Silicon Valley’s year of reckoning

Tech companies have always branded themselves as the good guys. But 2018 was the year that the long-held belief that Silicon Valley is on the right side of progress and all things good was called into question by a critical mass.

As startups grow bigger and richer, amassing more power and influence outside of the Valley, a reckoning has played out in government and business. Mission statements like “connecting the world” and “don’t be evil” no longer hold water.

A look at a few of this year’s most impactful news themes underscore why; we’ve racked up too many examples to the contrary.

Android co-creator Andy Rubin’s $90 million payout and sexual misconduct revealed

Since the #MeToo movement opened the floodgates on the importance of fighting for gender equality and fair treatment of women and underrepresented minorities at a large scale, the tech industry was rightfully singled out as a microcosm for rampant misconduct.

In October, a New York Times investigation detailed how Android co-creator Andy Rubin was paid out a $90 million exit package when he left Google in 2014. At the time, Google concealed that the executive had multiple relationships with Google staffers and that credible accounts of sexual misconduct had been filed against him during his time at the company. It was an all-too-familiar story recounting how women in tech aren’t safe at work and misbehaved executives are immune from penalty. Google employees didn’t stand for it. 

At a rally in San Francisco, Google staffers read off their list of demands, which included an end to forced arbitration in cases of harassment and discrimination, a commitment to end pay and opportunity inequity and a clear, inclusive process for reporting sexual misconduct safely and anonymously, reported Kate Clark.

Rubin has since taken leave from his smartphone company, Essential.

The first self-driving car fatality occurred when an Uber SUV struck and killed a woman in Arizona

Dara Khosrowshahi, chief executive officer of Uber, arrives for a morning session at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, U.S., on Wednesday, July 10. Photographer: Scott Eells/Bloomberg via Getty Images

In March, the first self-driving car fatality occurred in Tempe, Arizona when 49-year-old pedestrian Elaine Herzberg was struck by an Uber autonomous test SUV. The car was in self-driving mode, and there was a safety driver behind the wheel who failed to intervene.

Investigators determined the driver had looked down at a phone 204 times during a 43-minute test drive, and that the driver was streaming “The Voice” on Hulu, according to a police report released by the Tempe Police Department. Law enforcement determined her eyes were off the road for 3.67 miles of the 11.8 total miles driven, or about 31 percent of the time.

Uber paused all of its AV testing operations in Pittsburgh, Toronto, San Francisco and Phoenix as a result, and released a safety report detailing how it will add precautions to its testing of self-driving cars. Two employees will be required to sit in the front seat at all times, and an automatic braking system will be enabled.

The incident immediately raised questions about insurance and liability, along with the investigation from the National Transportation Safety Board. As mobility companies charge full speed ahead in developing solutions that will shape the future of urban transportation, tragedies like this remind us that while AVs and humans share the roads, these programs are rife with risk. Has Uber learned a lesson? We’ll find out soon, as the company received permission by the state of Pennsylvania to resume autonomous vehicle testing.

Jamal Khashoggi was assassinated by Saudi agents, prompting Silicon Valley to think about how it got so rich

JIM WATSON/AFP/Getty Images

Silicon Valley companies are used to getting away with a lot. Larger orgs like Uber, Tesla and Facebook rotate in and out of the hot seat as security breaches wreak havoc and sexual harassment scandals are exposed, only to be washed out of the news cycle by a viral image of Elon Musk sampling marijuana the next day.

But one story shocked the public for weeks, after agents of the Saudi government assassinated Washington Post columnist Jamal Khashoggi at the Saudi Arabian consulate in Istanbul as he was trying to obtain marriage license papers.

The tech industry was collectively upset by its proximity to a government and funding source that blatantly misused its power. Silicon Valley gets most of its money through SoftBank’s Vision Fund and by proxy the Saudi kingdom. About half of SoftBank’s massive $93 billion tech-focused fund is powered by a $45 billion commitment from the Saudi kingdom. This means the total invested by the kingdom alone into U.S. startups is far greater than the total raised by any single VC fund. Did we see a single example of a startup that refused to work with SoftBank in the aftermath? No. Will we? Probably not. Because Silicon Valley players are mostly only political and activist when it’s convenient for them.

Silicon Valley companies that have accepted money from this source have a vested interest in keeping the peace with Saudi Arabia and its Crown Prince Mohammed bin Salman — the leader known for getting friendly with tech CEOs in the past. But where does this leave us now as Saudi Arabian money continues to distort American venture? SoftBank has sustained countless startups with round after round of funding as it plunges into debt.

With SoftBank money inflating round sizes and therefore valuations, tech founders and CEOs are faced with the age-old question of whether or not it’s okay to use dirty money to do “good things.” SoftBank’s 2018 culminated in a record IPO that saw a 15 percent drop in value on its debut. Regardless, the aftermath of the Khashoggi assassination could signify the end of an era in American venture if founders begin to think critically about the source of their funding — and act on it. 

Facebook’s struggle

UNITED STATES – APRIL 11: Facebook CEO Mark Zuckerberg testifies before a House Energy and Commerce Committee in Rayburn Building on the protection of user data on April 11, 2018. (Photo By Tom Williams/CQ Roll Call)

Facebook’s 2018 kicked off with Zuckerberg’s wishful, vague post about his personal challenge to “fix Facebook.” The social network bowed out of 2017 with critics saying Zuckerberg hadn’t done enough to combat the proliferation of fake news on Facebook or block Russian interference in the 2016 U.S. election. Online abuse had never been so bad. All of this was happening just as people started to realize that mindlessly browsing the newsfeed — Facebook’s core product — is a total waste of time.

What better timing for not one, but two massive security scandals?

