Sunday, July 13, 2014

Winners Of The Techcrunch London Meetup: GiftGaming, Rook And Keekla

The Techcrunch London Summer Meetup rolled into town this week as part of our Summer Tour to promote TechCrunch Disrupt in London on October 20-21. We had a bunch of brand new startups apply.

The pitch-off was judged by TechCrunch writers Ingrid Lunden and Natasha Lomas and myself, with Andy Chung of AngelList and James Governor of Shoreditch Works, our hosts. We were kindly supported by sponsorship from Almaz Capital, Gordon and Eden and Mobfox.

We listened to a bunch of brand new startup founders talk about their products in a fast-paced 90 second style, achieved in difficult conditions as the supplier of air conditioning units had… not supplied them.

But, in the end, we had one overall winner.

The winner was GiftGaming.com. This startup is addressing the problem that 50% of games are free-to-play but only 1.5% of players make in-app purchases. Meanwhile, UK Mobile Ad Spend will reach £2bn and the in-game ads industry is worth £1.1bn. So GiftGaming’s idea is to create a platform for self-service in-game adverts, enabling game publishers to integrate it, brands to run campaigns on it, such as offering power ups and discount coupons. In other words, brands pay for you in-game purchases when you interact with their ads. GiftGaming then runs on revenues from commissions. This is a seriously great idea and they have already raised seed capital. They will receive a Startup Alley table at TechCrunch Disrupt London.

The runner-ups and winner of two tickets each company to Disrupt London were Rook and Keekla.

Rook is an eBook platform with an innovative content delivery method. Users have free access to their entire library of books when on defined networks or locations such as cafes, airports & transportation networks. When not on these networks, content switches from freemium to premium â€" users must now pay for the same content. The analogy is this: you can walk into a bookstore now and read any book you want but if you want to walk away with it you have to buy it.

The other runner-up was Keekla, a mobile first platform connecting companies and individuals directly during a recruitment campaign. Keekla wants to disrupt the outdated recruitment market by providing a “discreet, accurate and direct mobile platform built exclusively to connect the hiring company with job seekers.” A person creates profile, says what looking for and instead of going to recruiters.

Here is the full list of the startups that pitched. All of them were interesting, and many had already raised seed capital. Thanks for making the TechCrunch London Summer meetup a success and we’ll see you next year!

PlayEnable
Location based search to find and book fitness classes and sports activities.

CharityStars
A fundraising platform that helps charitable organisations raise funds by auctioning unique celebrity experiences and memorabilia.

local.app
One app on your phone that automatically adapts its content to your location, with offers.

Hitch
A social discovery app that lets users play the matchmaker, select two friends and set them up on a date. ‘My single friend in mobile app form’.

Friend-Chain
App for iOS, where users can create fun video compilation ‘chains’ with their friends and share them with the world.

ZenSuite
A booking and hotel management platform for independent hotels.

Flirt Planet Play
‘Gamifying Romance’ this blends together social interactions, human courtship, behavioural psychology and neuroscience with video game mechanics.

Tellyo
With Tellyo TV broadcasters and media companies can engage TV viewers on 2nd screen devices as well as monetize this interaction by enabling TV viewers to capture short video clips from television to instantly share them on social media. Similar to ConnectTV but in Europe.

Campus board
A platform designed and built to connect the London Tech Community.

Gitoon â€" Peer reviewed UGC content platform

German Cartel Office Says Google, Other Tech Giants Could Be Regulated Like Utilities: Report

Germany has not been the biggest fan of tech giants that it believes overreach their influence. Now, a report claims that it is considering a new way to deal with them: regulating them like utilities.

The Sunday Times writes that the country’s Federal Cartel Office (Bundeskartellamt) has prepared a 30-page proposal with suggestions of how to cope with the growing power of Google, along with other tech giants. Treating Google as a utility, one of the proposed suggestions, would mean the state having a stronger hand in how services like advertising on the search engine are priced, without diving into questions of how Google needs to alter its search algorithm.

We have contacted both the Federal Cartel Office and Google for comment.

If accurate, it’s worth wondering what other suggestions the Cartel Office has made in addition to the idea of regulating Google and other tech giants. It seems that this is not the first time that the document has been mentioned: it comes up in this Der Spiegel story on Google regulation from July 1, describing that utility-style regulation could be used in an “emergency”, presumably when other routes to ensuring better competition have been exhausted.

The Cartel Office has in the past butted heads with other large tech companies like Amazon, and prevailed. In November 2013 the Cartel Office dropped an investigation into Amazon’s pricing after the e-commerce giant agreed to abandon a policy of barring third-party resellers from offering goods for lower prices on platforms competitive to Amazon.

In any case, it seems like the Federal Ministry of Economic Affairs and Energy (where the Cartel/Antitrust Office sits) is not the only German government body thinking about utility-style regulation. In an interview at the end of June, the Minister of Justice, Heiko Maas, suggested that the company be “unbundled” to break open its monopoly on search services, if it could be demonstrated that Google has abused its market position.

Asked in an interview with Germany’s Frankfurter Allgemeine Zeitung newspaper if he agreed with his political party’s chairman Sigmar Gabriel about “the destruction of Google”, Maas responded like this (via Google Translate and slightly edited):

“Imagine an energy company covering 95 percent of the total market. The antitrust authorities would be quickly on it. Such conditions in a market economy do not make sense, are not healthy. So yes, if Google has abused its dominant market position to exclude competitors systematically, then consideration should be given as a last resort, something like an unbundling.”

(No mention of other areas where Google is active such as in cloud-based applications like Gmail, internet browsing via Chrome or in mobile services with Android, which is the most popular smartphone OS in Germany.)

The news of how a specific country might take action against Google comes at a key time for the company in Europe and its search ads business.

While the most recent Google news concerns how it is implementing the “right to be forgotten” in search results, made in the name of more privacy for individuals, there has been another issue specifically related to search advertising â€" the same thing that is at issue in these German proposals.

The EU has reached an agreement with Google over how it can modify its search ads and results to make way for more competitors from vertical sectors (eg travel) in its popular search portal. But the settlement has been criticised by competitors, who are now hoping that the incoming European Union president, Jean-Claude Juncker, will block the settlement and re-open the investigation. To complicate things, now Yelp has also moved from being an observer to active participant in the debate with its own formal complaint against Google.

If the reports about the German proposals are accurate, they are a sign that even without a change in that European ruling, Google could potentially face problems in individual countries.

Meanwhile, there are other ways that Google may raise its profile and influence in this part of the world: Last week the company’s investment arm, Google Ventures, confirmed that it would be opening its first office in Europe, in London, with a $100 million fund for startup investments in the region.

That’s not the only investment that Google could be making in Europe. In December, Google revealed that it was earmarking some $20-30 billion of its foreign cash to “fund potential acquisitions of foreign targets and foreign technology rights from U.S. targets in 2013 and beyond.”

In fact, in 2013, Google said it had already looked “pursued but discontinued a potential buyout of a foreign company, with a valuation estimated in the range of $4 to $5 billion,” although it’s not clear whether that was in Europe or another region outside the U.S.

Hardware Case Study: Why Lockitron Has Taken So Long To Ship

Editor’s note: Cameron Robertson is a co-founder of Lockitron.

There has been renewed excitement at Lockitron HQ in the last few weeks as we pass shipping to our 3,000th backer. Following an incredibly oversubscribed crowdfunding campaign at the end of 2012 â€" during which we raised over $2.3 million (and garnered 15,000 backers) â€" we had to adapt our manufacturing plans and shift to volume production from our originally planned run of 1,000 units.

So why has Lockitron taken so long to ship?

Why Is Hardware So Damn Hard?

Tech pundits and investors will frequently tout how “hardware is coming back” and tools like Arduino, 3D printing and rapid prototyping are allowing small startups to build great hardware experiences. While there is some truth to this, making hardware at scale is still incredibly difficult â€" if not for the actual physical manufacturing itself but for the compounding complexity of suppliers, tooling and testing.

