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How to watch big tech’s CEOs tangle with Congress on antitrust issues and more

Jeff Bezos, Tim Cook, Sundar Pichai and Mark Zuckerberg will defend their companies before the House Antitrust Subcommittee Wednesday in a hearing that will make tech industry history, no matter what happens.

Given that the tech giants are accustomed to answering to no one in particular, collecting four of them on a substantive topic is notable in its own right. Remarkably, Wednesday will mark the first time Amazon’s CEO has faced lawmakers in a public hearing — and they’re bound to have plenty of questions for the take-no-prisoners online retail behemoth.

For Apple and Cook, who prefer to stay above the public-facing political fray, it’s the first time before Congress in years. Facebook and Google have both been called to Congress more recently, but lawmakers have still barely scratched the surface of two companies that have completely reshaped modern life.

If you’re just catching up, read our explainer about why this whole thing is happening at all and what to expect. You can also read the opening statements from Apple, Amazon, Facebook and Google and skip them tomorrow so you can spend more time with your Nespresso or whatever it is we’re all doing to get by these days. The statements provide a good idea of how the companies will play defense against regulators keen to install some safety features before we barrel into a fresh decade of unchecked growth.

There are a lot of unknowns heading into the hearing. Will lawmakers extract any useful revelations or will it be five hours of “let us get back to you on that?” Could tech executives manage to be even more evasive now that they’re appearing remotely via video chat? Will some subcommittee members lead the hearing so far into off-topic territory that we learn nothing about the business practices that scaled an industry of market-owning giants? And most importantly: On a scale of one to supervillain, what kind of vibes will Bezos give off?

We hope to know the answers to all of these questions and more — possibly even a question from a lawmaker or two — as we cover Wednesday’s events closely. If you’re interested in watching it go down yourself, you can tune into the livestream right here (well, up there) on Wednesday July 29 at 12PM ET.

All the best deals on Amazon’s range of popular devices

All the best deals on Amazon's range of popular devices

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India’s lockdown is making life hard for its most popular apps

The coronavirus pandemic, which has forced billions of people to stay home, has led to a surge in new downloads of several consumer and enterprise focused apps in the west. But in India, the biggest open market globally, things have taken a slightly different turn.

Daily downloads for several popular apps including TikTok, WhatsApp, Truecaller, Helo, Vmate, Facebook, Google Pay, and Paytm have either remained unchanged in the last three months or taken a dip, according to a TechCrunch analysis of figures provided by research firm Apptopia.

Additionally, several popular apps that offer in-app purchases have seen their revenue dramatically drop in the last four weeks as most companies in India recommended employees to work from home and New Delhi imposed a 21-day nationwide lockdown — now extended to May 3.

TikTok was downloaded 20.2 million times in India in a 31-day period ending April 12, down from 21.6 million times it was downloaded in the month of January, for instance. During the same period, WhatsApp’s download plummeted to 12 million from 17 million; Hotstar fell from 9.8 million to 3 million; and ByteDance’s Helo dropped from 10.5 million to 7.5 million.

For most of February, TikTok saw more than 700,000 downloads a day in India, peaking at 891,000. In the last one week, volume of daily downloads of the app has fallen below 450,000. WhatsApp’s figure has dropped from about 650,000 to below 250,000, according to Apptopia .

Aarogya Setu, an app launched by the Indian government to help people know if they have been in the vicinity of someone who has tested positive for coronavirus, is currently topping the chart in India with more than 780,000 downloads a day.

Tinder clocked $319,102 in in-app revenue on the App Store and Google Play Store in India between March 13 to April 12, down from $547,103 in January. Netflix’s in-app revenue fell from $285,562 to $192,154 during the same period. LinkedIn and YouTube also observed a decline.

One app that has seen its in-app revenue improve noticeably is Hotstar, which went from $173,253 to $329,675. Disney launched Disney+ atop Hotstar in India earlier this month.

Grocery delivery apps BigBasket, which raised $60 million last week, and Grofers have surged considerably, while Amazon, Flipkart, and Snapdeal that have halted taking non-essential orders in recent weeks have seen a decline in volume of daily downloads and active users on Android in India, according to marketing research firm SimilarWeb.

Zoom, a popular video chat app, has seen its daily downloads surge to over 500,000 in recent weeks, up from about 9,000 in early February. Ludo King, a popular game in Asian markets, has seen its daily download figure jump from about 150,000 in early February to over 450,000 in India in recent days.

As people stay at home, desktop usage has also increased in India, a mobile-first nation with nearly half a billion smartphone users.

“India has consistently seen mobile web browsing account for the heavy majority compared to the desktop, however from February to March, desktop usage increased its share of total visits to the top 100 sites by 1.6%. While this may seem small, it is 1.6% of 31.32 billion visits, so it is still rather significant,” a SimilarWeb representative told TechCrunch.

‘A perfect storm for first time managers,’ say VCs with their own shops

Until very recently, it had begun to seem like anyone with a thick enough checkbook and some key contacts in the startup world could not only fund companies as an angel investor but even put himself or herself in business as a fund manager.

It helped that the world of venture fundamentally changed and opened up as information about its inner workings flowed more freely. It didn’t hurt, either, that many billions of dollars poured into Silicon Valley from outfits and individuals around the globe who sought out stakes in fast-growing, privately held companies — and who needed help in securing those positions.

Of course, it’s never really been as easy or straightforward as it looks from the outside. While the last decade has seen many new fund managers pick up traction, much of the capital flooding into the industry has accrued to a small number of more established players that have grown exponentially in terms of assets under management. In fact, talk with anyone who has raised a first-time fund and you’re likely to hear that the fundraising process is neither glamorous nor lucrative and that it’s paved with very short phone conversations. And that’s in a bull market.

What happens in what’s suddenly among the worst economic environments the world has seen? First and foremost, managers who’ve struck out on their own suggest putting any plans on the back burner. “I would love to be positive, and I’m an optimist, but I would have to say that now is probably one of the toughest times” to get a fund off the ground, says Aydin Senkut, who founded the firm Felicis Ventures in 2006 and just closed its seventh fund.

“It’s a perfect storm for first-time managers,” adds Charles Hudson, who launched his own venture shop, Precursor Ventures, in 2015.

Hitting pause doesn’t mean giving up, suggests Eva Ho, cofounder of the three-year-old, seed-stage L.A.-based outfit Fika Ventures, which last year closed its second fund with $76 million. She says not to get “too dismayed” by the challenges.