Zuckerberg answered to Congress after Facebook was infiltrated by Cambridge Analytica, a data organization with ties to the Trump administration. In the beginning of 2014, the organization obtained data on 50 million Facebook users in a way that deceived both the users and Facebook itself. 

If that weren’t enough, just months later Facebook revealed at least 30 million users’ data were confirmed to be at risk after attackers exploited a vulnerability allowing them access to users’ personal data. Zuckerberg said that the attackers were using Facebook developer APIs to obtain information, like “name, gender, and hometowns” linked to a user’s profile page. Queue #deletefacebook

A Pew report detailed how Facebook users are becoming more cautious and critical, but they still can’t quit. News and social networking are like oil and water — they can’t blend into coexistence on the same news feed. In 2018, Facebook was caught in a perfect storm. Users started to understand Facebook for what it actually is: powered by algorithms that coalesce fact, opinion and malicious fake content on a platform designed to financially profit off the addictive tendencies of its users. The silver lining is that as people become more cautious and critical of Facebook, the market is readying itself for a new, better social network to be designed off the pioneering mistakes of its predecessors.

Apple hits a $1 trillion market cap and celebrates the anniversary of the iPhone with design changes

SAN FRANCISCO, CA – OCTOBER 22: Apple CEO Tim Cook speaks during an Apple announcement. (Photo by Justin Sullivan/Getty Images)

This was a hardware-heavy year for Apple. The MacBook Air got Retina Display. The Apple Watch got a big redesign. The iPad Pro said farewell to the home button. We met the new mac Mini and an updated Apple Pencil. In September, Apple held its annual hardware event in Cupertino to announce three new iPhone models, the XS (the normal one), XR (the cheap one) and the XS Max (the big one). We also learned that the company went back to the drawing board on the Mac Pro.

In August, Apple won the race to $1 trillion in market cap. It wasn’t the frayed cords or crappy keyboards that boosted the company past this milestone, but rather price hikes in its already high-margin iPhone sales. But while Apple remains wildly profitable, growth is slowing notably.

Tech stocks took a beating toward the end of the year, and although Apple seems to have weathered the storm better than most companies, it may have reached a threshold for how much it can innovate on its high-end hardware. It may be wise for the company to focus on other methods of bringing in revenue like Apple Music and iCloud if it wants to shoot for the $2 trillion market cap.

As the biggest, richest companies get bigger and richer, questions about antitrust and regulation rise to ensure they don’t hold too much economic power. Tim Cook has more authority than many political leaders. Let’s hope he uses it for good.

Tesla CEO Elon Musk sued by the SEC for securities fraud

CHICAGO, IL – JUNE 14: Engineer and tech entrepreneur Elon Musk of The Boring Company listens as Chicago Mayor Rahm Emanuel talks about constructing a high speed transit tunnel at Block 37 during a news conference on June 14, 2018 in Chicago, Illinois. Musk said he could create a 16-passenger vehicle to operate on a high-speed rail system that could get travelers to and from downtown Chicago and O’Hare International Airport under twenty minutes, at speeds of over 100 miles per hour. (Photo by Joshua Lott/Getty Images)

In August, Tesla CEO Elon Musk announced in a tweet heard around the internet that he was considering taking Tesla private for $420 per share and that he’d secured funding to do so. The questioning started. Was it legit? Was it a marijuana joke? The tweet caused Tesla’s stock price to jump by more than 6 percent on August 7. Musk also complained that being a public company “subjects Tesla to constant defamatory attacks by the short-selling community, resulting in great harm to our valuable brand.”

Turns out, Musk had indeed met with representatives from the Saudi sovereign wealth fund, and that the fund’s lead rep told Musk that they’d bought about 5 percent of Tesla’s stock at a stake worth $2 billion, were interested in taking the company private and confirmed that this rep had the power to make these kinds of investment decisions for the fund. However, nothing was written on paper, and Musk did not notify the Nasdaq — an important requirement.

At the end of September, the SEC filed a lawsuit against Musk for securities fraud in regards to his “false and misleading” tweets, seeking to remove him from Tesla. Musk settled with the SEC two days after being charged, resigning from his chairman position but remaining CEO. Musk and Tesla were also ordered to pay separate $20 million fines to “be distributed to harmed investors under a court-approved process,” according to the SEC.

Public companies are supposed to value the interests of their shareholders. Pulling the trigger on an impulsive tweet breaks that trust — and in Musk’s case, cost $40 million and a board seat. This is why we should never put too much fear or faith in our leaders. Musk is brilliant and his inventions are changing the world. But he is human and humans are flawed and the Tesla board should have done more to balance power at the top. 

The great Amazon HQ2 swindle

Chief Executive Officer of Amazon, Jeff Bezos, tours the facility at the grand opening of the Amazon Spheres, in Seattle, Washington on January 29, 2018. Amazon opened its new Seattle office space which looks more like a rainforest. The company created the Spheres Complex to help spark employee creativity. (Photo: JASON REDMOND/AFP/Getty Images)

Tech jobs bring new wealth to cities. Amazon set out on a roadshow across America in what the company described as a search for its second headquarters, or “HQ2.” The physical presence of Amazon’s massive retail and cloud businesses would undoubtedly bring wealth, innovation, jobs and investment into a region.

There was initial hope that the retail giant would choose a city in the American heartland, serving as a catalyst for job growth in a burgeoning tech hub like Columbus, Ohio, Detroit, Mich., or Birmingham, Ala. But in the end, Amazon split the decision between two locations: New York (Long Island City) and Arlington, Virginia, as the sites for its new offices. The response? Outrage.

