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Tech giants offer empty apologies because users can’t quit

A true apology consists of a sincere acknowledgement of wrong-doing, a show of empathic remorse for why you wronged and the harm it caused, and a promise of restitution by improving ones actions to make things right. Without the follow-through, saying sorry isn’t an apology, it’s a hollow ploy for forgiveness.
That’s the kind of “sorry” we’re getting from tech giants — an attempt to quell bad PR and placate the afflicted, often without the systemic change necessary to prevent repeated problems. Sometimes it’s delivered in a blog post. Sometimes it’s in an executive apology tour of media interviews. But rarely is it in the form of change to the underlying structures of a business that caused the issue.
Intractable Revenue
Unfortunately, tech company business models often conflict with the way we wish they would act. We want more privacy but they thrive on targeting and personalization data. We want control of our attention but they subsist on stealing as much of it as possible with distraction while showing us ads. We want safe, ethically built devices that don’t spy on us but they make their margins by manufacturing them wherever’s cheap with questionable standards of labor and oversight. We want groundbreaking technologies to be responsibly applied, but juicy government contracts and the allure of China’s enormous population compromise their morals. And we want to stick to what we need and what’s best for us, but they monetize our craving for the latest status symbol or content through planned obsolescence and locking us into their platforms.

The result is that even if their leaders earnestly wanted to impart meaningful change to provide restitution for their wrongs, their hands are tied by entrenched business models and the short-term focus of the quarterly earnings cycle. They apologize and go right back to problematic behavior. The Washington Post recently chronicled a dozen times Facebook CEO Mark Zuckerberg has apologized, yet the social network keeps experiencing fiasco after fiasco. Tech giants won’t improve enough on their own.
Addiction To Utility
The threat of us abandoning ship should theoretically hold the captains in line. But tech giants have evolved into fundamental utilities that many have a hard time imagining living without. How would you connect with friends? Find what you needed? Get work done? Spend your time? What hardware or software would you cuddle up with in the moments you feel lonely? We live our lives through tech, have become addicted to its utility, and fear the withdrawal.
If there were principled alternatives to switch to, perhaps we could hold the giants accountable. But the scalability, network effects, and aggregation of supply by distributors has led to near monopolies in these core utilities. The second-place solution is often distant. What’s the next best social network that serves as an identity and login platform that isn’t owned by Facebook? The next best premium mobile and PC maker behind Apple? The next best mobile operating system for the developing world beyond Google’s Android? The next best ecommerce hub that’s not Amazon? The next best search engine? Photo feed? Web hosting service? Global chat app? Spreadsheet?
Facebook is still growing in the US & Canada despite the backlash, proving that tech users aren’t voting with their feet. And if not for a calculation methodology change, it would have added 1 million users in Europe this quarter too.
One of the few tech backlashes that led to real flight was #DeleteUber. Workplace discrimination, shady business protocols, exploitative pricing and more combined to spur the movement to ditch the ridehailing app. But what was different here is that US Uber users did have a principled alternative to switch to without much hassle: Lyft. The result was that “Lyft benefitted tremendously from Uber’s troubles in 2018” eMarketer’s forecasting director Shelleen Shum told the USA Today in May. Uber missed eMarketer’s projections while Lyft exceeded them, narrowing the gap between the car services. And meanwhile, Uber’s CEO stepped down as it tried to overhaul its internal policies.
This is why we need regulation that promotes competition by preventing massive mergers and giving users the right to interoperable data portability so they can easily switch away from companies that treat them poorly
But in the absence of viable alternatives to the giants, leaving these mainstays is inconvenient. After all, they’re the ones that made us practically allergic to friction. Even after massive scandals, data breaches, toxic cultures, and unfair practices, we largely stick with them to avoid the uncertainty of life without them. Even Facebook added 1 million monthly users in the US and Canada last quarter despite seemingly every possible source of unrest. Tech users are not voting with their feet. We’ve proven we can harbor ill will towards the giants while begrudgingly buying and using their products. Our leverage to improve their behavior is vastly weakened by our loyalty.
Inadequate Oversight
Regulators have failed to adequately step up either. This year’s congressional hearings about Facebook and social media often devolved into inane and uninformed questioning like how does Facebook earn money if its doesn’t charge? “Senator, we run ads” Facebook CEO Mark Zuckerberg said with a smirk. Other times, politicians were so intent on scoring partisan points by grandstanding or advancing conspiracy theories about bias that they were unable to make any real progress. A recent survey commissioned by Axios found that “In the past year, there has been a 15-point spike in the number of people who fear the federal government won’t do enough to regulate big tech companies — with 55% now sharing this concern.”