Still, it’s good to understand what a first-time manager is up against right now, and what can be learned more broadly about how to proceed when the time is right.

Know it’s hard, even in the best times

As a starting point, it’s good to recognize that it’s far harder to assemble a first fund than anyone who hasn’t done it might imagine.

Hudson knew he wanted to leave his last job as a general partner with SoftTech VC when the firm — since renamed Uncork Capital — amassed enough capital that it no longer made sense for it to issue very small checks to nascent startups. “I remember feeling like, Gosh, I’ve reached a point where the business model for our fund is getting in the way of me investing in the kind of companies that naturally speak to me,” which is largely pre-product startups.

Hudson suggests he miscalculated when it came to approaching investors with his initial idea to create a single GP fund that largely backs ideas that are too early for other VCs. “We had a pretty big LP based [at SoftTech] but what I didn’t realize is the LP base that’s interested in someone who is on fund three or four is very different than the LP base that’s interested in backing a brand new manager.”

Hudson says he spent a “bunch of time talking to fund of funds, university endowments — people who were just not right for me until someone pulled me aside and just said, ‘Hey, you’re talking to the wrong people. You need to find some family offices. You need to find some friends of Charles. You need to find people who are going to back you because they think this is a good idea and who aren’t quite so orthodox in terms of what they want to see in terms partner composition and all that.’”

Collectively, it took “300 to 400 LP conversations” and two years to close his first fund with $15 million. (It’s now raising its third pre-seed fund).

Ho says it took less time for Fika to close its first fund but that she and her partners talked with 600 people in order to close their $41 million debut effort, adding that she felt like a “used car salesman” by the end of the process.

Part of the challenge was her network, she says. “I wasn’t connected to a lot of high-net-worth individuals or endowments or foundations. That was a whole network that was new to me, and they didn’t know who the heck I was, so there’s a lot of proving to do.” A proof-of-concept fund instilled confidence in some of these investors, though Ho notes you have to be able to live off its economics, which can be miserly.

She also says that as someone who’d worked at Google and helped found the location data company Factual, she underestimated the work involved in running a small fund. “I thought, ‘Well, I’ve started these companies and run these big teams. How how different could it be?” But “learning the motions and learning what it’s really like to run the funds and to administer a fund and all responsibilities and liabilities that come with it . . . it made me really stop and think, ‘Do I want to do this for 20 to 30 years, and if so, what’s the team I want to do it with?’”

Investors will offer you funky deals; avoid these if you can

First-time managers often look to close on a big anchor investor as a positive indicator to other backers, and some LPs will take advantage of their real or perceived desperation to lock something down. Yet seizing certain opportunities can actually send the wrong signal, depending on the scenario.

In Hudson’s case, an LP offered him two options: either a typical LP agreement wherein the outfit would write a small check, or an option wherein it would make a “significant investment that would have been 40% of our first fund,” says Hudson.

Unsurprisingly, the latter offer came with a lot of strings. Namely, the LP said it wanted to have a “deeper relationship” with Hudson, which he took to mean it wanted a share of Precursor’s profits beyond what it would receive as a typical investor in the fund.

“It was very hard to say no to that deal, because I didn’t get close to raising the amount of money that I would have gotten if I’d said yes for another year,” says Hudson. He still thinks it was the right move, however. “I was just like, how do I have a conversation with any other LP about this in the future if I’ve already made the decision to give this away?”

Fika similarly received an offer that would have made up 25 percent of the outfit’s debut fund, but the investor wanted a piece of the management company. It was “really hard to turn down because we had nothing else,” recalls Ho. But she says that other funds Fika was talking with made the decision simpler. “They were like, ‘If you sign on to those terms, we’re out.” The team decided that taking a shortcut that could damage them longer term wasn’t worth it.

Your LPs have questions, but you should question LPs, too

More so than most first-time managers, Senkut started off with certain financial advantages, having been the first product manager at Google and enjoying the fruits of its IPO before leaving the outfit in 2005 along with many other Googleaires, as they were dubbed at the time.

It allowed him to start putting money to work immediately. Still, as he tells it, it was “not a friendly time a decade ago” to raise outside capital, with most solo general partners spinning out of other venture funds —  not search engines. As an outsider, to crack into the venture industry, he largely tried to shadow angel investor Ron Conway, working checks into some of the same deals that Conway was backing.

“If you want to get into the movie industry, you need to be in hit movies,” says Senkut. “If you want to get into the investing industry, you need to be in hits. And the best way to get into hits is to say, ‘Okay. Who has an extraordinary number of hits, who’s likely getting the best deal flow,’ because the more successful you are, the better companies you’re going to see, the better the companies that find you.”

Senkut has developed an enviable track record over time, including stakes in Credit Karma, which was just gobbled up by Intuit, and Plaid, sold in January to Visa. Those kinds of exits may give him more confidence than managers earlier in their careers might muster. Still, Senkut also says it’s very important for anyone raising a fund to not just answer LPs’ questions but to also ask the right questions of them.

He says, for example, that with Felicis’s newest fund, the team asked many managers outright about how many assets they have under management, how much of those assets are dedicated to venture and private equity, and how much of their allotment to each was already taken.

Felicis did this so it doesn’t find itself in a position of making a capital call that an investor can’t meet, especially given that in recent years, many institutional investors have been writing out checks to VCs at a faster pace than ever been before and have, in many cases, too much of their capital in the venture industry at this point.

In fact, Felicis added new managers who “had room” while cutting back some existing LPs “that we respected . .. because if you ask the right questions, it becomes clear whether they’re already 20% over-allocated [to the asset class] and there’s no possible way [they are] even going to be able to invest if they want to.”

It’s smart thinking and, when the market eventually eases up again, and new funds can again capture the attention of investors, certainly something to keep in mind.

Workers at America’s largest companies are not covered under coronavirus aid package

Workers at America’s largest companies are not covered under a bill passed by the House of Representatives on Friday that is supposed to support American workers impacted by the spread of the novel coronavirus.

The bill still has to be voted on by the Senate and approved before it can be signed into law, but its structure leaves a gaping hole in the prevention strategy the government has said is necessary to reduce the COVID-19 outbreak in the US.

“No American worker should worry about missing a paycheck if they’re feeling ill,” said Vice President Mike Pence at the Sunday press briefing from the Coronavirus Task Force. “If you’re sick with a respiratory illness stay home.”