Jon Shieber noted that cities opened their books to the company to prove their viability as a second home for the retailing giant. In return, Amazon reaped data on urban and exurban centers that it could use to develop the next wave of its white-collar office space, and more than $2 billion worth of tax breaks from the cities that it will eventually call home for its new offices.

Danny Crichton argued that Amazon did exactly what it should have with its HQ2 process. Crichton wrote that Amazon is its own entity and therefore has ownership of its decisions. It allowed cities to apply and provide information on why they might be the best location for its new headquarters. Maybe the company ignored all of the applications. Maybe it was a ploy to collect data. Maybe it wanted publicity. Regardless, it allowed input into a decision it has complete and exclusive control over.

Let’s hope that in 2019, Silicon Valley will hold on to some of its ethos as a venture-funded sandbox for brilliant entrepreneurs who want to upend antiquated industries with proprietary tech inventions. But let it be known that sleeping at the wheel while your company gets breached, turning a blind eye to the evil doings of your largest funding sources and executive immunity from sexual misconduct violations no longer have their place here. 


Source: Tech Crunch

Alphabet spins off moonshot project Malta with backing from Gates’s BEV fund

Malta, the renewable energy storage project born in Alphabet’s moonshot factory X, is now on its own and flush with $26 million from a Series A funding round led by Breakthrough Energy Ventures .

Concord New Energy Group and Alfa Laval also invested in the round.

Project Malta launched last year in Alphabet’s X (formerly Google X) with an aim to build energy storage facilities that can support full-scale power grids. The independent company spun out of Alphabet is now called Malta Inc.

Malta Inc. has developed a system designed to keep power generated from renewable energy or fossil fuels in reserve for longer than lithium-ion batteries. The electro-thermal storage system first captures energy generated from wind, solar or fossil generators on the grid. The collected electricity drives a heat pump, which converts the electrical energy into thermal energy. The heat is stored in molten salt, while the cold is stored in a chilled antifreeze liquid. A heat engine is used to convert the energy back to electricity for the grid when it’s needed.

The system can store electricity for days or even weeks, Malta says.

Malta is going to use the funds to work with industry partners to turn the detailed designs developed and refined at X into industrial-grade machinery for its first pilot system.

BEV, the lead investor in Malta’s Series A round, was created in 2016 by the Breakthrough Energy Coalition, an investor group that includes Microsoft co-founder Bill Gates, John Doerr, chairman of venture firm Kleiner Perkins Caufield & Byers, Alibaba founder Jack Ma, Amazon founder and CEO Jeff Bezos, and SAP co-founder Hasso Plattner.


Source: Tech Crunch

Dolls Kill is raising up to $15 million for its edgy fashion brand made for ‘misfits’

When founder Bobby Farahi met Shaudi “Shoddy” Lynn, it was at a rave in L.A. Farahi has said he was immediately drawn to the fashion sense of Lynn, who was a DJ at the time; she, meanwhile, might have appreciated the business acumen of Farahi, who had already sold a broadcast monitoring service called Multivision to a rival company.

As Farahi told Inc. magazine several years ago, the couple, now married, decided to try their hand at business together, calling it Dolls Kill and selling foxtail keychains before eventually evolving the brand into an online boutique that sells edgy, risqué clothes and accessories from companies like Killstar and Motel, both in the U.K., as well as makeup from another London company called Skinnydip.

Shoppers like what they see, seemingly. Back in 2014, Inc. reported, Dolls Kill, which is based in San Francisco, generated $7.6 million in sales. It was enough to elicit the attention of the consumer-focused venture firm Maveron, which wrote the company a check for $5 million. Now, shows an SEC filing, seven-year-old Dolls Kill is raising $15 million in new equity funding, and it has secured at least $10.7 million toward that end.

Some of that capital is seemingly being used to test out offline stores. Dolls Kill already has one brick-and-mortar store in San Francisco’s famous Haight neighborhood. In August, the company opened a second concept store in a 6,000-square-foot space on Fairfax Avenue in Los Angeles.

Dolls Kill is sometimes likened to Nasty Gal, founded in 2006 by Sophia Amoruso. Nasty Gal had filed for bankruptcy protection in 2016 after raising tens of millions of dollars from investors and reportedly spending heavily on marketing; two storefronts in L.A.; a downtown L.A. headquarters that quadrupled the size of an earlier HQ; and a fulfillment center in Kentucky.

At the time, industry analyst Richie Siegel told the L.A. Times that a central challenge to the company’s growth was Nasty Gal’s target market, suggesting that there is a ceiling to the number of women to whom a brand like Nasty Gal appeals. The company, since acquired by British online retailer Boohoo, continues as an online business only.


Source: Tech Crunch

On Christmas Eve, Chevrolet drivers can track Santa from their cars

North American Aerospace Defense Command, or NORAD, has been tracking Santa’s progress around the globe every Christmas Eve for more than 60 years. Even a government shutdown won’t prevent NORAD from completing its once-a-year mission.

Now, General Motors is getting in on the annual tradition.

On December 24, owners of the company’s Chevrolet -branded vehicles, including the Traverse and Tahoe SUVs, Silverado truck and Cruze sedan, can push the OnStar button and get a real-time update on Santa’s whereabouts. Only Chevrolet owners with an active OnStar plan can push their blue OnStar button to request a Santa Update and learn Santa’s current location.

The location service uses NORAD’s official Santa location data. Santa update calls can be made anytime between 6 a.m. ET on Dec. 24  through 5 a.m. ET on December 25. Advisor staffing is adjusted to accommodate increased call volume from Santa Update requests, GM said.

“Each year we receive thousands of Santa Update requests,” said Stacey Unold, director of Contact Center Operations supporting Chevrolet. “It’s a fun way for Chevrolet owners to use technology to connect their families with important information about Santa’s journey and spread holiday cheer.”