Regulation could protect Facebook, not punish it

When regulators do step in, their attempts can backfire. GDPR was supposed to help tamp down on the dominance of Google and Facebook by limiting how they could collect user data and making them more transparent. But the high cost of compliance simply hindered smaller players or drove them out of the market while the giants had ample cash to spend on jumping through government hoops. Google actually gained ad tech market share and Facebook saw the littlest loss while smaller ad tech firms lost 20 or 30 percent of their business.
Europe’s GDPR privacy regulations backfired, reinforcing Google and Facebook’s dominance. Chart via Ghostery, Cliqz, and WhoTracksMe.
Even the Honest Ads act, which was designed to bring political campaign transparency to internet platforms following election interference in 2016, has yet to be passed even despite support from Facebook and Twitter. There’s hasn’t been meaningful discussion of blocking social networks from acquiring their competitors in the future, let alone actually breaking Instagram and WhatsApp off of Facebook. Governments like the U.K. that just forcibly seized documents related to Facebook’s machinations surrounding the Cambridge Analytica debacle provide some indication of willpower. But clumsy regulation could deepen the moats of the incumbents, and prevent disruptors from gaining a foothold. We can’t depend on regulators to sufficiently protect us from tech giants right now.
Our Hope On The Inside
The best bet for change will come from the rank and file of these monolithic companies. With the war for talent raging, rock star employees able to have huge impact on products, and compensation costs to keep them around rising, tech giants are vulnerable to the opinions of their own staff. It’s simply too expensive and disjointing to have to recruit new high-skilled workers to replace those that flee.
Google declined to renew a contract with the government after 4000 employees petitioned and a few resigned over Project Maven’s artificial intelligence being used to target lethal drone strikes. Change can even flow across company lines. Many tech giants including Facebook and Airbnb have removed their forced arbitration rules for harassment disputes after Google did the same in response to 20,000 of its employees walking out in protest.
Thousands of Google employees protested the company’s handling of sexual harassment and misconduct allegations on Nov. 1.
Facebook is desperately pushing an internal communications campaign to reassure staffers it’s improving in the wake of damning press reports from the New York Times and others. TechCrunch published an internal memo from Facebook’s outgoing VP of communications Elliot Schrage in which he took the blame for recent issues, encouraged employees to avoid finger-pointing, and COO Sheryl Sandberg tried to reassure employees that “I know this has been a distraction at a time when you’re all working hard to close out the year — and I am sorry.” These internal apologizes could come with much more contrition and real change than those paraded for the public.
And so after years of us relying on these tech workers to build the product we use every day, we must now rely that will save us from them. It’s a weighty responsibility to move their talents where the impact is positive, or commit to standing up against the business imperatives of their employers. We as the public and media must in turn celebrate when they do what’s right for society, even when it reduces value for shareholders. If apps abuse us or unduly rob us of our attention, we need to stay off of them.
And we must accept that shaping the future for the collective good may be inconvenient for the individual. There’s an oppprtunity here not just to complain or wish, but to build a social movement that holds tech giants accountable for delivering the change they’ve promised over and over.

For more on this topic:

Internal Facebook memo sees outgoing VP of comms Schrage take blame for hiring Definers

The real threat to Facebook is the Kool-Aid turning sour

Google walkout organizers aren’t satisfied with CEO’s response

Facebook and the endless string of worst-case scenarios

Tech giants offer empty apologies because users can’t quit

Snapchat shares hit all-time low as search acquisition Vurb’s CEO bails

Snapchat’s sagging share price is making it tough to retain talent. Bobby Lo, founder and CEO of mobile search app Vurb that Snap Inc acquired for $114.5 million two years ago is leaving day-to-day operations at the company. That means Lo cut out early on his four-year retention package vesting schedule, which was likely influenced by Snapchat falling to new share price lows. Snap is trading around $9.15 today, compared to its $17 IPO price and $24 first-day close.
That’s down over 7 percent from yesterday following BTIG analyst Rich Greenfield gave Snap a sell rating with a target price of $5 saying “We are tired of Snapchat’s excuses for missing numbers and are no longer willing to give management ‘time’ to figure out monetization.” Greenfield is known as one of the top social network analysts, so people take him seriously when he says “We have been disappointed in SNAP’s product evolution (as have users) and see no reason to believe this will change.”