However, millions of Americans potentially don’t have the ability to make that choice under the congressional aid package touted by both Democrats and Republicans. By excluding companies with more than 500 employees from the Congressional aid, the health and welfare of millions of Americans in industries providing goods, manufacturing, and vital services to most of the country is being left up to the discretion of their employers.

Details of the legislative compromise were first reported by The New York Times yesterday. And chart published by The New York Times illustrated just how many companies didn’t have paid sick leave policies in place as the coronavirus began to spread in the US (companies have changed policies to respond to the coronavirus).

Image courtesy of The New York Times

Big technology companies took the lead early this month in changing policies for their workers and by the end of last week many of the country’s largest employers had followed suit. But it looks like their work won’t be covered under the government’s current plan — and that any measures to extend sick leave and paid time off will be limited to a response to the current outbreak.

These large employers have already responded by closing stores or reducing hours in areas where most cases of the novel coronavirus have been diagnosed — and companies operating in most of those states are required by law to offer paid leave to their hourly employees and contractors.

Companies who have responded to the outbreak by changing their time-off and sick leave policies include Walmart, Target, Darden Restaurants (the owner of the Olive Garden restaurant chain), Starbucks, Lowes, and KFC, have joined tech companies and gig economy businesses like Alphabet (the parent company of Google), Amazon, Apple, Facebook, Instacart, Microsoft, Postmates, Salesforce, and Uber in offering extended leave benefits to employees affected by the coronavirus.

These kinds of guarantees can go a long way to ensuring that hourly workers in the country don’t have to choose between their health and their employment. The inability to pass a law that would cover all workers puts everyone at risk.

Without government stepping in, industries are crafting their own responses. Late Sunday, automakers including GM, Ford, and FiatChrysler joined the United Auto Workers union in announcing the creation of a coronavirus task force to coordinate an industrywide response for the automotive sector.

As the Pew Research Center noted last week, the bill proposed by House Democrats had initially proposed temporary federal sick leave covering workers with COVID-19 or caring for family members with two-thirds of their wages for up to three months; expiring in January 2021. The measure would have also guaranteed private employers give workers seven days of paid sick leave with another 14 days available immediately in the event of future public health emergencies.

Most workers have less than nine days of sick leave covered under current state legislation. There is no national mandate for paid sick leave. After one year on the job, 22 percent of workers have access to less than five days, while another 46 percent of employees can get five-to-nine days of paid sick leave. Only 38 percent of workers have between ten and fourteen days of leave.

The Pew Research Center also reported that the lack of access to paid sick leave increases as wages decline. Over 90 percent of workers receiving hourly rages over $32.21 have some form of paid sick leave. Only about 50 percent of workers who make $13.80 or less have access to some form of paid sick leave. For Americans who make under $10.80 an hour, only about 30 percent receive any sick leave.

Amazon withdraws from MWC over coronavirus-related concerns

Amazon is the latest company to cancel its plans for the Mobile World Congress, which will take place later this month in Barcelona, over coronavirus-related concerns.

In a statement emailed to TechCrunch, an Amazon spokesperson said “due to the outbreak and continued concerns about novel coronavirus, Amazon will withdraw from exhibiting and participating in Mobile World Congress 2020, scheduled for Feb. 24-27 in Barcelona, Spain.”

Other companies that have cancelled or scaled back their plans for MWC due to the outbreak include LG, NVIDIA and Ericsson. The event’s organizer, GSMA, recently issued a new statement about precautions it is taking, including a ban on visitors from Hubei province, where the epidemic is believed to have begun.

 

The vast majority of people affected by coronavirus are in China, where there have been 908 deaths and 40,171 confirmed infections, as of the time this article was posted. The outbreak has also led to a wave of anti-Asian racism and xenophobia across the world.

InterviewBit secures $20M to grow its advanced online computer science program in India

InterviewBit, a Bangalore-based startup that runs an advanced online computer science program for college graduates and young professional engineers, has raised $20 million in one of the largest Series A financing rounds in the education sector.

The nine-month-old startup’s Series A round was led by Sequoia India, Tiger Global and Global Founders Capital among others, it said. The startup said it is also rebranding its online coding program, earlier called InterviewBit Academy, to Scaler Academy.

InterviewBit operates on an income-sharing model, where students have the option to pay after they have landed a job. The concept, also known as human capital contract, has been around for decades but is beginning to see some traction now.

The startup said more than 2,000 students have enrolled in its six-month program to date. It had received over 200,000 applications. And “several hundred” of those who enrolled in the program have landed jobs at tech companies such Google, Amazon, and Microsoft.

Students enrolled in Scaler Academy are mentored and taught by tech leaders and subject matter experts working with organisations including Google, Facebook, Twitter, and Netflix.

The startup, which is part of Sequoia India’s Surge accelerator program, will use the new fund to scale up its enrollment and launch in new markets. It also plans to invest in its curriculum and in live teaching product.

Indian newspaper Times of India first reported about the financing round last year, and said the round would value InterviewBit at over $100 million.

“Within a short period of time, Scaler Academy has made a huge impact on the capabilities of our students, who spend, on average 4-5 hours/day on our online and live learning platform,” said Abhimanyu Saxena, co-founder of InterviewBit. “We are very excited that our work results in a step function change in the careers of our students — and so we have rebranded it to Scaler Academy, a platform for pursuing excellence in software programming.”

A recent National Employability Report Engineers 2019 report highlighted that the employability of Indian engineers continues to be as low as 20%. “With that in mind, Scaler Academy’s meticulously structured 6-month online program effectively enhances the coding skills of professionals by creating a modern curriculum with exposure to the latest technologies,” the startup said.

Talk to the hand? Amazon reportedly wants you to pay with it.

Talk to the hand? Amazon reportedly wants you to pay with it.

Apple and Google make it easy to leave your wallet be when it’s time to pay at the register, but now there are murmurs about factoring out your smartphone as well.

The Wall Street Journal reports that Amazon shops and other merchants could offer a hand-based payment system. Your credit card or account info would be linked to your palms, so when checking out you’d just put out your hand. Scan it and you’re set.

The terminals could be used at any store, not just Amazon-owned ones. Early talks with financial institutions suggest the powers-that-be are mulling connecting customer payment info to the hand-readers. Read more…

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Amazon partners with India’s second largest retailer to sell its goods online

Amazon is deepening its relationship with India’s second largest retail chain, Future Retail, as the e-commerce giant widens its footprint in one of its key overseas markets.