The argument can be made that building a hardware product is an order of magnitude more difficult than building a software product. While controlling for scope, “hardware” (in the Silicon Valley sense of the word) requires a breadth of competencies that not only encompass the app and web development but also industrial design, mechanical design, operations, embedded development, and more.

Better prototyping tools have lowered the barrier to entry along with falling costs in electronic components, namely components like Wi-Fi and Bluetooth radios that enable Lockitron to talk to the rest of the world. But debugging tooling, coordinating dozens of suppliers and establishing QC procedures can be incredibly difficult.

Choose Your Own Adventure

Beginning in 2010 we sold a first-generation product that we assembled by hand in our living room from off-the-shelf parts. By contrast, the product now integrates dozens of discrete plastic, POM (a form of nylon), steel and aluminum components â€" and nearly every component is made to order.

In our initial RFQs (“request for quote”) we leaned heavily towards manufacturing entirely in the United States. Our impetus for this was largely around logistics; if we could make everything domestically, we wouldn’t have to travel far and wide to ensure the quality we expected.

It quickly became apparent that manufacturing domestically would cost far beyond what we had budgeted for. Given the number of parts, required touch time (the amount of time it takes someone to assemble a product), various materials and processes used, building entirely in the U.S. wasn’t viable. Potential domestic suppliers still looked East for most of the components we needed, albeit with longer lead times.

At the end of the day we opted for a mix; we manufacture our high touch time mechanical assembly in China and high value components, like our circuit board, in California. Final assembly takes place in California, giving us easy access to final stage quality control.

Everything Is Bespoke

Unlike replacement locks, we designed to fit entirely over an existing lock and we knew that most components would have to be custom made as a result. We quickly learned that there was no concept of “off the shelf” when manufacturing in China.

Even what seemed to be commodity components like switches, screws and motors would be made to spec. This also meant protracted lead times as well as the potential for vendor lock-in for our most specialized parts.

Perhaps the most frustrating aspect was that a delay or quality-control issue in any one of the 41 discrete mechanical components necessary to build our hardware throws a wrench into production.

The perfect storm of an inept supplier, poor quality control and rushed work meant the first small run of Lockitrons couldn’t turn, had inconsistent finishes and generally were inoperable. Several gears and rings had “flash” or excess material where they meshed with other parts; the die casting for the aluminum was poorly machined preventing our circuit board from installing correctly.

Using tools like problem follow-up sheets, we documented each individual problem on each part and worked with our contract manufacturer to adjust tooling, test injection mold cycle times and find new suppliers where corners had been cut.

All of this, however, comes at the cost of time; it would take another two months of debugging before we had working products.

A Robot for Your Door

We demonstrated one of the first fully operable prototype Lockitrons at CES in 2013. Connecting over Bluetooth Low Energy, our demo carried out everything as expected; however the motor was loud, connectivity was intermittent and the circuit board was finicky. We spent the next few months redesigning our gearbox to reduce noise while increasing power to deal with sticky or hard-to-close locks.

While the choice was the right one to make, it cost us valuable time; a few parts had to be retooled and there were cascading effects on our electronics and supplier choices. We selected an ultra-efficient, powerful motor to place at the lock’s heart, but this also impacted our timeline.

Most challenging, however, was the meshing of electronic and mechanical worlds. An initial circuit board design proved overly complex and underpowered.

The resulting power and torque requirements of our gear box required a number of changes on our circuit board that would have been nearly impossible to predict from our prototype units. It took several more PCB iterations to fine-tune the circuit board’s electromechanical requirements.

Develop Process

Creating an assembly line that can reliably manufacture, assemble and QC a product with dozens of discrete, custom components is an incredible challenge. Each step along the way needs to be clearly documented with the expectation that anyone with little training can sit down and understand what needs to happen.

Something as small as an overtightened screw or improperly angled switch can wreak havoc when products arrive in a customer’s hands. Even with numerous quality control steps, units need to be subjected to random spot checks and production lines overseen by third parties (or ideally us).

Along with printed and video guides to assembling Lockitron, we also record the failures we see from different components. This lets us see if there is something wrong with a single batch of units or with our assembly or QC steps.

Engage Early Backers to Beta Test

When we originally launched Lockitron using our own homebrew crowdfunding app after being rejected from Kickstarter, we did so with only a single funding tier promising Lockitrons would be shipped in order to our backers based on their place in line.

Unlike other crowdfunded projects, we missed the opportunity to create a “developer”or “beta”tier and unwittingly put some of our earliest backers through a rough experience. Given the support our backers have shown us to bring Lockitron to market, building a structured beta would have brought in valuable feedback more quickly and with a smoother experience for our earliest backers.

Push Firmware Early, Push Often

When Lockitron’s crowdfunding campaign rocketed beyond all expectations, one of our close advisors from the software world asked us why we couldn’t iterate Lockitron in batches. “Ship 1,000 units, pause, and learn from what users wanted in the hardware, then build another 1,000.”With limited resources, this simply isn’t possible; each Lockitron prototype was a $3,000-5,000 investment. Conversely, while consumer grade 3D printing allows for the creation of a broad range of prototypes, the strength and precision of the parts it yields simply isn’t good enough for mechanical prototypes.

On the software front, however, we built Lockitron to allow for continuous updates. Lockitron’s Wi-Fi connectivity has proven crucial in letting us roll out promised functionality, solve problems and diagnose faulty units.

While our initial users at the beginning of this year had a barebones feature set with poor battery life, we’ve since updated the firmware over a dozen times, each time incrementally improving the Lockitron experience. Bluetooth-only devices are beholden to their smartphone leashes for updates; rather than prompting users at the door each time a new build is pushed we can push new features, security updates and bug fixes without making Lockitron owners wait.

Shipping and Beyond

Our commitment to our incredibly patient backers in simple; Lockitron will get better everyday from the first time you install it.

From additional features to improvements in battery life and connectivity, we’re excited for what’s in store over the few months. We’re a small but dedicated team working with some incredible partners to take Lockitron to next level while building a seamless experience. We’re excited to see where developers take Lockitron through our simple web API that’s available today.

Ultimately we believe the true value behind Lockitron is in how others integrate will integrate into their own experiences as they see fit; just as we could have never predicted the massive support we would receive during our crowdfunding campaign we’re excited to see where backers install their Lockitrons.

Hardware Case Study: Why Lockitron Has Taken So Long To Ship

Editor’s note: Cameron Robertson is a co-founder of Lockitron.

There has been renewed excitement at Lockitron HQ in the last few weeks as we pass shipping to our 3,000th backer. Following an incredibly oversubscribed crowdfunding campaign at the end of 2012 â€" during which we raised over $2.3 million (and garnered 15,000 backers) â€" we had to adapt our manufacturing plans and shift to volume production from our originally planned run of 1,000 units.

So why has Lockitron taken so long to ship?

Why Is Hardware So Damn Hard?

Tech pundits and investors will frequently tout how “hardware is coming back” and tools like Arduino, 3D printing and rapid prototyping are allowing small startups to build great hardware experiences. While there is some truth to this, making hardware at scale is still incredibly difficult â€" if not for the actual physical manufacturing itself but for the compounding complexity of suppliers, tooling and testing.

The argument can be made that building a hardware product is an order of magnitude more difficult than building a software product. While controlling for scope, “hardware” (in the Silicon Valley sense of the word) requires a breadth of competencies that not only encompass the app and web development but also industrial design, mechanical design, operations, embedded development, and more.

Better prototyping tools have lowered the barrier to entry along with falling costs in electronic components, namely components like Wi-Fi and Bluetooth radios that enable Lockitron to talk to the rest of the world. But debugging tooling, coordinating dozens of suppliers and establishing QC procedures can be incredibly difficult.

Choose Your Own Adventure

Beginning in 2010 we sold a first-generation product that we assembled by hand in our living room from off-the-shelf parts. By contrast, the product now integrates dozens of discrete plastic, POM (a form of nylon), steel and aluminum components â€" and nearly every component is made to order.

