Архив метки: Silicon Valley

Regulation could protect Facebook, not punish it

You know what tech startups hate? Complicated legal compliance. The problem is, Facebook isn’t a startup any more, but its competitors are.
There have been plenty of calls from congress and critics to regulate Facebook following the election interference scandal and now the Cambridge Analytica debacle. The government could require extensive ads transparency reporting or data privacy protections. That could cost Facebook a lot of money, slow down its operations, or inhibit its ability to build new products.
But the danger is that those same requirements could be much more onerous for a tiny upstart company to uphold. Without much cash or enough employees, and with product-market fit still to nail down, young startups might be anchored by the weight of regulation. It could prevent them from ever rising to become a true alternative to Facebook. Venture capitalists choosing whether to fund the next Facebook killer might look at the regulations as too high of a price of entry.
STANFORD, CA – JUNE 24: Facebook CEO Mark Zuckerberg (R) hugs U.S. President Barack Obama during the 2016 Global Entrepeneurship Summit at Stanford University on June 24, 2016 in Stanford, California. President Obama joined Silicon Valley leaders on the final day of the Global Entrepreneurship Summit. (Photo by Justin Sullivan/Getty Images)
The lack of viable alternatives has made the #DeleteFacebook movement toothless. Where are people going to go? Instagram? WhatsApp? The government already missed its chances to stop Facebook from acquiring these companies that are massive social networks in their own right.
The only social networks to carve out communities since Facebook’s rise did so largely by being completely different, like the ephemeral Snapchat that purposefully doesn’t serve as a web identity platform, and the mostly-public Twitter that caters to thought leaders and celebrities more than normal people sharing their personal lives. Blockchain-based decentralized social networks sound nice but may be impossible to spin up.
That’s left few places for Facebook haters to migrate. This might explain why despite having so many more users, #DeleteFacebook peaked last week at substantially fewer Twitter mentions than the big #DeleteUber campaign from last January, according to financial data dashboard Sentieo. Lyft’s existence makes #DeleteUber a tenable stance, because you don’t have to change your behavior pattern, just your brand of choice.

If the government actually wants to protect the public against Facebook abusing its power, it would need to go harder than the Honest Ads Act that would put political advertising on Internet platforms under the same scrutiny regarding disclosure of buyers as the rules for TV and radio advertising. That’s basically just extra paperwork for Facebook. We’ve seen regulatory expenses deter competition amongst broadband internet service providers and in other industries. Real change would necessitate regulation that either creates alternatives to Facebook or at least doesn’t inhibit their creation.
That could mean only requiring certain transparency and privacy protections from apps over a certain size, like 200 million daily users. This would put the cap a bit above Twitter and Snapchat’s size today, giving them time to prepare for compliance, while immediately regulating Facebook, Messenger, Instagram, WhatsApp, and Google’s social problem child YouTube.
Still, with Facebook earning billions in profit per quarter and a massive war chest built up, Mark Zuckerberg could effectively pay his way out of the problem. That’s why it makes perfect sense for him to have told CNN “I’m not sure we shouldn’t be regulated” and that “There are things like ad transparency regulation that I would love to see.” Particular regulatory hurdles amount to just tiny speed bumps for Facebook. Courting this level of regulation could bat down the question of whether it should be broken up or its News Feed algorithm needs to change.
Meanwhile, if the government instituted new rules for tech platforms collecting persona information going forward, it could effectively lock in Facebook’s lead in the data race. If it becomes more cumbersome to gather this kind of data, no competitor might ever amass an index of psychographic profiles and social graphs able to rival Facebook’s.