The two said on Monday that they have entered into a long-term business agreement to expand the reach of Future Retail’s stores through Amazon India marketplace. Future Retail operates more than 1,500 stores across India, but until now, it has not aggressively explored sales online.

As part of the agreement, Amazon India will become the authorized online sales channel for Future Retail stores including department and grocery stores chain Big Bazaar and lifestyle food superstore Foodhall, the two said. Additionally, India’s second largest retail chain, which attracts over 350 million footfalls a year across its network, will list its items on Amazon’s two-hour delivery platform Prime Now, which is currently operational in Delhi, Mumbai, Bengaluru, and Hyderabad.

The two giants said that they have agreed to focus on grocery — a category that Amazon has been working in India for awhile — general merchandize, fashion and apparel, and beauty products.

Future Retail will “augment its existing store-infrastructure” at its retail outlets for facilitating seamless packaging and pickup of products ordered online. The two have already launched this service across 22 stores and the early results have been “encouraging,” they said.

Future Consumer, which is also a part of Future Retail, has also formed a long-term partnership with Amazon to secure an online distribution through the Amazon India marketplace.

Future Consumer offers a wide-range of food, home care, personal care, and beauty products and has built a number of in-house brands such as Tasty Treat for snacks, Voom for fabric care, Dreamery for dairy, Karmiq for dry fruits, Mother Earth for organic staples, Kara for personal care, and CleanMate for household cleaning.

Kishore Biyani, Chairman and Managing Director of Future Retail, said the partnership will “allow us to build upon each other’s strengths in the physical and digital space so that customers benefit from the best services, products, assortment and price.”

The announcement today comes months after Amazon bought stakes in Future Retail’s Future Coupons — that effectively gave it a 3.58% stake in the retail chain group’s India business — and days after India’s largest retail chain, Reliance Retail, began its e-commerce venture.

“Future Retail’s national footprint of stores offering thousands of products across fashion, appliances, home, kitchen and grocery will now be available to millions of customers shopping on Amazon.in, in hours across 25+ cities,” said Amit Agarwal, SVP and Country Head of Amazon India, in a statement.

According to research firm Technopak Advisors, retail in India is estimated to be a $188 billion business in next three years, up from about $79 billion in 2018. Online sales still account for less than 5% of overall retail.

Tech’s biggest companies are worth ~$5T as 2019’s epic stock market run wraps

Look, this is the last post I’m writing in 2019 and I’m tired. But I can’t let the year close without taking stock of how well tech stocks did this year. It was bonkers.

So let’s mark the year’s conclusion with some notes for our future selves. Yes, we know that the Nasdaq has been setting new records and SaaS had a good year. But we need to dig in and get the numbers out so that we can look back and remember.

Let’s cap off this year the way it deserves to be remembered, as a kick-ass trip ’round the sun for your local, public technology company.

Keeping score

We’ll start with the indices that we care about:

  • The tech-heavy Nasdaq Composite rose 35% in 2019
  • The SaaS-heavy Bessemer Cloud Index rose 41% this year

Next, the highest-value U.S.-based technology companies:

  • Microsoft was up around 55% in 2019
  • Apple managed an 86% gain in the year
  • Not be left out, Facebook rose 57%
  • Amazon posted its own gain of 23% in 2019
  • Alphabet managed to grow by 29%, as well

Now let’s turn to some companies that we care about, even if they are smaller than the Big Five:

  • Salesforce? Up 19% this year
  • Adobe was up 46% in 2019, which was astounding
  • Intel picked up 28% in the year, making it no slouch
  • Even Oracle managed to gain 17% in 2019

And so on.

The technology industry’s epic run has been so strong that The Wall Street Journal noted this morning that, powered by tech companies, U.S. stocks “are poised for their best annual performance in six years.” The Journal highlighted the performance of Apple and Microsoft in particular for helping drive the boom. I wonder why.

How long will we live in the neighborhood of Nasdaq 9,000? How long can two tech companies be worth more than $1 trillion at the same time? How long can the biggest tech companies be worth a combined $4.93 trillion (I remember when $3 trillion for the Big Five was news, and I recall when the group reach a collective value of $4 trillion).1

But the worst trade in recent years has been the pessimists’ gambit. No matter what, stocks have kept going up, short-term hiccoughs and other missteps aside.

For nearly everyone, that is. While tech stocks in general did very well, some names that we all know did not. Let’s close on those reminders that a rising tide lifts only most boats.

2019 naughty list

Several of the most lackluster public tech companies were 2019 technology IPOs, interestingly enough. Who didn’t do well? Uber earns a spot on the naughty list for not only being underwater from its IPO price, but also from its final private valuations. And as you guessed, Lyft is down from its IPO price as well, which is not good.

Some 2019 IPOs did well in the middle of the year, but fell a little flat as the year came to a close. Pinterest, Beyond Meat and Zoom meet that criteria, for example. And some SaaS companies struggled, even if we think they will reach $1 billion in revenue in time.

But it was mostly a party. The public markets were good, and tech stocks were great. This helped create another 100+ unicorns in the year.

Such was 2019. On to 2020!

  1. In time, those numbers will look small. But sitting here on December 31, 2019, they appear huge and towering and, it must be said, somewhat perilously stacked.

Hackers are getting really good at hacking Ring cameras and the results are terrifying

Hackers are getting really good at hacking Ring cameras and the results are terrifying

In case you needed another reminder of the potentially terrifying downside of having a Wi-Fi-connected security camera in your home, consider this: it’s surprisingly easy for hackers to gain access to them.

Hackers have created software that essentially streamlines the process, and are selling and sharing it on internet forums, Motherboard reported. The exploit is possible not because of any one vulnerability in Ring’s software, but rather how it takes advantage of insecure passwords in order to get into the accounts in question. 

This is much more than a theoretical vulnerability. There have been reports all around the country of people encountering strangers on the other end of their in-home security camera.  Read more…

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Hackers are getting really good at hacking Ring cameras and the results are terrifying

Hackers are getting really good at hacking Ring cameras and the results are terrifying

In case you needed another reminder of the potentially terrifying downside of having a Wi-Fi-connected security camera in your home, consider this: it’s surprisingly easy for hackers to gain access to them.

Hackers have created software that essentially streamlines the process, and are selling and sharing it on internet forums, Motherboard reported. The exploit is possible not because of any one vulnerability in Ring’s software, but rather how it takes advantage of insecure passwords in order to get into the accounts in question. 