Chevrolet and OnStar plan to donate $1 to the American Red Cross for each Santa Update button push received in the United States.


Source: Tech Crunch

Here comes the downturn

It’s remarkable how fast the tenor of the times has changed. Only a few months ago we were in a boom that seemed like it might never end. Now the yield curve has inverted; the markets have gone bear; and Google Trends has the word “recession” at its highest level since 2009. There seems to be near-universal consensus that a major, worldwide economic downturn is coming.

When exactly? Who knows? Late 2019 or early 2020, says the smart money; much sooner than that, quoth the doomsayers (including a truly remarkable percentage of CEOs.) What effect will it have on tech, in particular? Ah, now there’s a very interesting question indeed.

You can make a pretty good case that technology, as an industry, will actually see a net benefit from any downturn. Note how tech essentially ignored the Great Recession of 2008 and kept on thriving, despite much of the smart money at the time warning us that the tech industry as we knew it was all but doomed — who can forget Sequoia Capital’s infamous “R.I.P. Good Times” deck?

The theory goes: every industry is becoming a technology industry, and downturns only accelerate the process, because software is eating the world, and recessions bring fresh carrion we don’t even have to hunt. It’s plausible. It’s uncomfortable, given how much real human suffering and dismay is implicit in the economic disruption from which we often benefit. And on the macro scale, in the long run, it’s even probably true. Every downturn is a meteor that hits the dinosaurs hardest, while we software-powered mammals escape the brunt.

Even if so, though, what’s good for the industry as a whole is going to be bad for a whole lot of individual companies. Enterprises will tighten their belts, and experimental initiatives with potential long-term value but no immediate bottom-line benefit will be among the first on the chopping block. Consumers will guard their wallets more carefully, and will be ever less likely to pay for your app and/or click on your ad. And everyone will deleverage and/or hoard their cash reserves like dragons, just in case, which means less money for new or struggling companies.

Above all we might be hurt by the mindset more than the money. Bruce Sterling once observed, of the debt calamities of 2008, that the interesting thing was that physically, hardly a molecule had changed — and yet we all agreed that we had all transitioned from a world of plenty to one of despair. Similarly, on paper, any recession’s numbers really won’t be so bad. Heck, even if GDP shrank an impossible-to-imagine 10%, that would take us back to the dire wasteland of warlords and mutants that we last suffered through in [checks notes] er, 2013, which didn’t seem like such an dystopia at the time. But we’re geared so much for growth that even stagnation feels like disaster.

The lesson is pretty clear: it’s coming, and it will bring both misery and opportunities, depending on some combination of its vicissitudes and how well you are positioned for it. Don’t be overstretched. Don’t be in (too much) debt. Don’t be flailing. And this is probably a worse-than-usual time to bet the company on any particular project, or pivot. But at the same time, for better or worse, we in tech are, currently, carrion eaters high up in the food chain. That bright light in the sky, that oncoming meteor, brings a kind of ugly promise. Let’s try to make the best of it, and not just for ourselves?


Source: Tech Crunch

Uber reaches tentative settlement with drivers arbitrating over employment status and expense reimbursement

Uber is reportedly on track to go public in the first quarter next year, and in the lead up to that, it’s sewing up some loose ends.

TechCrunch has learned that Uber has offered a tentative settlement to pay out 11 cents for every mile driven for Uber (including adjacent services like Uber Eats) to drivers who have been in individual arbitration with the company over their employment classification. Drivers were pursuing individual arbitration after an appeals court ruled in September that they could not combine their cases into a class action lawsuit.

Uber has declined to comment for this story, and one of the firms representing drivers, Lichten & Liss-Riordan, has not yet responded to our request for comment.

In a case that now goes back years and covers nine states, some 160,000 drivers had been seeking to be classified as employees rather than independent contractors, partly in order to get compensated for expenses related to driving for the company, such as gasoline used and vehicle maintenance.

Another big complaint in the case involved tips: drivers said Uber would not allow them to take or keep tips from passengers. (The claim preceded June 2017, when Uber formally introduced tips in its app, netting some $600 million extra for drivers in one year.)

Uber’s settlement of 11 cents per mile for all on-trip miles that were driven for Uber bypasses addressing those specific details. Notably, drivers who accept the settlement sign documents to release all claims against Uber related to employee misclassification.

The settlement is tentative depending on a sufficient number of drivers signing the agreement (we do not know what the minimum would be — so if you’re a relevant driver, you should check your mailboxes and respond if you want compensation), among other factors, and it could take up to six months for payments to get to drivers.

On one hand, this an okay result in what was a challenging situation for litigating drivers. A class action lawsuit, combining several people into one case, would have gained economies of scale in terms of legal costs, and that could have meant a stronger recovery payout for the group.

But with the appeals judges striking down that possibility, it would have been left to individual drivers to pursue their own cases against the company. That is an expensive and time-consuming process and might not have seen as many plaintiffs willing to fight.

It may have been unpalatable for Uber, too. With the company gearing up for a public listing and all the scrutiny that comes with that, drawing a line under these cases with a settlement is a better result than multiple, years-long arbitration cases.

It’s also an important step in Uber repairing its image with current and potential drivers.

The company went through a huge crisis last year that highlighted questionable management and bad company culture when it came to female employees, treatment of drivers, interfacing with regulators and more.

(In fact the tipping was introduced as part of the company’s wider efforts to repair its business and image among drivers, passengers and employees. It also included appointing a new CEO. )

Having a loyal and growing base of drivers is essential to Uber scaling its business, and this settlement is one signal to drivers that Uber is trying to do right by them.