In our initial RFQs (“request for quote”) we leaned heavily towards manufacturing entirely in the United States. Our impetus for this was largely around logistics; if we could make everything domestically, we wouldn’t have to travel far and wide to ensure the quality we expected.

It quickly became apparent that manufacturing domestically would cost far beyond what we had budgeted for. Given the number of parts, required touch time (the amount of time it takes someone to assemble a product), various materials and processes used, building entirely in the U.S. wasn’t viable. Potential domestic suppliers still looked East for most of the components we needed, albeit with longer lead times.

At the end of the day we opted for a mix; we manufacture our high touch time mechanical assembly in China and high value components, like our circuit board, in California. Final assembly takes place in California, giving us easy access to final stage quality control.

Everything Is Bespoke

Unlike replacement locks, we designed to fit entirely over an existing lock and we knew that most components would have to be custom made as a result. We quickly learned that there was no concept of “off the shelf” when manufacturing in China.

Even what seemed to be commodity components like switches, screws and motors would be made to spec. This also meant protracted lead times as well as the potential for vendor lock-in for our most specialized parts.

Perhaps the most frustrating aspect was that a delay or quality-control issue in any one of the 41 discrete mechanical components necessary to build our hardware throws a wrench into production.

The perfect storm of an inept supplier, poor quality control and rushed work meant the first small run of Lockitrons couldn’t turn, had inconsistent finishes and generally were inoperable. Several gears and rings had “flash” or excess material where they meshed with other parts; the die casting for the aluminum was poorly machined preventing our circuit board from installing correctly.

Using tools like problem follow-up sheets, we documented each individual problem on each part and worked with our contract manufacturer to adjust tooling, test injection mold cycle times and find new suppliers where corners had been cut.

All of this, however, comes at the cost of time; it would take another two months of debugging before we had working products.

A Robot for Your Door

We demonstrated one of the first fully operable prototype Lockitrons at CES in 2013. Connecting over Bluetooth Low Energy, our demo carried out everything as expected; however the motor was loud, connectivity was intermittent and the circuit board was finicky. We spent the next few months redesigning our gearbox to reduce noise while increasing power to deal with sticky or hard-to-close locks.

While the choice was the right one to make, it cost us valuable time; a few parts had to be retooled and there were cascading effects on our electronics and supplier choices. We selected an ultra-efficient, powerful motor to place at the lock’s heart, but this also impacted our timeline.

Most challenging, however, was the meshing of electronic and mechanical worlds. An initial circuit board design proved overly complex and underpowered.

The resulting power and torque requirements of our gear box required a number of changes on our circuit board that would have been nearly impossible to predict from our prototype units. It took several more PCB iterations to fine-tune the circuit board’s electromechanical requirements.

Develop Process

Creating an assembly line that can reliably manufacture, assemble and QC a product with dozens of discrete, custom components is an incredible challenge. Each step along the way needs to be clearly documented with the expectation that anyone with little training can sit down and understand what needs to happen.

Something as small as an overtightened screw or improperly angled switch can wreak havoc when products arrive in a customer’s hands. Even with numerous quality control steps, units need to be subjected to random spot checks and production lines overseen by third parties (or ideally us).

Along with printed and video guides to assembling Lockitron, we also record the failures we see from different components. This lets us see if there is something wrong with a single batch of units or with our assembly or QC steps.

Engage Early Backers to Beta Test

When we originally launched Lockitron using our own homebrew crowdfunding app after being rejected from Kickstarter, we did so with only a single funding tier promising Lockitrons would be shipped in order to our backers based on their place in line.

Unlike other crowdfunded projects, we missed the opportunity to create a “developer”or “beta”tier and unwittingly put some of our earliest backers through a rough experience. Given the support our backers have shown us to bring Lockitron to market, building a structured beta would have brought in valuable feedback more quickly and with a smoother experience for our earliest backers.

Push Firmware Early, Push Often

When Lockitron’s crowdfunding campaign rocketed beyond all expectations, one of our close advisors from the software world asked us why we couldn’t iterate Lockitron in batches. “Ship 1,000 units, pause, and learn from what users wanted in the hardware, then build another 1,000.”With limited resources, this simply isn’t possible; each Lockitron prototype was a $3,000-5,000 investment. Conversely, while consumer grade 3D printing allows for the creation of a broad range of prototypes, the strength and precision of the parts it yields simply isn’t good enough for mechanical prototypes.

On the software front, however, we built Lockitron to allow for continuous updates. Lockitron’s Wi-Fi connectivity has proven crucial in letting us roll out promised functionality, solve problems and diagnose faulty units.

While our initial users at the beginning of this year had a barebones feature set with poor battery life, we’ve since updated the firmware over a dozen times, each time incrementally improving the Lockitron experience. Bluetooth-only devices are beholden to their smartphone leashes for updates; rather than prompting users at the door each time a new build is pushed we can push new features, security updates and bug fixes without making Lockitron owners wait.

Shipping and Beyond

Our commitment to our incredibly patient backers in simple; Lockitron will get better everyday from the first time you install it.

From additional features to improvements in battery life and connectivity, we’re excited for what’s in store over the few months. We’re a small but dedicated team working with some incredible partners to take Lockitron to next level while building a seamless experience. We’re excited to see where developers take Lockitron through our simple web API that’s available today.

Ultimately we believe the true value behind Lockitron is in how others integrate will integrate into their own experiences as they see fit; just as we could have never predicted the massive support we would receive during our crowdfunding campaign we’re excited to see where backers install their Lockitrons.

Saturday, July 12, 2014

Software Entrepreneurs Must Go Mobile-First Or Die

Editor’s note: Roger Lee is a general partner with Battery Ventures. 

Seven years ago when the iPhone was first introduced, smartphones were a novelty. Now they’re the default method of computing for most people. As of late last year, Americans spent 34 hours a month on their mobile devices, compared with just 27 hours accessing the web via a computer, according to Nielsen.

This mobile-first mindset has also deeply permeated the enterprise. Some 95 percent of knowledge workers own smartphones, and they reach for them first to do all kinds of tasks â€" from email and document sharing/management to meeting planning and videoconferencing.

Smartphones and tablets are also rapidly entering business sectors such as construction, shipping, manufacturing, healthcare, real estate, education, law enforcement, fleet management and others. Most people have noticed field workers using mobile devices equipped with industry-specific apps (everyone from rental-car agents to home contractors) to complete tasks on the go.

As Salesforce.com CEO Marc Benioff recently said at a technology conference: “Today I run my business from my phone; I could never have imagined that a few years ago.”

So for enterprise software entrepreneurs, this platform shift has massive ramifications on product roadmap, product design, hiring, go-to-market strategy and pricing.  In other words, it impacts everything.

If you’re building an enterprise-software company, mobile must be core to your product strategy; it can’t be an afterthought or add-on. And you must build an elegant, easy-to-use mobile app, because employees and consumers far prefer mobile apps to mobile websites. U.S. smartphone users spend 86 percent of their time on mobile apps, vs. 14 percent of their time using mobile browsers.

Mobile-first

One example of an enterprise startup getting it right with mobile is Clari, a CRM software company. At right, a screen shot of the clean, great-looking Clari Daily Brief â€" perfect for a sales rep on the go whose smartphone is his or her primary computing device.

There’s also PagerDuty, a company that alerts IT professionals to potential problems via SMS and email. Also in the market is CoTap, a mobile-first messaging system for workplace teamsâ€"sort of like WhatsApp for business.

These companies and others illustrate a few key precepts that entrepreneurs should keep in mind when trying to build a mobile-first product and mobile-centric company culture.

Pick one platform to get product/market fit. iOS and Android are very different environments and, as a resource-constrained entrepreneur, you need to pick one. Be conscious of the types of devices your end customer will be using and think through the pros and cons of each platform (e.g. Android is easier to release/iterate in the early days as you are searching for product/market fit, while iOS can be easier to monetize). Once you have made your platform decision …

Hire dedicated developers for that platform. You will need a dedicated team of three to four engineers/designers for either iOS or Android. These folks are tough to find, but you don’t have a choice. To build an A+ mobile app, you need a dedicated team that is solely focused on building in iOS or Android.