This is much more than a theoretical vulnerability. There have been reports all around the country of people encountering strangers on the other end of their in-home security camera.  Read more…

More about Tech, Amazon, Cybersecurity, Ring, and Tech

Pastors are getting in on Ring’s ever-growing surveillance state

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God is always watching — and soon, thanks to Amazon, a bunch of church pastors may join in on the fun. 

According to the Baltimore Sun, the Seattle tech giant has partnered with a host of religious leaders to equip Baltimore residents with Ring surveillance cameras. Amazon reportedly helped the group of pastors secure $15,000 to acquire the Amazon-owned cameras that have gained notoriety as a privacy-violating, police-fueled creep show.  

Notably, these cameras will not be deployed at physical places of worship — often a sad necessity in an age of rising anti-semitism and white nationalist violence — but rather employed to bust people in the community.  Read more…

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Flip flops made of grass, live hermit crabs, and more weird stuff on Amazon this week

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As your friendly neighborhood shopping writers, we spend our days scouring the internet and of course, Amazon, to bring you the best deals on the gadgets and gizmos you need the most. But there’s something we need to get off our chests: beneath Amazon’s calm surface of MacBooks, KitchenAid mixers, and eco-friendly air conditioners there lurks a strange — yet wonderful — underbelly. 

One where you find one hyperrealistic steak pillow and before you know it, you’ve been sucked further into the head-scratching vortex until you’re decorating your apartment with a life size Celine Dion cardboard cutout. It happens.  Read more…

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The Knight Foundation launches $750,000 initiative for immersive technology for the arts

The John S. and James L. Knight Foundation is looking for pitches on how to enhance and augment traditional creative arts through immersive technologies.

Through a partnership with Microsoft the foundation is offering a share of a $750,00 pool of cash and the option of technical support from Microsoft, including mentoring in mixed-reality technologies and access to the company’s suite of mixed reality technologies.

“We’ve seen how immersive technologies can reach new audiences and engage existing audiences in new ways,” said Chris Barr, director for arts and technology innovation at Knight Foundation, in a statement. “But arts institutions need more knowledge to move beyond just experimenting with these technologies to becoming proficient in leveraging their full potential.”

Specifically, the foundation is looking for projects that will help engage new audiences; build new service models; expand access beyond the walls of arts institutions; and provide means to distribute immersive experiences to multiple locations, the foundation said in a statement.

“When done right, life-changing experiences can happen at the intersection of arts and technology,” said Victoria Rogers, Knight Foundation vice president for arts. “Our goal through this call is to help cultural institutions develop informed and refined practices for using new technologies, equipping them to better navigate and thrive in the digital age.”

Launched at the Gray Area Festival in San Francisco, the new initiative is part of the Foundation’s art and technology focus, which the organization said is designed to help arts institutions better meet changing audience expectations. Last year, the foundation invested $600,000 in twelve projects focused on using technology to help people engage with the arts.

“We’re incredibly excited to support this open call for ways in which technology can help art institutions engage new audiences,” says Mira Lane, Partner Director Ethics & Society at Microsoft. “We strongly believe that immersive technology can enhance the ability for richer experiences, deeper storytelling, and broader engagement.”

Here are the winners from the first $600,000 pool:

  • ArtsESP – Adrienne Arsht Center for the Performing Arts

Project lead: Nicole Keating | Miami | @ArshtCenter

Developing forecasting software that enables cultural institutions to make data-centered decisions in planning their seasons and events.

  • Exploring the Gallery Through Voice – Alley Interactive

Project lead: Tim Schwartz | New York | @alleyco@cooperhewitt@SinaBahram

Exploring how conversational interfaces, like Amazon Alexa, can provide remote audiences with access to an exhibition experience at Cooper Hewitt, Smithsonian Design Museum.

  • The Bass in VR – The Bass

Project lead: T.J. Black | Miami Beach | @TheBassMoA

Using 360-degree photography technology to capture and share the exhibit experience in an engaging, virtual way for remote audiences.

  • AR Enhanced Audio Tour – Crystal Bridges Museum of American Art

Project lead: Shane Richey | Bentonville, Arkansas | @crystalbridges

Developing mobile software to deliver immersive audio-only stories that museum visitors would experience when walking up to art for a closer look.

  • Smart Label Initiative – Eli and Edythe Broad Art Museum at Michigan State University

Project lead: Brian Kirschensteiner | East Lansing, Michigan | @msubroad

Creating a system of smart labels that combine ultra-thin touch displays and microcomputers to deliver interactive informational content about artwork to audiences.

  • Improving Arts Accessibility through Augmented Reality Technology – Institute on Disabilities at Temple University, in collaboration with People’s Light

Project lead: Lisa Sonnenborn | Philadelphia | @TempleUniv,@IODTempleU@peopleslight 

Making theater and performance art more accessible for the deaf, hard of hearing and non-English speaking communities by integrating augmented reality smart glasses with an open access smart captioning system to accompany live works.

  • ConcertCue – Massachusetts Institute of Technology (MIT); MIT Center for Art, Science & Technology

Project lead: Eran Egozy | Cambridge, Massachusetts | @EEgozy,@MIT,@ArtsatMIT@MIT_SHASS

Developing a mobile app for classical music audiences that receives real-time program notes at precisely-timed moments of a live musical performance.

  • Civic Portal – Monument Lab

Project lead: Paul Farber and Ken Lum | Philadelphia | @monument_lab@PennDesign@SachsArtsPhilly@paul_farber

Encouraging public input on new forms of historical monuments through a digital tool that allows users to identify locations, topics and create designs for potential public art and monuments in our cities.

  • Who’s Coming? – The Museum of Art and History at the McPherson Center

Project lead: Nina Simon | Santa Cruz, California | @santacruzmah@OFBYFOR_ALL

Prototyping a tool in the form of a smartphone/tablet app for cultural institutions to capture visitor demographic data, increasing knowledge on who is and who is not participating in programs.

  • Feedback Loop – Newport Art Museum, in collaboration with Work-Shop Design Studio

Project lead: Norah Diedrich | Newport, Rhode Island | @NewportArtMuse

Enabling audiences to share immediate feedback and reflections on art by designing hardware and software to test recording and sharing of audience thoughts.

