1.8 billion. Every time I think about this single number it astonishes me. Every year, almost 2 billion smartphones are sold. Astounding. There may not be a single product with this kind of total addressable market.

Things start to sound even crazier when we start talking about the Internet of things. We are counting down the time before we hit 50 billion connected objects. That number will be quickly eclipsed by 100 billion connected objects as we march toward an inevitable future where we have 1 trillion-plus connected objects in the world. These connected objects will surround us in our homes, cities and workplaces, and will even be embedded into everyday objects like our household appliances, cars, beds, shoes, sports equipment, and clothing.

There is tremendous opportunity ahead for everyone participating in advancing the technology industry. This is not a zero-sum game where for someone else to succeed someone else has to fail. This fact is a core trait of a mature industry. This industry is large enough to sustain a number of healthy growing companies all thriving for decades to come.

Those of us who write about, observe, analyze, and work in this industry are on a journey. However, on a journey the scenery changes. And while this industry is mature, there is still much change that will take place in the years to come. I believe we are just about halfway through this journey and this adventure will be filled with twists and turns for decades to come.

[Image via Shutterstock]

Saturday, February 1, 2014

BuzzFeed Is The Future (Whether It Lives Or Dies)

It’s time for a little inside baseball! Be still your beating hearts.

But admit it: secretly you want to know about the success/failure of the myriad news sources whose stories flit disconnectedly across your Facebook and Twitter feeds from time to time, if only so you can tell your friends that you already knew who was doomed, on the day that long-fabled Great Shakeout finally comes and half of the world’s journalists find themselves surplus to needs.

Old media! Right? Newspapers, magazines, and even, eventually, television: those shambling dinosaurs will be eaten alive by nimble new-media mammals, obsoleted by customized news feeds like Flipboard and Pulse and Feedly and Facebook’s new Paper. As our collective news diet is slowly but inexorably shaped ever more by our social media feeds, rather than the TV channels we watch or the newspaper(s) we read, their audience will turn away from them and leave them to die. You’d think.

And yet I am the proud possessor of some interesting data which indicates that the world is, as always, to some extent at least, more nuanced and complex than that. I’m talking about my pet social-sharing tool Scanvine, which I built last year* to track, measure, and rank how often news stories from a panoply of sources are shared on Facebook, Twitter, Google+, and LinkedIn. Scanvine now has a whole year of data under its belt, which points in some interesting directions.

A whole lot of old-media sources are stagnating, it’s true. I give you the BBC World feed…

bbc

…which is plenty jagged, but clearly shows a slow decline in shares-per-story over the course of 2013. (The red line counts average shares per story, the blue line how many stories Scanvine tracked.) The same was true for Fox News:

fox

…at least until the week of December 2, after which there was a noticeable uptick. Hmm. What could possibly have happened that week?

Oh, right. December 2, 2013: ‘Facebook’s Feed Adds More Links And “Related Articles” To Battle News Discovery Apps.’ And boom, all the major TV networks benefit â€" ABC, CBS, and NBC all spiked near the end of the year. NBC less so, admittedly … but then, they were the only one of the Big Four who had been thriving already. It seems Facebook’s new feed gave a shot in the arm to some organizations who hadn’t quite figured out social media for themselves.

Will that really matter in the long run, though? All of those graphs are still essentially flat. Consider those old-media mavens who are thriving on social media, like The Atlantic:

atlantic

And above all, CNN who, to my considerable surprise, boasts the second-highest shares-per-story average of any news source that Scanvine tracks:

cnn

That’s legitimately impressive â€" until you compare the slope of that graph to, say, TMZ:

tmz

Or most of all, BuzzFeed:

buzzfeed

I’m not sure what’s up with that anomalous dip at the end of the year, but that graph as a whole is insane. But still more sensible than Upworthy, which doesn’t just top Scanvine’s source leaderboard, it dominates it to such an extent that I actually thought there was some kind of bug in my code until their pre-eminence was confirmed by NewsWhip. (Which does what Scanvine does, sort of, albeit in a paid and slightly less idiosyncratic way.)