Vurb is a good example of this. The app let users make plans with friends to visit local places, allowing them to bundle restaurants, movie theaters, and more into shareable decks of search cards. It took over a year after the October 2016 acquisition for the tech to be integrated into Snapchat in the form of context cards in search. But Snap never seemed to figure out how to make its content-craving teen audience care about Vurb’s utility. Snap could have built powerful offline meetup tools out of the cards but never did, and lackluster Snap Map adoption furthered clouded the company’s path forward around local businesses.

Now Lo tells TechCrunch of his departure, “Building experiences at Snap has been a wonderful culmination of my seven-year startup journey with Vurb. My transition to an advisor at Snap lets me continue supporting the amazing people there while directing my time back into startups, starting with investing and advising in founders.”
Lo was early to embrace the monolithic app style pioneered by WeChat in China that’s become increasingly influential in the states. Snap confirmed the departure while trying to downplay it. A spokesperson tells me, “Bobby transitioned to an advisory role this summer, and we appreciate his continued contributions to Snap.”
Given Snap is known to back-weight its stock vesting schedules, Lo could be leaving over half of his retention shares on the table. That decision should worry investors. As a solo founder, Lo already made off with a big chunk of the acquisition price that including $21 million in cash and $83 million in stock, so with the company’s share price so low, he might have had little incentive to stay.
 
Snapchat Context Cards built from Vurb’s acquired technology
Since last July, Snap has lost a ton of talent including SVP of Engineering Tim Sehn, early employee Chloe Drimal, VP of HR and Legal Robyn Thomas and VP of Securities and Facilities Martin Lev, CFO Drew Vollero, VP of product Tom Conrad, TimeHop co-founder Jonathan Wegener, Spectacles team lead Mark Randall, ad tech manager Sriram Krishnan, head of sales Jeff Lucas, and just last week, its COO Imran Khan.
With its user count shrinking, constant competition from Facebook and Instagram, and talent fleeing, it’s hard to see a bright future for Snap. Unless CEO Evan Spiegel, without the help of his departed lieutenants, can come up with a groundbreaking new product that’s not easy to copy, we could be looking at downward spiral for the ephemeral app. At what point must Snap consider selling itself to Google, Apple, Tencent, Disney, or whoever will take on the distressed social network?

Snapchat shares hit all-time low as search acquisition Vurb’s CEO bails

Coinbase acquires Distributed Systems to build ‘Login with Coinbase’

Coinbase wants to be Facebook Connect for crypto. The blockchain giant plans to develop “Login with Coinbase” or a similar identity platform for decentralized app developers to make it much easier for users to sign up and connect their crypto wallets. To fuel that platform, today Coinbase announced it has acquired Distributed Systems, a startup founded in 2015 that was building an identity standard for dApps called the Clear Protocol.
The five-person Distributed Systems team and its technology will join Coinbase. Three of the team members will work with Coinbase’s Toshi decentralized mobile browser team, while CEO Nikhil Srinivasan and his co-founder Alex Kern are forming the new decentralized identity team that will work on the Login with Coinbase product. They’ll be building it atop the “know your customer” anti-money laundering data Coinbase has on its 20 million customers. Srinivasan tells me the goal is to figure out “How can we allow that really rich identity data to enable a new class of applications?”

Distributed Systems had raised a $1.7 million seed round last year led by Floodgate and was considering raising a $4 million to $8 million round this summer. But Srinivasan says, “No one really understood what we’re building,” and it wanted a partner with KYC data. It began talking to Coinbase Ventures about an investment, but after they saw Distributed Systems’ progress and vision, “they quickly tried to move to find a way to acquire us.”
Distributed Systems began to hold acquisition talks with multiple major players in the blockchain space, and the CEO tells me it was deciding between going to “Facebook, or Robinhood, or Binance, or Coinbase,” having been in formal talks with at least one of the first three. Of Coinbase the CEO said, they “were able to convince us they were making big bets, weaving identity across their products.” The financial terms of the deal weren’t disclosed.