  • The Traveling Stanzas Listening Wall – Wick Poetry Center at Kent State University Foundation

Project lead: David Hassler | Kent, Ohio | @DavidWickPoetry,@WickPoetry,@KentState@travelingstanza

Producing touchscreen installations in public locations that allow users to create and share poetry by reflecting on and responding to historical documents, oral histories, and multimedia stories about current events and community issues.

  • Wiki Art Depiction Explorer – Wikimedia District of Columbia, in collaboration with the Smithsonian Institution

Project lead: Andrew Lih | Washington, District of Columbia | @wikimedia@fuzheado

Using crowdsourcing methods to improve Wikipedia descriptions of artworks in major collections so people can better access and understand art virtually.

Everything you need to know about Amazon Prime for Australia

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Although it’s been long enjoyed and fretted over across the globe, Australians had been anticipating the arrival of Amazon’s Prime Day for quite some time — and now, it’s officially part of the calendar.

Following the event’s 2018 debut, Amazon is bringing Prime Day back to Australia, as part of its signature worldwide shopping marathon. Being ahead of the timezone, Aussie Prime members will get first access to some pretty epic deals. 

Prime members get fast and free delivery, a range of entertainment options, early access to content as well as tonnes of deals and events like the much-anticipated Prime Day. This is all provided through an annual or monthly subscription — and so far, there’s more than 100 million paid members around the globe. Read more…

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Fake Amazon reviews surge around Prime Day

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As products jockey for your attention on Prime Day, some of them will be playing dirty.

Fake reviews on Amazon tend to surge around Prime Day, according to an analysis by the free review integrity analytics service Fakespot. This year’s Prime Day is right around the corner, spanning two days, July 15 and 16.

Fake reviews are always out in force in the world of e-commerce, not just on Amazon. But on Prime Day, when shoppers flock to the retailer, there’s an even larger push by companies seeking to feature their products to deploy fake reviews that boost ratings and visibility. 

“Companies publish fake reviews ahead of Prime Day because it helps move their products up the product ranking page,” a Fakespot representative said. “If anyone is searching for alternatives to Prime Day deals, they will see their products.” Read more…

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India’s largest video streaming service, owned by Disney, breaks Safari compatibility to fix security flaw

Hotstar, India’s largest video streaming service with more than 300 million users, disabled support for Apple’s Safari web browser on Friday to mitigate a security flaw that allowed unauthorized usage of its platform, two sources familiar with the matter told TechCrunch.

The incident comes at a time when the streaming service — operated by Star India, part of 20th Century Fox that Disney acquired — enjoys peak attention as millions of people watch the ongoing ICC World Cup cricket tournament on its platform.

As users began to complain about not being able to use Hotstar on Safari, the company’s official support account asserted that “technical limitations” on Apple’s part were the bottleneck. “These limitations have been from Safari; there is very little we can do on this,” the account tweeted Friday evening.

Sources at Hotstar told TechCrunch that this was not an accurate description of the event. Instead, company’s engineers had identified a security hole that was being exploited by unauthorized users to access Hotstar’s content, they said.

Hotstar intends to work on patching the flaw soon and then reinstate support for Safari, the sources said.

The security flaw can only be exploited through Safari’s desktop and mobile browsers. On its website, the company recommends users to try Chrome and Firefox, or its mobile apps, to access the service. Hotstar did not respond to requests for comment.

Hotstar, which rivals Netflix and Amazon Prime Video in India, maintains a strong lead in the local video streaming market (based on number of users and engagement). Last month, it claimed to set a new global record by drawing more than 18 million viewers to a live cricket match.

India’s largest video streaming service, owned by Disney, breaks Safari compatibility to fix security flaw

Hotstar, India’s largest video streaming service with more than 300 million users, disabled support for Apple’s Safari web browser on Friday to mitigate a security flaw that allowed unauthorized usage of its platform, two sources familiar with the matter told TechCrunch.

The incident comes at a time when the streaming service — operated by Star India, part of 20th Century Fox that Disney acquired — enjoys peak attention as millions of people watch the ongoing ICC World Cup cricket tournament on its platform.

As users began to complain about not being able to use Hotstar on Safari, the company’s official support account asserted that “technical limitations” on Apple’s part were the bottleneck. “These limitations have been from Safari; there is very little we can do on this,” the account tweeted Friday evening.

Sources at Hotstar told TechCrunch that this was not an accurate description of the event. Instead, company’s engineers had identified a security hole that was being exploited by unauthorized users to access Hotstar’s content, they said.

Hotstar intends to work on patching the flaw soon and then reinstate support for Safari, the sources said.

The security flaw can only be exploited through Safari’s desktop and mobile browsers. On its website, the company recommends users to try Chrome and Firefox, or its mobile apps, to access the service. Hotstar did not respond to requests for comment.

Hotstar, which rivals Netflix and Amazon Prime Video in India, maintains a strong lead in the local video streaming market (based on number of users and engagement). Last month, it claimed to set a new global record by drawing more than 18 million viewers to a live cricket match.

Great teams, UBI, data retention policies, and Amazon HQ2

3 key secrets to building extraordinary teams

David Cancel, the CEO and founder of Drift, wrote a deep dive on how to think about finding and recruiting the kinds of people who build incredible startups. Among the factors he looks at:

Scrappiness (Importance: 35%)

The four most telling words a new hire can say: “I’ll figure it out.” If you find someone who says that (and can follow through on it), you know you’ve found someone with drive — someone who will plunge headfirst into any challenge and help move the company forward. But to clarify, the type of drive I look for in new hires is different from traditional ambition. Because traditionally ambitious people, while hard workers, tend to obsess over their own personal rise up the corporate ladder. They always have an eye on that next title change, from manager to director, director to VP, or VP to C-suite, and that influences how they perform. That’s why a decade ago, while running my previous company Performable, I added a new requirement to our job descriptions: “Scrappiness.” Today, it’s one of our leadership principles at Drift.

Scrappy people don’t rely on titles or defined sets of responsibilities. Instead, they do whatever it takes to get the job done, even when no one is looking, and even if the tasks they’re performing could be considered “beneath their title.”

Takeaways from F8 and Facebook’s next phase

We had a greatly informative conference call with our very own Josh Constine and Frederic Lardinois, who were checking in from Facebook’s F8 conference in San Jose this week. In case you weren’t able to join us, the transcript and audio have been posted for Extra Crunch members:

Amazon reportedly nixes its price parity requirement for third-party sellers in the U.S.

Amazon will stop forbidding third-party merchants who list on its e-commerce platform in the United States from selling the same products on other sites for lower prices, reports Axios.