Design, design, design. You only have a few minutes to convince users your mobile app is valuable. If they have to spend 2-3 minutes struggling to understand how to use it, you’ve likely lost them for good. A great mobile app is intuitive from the first minute a user taps on it. But designing something so elegant is extremely difficult. You need great designers and lots of them. Make sure an experienced designer is one of your first few hires, or ideally part of the founding team. Then, aim to hire one designer for every three to five engineers going forward.

Think through workflow and how it impacts the user experience. This is stating the obvious, but the way people use smartphones and tablets is vastly different from the way they manipulate keyboards and mice. Instead of relying on clicks and text entry â€" the standard for enterprise desktop apps for decades â€" you’ll need to design mobile workflows based on taps and swipes. Depending on your mindset, this can be either scary or liberating. Embrace this design constraint and you will be surprised at what is possible.

Don’t overbuild. Another key to success with mobile apps is to keep it simple. Don’t build in too much functionality, and make sure the user can get real value within three to four swipes/taps. Most incumbent software vendors have not figured this out, as they take their year 2000-era software playbook and cram in too much functionality, yielding a bloated and difficult-to-use product. Don’t fall into that trap. Keep it simple.

Decide if your app plays a standalone or support role. Just because people vastly prefer to use smartphones over their PCs doesn’t mean there aren’t some work tasks that still require a computer. Startups like Accompani are getting this balance right. The company, which makes relationship-management software, can fulfill on-the-go use cases over customers’ mobile devices but accomplish batch-processing type tasks â€" clearing out your inbox, prepping for the next day full of meetings â€" on a PC or tablet.  

After all, programming, graphic design, writing, creating presentations and other jobs are still mostly done using keyboards and large screens. Figure out if your mobile enterprise app is for a task that never, ever needs a computer, or conversely, if it needs to work in conjunction with a desktop application. Everything from how you design the mobile app interface to whether you need mobile-desktop sync will depend on this critical distinction.

Even if you didn’t start your company as a mobile-first business, there is still time to make this massive pivot. Facebook did it â€" moving from a consumer, desktop-based website to a mobile-first app â€" and changed its entire revenue stream in the process. If a huge company like Facebook can do a mobile about-face, your smaller enterprise software startup can, too.

You just have to throw out all your old ideas about how users interact with your software and put all your energy into designing a streamlined, elegant, efficient mobile app. It won’t be easy, but it has to be done. Otherwise, your enterprise software company may slowly fade away as a relic of the bygone desktop era.

Curated Food Delivery Startup Caviar In Talks To Be Acquired By Square For $100 Million

Curated food delivery startup Caviar is in talks to be acquired by Square in a deal that could be worth at least $100 million, according to several sources. While we’ve heard the deal is slated to take place over the next couple of weeks, these things could always fall apart.

Caviar is one of many new startups that seeks to enable customers to order meals online and have them delivered in a short period of time. It differentiates by striking exclusive delivery deals with high-quality restaurants, and also by offering a group-ordering feature so that customers can have their family and coworkers add their own meal selections simply by sharing a link.

Launching first in San Francisco, the service is now available in other major markets, including New York City, Boston, Chicago, Seattle, and Washington, D.C.

We’ve seen a lot of investment go into the food delivery space over the last several months, with Caviar being one of the beneficiaries of that funding. The company raised a $13 million Series A round led by Tiger Global just this April. It had previously secured $2 million in seed funding prior to that, with investors that included Winklevoss Capital and Andreessen Horowitz, among others.

But it hasn’t been alone: Investors have poured funding into a wide range of on-demand food delivery services of late. In recent months, we’ve seen Munchery raise $28 million, Postmates raise $16 million, and Spoonrocket and Sprig each raise about $10 million.

All that competition could be part of the reason for what seems like an early exit for the company. While it seems strange Caviar would seek to be acquired so soon after raising funding, it’s possible that the competitive environment is just too much for it to handle, and maybe it would do better to be part of a larger company.

Payment processing company Square launched Square Order in May to bite into the food delivery service industry. There have been speculations as to whether the technology was built in-house or was part of another acquisition or third party.

Currently, Square Order offers a mobile app for consumers to order food for takeout. But it requires the consumer to pick up their own order. Caviar, by contrast, handles all pickup and delivery for the restaurants it partners with, lowering the fixed costs associated with delivery and could provide a big value-add to potential Square restaurant partners.

Humans And Computers Will Come Together For Middle Work

Editor’s note: David Greenbaum is CEO and co-founder of Boost Media. Previously, David worked in venture capital and at Goldman Sachs, and was director of strategy and M&A at Interval Leisure Group.

Jon Evans’ post “Welcome To Extremistan! Check Your Career At The Door” on TechCrunch warns of mass penury for this generation and the next as the dual horseman of the techno-apocalypse, robots and software, strip humans of their ability to make a living.

Essentially, he predicts machines and algorithms will consume jobs faster than we can create them. Don’t believe this dystopian vision of the future for a second, because both humans and robots will contribute to the economy in generations to come through a concept called “middle work.”

Today, non-manufacturing work largely falls into one of two categories: purely human (a judge serving sentences) or purely software (a computer serving search results). However, there’s an emerging category called middle work that is neither purely human, nor purely software. This new labor category combines both algorithms and human thought processes and will be an impactful economic driver in the next decades.

Middle work leverages what machines do best â€" solving low-value, high-volume problems â€" and combines it with what humans do best â€" solving high-value, low-volume problems.

Middle work is not just “information work” where humans use computers to complete tasks like millions of people do every day in the office. Rather it’s defined as work that wouldn’t be economically viable for a human to do without a workflow platform, yet  is too nuanced for software to perform unaided. For example, software is great for spellchecking a marketing email, but only a human can think creatively to write an engaging headline to get consumers to click on that email.

Between these two extremes exists a middle-work world where humans use software to make the process of writing ad copy more automated and efficient. In this example, middle work might entail hundreds of copywriters using an online network to contribute potential email headlines, allowing a marketer to choose among dozens of headline options and submit several choices for A/B testing. Contributors whose headlines are chosen would earn money for their work. For marketers, this process is more streamlined and cost-efficient than hiring a stable of copywriters.

Of course, over time, software will become more advanced, but it will never be as good as people at jobs that entail creativity, judgment, empathy and a raft of other uniquely human traits. Middle work combines efficient software algorithms with human ingenuity to create a whole new class of jobs â€" opening up a large swath of economic opportunity. Humans will be able to use software to perform high-value, low-volume tasks with high levels of precision and accuracy.

In many ways Amazon’s Mechanical Turk was the first software-based middle work company. Today, people use Mechanical Turk to solve low-value problems such as classifying the subject of a picture. But the emerging trend is for middle-work companies to verticalize and specialize, allowing humans to leverage software platforms to solve higher-value problems. In middle work, a workflow platform creates standardized units of work, while a marketplace of human labor provides pools of workers who bring creativity and judgment to the tasks at hand.

To make it clear why middle work will become commonplace, consider the following examples: A non-native English speaker wants to verify whether she is using idioms correctly in professional correspondence. A small business owner wants to file his taxes using QuickBooks but isn’t sure of the correct categorization of a deductible 401k plan. An executive needs an accurate transcription of a meeting, but also to clearly identify each of the speakers and their importance to the group.  All of these issues could be solved by web-connected humans using advanced software platforms.

Because middle-work participants don’t have to find the work themselves (the network provides the work opportunities), they can work at lower per-unit costs but still make substantial per-hour rates because their time is spent only delivering work â€" not prospecting, invoicing and managing clients.

For many industries, the size of the addressable middle can be larger than the head (top-level salaried positions) or the tail (low-value contract work).  A handful of emerging companies are lowering the cost of producing a unit of work by combining software with human labor.

By addressing the middle, companies are not taking jobs away from people who were doing them before, but rather are adding jobs by unlocking a category of work that didn’t exist in the purely human or purely software realms.