Coinbase’s plan to roll out the Login with Coinbase-style platform is an SDK that others apps could integrate, though that won’t necessarily be the feature’s name. That mimics the way Facebook colonized the web with its SDK and login buttons that splashed its brand in front of tons of new and existing users. This turned Facebook into a fundamental identity utility beyond its social network.
Developers eager to improve conversions on their signup flow could turn to Coinbase instead of requiring users to set up whole new accounts and deal with crypto-specific headaches of complicated keys and procedures for connecting their wallet to make payments. One prominent dApp developer told me yesterday that forcing users to set up the MetaMask browser extension for identity was the part of their signup flow where they’re losing the most people.
This morning Coinbase CEO Brian Armstrong confirmed these plans to work on an identity SDK. When Coinbase investor Garry Tan of Initialized Capital wrote that “The main issue preventing dApp adoption is lack of native SDK so you can just download a mobile app and a clean fiat to crypto in one clean UX. Still have to download a browser plugin and transfer Eth to Metamask for now Too much friction,” Armstrong replied “On it :)”

On it 🙂
— Brian Armstrong (@brian_armstrong) August 15, 2018

In effect, Coinbase and Distributed Systems could build a safer version of identity than we get offline. As soon as you give your Social Security number to someone or it gets stolen, it can be used anywhere without your consent, and that leads to identity theft. Coinbase wants to build a vision of identity where you can connect to decentralized apps while retaining control. “Decentralized identity will let you prove that you own an identity, or that you have a relationship with the Social Security Administration, without making a copy of that identity,” writes Coinbase’s PM for identity B. Byrne, who’ll oversee Srinivasan’s new decentralized identity team. “If you stretch your imagination a little further, you can imagine this applying to your photos, social media posts, and maybe one day your passport too.”
Considering Distributed Systems and Coinbase are following the Facebook playbook, they may soon have competition from the social network. It’s spun up its own blockchain team and an identity and single sign-on platform for dApps is one of the products I think Facebook is most likely to build. But given Coinbase’s strong reputation in the blockchain industry and its massive head start in terms of registered crypto users, today’s acquisition well position it to be how we connect our offline identity with the rising decentralized economy.

What the Facebook Crypto team could build

Coinbase acquires Distributed Systems to build ‘Login with Coinbase’

Former Viki CEO Tammy Nam joins PicsArt as its first COO

PicsArt, the company behind the photo-editing app of the same name, has hired Tammy Nam as its first chief operating officer.
Nam was most recently the CEO of Viki, the Rakuten-acquired video streaming service, and before that served as a marketing executive at Viki, Scribd and Slide.
PicsArt said Nam will report to founder and CEO Hovhannes Avoyan, and that she will oversee all aspects of the business except for product and engineering.
“PicsArt has grown organically so far, but our next big opportunity is in directing this growth through the right market development, community engagement and revenue channels,” Avoyan said in the announcement. “In addition to her proven operational experience in both consumer advertising and subscription-based businesses, Tammy adds deep bench strength in market, brand and community development — areas that will be critical for us moving forward.”
The company announced last year that it’s reaching 100 million monthly active users. Nam told me she was particularly impressed that it achieved that growth without significant marketing spend.
“I understand what it takes to grow quickly, but also thoughtfully,” she said. “Because of my background, the CEO and the board felt like I would be a great match to [help PicsArt] reach the next 200 million, the next 500 million users.”

Asked what thoughtful growth looks like for PicsArt, Nam said it means not just growing at any cost, but also considering things like revenue and the different communities using the app. She said she’s trying to examine the company’s structure to ensure it can “maximize efficiencies towards these big goals.”
“It will continue to grow organically, but the branding, the user development will definitely evolve,” she added. “There’s a sea of companies that play in our space … How do you stand out? And how do you stay relevant?”
Nam also said that she’ll be looking at PicsArt’s opportunities for international growth. Not that the company has been neglecting the world beyond the United States — China is its fastest-growing market and already one of its top countries for revenue. (The company says it recently became profitable following the launch of its PicsArt Gold subscription.)
Nam suggested that PicsArt can move into new markets without competing with the dominant social media platforms, because it’s “agnostic” in terms of where users publish their edited photos.
“It’s completely lowered the barrier,” she said. “It used to be you had to know Photoshop. Now it’s so easy to create professional-looking photos, images and soon animations, videos, etc. Everyone is a creator.”