The company’s decision to end its price parity provision comes three months after Sen. Richard Blumenthal urged the Department of Justice to open an antitrust investigation into Amazon’s policies and a few days after Democratic presidential candidate Sen. Elizabeth Warren announced she would make breaking up Amazon, Google and Facebook a big part of her campaign platform.

Also called “most favored nation” (MFN) requirements, Amazon’s price parity provisions gave it a competitive edge, but because of its size, also led to concerns about its impact on competition and fair pricing for consumers. Amazon stopped requiring price parity of its European Union sellers in 2013 after it was the subject of investigations by the United Kingdom’s Office of Fair Trading and Germany’s Federal Cartel Office.

In a statement, Blumenthal said Amazon’s “wise and welcome decision comes only after aggressive advocacy and attention that compelled Amazon to abandon its abusive contract clause.” He added that “I remain deeply troubled that federal regulators responsible for cracking down on anti-competitive practices seem asleep at the wheel, at great cost to American innovation and consumers.”

TechCrunch has contacted Amazon for comment.

Amazon’s QVC-style shopping channel is a monument to sadness

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Even in these dark online times, there are places on the internet that manage to shine through and offer us some form of digital redemption; places where we yearn to stay and build new forms of community.

Amazon Live is not one of those places. 

The QVC-like streaming media service — soft-launched on Amazon’s mobile apps, in stealth mode on the web, and first discovered by TechCrunch — offers a carousel of teeth-whitened enthusiasts detailing all the ways a featured product will improve their lives. 

But wait, there’s more.  Read more…

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President Bolsonaro should boost Brazil’s entrepreneurial ecosystem

Romero Rodrigues
Contributor

Romero Rodrigues is a managing partner at Redpoint eVentures, the Brazilian-focused arm of the Silicon Valley venture firm Redpoint.

In late October following a significant victory for Jair Bolsonaro in Brazil’s presidential elections, the stock market for Latin America’s largest country shot up. Financial markets reacted favorably to the news because Bolsonaro, a free-market proponent, promises to deliver broad economic reforms, fight corruption and work to reshape Brazil through a pro-business agenda. While some have dubbed him as a far-right “Trump of the Tropics” against a backdrop of many Brazilians feeling that government has failed them, the business outlook is extremely positive.

When President-elect Bolsonaro appointed Santander executive Roberto Campos as new head of Brazil’s central bank in mid-November, Brazil’s stock market cheered again with Sao Paulo’s Bovespa stocks surging as much as 2.65 percent on the day news was announced. According to Reuters, “analysts said Bolsonaro, a former army captain and lawmaker who has admitted to having scant knowledge of economics, was assembling an experienced economic team to implement his plans to slash government spending, simplify Brazil’s complex tax system and sell off state-run companies.”

Admittedly, there are some challenges as well. Most notably, pension-system reform tops the list of priorities to get on the right track quickly. A costly pension system is increasing the country’s debt and contributed to Brazil losing its investment-grade credit rating in 2015. According to the new administration, Brazil’s domestic product could grow by 3.5 percent during 2019 if Congress approves pension reform soon. The other issue that’s cropped up to tarnish the glow of Bolsonaro coming into power are suspect payments made to his son that are being examined by COAF, the financial crimes unit.

While the jury is still out on Bolsonaro’s impact on Brazilian society at large after being portrayed as the Brazilian Trump by the opposition party, he’s come across as less authoritarian during his first days in office. Since the election, his tone is calmer and he’s repeatedly said that he plans to govern for all Brazilians, not just those who voted for him. In his first speech as president, he invited his wife to speak first which has never happened before.

Still, according to The New York Times, “some Brazilians remain deeply divided on the new president, a former army captain who has hailed the country’s military dictators and made disparaging remarks about women and minority groups.”

Others have expressed concern about his environment impact with the “an assault on environmental and Amazon protections” through an executive order within hours of taking office earlier this week. However, some major press outlets have been more upbeat: “With his mix of market-friendly economic policies and social conservativism at home, Mr. Bolsonaro plans to align Brazil more closely with developed nations and particularly the U.S.,” according to the Wall Street Journal this week.

Based on his publicly stated plans, here’s why President Bolsonaro will be good for business and how his administration will help build an even stronger entrepreneurial ecosystem in Brazil:

Bolsonaro’s Ministerial Reform

President Temer leaves office with 29 government ministries. President Bolsonaro plans to reduce the number of ministries to 22, which will reduce spending and make the government smaller and run more efficiently. We expect to see more modern technology implemented to eliminate bureaucratic red tape and government inefficiencies.

Importantly, this will open up more partnerships and contracting of tech startups’ solutions. Government contacts for new technology will be used across nearly all the ministries including mobility, transportation, health, finance, management and legal administration – which will have a positive financial impact especially for the rich and booming SaaS market players in Brazil.

Government Company Privatization

Of Brazil’s 418 government-controlled companies, there are 138 of them on the federal level that could be privatized. In comparison to Brazil’s 418, Chile has 25 government-controlled companies, the U.S. has 12, Australia and Japan each have eight, and Switzerland has four. Together, Brazil-owned companies employ more than 800,000 people today, including about 500,000 federal employees. Some of the largest ones include petroleum company Petrobras, electric utilities company EletrobrasBanco do Brasil, Latin America’s largest bank in terms of its assets, and Caixa Economica Federal, the largest 100 percent government-owned financial institution in Latin America.

The process of privatizing companies is known to be cumbersome and inefficient, and the transformation from political appointments to professional management will surge the need for better management tools, especially for enterprise SaaS solutions.

STEAM Education to Boost Brazil’s Tech Talent

Based on Bolsonaro’s original plan to move the oversight of university and post-graduate education from the Education Ministry to the Science and Technology Ministry, it’s clear the new presidential administration is favoring more STEAM courses that are focused on Science, Technology, Engineering, the Arts and Mathematics.

Previous administrations threw further support behind humanities-focused education programs. Similar STEAM-focused higher education systems from countries such as Singapore and South Korea have helped to generate a bigger pipeline of qualified engineers and technical talent badly needed by Brazilian startups and larger companies doing business in the country. The additional tech talent boost in the country will help Brazil better compete on the global stage.