A much more consequential approach would be to break up Facebook, Instagram, and WhatsApp. Facebook is trying to preempt these drastic measures with Zuckerberg’s recent apology tour and its purchase of full-page ads in nine newspapers today claiming it understands its responsibility.
Establishing them as truly independent companies that compete would create meaningful alternatives to Facebook. Instagram and WhatsApp would have to concern themselves with actually becoming sustainable businesses. They’d all lose some economies of data scale, forfeiting the ability to share engineering, anti-spam, localization, ad sales, and other resources that a source close to Instagram told me it gained by being acquired in 2012, and that Facebook later applied to WhatsApp too.
Both permanent photo sharing and messaging would become two-horse races again. That could lead to the consumer-benefiting competition and innovation the government hopes for from regulation.
Yet with strong regulation like dismantling Facebook seeming beyond the resolve of congress, and weak regulation potentially protecting Facebook, perhaps it’s losing the moral high ground that will be Facebook’s real punishment.
Facebook chief legal officer Colin Stretch testifies before congress regarding Russian election interference
We’ve already seen that first-time download rates aren’t plummeting for Facebook, its App Store ranking has actually increased since the Cambridge Analytica scandal broke, and blue chip advertisers aren’t bailing, according to BuzzFeed. But Facebook relies on the perception of its benevolent mission to recruit top talent in Silicon Valley and beyond.
Techies take the job because they wake up each day believing that they’re having a massive positive influence by connecting the world. These people could have founded or worked at a new startup where they’d have discernible input on the direction of the product, and a chance to earn huge return multiples on their stock. Many have historically worked at Facebook because its ads say it’s the “Best place to build and make an impact”.
But if workers start to see that impact as negative, they might not enlist. This is what could achieve that which surface-level regulation can’t. It’s perhaps the most important repercussion of all the backlash about fake news, election interference, well-being, and data privacy: that losing talent could lead to a slow-down of innovation at Facebook that might  leave the door open for a new challenger.
For more on Facebook’s Cambridge Analytica scandal, read our feature pieces:

Zuckerberg’s response to Cambridge scandal omits why it delayed investigating

7 much scarier questions for Zuckerberg

Facebook and the endless string of worst-case scenarios

Regulation could protect Facebook, not punish it

Houzz raises a huge $400M round at a $4B valuation

 If you ask investors in Silicon Valley about Houzz — an app where you browse ridiculously nice homes and check out interesting interior design ideas — they’ll probably quietly mutter that they’re just growing their business. We really don’t hear about Houzz’s business that often. Except now the company says it has raised $400 million led by Iconiq Capital,… Read More

Houzz raises a huge $400M round at a $4B valuation

Silicon Valley’s Mobile Accelerator Tandem Capital Reveals Its Latest Batch Of Startups

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Tandem Capital, the Silicon Valley startup accelerator that focuses exclusively on early-stage mobile businesses, is today revealing the six companies that are participating in its most recent batch. The seed fund and accelerator raised its second, $32 million fund in June, which it uses to offer $200K convertible notes (in exchange for 10 percent equity) to the startups participating in its accelerator. Like other accelerators, Tandem works closely with its startups on everything from strategy to product design and marketing, offers free work space and daily meeting.

Unlike the many others in the space, however, it keeps its batches small (generally two to six teams) in the belief that smaller class sizes mean higher returns and success rates. Its program is also 6-months long, although this tends to be open-ended, as there’s no demo day or graduation day and entrepreneurs are given the choice to remain at Tandem’s headquarters after the program ends.

Tandem has been operating as a capital fund since 2007, having invested in and advised the teams behind Juice In The City, Playhaven, and Zumodrive, for example, and launched its mobile accelerator officially in July. Today, Tandem is pulling the curtain back on its second (and third) batches of six startups, and has opened up for submissions to its fall/winter class, with the deadline of October 1st. [You can find coverage of accelerator’s first batch here.]

The accelerator focused on incubating lean, mobile-oriented startups disrupting large markets but otherwise doesn’t put constraints on ideas its considers for investment. The accelerator’s latest batches are fairly wide-ranging. And although Tandem co-founder Doug Renert said the founders had made a decision not to invest in music-focused startups (for a number of good reasons), they broke that oath in their latest round, as you’ll see below.

The companies include:

  • A-Blast enables merchants to engage customers on their smartphones over the Wi-Fi channel, removing the need for customers to download or open an app.
  • Appington, founded by the engineer who built Rovio’s analytics framework, offers an audio platform to mobile game developers looking for instant and dramatic increases in their user monetization and retention.
  • Heyyolo is an endorsement service for apparel companies that turns their fans into spokespersons through the proliferation of user-generated photos.
  • Nusonix, a Canadian-based startup, is building a song-based messaging service that allows people to combine voice messages with their favorite tunes, all with the support of major record labels. Renert says that Nusonix has been a long time in the making, and although the team was hesitant at first, the team has apparently been working hard to get the business-side squared away so that it operates within the industry in a way that won’t encourage a million lawsuits. It helps that it has a number of record executives on its board. Tandem will be helping the team build out the product side.
  • Parkify was launched by former UC Berkeley students to provide a smartphone-based P2P marketplace for parking spots around college campuses.
  • QuadNode, an Indian startup, instantly turns any smartphone into a kid-friendly device, whether a child is borrowing a parent’s phone or a pre-teen is getting his or her first device.