Still, it seems that the bargaining power here may have been more on Uber’s side.

Uber, valued at $72 billion as of its last funding and potentially as high as $120 billion in an IPO, is one of the world’s biggest privately-held tech companies. The 11 cents per mile it’s offering as a settlement is estimated to be only one-third of what a driver could have recovered for just one of the claims, expense reimbursement, had he or she pursued the arbitration rather than opted for the settlement.

Securing rights for the growing number of contract workers in the labor market has been one of the more controversial aspects of the boom in “gig-economy” businesses. It will be interesting to see how and if more of these kinds of cases come to light, and if regulators start to wade in, in cases where employers have not.


Source: Tech Crunch

How Juul made vaping viral to become worth a dirty $38 billion

A Juul is not a cigarette. It’s much easier than that. Through devilishly slick product design I’ll discuss here, the startup has massively lowered the barrier to getting hooked on nicotine. Juul has dismantled every deterrent to taking a puff.

The result is both a new $38 billion valuation thanks to a $12.8 billion investment from Marlboro Cigarettes-maker Altria this week, and an explosion in popularity of vaping amongst teenagers and the rest of the population. Game recognize game, and Altria’s game is nicotine addiction. It knows it’s been one-upped by Juul’s tactics, so it’s hedged its own success by handing the startup over a tenth of the public corporation’s market cap in cash.

Juul argues it can help people switch from obviously dangerous smoking to supposedly healthier vaping. But in reality, the tiny aluminum device helps people switch from nothing to vaping…which can lead some to start smoking the real thing. A study found it causes more people to pick up cigarettes than put them down.

Photographer: Gabby Jones/Bloomberg via Getty Images

How fast has Juul swept the nation? Nielsen says it controls 75 percent of the U.S. e-cigarette market up from 27 percent in September last year. In the year since then, the CDC says the percentage of high school students who’ve used an e-cigarette in the last 30 days has grown 75 percent. That’s 3 million teens or roughly 20 percent of all high school kids. CNBC reports that Juul 2018 revenue could be around $1.5 billion.

The health consequences aside, Juul makes it radically simple to pick up a lifelong vice. Parents, regulators, and potential vapers need to understand why Juul works so well if they’ll have any hope of suppressing its temptations.

Shareable

It’s tough to try a cigarette for the first time. The heat and smoke burn your throat. The taste is harsh and overwhelming. The smell coats your fingers and clothes, marking you as smoker. There’s pressure to smoke a whole one lest you waste the tobacco. Even if you want to try a friend’s, they have to ignite one first. And unlike bigger box mod vaporizers where you customize the temperature and e-juice, Juul doesn’t make you look like some dorky hardcore vapelord.

Juul is much more gentle on your throat. The taste is more mild and can be masked with flavors. The vapor doesn’t stain you with a smell as quickly. You can try just a single puff from a friend’s at a bar or during a smoking break with no pressure to inhale more. The elegant, discrete form factor doesn’t brand you as a serious vape users. It’s casual. Yet the public gesture and clouds people exhale are still eye catching enough to trigger the questions, “What’s that? Can I try?” There’s a whole other article to be written about how Juul memes and Instagram Stories that glamorized the nicotine dispensers contributed to the device’s spread.

And perhaps most insidiously, vaping seems healthier. A lifetime of anti-smoking ads and warning labels drilled the dangers into our heads. But how much harm could a little vapor do?

A friend who had never smoked tells me they burn through a full Juul pod per day now. Someone got him to try a single puff at a nightclub. Soon he was asking for drag off of strangers’ Juuls. Then he bought one and never looked back. He’d been around cigarettes at parties his whole life but never got into them. Juul made it too effortless to resist.

Concealable

Lighting up a cigarette is a garish activity prohibited in many places. Not so with discretely sipping from a Juul.

Cigarettes often aren’t allowed to be smoked inside. Hiding it is no easy feat and can get you kicked out. You need to have a lighter and play with fire to get one started. They can get crushed or damp in your pocket. The burning tip makes them unruly in tight quarters, and the bud or falling ash can damage clothing and make a mess. You smoke a cigarette because you really want to smoke a cigarette.

Public establishments are still figuring out how to handle Juuls and other vaporizers. Many places that ban smoking don’t explicitly do the same for vaping. The less stinky vapor and more discrete motion makes it easy to hide. Beyond airplanes, you could probably play dumb and say you didn’t know the rules if you did get caught. The metal stick is hard to break. You won’t singe anyone. There’s no mess, need for an ashtray, or holes in your jackets or couches.

As long as your battery is charged, there’s no need for extra equipment and you won’t draw attention like with a lighter. Battery life is a major concern for heavy Juulers that smokers don’t have worry about, but I know people who now carry a giant portable charger just to keep their Juul alive. But there’s also a network effect that’s developing. Similar to iPhone cords, Juuls are becoming common enough that you can often conveniently borrow a battery stick or charger from another user. 

And again, the modular ability to take as few or as many puffs as you want lets you absent-mindedly Juul at any moment. At your desk, on the dance floor, as you drive, or even in bed. A friend’s nieces and nephews say that they see fellow teens Juul in class by concealing it in the cuff of their sleeve. No kid would be so brazen as to try smoke in cigarette in the middle of a math lesson.

Distributable

Gillette pioneered the brilliant razor and blade business model. Buy the sometimes-discounted razor, and you’re compelled to keep buying the expensive proprietary blades. Dollar Shave Club leveled up the strategy by offering a subscription that delivers the consumable blades to your door. Juul combines both with a product that’s physically addictive.

When you finish a pack of cigarettes, you could be done smoking. There’s nothing left. But with Juul you’ve still got the $35 battery pack when you finish vaping a pod. There’s a sunk cost fallacy goading you to keep buying the pods to get the most out of your investment and stay locked into the Juul ecosystem.