Unlocking the middle is a massive opportunity for entrepreneurs, employees and customers alike in industries as diverse as medicine, accounting, law, and music discovery.

IMAGE BY Shutterstock USER ND Johnston (IMAGE HAS BEEN MODIFIED)

Amazon Web Services Moves Beyond Developer Tools

Amazon Web Services is known for many things, but all of those have to do with developer services like cloud computing instances, databases and storage. Lately, however, AWS is slowly getting more into productivity tools that are meant for end users.

Amazon’s first attempt to get into this market was Amazon Cloud Drive. It launched back in 2011, but while there are no exact numbers about its usage, I doubt all that many consumers ever signed up for it. Now â€" maybe in the wake of its Fire Phone launch â€" it feels like the company is starting to reboot its efforts, and it is doing so for enterprise users under the AWS label.

After Cloud Drive, things got pretty quiet in this space for Amazon, but last year, it launched an invite-only beta of Amazon WorkSpaces, a virtual desktop for enterprises that launched to the public in March. With WorkSpaces, an admin still has to go into the AWS Management Console and provision it, but for the user, the experience is pretty straightforward.

That project, of course, was more about virtualization than about an actual web application. With Zocalo, however, Amazon launched a full-featured competitor to Google Drive for Work and Dropbox, complete with a web-based interface. The focus here is still mostly on enterprises, and there is no free tier for consumers (though the regular price of $5 per user/month is extremely aggressive). But once it’s out of preview, it’s hard to imagine that Amazon would only allow businesses to sign up.

While Amazon itself has long offered some kinds of web apps for its e-book and music service, for example (and one could probably argue that Amazon.com is also a web app), Zocalo is a step in a very new direction for AWS. It’s also one that startups should be worried about. Dropbox started out on AWS, for example. But what if Amazon now wants a piece of this market for itself, too?

With Fire OS, the company has shown that it can do design and it’s probably no coincidence that Zocalo takes some of its design queues from Fire OS.

While it isn’t for consumers, AWS’s new mobile app analytics service similarly puts Amazon into competition with other Analytics services that were likely built on top of its architecture. Its feature set doesn’t seem to be quite on par with the likes of Flurry’s analytics service just yet, but it has a pretty generous free allowance and may just be enough for many developers.

At this point, AWS offers pretty much everything developers need to build their applications, whether that’s for mobile or web apps. While it continues to roll out new features for its services at a rapid clip, most of them are now very incremental updates. It makes sense that the company is looking at how it can expand AWS into new areas (or at least new for Amazon), and many of those involve going beyond developer services and APIs.

Amazon is nothing if not a very ambitious company and that’s on display right now with the launch of the Fire Phone and these new web services. That may irk some of its competitors in these spaces, but that’s probably not something Amazon is all that worried about.

Friday, July 11, 2014

647,000 Comments Have Been Sent To The FCC About Net Neutrality. Keep Them Coming.

In just a few months, the FCC is expected to enact new rules that would allow (or, perhaps more accurately, fail to disallow) ISPs to provide “fast lanes” for companies who could afford to cough up the dough.

When ISPs are able to decide which site’s data moves the fastest, competition becomes a matter of who is willing/able to spend the most. Big companies like Netflix, ESPN, and Disney lose. Startups lose. You lose. Everyone loses (besides the ISPs).

The open Internet is in danger â€" but how many people actually care?

647,000, give or take.

That’s the number of comments that FCC Chairman Tom Wheeler says they’ve received so far.

Keep’em coming.

In four days, the commenting process enters the “reply” phase. At that point, this first batch of comments become public. You’ll be able to read what others have commented, and voice your support/disagreement.

Need a refresher on why this matters? Watch the video up top, in which John Oliver breaks it down better than just about anyone could.

Crooks Reainmate A Dead Botnet To Target High-Value Bank Accounts

In something that sounds like the plot of a Hollywood movie, hackers have reanimated an apparently dead botnet called Gameover Zeus even as malware researchers dismantled the previous version of the network. The botnet, essentially a collection of zombie computers that can be activated to perform denial of service attacks on banks and other financial firms in order to hide thefts from account holders, was torn down in June.

According to Brian Krebs, the tools used to build the network have been slightly improved to allow them to recreate the network without the original command and control structure. He writes:

Warner said the original Gameover botnet that was clobbered last month is still locked down, and that it appears whoever released this variant is essentially attempting to rebuild the botnet from scratch. “This discovery indicates that the criminals responsible for Gameover’s distribution do not intend to give up on this botnet even after suffering one of the most expansive botnet takeovers and takedowns in history,” [Gary Warner of Malcovery] said.

The network is just one part of the criminal scam. First, hackers break into a bank account â€" they’ve allegedly taken $100 million so far â€" to grab the cash, transferring it to their own accounts. While this is happening, the hackers point the botnet at the user’s own servers to prevent them from seeing the theft until it is too late. The Gameover Zeus botnet, then, is a sort of smoke screen to keep things under cover until the hack is over.

Malcovery has a complete rundown of the botnet and shows the spam that it sends to lure users and the fake files it uses to hack into zombie computers.

The original botnet died when law enforcement took over the command and control domain names. Now, however, the new botnet uses seemingly random domain names for command and control. As Malcovery writes, “this discovery indicates that the criminals responsible for GameOver’s distribution do not intend to give up on this botnet even after suffering one of the most expansive botnet takeovers/takedowns in history.” It’s a fascinating look at a powerful DDoS tool and the lengths crooks will go to keep these things alive.

Apple Spent Over $3B With 7,000 U.S. Small Businesses In 2013

Today, Apple SVP of Operations, Jeff Williams attended a meeting with President Obama as the company signs the White House’s ‘SupplierPay’ initiative. The program, which also includes a financing component, is essentially an agreement by companies like Apple, Nissan, Rolls Royce and more to pay its small business suppliers faster â€" so that they can reinvest funds into growth.

SupplierPay is an evolution of QuickPay, which required federal agencies to pay small businesses within 15 days. SupplierPay applies this to the private sector, where manufacturers will fork over cash quicker to suppliers and investment companies will help them get lower-cost capital.

Basically, this is an attempt to get companies that can afford it to return cash flow to small or ‘diverse’ businesses quicker to let them spend that money, rather than it gathering interest in the coffers of a company like Apple.

One of the case studies highlighted by the White House is Metal Impact, a company that mills aluminum, one of Apple’s favorite materials â€" and the company that manufactures the Mac Pro’s distinctive cylindrical enclosure.

In fact, you can see Metal Impact’s aluminum mill at work in Apple’s video about the making of the Mac Pro from last year.

“Last year, Apple spent more than $3 billion with over 7,000 suppliers running small and diverse businesses, creating tens of thousands of U.S. jobs,” the company said in a statement.

This is the first time Apple has released these kinds of numbers related to its U.S. supply chain, which it has been building out recently.

“We are proud to be making Mac Pro in Austin, Texas, partnering with dozens of component and equipment suppliers from 23 states. The first thing customers notice when they look at a Mac Pro is the revolutionary cylindrical aluminum enclosure which comes from Metal Impact, a small company in Elk Grove Village, Illinois,” said Apple in a statement.

Apple says that Metal Impact was primarily working with aluminum in the automotive space before it came to them about working on the Mac Pro.

“Alongside their team we created an entirely new process and supply chain, conducting more than 40 experiments with ten different alloys on multiple aluminum mills.”

Apple says that working with Metal Impact on the Mac Pro created 18 new jobs and millions in revenue to the Illinois company, which was founded in 1959.

Metal Impact credits Apple for aiding in its economic recovery over the past few years â€" in which they’ve tripled their business.

“Apple’s role in our recovery has been significant in both our financial results and, perhaps more importantly, the innovation they have provoked,” the company said in a statement. “Apple believed in us and has totally changed the way we look at our business today. Our work with Apple has inspired us to do things that had never been done before. Together we created an entirely new manufacturing process and have built something that we never imagined possible.”