These six teams were selected from hundreds of applicants and each company is still in stealth mode, but plan to release their products before the end of the year.

In addition, the first six companies backed by Tandem’s most recent fund have lined up their next respective rounds of funding, although not all of them have announced the closings yet. Stay tuned for that. This group includes BitRhymes, the producer of Bingo Bash, currently the no. 1 grossing app on the iPad; Sift, a tablet shopping app that uses email to instantly customize the experience; and UpOut, a next generation local event directory.

For more on Tandem and application submissions, find it here.


Silicon Valley’s Mobile Accelerator Tandem Capital Reveals Its Latest Batch Of Startups

Misfit Wearables, The Startup From Agamatrix’s Founders, Former Apple CEO John Sculley, Raises $7.6M

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Google Glass isn’t the only game in town.

Misfit Wearables, a wearable computing startup from the founding team of mobile health company Agamatrix and former Apple chief executive John Sculley, just raised $7.6 million in a round co-led by Founders Fund. The other notable firm in the deal isn’t disclosed, but we hear through a source that it’s Khosla Ventures.

Misfit isn’t saying too much about what it’s working on, except to say that the next generation of wearable devices shouldn’t compete with fashion, has to be ambient and has to have functions outside of sensing. It has to be the kind of thing a consumer wouldn’t need to remember to wear and ideally, it would be something that’s so critical that a person would go back home if they left it there.

“Wearables from the 1.0 era make people look like Iron Man,” said chief executive Sonny Vu.

The name of the company has a super-interesting backstory. Up until last fall, Vu, Sculley and his Agamatrix co-founder Sridhar Iyengar, were tossing around some pretty lackluster name ideas like Etherware. He, Iyengar and Sculley were sitting around at a table at the Rosewood on Menlo Park’s Sand Hill Road, having trouble deciding when news flashed that Steve Jobs had passed away.

“It was a real shame we never got them together after John’s departure from Apple, so we decided to name the company in honor of Steve,” Vu said.

The name Misfit Wearables is inspired by the opening line in the famous 1997 Apple commercial that launched the “Think Different” slogan: “Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes.”

The other thing that’s notable about the company is the team. Vu and Iyengar co-founded Agamatrix. It isn’t a household name in Silicon Valley, but it made the first medical device add-on that Apple approved for the iPhone. It’s a glucose meter that diabetes patients use to test their blood sugar levels regularly.

Over 10 years, Vu and Iyengar built it into a business that makes between $50 and 100 million per year through the sale of glucose test strips. The two of them started tinkering with glucose sensing technology, and found a way that was twice as accurate as the leading technology on the market purely through better math. Vu said since most research and development teams working on glucose sensing were led by biologists, his team could fix inefficiencies that experts from other disciplines couldn’t see. When Agamatrix originally entered the market, there were more than 30 competing products. Yet they managed to gain a foothold.

Then when the iPhone came out, they dreamed up a new concept: a glucose meter that would upload and track a patient’s blood sugar levels through an app. It took nine months of back-and-forth with Apple to get approved it for the iPhone. It also took a few years for them to get insurance companies and Medicare to cover the cost of glucose meters for diabetes patients. The FDA cleared it last December and pharmaceutical giant Sanofi-Aventis now markets it under the name iBG Star.

So for all of you who might complain about how hard it is start a mobile or Facebook app company, this was crazy hard!

Vu says he’s using the new round of funding to grow his team. He’s relocating to San Francisco from Boston where he’ll build a hardware and industrial design team locally. Then, interestingly enough, Misfit’s software team is located in Vietnam, because Vu found some world-class machine learning experts there that were trained in good U.S. technical Ph.D. programs like the one at University of Illinois-Urbana Champaign. (Honestly, this isn’t so crazy though. I run into companies every week that have serious development studios in Eastern Europe, Pakistan and East Asia.)

“We’re doing algorithms (machine learning) and app development in Vietnam because of speed, not just cost,” Vu said. “There’s lots of this kind of talent in Silicon Valley but they’re just not readily available, at least not to newcomers like us.”