Former Viki CEO Tammy Nam joins PicsArt as its first COO

Dating app Hinge is ditching the Facebook login requirement

Hinge, the dating app that promised a better set of prospects by suggesting matches who share Facebook friends, is about to radically change its course: it’s ditching its requirement that users log in with Facebook. The change will go into effect on Monday, June 5th on Android, followed by a June 12th release on iOS.
While the option to use Facebook won’t be fully removed, users will instead be able to choose to authenticate using their phone number, the company says.
The decision was prompted by ongoing requests from users who have asked for a non-Facebook login option, Hinge founder and CEO Justin McLeod says. This is especially important to the company as people “move away from Facebook and onto other platforms,” he notes.
This may refer to younger users’ preference for different social platforms, as reflected by a Pew Internet survey released this week, which found that teens are dumping Facebook proper for YouTube, Snapchat and (Facebook-owed) Instagram. 
But Hinge isn’t the first dating app to go this route. Bumble also recently said it was removing the Facebook requirement, in response to user feedback.

In Hinge’s case, however, the decision changes the dating app’s fundamental value proposition, which was focused on matching singles with people they were already connected to by way of Facebook friends, up to three degrees away. The premise was that this would make online dating feel less creepy. And, because you shared mutual friends, you’d be less concerned that the person was a total nut.
This also helped Hinge stand out in a space that’s dominated by Tinder, which could often seem random and filled with those not in search of “real relationships,” let’s say.
Over the years, Hinge doubled down on this brand position with call-outs like “meet friends of friends, not randos” in its marketing materials.
Its user profiles, meanwhile, focus less on users’ looks — unlike the Hot or Not-ish Tinder. Instead, users answer getting-to-know-you questions and share fun, personality-revealing facts on their profile, along with photos and videos. But the goal is to present not just the person’s face or body, but their goals, interests and way they view the world.
Hinge had also experimented with features that make online dating less frustrating, ranging from anti-ghosting reduction features to an app that allows your friends to take over for you. (This has since shut down.)
It’s unclear how well these moves have paid off for Hinge in the long run, as the company won’t share user numbers. It will only say the active member base has doubled since the beginning of the year. However, Sensor Tower estimates Hinge has more than 3 million worldwide downloads across both iOS and Android, 94 percent of which are in the U.S.
The removal of the Facebook requirement, not at all coincidentally, comes at an interesting time for dating app businesses in general, which have just learned Facebook now aims to compete with them directly.
In May, Facebook announced a new dating feature that would allow people to meet non-friends. Hinge took notice, as did others.
“Facebook Dating Looks a Whole Lot Like Hinge,” wrote Wired, for example.

Our team watching the #f8 conference: pic.twitter.com/vCwP3qpgzE
— Hinge (@HingeApp) May 1, 2018

“It’s interesting to see a company facing so many privacy concerns enter one of the most intimate spaces in tech today,” McLeod says of Facebook’s dating plans. “We’re flattered they chose to copy our designs, but ultimately we’re not worried about them as a competitor – our members are increasingly moving away from Facebook as a platform.”
Burn. 
The updated Hinge app will offer users three ways to use Hinge: 1) they can continue to log in with Facebook as usual, 2) they can log in with their phone number, or 3) they can log in with a phone number, but use an option in the app to import select bio information from Facebook, for convenience.
After filling in the profile, users can disconnect from Facebook without losing the imported information, Hinge notes.
Hinge doesn’t believe the move away from Facebook as the underlying network will have an ill effect. Because of its robust profiles, which allow for the liking of individual pieces of content, it thinks its machine learning algorithms have advanced to the point where they can surpass “friends of friends” as a predictor of compatibility, the CEO says.
“Friends of friends is a symbol for what Hinge truly stands for: humanizing modern dating and fighting against the culture of shallow swiping,” says McLeod. “As the Hinge community continues to grow and evolve, we’re not relying on a single feature to best match our members; instead we’ll remain at the forefront of product development and double down on giving our members’ the best offline experience,” he adds.
It’s not hard to get on board with Hinge’s overall vision, but its app is still dwarfed by Tinder, which is now estimated to have more than 50 million users. Rival Bumble is growing as well, with some 22 million+ users. And because dating is ultimately a numbers game, Hinge needs the no-Facebook-needed policy to really boost its own.

Dating app Hinge is ditching the Facebook login requirement