“We’re a tiny part of Apple’s incredible story but every time a customer looks at their Mac Pro, we hope they see the pride our team in Elk Grove Village put into making it.”

One factor to consider, of course, is that it is likely that some of those 7,000 suppliers actually outsource manufacturing or supply of their own to China â€" so not all of that money is staying here. Still, Apple contributing to the U.S. economy is good â€" and certainly makes for good PR at a time when the supply chain of tech giants like Apple and its rival Samsung have come under massive scrutiny.

The general thought behind QuickPay was that it would reduce costs to small businesses to the tune of ‘billions’ by reducing the amount of interest they paid out on loans taken to finance growth or continued manufacturing. The goal, of course, would be to generate economic growth without having to rely on Congress. Since 2011, QuickPay has generated ‘over $1B’ in cost savings for small contractors â€" at least according to the administration.

We’ll have to wait and see whether SupplierPay will generate similar gains for these small businesses. Jason Roys, president of consulting firm SDV International told the New York Times that a major contractor of theirs, IBM, already pays faster than other firms. Still, faster would be better.

“We’re small and cash flow is a major constraint,” Roys said. “If we’re paid sooner, that would allow us to more quickly reinvest our earnings.”

Apple’s SupplierPay agreement is one component of an ongoing campaign to promote the company’s spending inside the U.S. These efforts have likely been accelerated by talk over how much manufacturing the company outsources to China, as well as the continuing back and forth over whether Apple pays its due taxes in the U.S.. Cook has stated that Apple pays ‘every dollar we owe’.

In an interview with Politico early last year, Apple CEO Tim Cook said that the company had made a $100M investment in domestic manufacturing of what we now know to be the Mac Pro â€" and maybe future products.

“We’re going very deep in this project,” Cook said at the time, noting that some components would be manufactured in Arizona, Texas, Florida and Illinois, where Metal Impact is located.

Apple has also made a major investment in Sapphire glass production with GT Advanced Technologies, an Arizona company. That expanded Apple’s ‘Made In The USA’ efforts beyond silicon facilities it maintains in Texas.

Other tech companies that have signed on to the SupplierPay initiative include IBM, AT&T, Intuit, Ericsson and Philips.

Additional reporting by Jon Shieber.

CrunchWeek: The Latest Tinder Drama, The New New Microsoft, Lyft’s Struggles To Launch In NYC


It’s time for a new episode of CrunchWeek, the show that brings a few of us writers together to talk about the most interesting news stories from the past seven days in tech.

This time, Ryan Lawler, Anthony Ha and I discussed the latest installment in the ongoing story about trouble between the co-founders at Tinder, the new vision for Microsoft’s future from new CEO Satya Nadella, and Lyft’s struggle to launch its ridesharing service in New York City.

Microsoft Acquires Disaster Recovery Service InMage

Microsoft today announced that it has acquired InMage, a business continuity service that helps enterprises migrate their data between public and private clouds, replicate their on-premise assets in the cloud and recover their data in case things go awry. The financial details of the acquisition were not disclosed.

Microsoft is clearly interested in making Azure more interesting to enterprise customers. The company says this acquisition will help it provide hybrid cloud business continuity solutions for any customer IT environment, “be it Windows or Linux, physical or virtualized on Hyper-V, VMware or others.”

Specifically, however, the company’s corporate vice president for cloud and enterprise marketing Takeshi Numoto argues that this acquisition will help make Azure “the ideal destination for disaster recovery for virtually every enterprise server in the world.” With that, he also manages to get a little dig in at VMware, because in his view, this will also help VMware’s customers “explore their options to permanently migrate their applications to the cloud, this will also provide a great onramp.”

InMage’s existing Scout service will be integrated into the Azure Site Recovery service and InMage will enable data migration to Azure with Scout. Existing customers will be able to continue using the service, but going forward, new customers will acquire access to Scout through Azure’s Site Recovery service. It’s unclear what exactly will happen to InMage’s other offerings, including its InMage-4000 appliance, but according to a message on InMage’s site, all of the current products will continue to work as before.

San Jose-based InMage, which was founded in 2001, had previously raised at least $36 million in venture capital from firms like Hummer Winblad, Amidzad Partners and Intel Capital.

IMAGE BY Flickr USER Robert UNDER CC BY 2.0 LICENSE

Chinese State Media Renews Anti-Apple Rhetoric, Calls The iPhone A “National Security Concern”

Apple has faced a fair amount of state-sponsored criticism in China, a market where the prevailing powers have a stated goal of promoting more home-grown network and IT solutions. The Wall Street Journal reports that Apple’s iOS 7 poses a threat to national security because of its ‘Frequent Locations’ feature, which identifies and provides users a map of their oft-visited places, for the explicit purpose of improving various device functions.

This location information could be used to potentially sleuth out information about the state of affairs in China, including possibly “state secrets” according to Chinese researchers quoted in the report, which was broadcast on the state-run China Central Television network on Friday. CCTV has previously been critical of Apple, including when it accused the company of discriminatory practices against Chinese customers implied in its warranty policies. The People’s Daily also decried Apple’s customer service practices as “arrogant” last year, and Xinhua cited Apple as a cause behind students running up high-interest debt.

All of these campaign efforts have so far fallen on deaf ears; Apple’s consumer base in China is strong and growing stronger. Nevertheless, Apple CEO Tim Cook has shown himself willing to play ball with the criticism from Chinese media, warranted or not â€" last year he issued an apology in the form of a letter for the complaints by CCTV about its warranty practices, and promised to amend its policies accordingly.

In most cases, the concerns of the Chinese state-sponsored media appear to be overblown, and not without agenda, but that doesn’t mean they don’t have influence. Cook clearly recognizes that and has acted in the past to make changes accordingly, but we’ll have to see if Apple formulates a response to this fresh criticism as well.

The PC Market Has Its Strongest Quarter In Recent Memory

Personal computers, long an ailing member of the larger technology market had a strong second quarter. After consistent quarters of decline, the worldwide PC market was either up 0.1%, or down a modest 1.7% in the period, according to Gartner and IDC respectively. In the United States, the PC market was up around 7% in the quarter, again according to the two firms.

A growing PC market? Don’t be too surprised, the end support for Windows XP has driven business demand for new computers as aging systems were made obsolete by the final demise of the now-ancient operating system,

Estimates vary based on how the market is counted â€" IDC doesn’t count Windows-based tablets, but does count Chromebooks; Gartner is the opposite â€" but all told the massive declines that the market for personal computers has sustained all but stopped in the quarter, which saw around 75 million units sold.

That figure, of course, puts the PC market on a roughly 300 million unit run rate, in keeping with prior estimates.

The augurs here are good for constituent members of the PC market, such as Microsoft and Intel. Both companies declined to comment in the new PC market’s most recent performance. Intel recently raised its forecast for the quarter, as TechCrunch reported:

For the second quarter, Intel expects revenue of $13.7 billion, plus or minus $300 million. This is greater than its prior expectation of $13 billion, plus or minus $500 million. So, on the top and bottom, Intel could see revenue of $14 billion in the second quarter, up from its lowest prior guidance band of $12.5 billion.

At issue here is the short-term impact of the end of Windows XP which could, I think reasonably, provide a few quarters of lift for the PC market. After that, the steroid will wear off. Aside from XP itself, Gartner sees “stabilization” in PCs, and IDC sees “returning consumer interest.” Both could provide longer-term momentum for PCs.

I doubt that PC volume will return to its prior heights, given the growing popularity of mobile computing â€" it’s up to you want to want to count in the PC category, of course â€" but at the same time, it’s now clear that short-term cries of the end of PCs, and the rise of a permanent and exclusively post-PC market were wrong.

In January I wrote the following:

We need to keep close eyes on continuing declines in PC sales, but inside the next 8 quarters we could see a positive year-over-year period for PC sales. Something to think about.

According to Gartner, that was this quarter. I don’t think many expected to reach this point so quickly. If the market can match these results in the third quarter, we may have ourselves a trend.