(Photo by Scott Olson/Getty Images)

One of Juul’s sole virality disadvantages compared to cigarettes is that they’re not as ubiquitously available. Some stores that sells cigs just don’t carry them yet. But more and more shops are picking them up, which will continue with Altria’s help. And Juul offers an “auto-ship” delivery option that knocks $2 off the $16 pack of four pods so you don’t even have to think about buying more. Catch the urge to quit? Well you’ve got pods on the way so you might as well use them. Whether due to regulation or a lack of innovation, I couldn’t find subscription delivery options for traditional cigarettes.

And for minors that want to buy Juuls or Juul pods illegally, their tiny size makes them easy to smuggle and resell. A recent South Park episode featured warring syndicates of fourth-graders selling Juul pods to even younger kids.

Dishonorable

Juul co-founder James Monsees told the San Jose Mercury News that “The first phase is proving the value and creating a product that makes cigarettes obsolete.” But notice he didn’t say Juul wants to make nicotine obsolete or reduce the number of people addicted to it.

Juul co-founder James Monsees

If Juul actually cared about fighting addiction, it’d offer a regimen for weaning yourself off of nicotine. Yet it doesn’t sell low-dose or no-dose pods that could help people quit entirely. In the US it only sells 5% and 3% nicotine versions. It does make 1.7% pods for foreign markets like Israel where that’s the maximum legal strengths, though refuses to sell them in the States. Along with taking over $12 billion from one of the largest cigarette companies, that makes the mission statement ring hollow.

Juul is the death stick business as usual, but strengthened by the product design and virality typically reserved for Apple and Facebook.


Source: Tech Crunch

Facebook’s fact-checkers toil on

Facebook is fielding so many problems, oversights, scandals, and other miscellaneous ills that it wouldn’t surprise anyone to hear that its fact-checking program, undertaken last year after the network was confronted with its inaction in controlling disinformation, is falling apart. But in this case the reason you haven’t heard much about it isn’t because it’s a failure, but because fact-checking is boring and thankless — and being done quietly and systematically by people who are just fine with that.

The “falling apart” narrative was advanced in a recent article at The Guardian, and some of the problems noted in that piece are certainly real. But I was curious at the lack of documentation of the fact-checking process itself, so I talked with a couple of the people involved to get a better sense of it.

I definitely didn’t get the impression of a program in crisis at all, but rather one where the necessity of remaining hands-off with the editorial process and teams involved has created both apparent and real apathy when it comes to making real changes.

No bells, no whistles

Facebook likes to pretend that its research into AI will solve just about every problem it has. Unfortunately not only is that AI hugely dependent on human intelligence to work in the first place, but the best it can generally do is forward things on to human agents for final calls. Nowhere is that more obvious than in the process of fact-checking, in which it is trivial for machine learning agents to surface possibly dubious links or articles, but at this stage pretty much impossible for them to do any kind of real evaluation of them.

That’s where the company’s network of independent fact-checkers comes in. No longer among their number are two former Snopes staffers who left to work at another fact-checking concern — pointedly not involved with Facebook — and who clearly had major problems with the way the program worked. Most explosive was the accusation that Facebook had seemingly tried to prioritize fact checks that concerned an advertiser.

But it wasn’t clear from their complaints just how the program does work. I chatted with Snopes head David Mikkelson and checked in with Politifact editor Angie Drobnic Holan. They emphatically denied allegations of Facebook shenanigans, though they had their own reservations, and while they couldn’t provide exact details of the system they used, it sounds pretty straightforward.

“For the most part it’s literally just data entry,” explained Mikkelson. “When we fact-check something, we enter its URL into a database. You could probably dress it up in all kinds of bells and whistles, but we don’t really need or expect much more than that. We haven’t changed what we do or how we do it.”

Mikkelson described the Facebook system in broad terms. It’s a dashboard of links that are surfaced, as Facebook has explained before, primarily through machine learning systems that know what sort of thing to look for: weird URLs, bot promotion, scammy headlines, etc. They appear on the dashboard in some semblance of order, for instance based on traffic or engagement.

“It lists a thumbnail of what the item is, like is it an article or a video; there’s a column for estimated shares, first published date, etc,” said Mikkelson. “They’ve never given us any instructions on like, ‘please do the one with the most shares,’ or ‘do the most recent entry and work your way down,’ or whatever.”

In fact there’s no need to even use the dashboard that way at all.

“There’s no requirement that we undertake anything that’s in their database. If there’s something that isn’t in there, which honestly is most of what we do, we just add it,” Mikkelson said.

Passive partner or puppet master?

I asked whether there was any kind of pushback or interference at all from Facebook, as described by Brooks Binkowski in the Guardian story, who mentioned several such occasions that occurred during her time at Snopes.

Politifact’s Holan said she thought the suggestion was “very misleading.” In a statement, the organization said that “As with all our work, we decide what to fact-check and arrive at our conclusions without input from Facebook or any third party. Any claim suggesting otherwise is misinformed and baseless.”

“I realize Facebook’s reputation is kind of in the dumpster right now already,” Mikkelson said, “but this is damaging to all the fact-checking partners, including us. We would never have continued a working relationship with Facebook or any other partner that told us to couch fact checks in service of advertisers. It’s insulting to suggest.”

The question of receiving compensation for fact-checking was another of Binkowski’s qualms. On the one hand, it could be seen as a conflict of interest for Facebook to be paying for the service, since that opens all kinds of cans of worms — but on the other, it’s ridiculous to suggest this critical work can or should be done for free. Though at first, it was.