Misfit Wearables, The Startup From Agamatrix’s Founders, Former Apple CEO John Sculley, Raises $7.6M

A Mid-Career Switch: From Massachusetts State Trooper to iOS Developer-To-The-Rescue

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After writing about Lovestagram, the app that Instagram co-founder Mike Krieger’s girlfriend made for him as a Valentine’s Day present, we didn’t think we could find a cuter story. But we totally did.

Smoopa, a mobile commerce app I wrote about yesterday, is also the by-product of a little love story. Derek Langton, who served as a Massachusetts state trooper for 18 years, picked up programming over the last year and a half to change his career and prove his ex-Googler husband and the company’s co-founder Mendel Chuang wrong.

“When you have an economy like the one we have now and when you’re trying to change career paths, it’s not easy,” Langton said. “But it comes down to motivation. It’s like losing weight. People try and fail. But when you see that it’s a lifestyle change and you make it part of who you are, you can be successful.”

Langton’s story is pretty interesting considering the way the local Silicon Valley economy seems to have divorced itself from the brutal employment market facing the rest of the country. In enclaves like Silicon Valley, it feels like the shortage of skilled workers is so intense that no number of H-1B visas could possibly fill it. And yet, in the rest of the country, there is an 8.2 percent unemployment rate. That’s nearly double the 4 to 5 percent range that the country hovered in before the 2008 financial crisis.

If the U.S. is going to fix its structural unemployment problems, it’s going to take mid-career people who are motivated enough to pick up technical skills and resources like Codecademy that will make it easier for them to do so.

So how and why did Langton do it?

After almost two decades of serving in the Massachusetts state police force, Langton felt like he wasn’t completely in love with police work anymore. He also saw how hard it was going to be for Chuang to do a startup from Boston, instead of Silicon Valley. Chuang was looking to co-found a mobile commerce company another MIT alum Charlie Sharp. The company is backed by SimplyHired’s co-founder and former chief technology officer Peter Weck, the original Google doodler Dennis Hwang and Nate Johnson, who leads consumer product marketing at LinkedIn.

But when Chuang, who used to work on AdSense while at Google, found himself short of developers, Langton stepped up. He’s been doing 80-hour weeks to pick up Cocoa and Objective C, his husband says. “He’s been mad-driven,” Chuang said of 42-year-old Langton. “The more I told him that iOS development was hard, the more he wanted to prove me wrong.”

Langton built the iOS version of Smoopa, a price check app that launched yesterday. It rewards shoppers when they share prices back from real-world stores. When they open the app, they can scan a barcode in the store. The app will pull up matching products from a database of 20 million items. The user picks one, and then they also find the store they’re in from a list of nearby places. If they share prices from the store, there’s a random chance they’ll get a reward of 50 cents or so that could go toward a gift card, rebate check or donation. The company earns affiliate revenue whenever a consumer makes a purchase through the app.

“Sometimes [Chuang] admits it’s even a little better than the Android version,” Langton joked.

Getting Langton’s skills up to snuff was a long process. He originally started out with watching computer science course videos from MIT and Stanford, but then he switched to watching YouTube tutorials from teenagers, like this one about how to use the camera integration in the iPhone.

“These kids are coding like mad scientists,” he said. “I found their videos to be some of the most user-friendly ones.”

He added, “I eat, drink and sleep iOS development. This is the kind of thing where either go or you don’t. You don’t go halfway.”

Here are the places he used most intensely during his year-long odyssey:

  1. Here’s a basic tutorial of how to use the camera integration with iOS.
  2. Another basic tutorial about showing alerts in iOS.
  3. One of O’Reilly Media’s many videos. This one is about building an iPhone app combining the tab bar, navigation and tab,
  4. He said this site by Ray Wenderlich had a lot of good advice.
  5. He also said this blog by Tyler Neylon had helpful tips.
  6. Langton said this site had decent articles about TableViews.
  7. This iPhone developer tips blog also has some decent tutorials.
  8. He added that this site from Matt Gallagher is good once you have the basics.
  9. Then there are university courses like this one from Stanford about developing iOS apps.
  10. Then here are similar classes from MIT.


A Mid-Career Switch: From Massachusetts State Trooper to iOS Developer-To-The-Rescue