IMAGE BY FLICKR USER DELL INC. UNDER CC BY 2.0 LICENSE (IMAGE HAS BEEN CROPPED) 

Loverly Gets Editorial With Launch Of New Content Hub

Loverly, the one-stop online shop for brides planning a wedding, has made an investment in their editorial content with the launch of a brand new content hub on the website and mobile app.

For the past 6 months or so, Loverly has been testing editorial content on the website with great success â€" the company says that 20 percent of the site’s traffic comes from editorial content.

For those of you who don’t already know, Loverly is a platform that brings together wedding vendors, photographers, brides, and anyone else interested in weddings to let users create Pinterest-style inspiration boards for their own big day. The platform is tied into 400,000 products from over 3,000 brands, making it one of the best places to start and finish the wedding planning process.

With the launch of the editorial content hub, Loverly is joining the ring with TheKnot, Brides, and Martha Stewart, who already provide tons of editorial content around brides, weddings, etc. The content on Loverly’s site will come not only from Loverly writers but also from their network of bloggers and contributors.

The launch will also include a redesigned home page that puts content front-and-center, along with a revamp of the site’s verticals so that content can surface easily based on the searches being performed on the site. These are categories like Wedding 101, Fashion, Beauty, Ideas, Guest Guide & Travel.

Here’s what CEO and founder Kellee Khalil had to say about it:

As we focus on building the largest ecosystem in bridal, content has become a huge part of our commerce & community strategy. We’re building a platform unlike anything else in the wedding industry; our new editorial section is the voice of a new generation of brides, grooms and guests.

A couple months ago, we heard from trusted sources that Loverly was raising a $2.5M round of funding, though we haven’t heard a peep since. It’s possible that this launch is part of a closed round, or that the round will be closed relatively soon.

Of course, only time will tell.

In the meantime, head on over to Loverly and check out the new content hub.

Google Agitates For Public Debate On Europe’s Right To Be Forgotten Ruling

Google has now announced the full compliment of Google-selected “experts” who will be sitting on an advisory committee it has established to help navigate the decision making process in the wake of the so-called right to be forgotten ruling in Europe.

It has published some names of committee members before, but there some new additions being confirmed today.

The backstory here is that, back in May, the European Court of Justice ruled that private individuals living in the European Union have the right, under European data protection law dating back to 1995, to ask search engines to de-index search results that are associated with their name if the information being flagged up is outdated or irrelevant.

Today, Google noted it has received removal requests “on all sorts of content” â€" listing the likes of “serious criminal records, embarrassing photos, instances of online bullying and name-calling, decades-old allegations, negative press stories, and more”.

The full complement of Google’s advisory committee on the rtbf issue is as follows:

  • Luciano Floridi â€" Professor of Philosophy and Ethics of Information at the University of Oxford, Senior Research Fellow and Director of Research at the Oxford Internet Institute, with research interests in the philosophy of information, the ethics of information, computer ethics, and the philosophy of technology
  • Sylvie Kauffmann â€" Editorial director at the French newspaper Le Monde, and also a contributing writer for the International New York Times Opinion section.
  • Lidia Kolucka-Zuk â€" A Yale World Fellow 2013 at Yale University. A lawyer by training, who has served as Executive Director for the Warsaw-based Trust for Civil Society in Central and Eastern Europe, and worked as a strategic advisor to the Polish Prime Minister on issues of state efficiency, reforms in the judicial and legal sectors and the creation of digital society in Poland.
  • Frank La Rue â€" UN Special Rapporteur for the Promotion and Protection of the Right to Freedom of Opinion and Expression of the UNHRC.
  • José-Luis Piñar â€" Doctor in Law. Former Director of the Spanish Data Protection Agency (2002-2007). Former Vice-Chairman of the European Group of Data Protection Commissioners (“Art. 29 Working Party Data Protection”) (2003-2007), Founder (2003) and former President of the Ibero-American Data Protection Network (2003-2007). Professor of Administrative Law, and Vice-Rector of International Relations at San Pablo-CEU University of Madrid. Founding partner at Piñar Mañas & Asociados Law Firm. He has published numerous works on data protection law including social networks and children’s privacy, and ECJ case law on the right to protection of personal data, in “BNA International. World Data Protection Report.” José-Luis was a member of the Expert’s Commission created by the Spanish Government for studying and analysing the Spanish Draft of Transparency and Access to Public Information Law.
  • Sabine Leutheusser-Schnarrenberger â€" A member of the German parliament for over 23 years and has served as the German Federal Justice Minister for a total of 8 years. Also a member of the Parliamentary Assembly on the Council of Europe for 7 years, where she was engaged in defending and protecting human rightsâ€"including the right to privacy, laid down in the European Convention on Human Rights as well as in UN conventions.
  • Peggy Valcke â€" Research professor at KU Leuven in Belgium, part-time professor at the European University Institute in Florence, Italy, and visiting professor at the University of Tilburg in the Netherlands. Her areas of expertise include legal aspects of media innovation, media pluralism, and the interaction between media/telecommunications regulation and competition law, and her research has included addressing media power, user-generated content, internet regulation, mobile and online television, e-publishing and online journalism, public service broadcasting and state aid, co- and self-regulation in the media, privacy in electronic communications and social networks.
  • Jimmy Wales â€" Founder and Chair Emeritus, Board of Trustees, Wikimedia Foundation, the non-profit corporation that operates the Wikipedia free online encyclopaedia and several other wiki projects. Founder, Wikia.com.
  • Eric Schmidt â€" Chairman of Google.
  • David C. Drummond â€" Senior vice president, corporate development and chief legal officer of Google.

Google started granting rtbf requests at the end of last month, but some of the early decisions it made looked a little un-thought-through, to put it charitably, given that Google subsequently reversed some of its de-indexing decisions. (A less charitable analysis is that Google is doing everything it can to make the law look unworkable â€" not least by making sure media outlets are made aware when it de-indexes a link to a story on their site, which has triggered a rash of articles declaiming the ruling as censorship.)

It’s fair to say that, so far, the application of rtbf requests has generated a media storm of outrage about ‘censorship’ of search results â€" a response that clearly chimes with Google’s own agenda.

Today, Google takes the next step in its strategy to manage the ECJ ruling, by convening a panel of experts who it says will weigh in on the issue its behalf to “help inform our evolving policies in this area”â€" and likely also encourage the public to weigh in.

Google said the council will hold public consultations in Europe this fall, which it said it intends to stream live and record, and will subsequently publish its findings.

It adds:

The council will also invite contributions from government, business, media, academia, the technology sector, data protection organizations and other organizations with a particular interest in the area, to surface and discuss the challenging issues at the intersection of the right to know and the right to privacy.

We also hope the Advisory Council’s findings will also be useful to others that may be affected by the court’s ruling. We all have a shared interest in giving proper effect to the Court’s decision, finding the best possible balance on this issue.

We already know the views of one member of the committee, Jimmy Wales, who told TechCrunch last month that the rtbf ruling is a “terrible danger”, and called for a First Amendment style US provision to be implemented into European law to protect free speech.

But it’s fair to say that Google has sought a balance of views for the committee as a whole â€" something it should be noted that Wales himself called for â€" with independent experts in data protection law, philosophy and ethics, media pluralism and regulation who may not be quite as sympathetic to Google’s view as Wales is, or indeed as the two insider Mountain View members (Schmidt and Drummond) obviously are.

What remains to be seen is how much influence these other members of the committee will have on Google’s decision and policies, given that the company has a fully formed opinion on the rtbf ruling already. Some committee members may be at risk of sitting in seats merely to lend credibility to a process of anti-European data protection law lobbying â€" couched as public debate. (Although, given that at least some of the consultations are going to be held in public, there will hopefully be a chance to hear all views aired, not just those that chime with Google’s own.)

Google’s Drummond published an opinion piece in the Guardian newspaper yesterday, acknowledging that the rtbf is a “complex” issue, and characterizing Google’s disagreement with the ruling as being on freedom of expression and opinion grounds, and because of the discrepancy it creates â€" whereby someone could find an article on a news website but would not be able to find that same article on Google.