So. My data indicates that a) old-media sources are thriving b) some new-media sources are really thriving. (Other examples: Business Insider and, I’m very pleased to say, TechCrunch.) But not everyone can win. People may be reading more news than ever, but there are still only so many eyeballs to go around. So who’s losing?

Guess what? It’s not just old media. My data says that once-mighty Gawker saw a slight but distinct decline over the course of 2013:

gawker

As did Jezebel:

jezebel

And in the world of tech news, which I know best, some former giants have developed feet of clay. Wired, in particular, has seen far better days:

wired

And it’s hard not to feel sorry for poor PandoDaily, which seems to have essentially flatlined at a mere 100 social shares per story:

pando

Though on the other end of the spectrum, credit where it’s due, The Verge has had a spectacular year.

verge

So what does this all mean, Jon? I imagine you inquiring. Funny you should ask. I just might have an answer or two.

1. New media rises and falls much faster than old media. That bodes ill for the latter.

What happens in the future is all about the rate of change today, and counting shares on social media seems a pretty good way to measure that rate of change. Television, newspapers, magazines â€" your CNNs, your New York Times, your New Yorkers â€" appear to have enormous momentum, meaning that their social readerships rise and fall only slowly. External forces like Facebook’s news-feed tweaks can influence this, but only a little.

This isn’t a factor of sheer size, either; BuzzFeed pieces already get many more social-media shares than do most so-called “mainstream” media sources, and yet their share counts just kept on skyrocketing all through last year. Rather, the so-called “new media” tend to rise â€" but also fall â€" much faster than the old. I can’t help but wonder whether Upworthy, in particular, will be here today but gone tomorrow.

So will we see a few new-media titans rise to stand with The Economist, The Guardian, The New York Times, etc., and dominate the landscape for many years? Or will those colossi totter and collapse like Ozymandias, only to be replaced by an endless series of flashes in the pan, as new generations of media organizations just keep on evolving and emerging, faster and faster, each one devouring the previous?

I think the answer is staring us in the face, one way or another: and I think its name is BuzzFeed. Immensely successful, hugely popular, everyone’s favorite source of online GIF listicles has quietly diversified to some impressive international and investigative news, as well as video. If BuzzFeed thrives and prospers, then we’re witnessing the rise of a new generation of titans; but if they fail and wither, if they are out-Buzzfed by something newer and hotter and hipper and catchier, then we’re seeing the news industry as we know it descend into an endless thrashing maelstrom of mayflies competing desperately for attention from an ever-more-fickle audience before they, in turn, are devoured. Let’s hope for the former.

2. Permeable paywalls are probably a pretty good idea.

One other striking thing about Scanvine’s data: every single source that Scanvine tracks, without exception, has a shares-per-story distribution which looks something like this:

bbc-dist

Or this:

tc-dist

In other words, all online news follows a power law: The scaling exponents may vary, but the fundamental distribution remains the same. A small number of viral articles get most of the attention, a long tail gets little to none, and the decay from the former to the latter is described by a surprisingly smooth curve.

This means that allowing readers to view N articles/month for free, but requiring them to pay a modicum to see the rest, makes good business sense. Your viral articles still go viral, so you attract most of the free eyeballs you would have anyway, while your long tail makes money from subscribers. How big should N be? Well, that depends â€"

â€" but this assumes, of course, that you can get anybody to pay you at all, which is a neat trick when there are a zillion other free news sources out there. And how do they pay for themselves? Via advertising, which is really only lucrative if you have a wealthy and highly targeted market like sports or tech news â€" or via sponsored content, such as…yep, you guessed it. BuzzFeed. So will the future be sponsored or paywalled? Again, for the answer, look to them.

And watch very carefully. Because if I’m right, they are the future of news in miniature, in real time, right here before us, as we witness it. No pressure, all y’all over there: but please don’t screw it up.

*Completely singlehandedly, he muttered modestly, right down to its Android/iOS apps. And its UX design. Which explains its UX design, in case you were wondering.