When the fact-checking team was first assembled in late 2016, Snopes wrote that it expects “to derive no direct financial benefit from this arrangement.” But eventually it did.

“When we published that, the partnership was in its earliest, embryonic stages — an experiment they’d like our help with,” Mikkelson said. Money “didn’t come up at all.” It wasn’t until the next year that Facebook mentioned paying fact checkers, though it hadn’t announced this publicly, and Snopes eventually did earn and disclose $100,000 coming from the company. Facebook had put bounties on high-profile political stories that were already on Snopes’s radar, as well as others in the fact-checking group.

The money came despite the fact that Snopes never asked for it or billed Facebook — a check arrived at the end of the year, he recalled, “with a note that said ‘vendor refuses to invoice.’ ”

Partners, but not pals

As for the mere concept of working for a company whose slippery methods and unlikeable leadership have been repeatedly pilloried over the last few years, it’s a legitimate concern. But Facebook is too important of a platform to ignore on account of ethical lapses by higher-ups who are not involved in the day-to-day fact-checking operation. Millions of people still look to Facebook for their news.

To abandon the company because (for instance) Sheryl Sandberg hired a dirty PR firm to sling mud at critics would be antithetical to the mission that drove these fact-checking companies to the platform to begin with. After all, it’s not like Facebook had a sterling reputation in 2016, either.

Both Politifact and Snopes indicated that their discontent with the company was more focused on the lack of transparency within the fact-checking program itself. The tools are basic and feedback is nil. Questions like the following have gone unanswered for years:

What constitutes falsity? What criteria should and shouldn’t be considered? How should satire be treated if it is spreading as if it were fact? What about state-sponsored propaganda and disinformation? Have other fact checkers looked at a given story, and could or should their judgments inform the other’s? What is the immediate effect of marking a story false — does it stop spreading? Is there pushback from the community? Is the outlet penalized in other ways? What about protesting an erroneous decision?

The problem with Facebook’s fact-checking operation, as so often is the case with this company, is a lack of transparency with both users and partners. The actual fact-checking happens outside Facebook, and rightly so; it’s not likely to be affected or compromised by the company, and in fact if it tried, it might find the whole thing blowing up in its face. But while the checking itself is tamper-resistant, it’s not clear at all what if any effect it’s having, and how it will be improved or implemented in the future. Surely that’s relevant to everyone with a stake in this process?

Over a year and a half or more of the program, little has been communicated and little has been changed, and that not fast enough. But at the same time, thousands of articles have been checked by experts who are used to having their work go largely unrewarded — and despite Facebook’s lack of transparency with them and us, it seems unlikely that that work has also been ineffective.

For years Facebook was a rat’s nest of trash content and systematically organized disinformation. In many ways, it still is, but an organized fact-checking campaign works like constant friction acting against the momentum of this heap. It’s not flashy and the work will never be done, but it’s no less important for all that.

As with so many other Facebook initiatives, we hear a lot of promises and seldom much in the way of results. The establishment of a group of third parties contributing independently to a fact-checking database was a good step, and it would be surprising to hear it has had no positive affect.

Users and partners deserve to know how it works, whether it’s working, and how it’s being changed. That information would disarm critics and hearten allies. If Facebook continues to defy these basic expectations, however, it only further justifies and intensifies the claims of its worst enemies.


Source: Tech Crunch

The top smartphone trends to watch in 2019

This was a bad year for the smartphone. For the first time, its seemingly unstoppable growth began to slow.

Things started off on a bad note in February, when Gartner recorded its first year-over-year decline since it began tracking the category. Not even the mighty Apple was immune from the trend. Last week, stocks took a hit as influential analyst Ming-Chi Kuo downgraded sales expectations for 2019.

People simply aren’t upgrading as fast as they used to. This is due in part to the fact that flagship phones are pretty good across the board. Manufacturers have painted themselves into a corner as they’ve battled it out over specs. There just aren’t as many compelling reasons to continually upgrade.

Of course, that’s not going to stop them from trying. Along with the standard upgrades to things like cameras, you can expect some radical rethinks of smartphone form factors, along with the first few pushes into 5G in the next calendar year.

If we’re lucky, there will be a few surprises along the way as well, but the following trends all look like no-brainers for 2019.

5G

Attendees look at 5G mobile phones at the Qualcomm stand during China Mobile Global Partner Conference 2018 at Poly World Trade Center Exhibition Hall on December 6, 2018 in Guangzhou, Guangdong Province of China.

GUANGZHOU, CHINA – DECEMBER 06: Attendees look at 5G mobile phones at the Qualcomm stand during China Mobile Global Partner Conference 2018 at Poly World Trade Center Exhibition Hall on December 6, 2018 in Guangzhou, Guangdong Province of China. The three-day conference opened on Thursday, with the theme of 5G network. (Photo by VCG/VCG via Getty Images)

Let’s get this one out of the way, shall we? It’s a bit tricky — after all, plenty of publications are going to claim 2019 as “The Year of 5G,” but they’re all jumping the gun. It’s true that we’re going to see the first wave of 5G handsets appearing next year.

OnePlus and LG have committed to a handset and Samsung, being Samsung, has since committed to two. We’ve also seen promises of a Verizon 5G MiFi and whatever the hell this thing is from HTC and Sprint.

Others, most notably Apple, are absent from the list. The company is not expected to release a 5G handset until 2020. While that’s going to put it behind the curve, the truth of the matter is that 5G will arrive into this world as a marketing gimmick. When it does fully roll out, 5G has the potential to be a great, gaming-changing technology for smartphones and beyond. And while carriers have promised to begin rolling out the technology in the States early next year (AT&T even got a jump start), the fact of the matter is that your handset will likely spend a lot more time using 4G.