He didn’t, of course, make any specific mention of Google’s ad-fueled business in explaining Mountain View’s opposition to the ruling, but the fact Google is a business with commercial interests to defend is a key part of what’s at stake here.

Bottom line: Google benefits from more information being public and searchable on Google, and from people viewing its search engine as a comprehensive index of information available on the Internet. Both are potentially threatened if private individuals have some say in how Google’s index can function as it relates to their personal information.

Although Drummond admitted there are “no easy answers” to what he described as a “complex issue” in his Guardian piece, in the same article he also cherrypicked some less nuanced examples (such as “former politicians wanting posts removed that criticise their policies in office” and “serious, violent criminals asking for articles about their crimes to be deleted”) â€" painting the debate in Google’s primary colours.

What’s clear is that Google is couching its legal duty in making rtbf decisions as an either or requirement to “weigh, on a case-by-case basis, an individual’s right to be forgotten with the public’s right to know”. However that mischaracterizes what’s at stake here, because the ruling was always about the rights of private individuals, and specifically not about helping public figures edit their public record.

In addition to announcing its full complement of advising experts today, Google is also soliciting public views on the ruling â€" with an online form asking people to “tell us your thoughts” â€" but again it has boiled the complexities down to an oversimplified question that’s obviously seeking to shape the kind of responses Google gets from a public petition so they say ‘the law is an ass’.

Google is asking: “How should one person’s right to be forgotten be balanced with the public’s right to know?”

Another, less self-serving, way to pose the question for the public might be: ‘Should un-famous people have the right to remove old irrelevant links?’

Or even: ‘Can the rights of private individuals be protected from Google’s business interests?’

Thursday, July 10, 2014

Silicon Valley’s Real Estate Crunch Is A Golden Opportunity For Other American Cities

huntsville-alabama

Curse CEO Hubert Thieblot moved his company headquarters to “Rocket City” Huntsville, Alabama from San Francisco last year.

When Curse CEO Hubert Thieblot told his employees last year that he was moving the company’s San Francisco headquarters to Huntsville, Alabama last year, they thought he was crazy.

About 20 of his employees quit because they didn’t want to relocate.

“It was very controversial,” said Thieblot, who had lived and run the company out of San Francisco for at least five years. “A lot of people did not like me for that decision.”

But today, the profitable, 110-person person company operates out of an Alabama city with a population of just under 200,000 people and the highest number of Ph.Ds per square mile given Huntsville’s history with NASA as the nation’s “Rocket City.” Curse just closed $16 million in funding earlier this week too from the China-centric venture firm GGV Capital.

“If you want to build a long-term company, you might have a better chance of keeping people outside of San Francisco,” Thieblot said. “The job market is too crazy here.”

Indeed, the cost of living and commercial real estate is also pricing smaller startups out of San Francisco. I’m seeing bootstrapped founders, who have yet to a take full round of funding, trickle into surrounding cities like Oakland, Daly City and the Bayview neighborhood of San Francisco, if they’re not considering urban hubs in other parts of the country altogether.

Jon Wheatley, a British entrepreneur who co-founded DailyBooth, wrote a good post about this when he decamped for St. Louis, Missouri to dream up new projects.

“If you’re trying to bootstrap, being based in San Francisco is awful,” he said. “The leading cause of startup death is running out of money. Moving to a cheap city and doubling (or more!) your company’s runway will more than likely vastly increase your chances of eventual success.”

Are we supposed to cry for these entrepreneurs, like the teachers, public servants, artists and the elderly who have already faced several decades of gentrification in San Francisco?

Um, no. Not really.

From a national perspective, it’s a good thing to see these job opportunities become more geographically diversified. (I mean, did you see the first quarter U.S. GDP numbers?! The economy contracted at an annualized pace of 2.9 percent.)

While the rest of the country is only starting to see the kind of job recovery that may make the Federal Reserve finally raise interest rates later this year, the San Francisco Bay Area is bursting at the seams.

The city is at its highest employment levels ever and the population is expected to reach 1 million people by 2032. The city grew by 32,207 people between 2010 and 2013, but only added 4,776 housing units in the same period. Hence, our housing crisis.

Similarly, commercial rents are nearing dot-com period highs. The Information reported last week that the average price per square foot for so-called Class A office space in San Francisco is $64.45, just shy of the dot-com bubble peak of $67.20 in the third quarter of 2000.

Commercial real estate developers are all scrambling to get their projects entitled as quickly as possible before they run into a nearly twenty-year-old San Francisco law called Prop M, that caps the amount of office space that can be built in a given time period.

Many startups are coping by operating distributed teams, with one founder here in Silicon Valley and another working with engineers in a different part of the country (or world).

Jason Citron, a veteran founder who sold OpenFeint to GREE for $104 million two years ago and is backed by Benchmark in his new hardcore tablet gaming company Hammer & Chisel, works in Burlingame while his co-founder Brandon Kitkouski is based around Dallas.

“His family’s in Texas. He’s got a nice house. If he had it in the Bay Area, it would cost millions of dollars,” Citron said. “He was commuting for awhile, but that was hard. The Bay Area is at capacity. It’s freaking expensive.” (And by the way, why is housing affordable in Texas? Houston had more housing starts than all of California in the first quarter of this year. Am I saying we should be Houston? No. I’m just pointing out policy trade-offs.)

Similarly, Jen Lu, who started YC-backed toy company ZowPow, splits her startup between San Francisco and Portland. Her co-founder Brian Krejcarek moved back to Oregon after living in San Francisco for many years.

“It’s been a good thing for us,” she said. “We’ve been looking to hire engineers and it’s just really hard to do it here because it’s so competitive and expensive. But he has a network and is able to find talent there.”

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Andreessen Horowitz is incubating Teleport, a “search engine for digital nomads” that helps knowledge workers maximize their quality of life through re-location.

Some of the Valley’s best-known investors are also encouraging geographic diversification. Andreessen Horowitz is incubating a startup called Teleport, which will help knowledge workers improve their quality of life by moving to places that maximize the difference between their cost of living and take-home pay. Marc Andreessen recently published an essay in Politico, arguing that other regions across the U.S. should remove regulatory hurdles around specific technologies they want to attract â€" be they self-driving car, stem cell or Bitcoin-related startups.

Is this bad for the Valley over the long-run?

Between giants like Google, Facebook and Apple and then later-stage companies like Uber, Square, Dropbox and Twitter, the region has a healthy mix of employers.

Yet the heated real estate market favors capital-rich, growth-stage companies right now, often at the expense of other kinds of creative experimentation, be it a longstanding artist’s collective or a not-yet-Ramen-profitable entrepreneur. The cost of living and the competition for talent simply doesn’t give startups a lot of time to find product-market fit here unless they’ve raised a lot of capital.

In contrast, Google, founded in 1998, and Facebook, founded in 2004, came of age when the Valley was weathering slower economic times and it was easier and cheaper to form a cluster of AAA technical talent inside any single company.

Is that worrisome? Maybe a little. When you look at other cities that have historically been dependent on a single industry like Detroit, the population declines started after power consolidated to a handful of companies like GM, Ford and Chrysler, which then began distributing their plants around the country in the 1950s to avoid the risk of production disruptions from worker strikes. (These changes predated competition from Asian auto manufacturers by at least a generation.) Ideally, you want a mix of firm sizes, and younger and older companies.

But ultimately, these things come and go in waves, and the Bay Area is an undeniably attractive place to live no matter what. A decade ago, the world’s leading mobile OS was built out of Helsinki by Nokia. Today, both of the world’s leading mobile OSs, Android and iOS, are here in Silicon Valley.

Cities have to maintain a certain equilibrium between people moving out and people moving in. Right now, the escalating costs and sheer limits of Bay Area’s housing and transit infrastructure are tilting that balance back out to the rest of the country.

So if you’re a mayor of another U.S. city and you want to attract jobs, now would be a good time to drop by a Y Combinator or 500 Startups demo day to make a pitch.

We have our hands full.