That is to say, until 5G becomes more ubiquitous, you’re going to be paying a hefty premium for a feature you barely use. Of course, that’s not going to stop hardware makers, component manufacturers and their carrier partners from rushing these devices to market as quickly as possible. Just be aware of your chosen carrier’s coverage map before shelling out that extra cash.

Foldables

We’ve already seen two — well, one-and-a-half, really. And you can be sure we’ll see even more as smartphone manufacturers scramble to figure out the next big thing. After years of waiting, we’ve been pretty unimpressed with the foldable smartphone we’ve seen so far.

The Royole is fascinating, but its execution leaves something to be desired. Samsung’s prototype, meanwhile, is just that. The company made it the centerpiece of its recent developer conference, but didn’t really step out of the shadows with the product — almost certainly because they’re not ready to show off the full product.

Now that the long-promised technology is ready in consumer form, it’s a safe bet we’ll be seeing a number of companies exploring the form factor. That will no doubt be helped along by the fact that Google partnered with Samsung to create a version of Android tailored to the form factor — similar to its embrace of the top notch with Android Pie.

Of course, like 5G, these designs are going to come at a major premium. Once the initial novelty has worn off, the hardest task of all will be convincing consumers they need one in their life.

Pinholes

Bezels be damned. For better or worse, the notch has been a mainstay of flagship smartphones. Practically everyone (save for Samsung) has embraced the cutout in an attempt to go edge to edge. Even Google made it a part of Android (while giving the world a notch you can see from space with the Pixel 3 XL).

We’ve already seen (and will continue to see) a number of clever workarounds like Oppo’s pop-up. The pin hole/hole punch design found on the Huawei Nova 4 seems like a more reasonable route for a majority of camera manufacturers.

Embedded Fingerprint Readers

The flip side of the race to infinite displays is what to do with the fingerprint reader. Some moved it to the rear, while others, like Apple, did away with it in favor of face scanning. Of course, for those unable to register a full 3D face scan, that tech is pretty easy to spoof. For that reason, fingerprint scanners aren’t going away any time soon.

OnePlus’ 6T was among the first to bring the in-display fingerprint scanner to market, and it works like a charm. Here’s how the tech works (quoting from my own writeup from a few months ago):

When the screen is locked, a fingerprint icon pops up, showing you where to press. When the finger is in the right spot, the AMOLED display flashes a bright light to capture a scan of the surface from the reflected light. The company says it takes around a third of a second, though in my own testing, that number was closer to one second or sometimes longer as I negotiated my thumb into the right spot.

Samsung’s S10 is expected to bring that technology when it arrives around the February time frame, and I wouldn’t be surprised to see a lot of other manufacturers follow suit.

Cameras, cameras, cameras (also, cameras)

What’s the reasonable limit for rear-facing cameras? Two? Three? What about the five cameras on that leaked Nokia from a few months back? When does it stop being a phone back and start being a camera front? These are the sorts of existential crises we’ll have to grapple with as manufacturers continue to attempt differentiation through imagining.

Smartphone cameras are pretty good across the board these days, so one of the simple solutions has been simply adding more to the equation. LG’s latest offers a pretty reasonable example of how this will play out for many. The V40 ThinQ has two front and three rear-facing cameras. The three on the back are standard, super wide-angle and 2x optical zoom, offering a way to capture different types of images when a smartphone camera isn’t really capable of that kind of optical zoom in a thin form factor.

On the flip side, companies will also be investing a fair deal in software to help bring better shots to existing components. Apple and Google both demonstrated how a little AI and ML can go a long way toward improving image capture on their last handsets. Expect much of that to be focused on ultra-low light and zoom.


Source: Tech Crunch

Slack says it will comply with sanctions and block Iran-based activity, apologizes for botched first effort

Slack has apologized after it shut down the accounts of users who have visited Iran following a poorly executed effort at complying with U.S. sanctions against the country.

The company, which has eight million users of its productivity tool, has scrapped that first go at the policy. But it did confirm it will now block all activity in Iran and other sanctioned countries, although user accounts won’t be closed.

As one of the world’s largest community services, that botched first implementation will have impacted significant numbers of users — both in terms of enterprise teams and free accounts which use Slack for membership of interest groups and communities.

The victims affected included Amir Abdi, a machine learning scientist at the University of British Columbia (UBC) who is also the recipient of the Vanier scholarship for PhD talent. Abdi told Motherboard that his account was shut down without prior warning, and the same appeared to apply to a number of other individuals who had visited Iran and used Slack from there.

Slack told us on Thursday, when we first reported the issue, that it had implemented the ban based on IP addresses. The general gist was that anyone who had logged on from Iran was blocked and the company admitted in a statement on Friday that it had made “a series of mistakes” by taking that approach.

“We recognize the disruption and inconvenience this caused and we sincerely apologize to the people affected by our actions,” the company said in a blog post.

Going forward, Slack said it will suspend user accounts while they are in Iran — and logged in from Iran-based IP address — but they once they return to a non-sanctioned market, full access will be restored. That policy will also apply to users who visit, or are based in, Cuba, North Korea, Syria and Ukraine’s Crimea region per OFAC sanctions.

Users who travel to a sanctioned country may not be able to access Slack while they remain in that country. However, we will not deactivate their account and they will be able to access Slack when they return to countries or regions for which no blocking is required.

The issue is perhaps the most serious screw up to date from Slack, which is reportedly planning an IPO next year. The company admitted that its policy had been both poorly communicated and badly implemented and it pledged to learn from the experience.

“We’ll take the failures here as lessons we can use to improve our service and avoid similar mistakes in the future,” the company said.


Source: Tech Crunch