The Chicago Boys’ “Super” Ministry

The merger of the Ministry of Economy with the Treasury, Planning and Industry and Foreign Trade and Services ministries will create a super ministry to be run by Dr. Paulo Guedes and his team of Chicago Boys. Trained at the Department of Economics in the University of Chicago under Milton Friedman and Arnold Harberger, the Chicago Boys are a group of prominent Chilean economists who are credited with transforming Chile into Latin America’s best performing economies and one of the world’s most business-friendly jurisdictions. Joaquim Levi, the recently appointed chief of BNDES (Brazilian Development Bank), is also a Chicago Boy and a strong believer in venture capital and startups.

Previously, Guedes was a general partner in Bozano Investimentos, a pioneering private equity firm, before accepting the invitation to take the helm of the world’s eighth-largest economy in Brazil. To have a team of economists who deeply understand the importance of rapid-growth companies is good news for Brazil’s entrepreneurial ecosystem. This group of 30,000 startup companies are responsible for 50 percent of the job openings in Brazil and they’re growing far faster than the country’s GDP.

Bolsonaro’s Pro-Business Cabinet Appointments

President Bolsonaro has appointed a majority of technical experts to be part of his new cabinet. Eight of them have strong technology backgrounds, and this deeper knowledge of the tech sector will better inform decisions and open the way to more funding for innovation.

One of those appointments, Sergio Moro, is the federal judge for the anti-corruption initiative knows as “Operation Car Wash.” With Moro’s nomination to Chief of the Justice Department and his anticipated fight against corruption could generate economic growth and help reduce unemployment in the country. Bolsonaro’s cabinet is also expected to simplify the crazy and overwhelming tax system. More than 40 different taxes could be whittled down to a dozen, making it easier for entrepreneurs to launch new companies.

In general terms, Brazil and Latin America have long suffered from deep inefficiencies. With Bolsonaro’s administration, there’s new promise that there will be an increase in long-term infrastructure investments, reforms to reduce corruption and bureaucratic red tape, and enthusiasm and support for startup investments in entrepreneurs who will lead the country’s fastest-growing companies and make significant technology advancements to “lift all boats.”

Cities that didn’t win HQ2 shouldn’t be counted out

Scott Andes
Contributor

Scott Andes is the program director for the National League of Cities City Innovation Ecosystem program.

The more than year-long dance between cities and Amazon for its second headquarters is finally over, with New York City and Washington, DC, capturing the big prize. With one of the largest economic development windfalls in a generation on the line, 238 cities used every tactic in the book to court the company – including offering to rename a city “Amazon” and appointing Jeff Bezos “mayor for life.”

Now that the process, and hysteria, are over, and cities have stopped asking “how can we get Amazon,” we’d like to ask a different question: How can cities build stronger start-up ecosystems for the Amazon yet to be built?

In September 2017, Amazon announced that it would seek a second headquarters. But rather than being the typical site selection process, this would become a highly publicized Hunger Games-esque scenario.

An RFP was proffered on what the company sought, and it included everything any good urbanist would want, with walkability, transportation and cultural characteristics on the docket. But of course, incentives were also high on the list.

Amazon could have been a transformational catalyst for a plethora of cities throughout the US, but instead, it chose two superstar cities: the number one and five metro areas by GDP which, combined, amounts to a nearly $2 trillion GDP. These two metro areas also have some of the highest real estate prices in the country, a swath of high paying jobs and of course power — financial and political — close at hand.

Perhaps the take-away for cities isn’t that we should all be so focused on hooking that big fish from afar, but instead that we should be growing it in our own waters. Amazon itself is a great example of this. It’s worth remembering that over the course of a quarter century, Amazon went from a garage in Seattle’s suburbs to consuming 16 percent — or 81 million square feet — of the city’s downtown. On the other end of the spectrum, the largest global technology company in 1994 (the year of Amazon’s birth) was Netscape, which no longer exists.

The upshot is that cities that rely only on attracting massive technology companies are usually too late.

At the National League of Cities, we think there are ways to expand the pie that don’t reinforce existing spatial inequalities. This is exactly the idea behind the launch of our city innovation ecosystems commitments process. With support from the Schmidt Futures Foundation, fifty cities, ranging from rural townships, college towns, and major metros, have joined with over 200 local partners and leveraged over $100 million in regional and national resources to support young businesses, leverage technology and expand STEM education and workforce training for all.

The investments these cities are making today may in fact be the precursor to some of the largest tech companies of the future.

With that idea in mind, here are eight cities that didn’t win HQ2 bids but are ensuring their cities will be prepared to create the next tranche of high-growth startups. 

Austin

Austin just built a medical school adjacent to a tier one research university, the University of Texas. It’s the first such project to be completed in America in over fifty years. To ensure the addition translates into economic opportunity for the city, Austin’s public, private and civic leaders have come together to create Capital City Innovation to launch the city’s first Innovation District at the new medical school. This will help expand the city’s already world class startup ecosystem into the health and wellness markets.

Baltimore

Baltimore is home to over $2 billion in academic research, ranking it third in the nation behind Boston and Philadelphia. In order to ensure everyone participates in the expanding research-based startup ecosystem, the city is transforming community recreation centers into maker and technology training centers to connect disadvantaged youth and families to new skills and careers in technology. The Rec-to-Tech Initiative will begin with community design sessions at four recreation centers, in partnership with the Digital Harbor Foundation, to create a feasibility study and implementation plan to review for further expansion.

Buffalo

The 120-acre Buffalo Niagara Medical Center (BNMC) is home to eight academic institutions and hospitals and over 150 private technology and health companies. To ensure Buffalo’s startups reflect the diversity of its population, the Innovation Center at BNMC has just announced a new program to provide free space and mentorship to 10 high potential minority- and/or women-owned start-ups.

Denver

Like Seattle, real estate development in Denver is growing at a feverish rate. And while the growth is bringing new opportunity, the city is expanding faster than the workforce can keep pace. To ensure a sustainable growth trajectory, Denver has recruited the Next Generation City Builders to train students and retrain existing workers to fill high-demand jobs in architecture, design, construction and transportation. 

Providence

With a population of 180,000, Providence is home to eight higher education institutions – including Brown University and the Rhode Island School of Design – making it a hub for both technical and creative talent. The city of Providence, in collaboration with its higher education institutions and two hospital systems, has created a new public-private-university partnership, the Urban Innovation Partnership, to collectively contribute and support the city’s growing innovation economy. 

Pittsburgh

Pittsburgh may have once been known as a steel town, but today it is a global mecca for robotics research, with over 4.5 times the national average robotics R&D within its borders. Like Baltimore, Pittsburgh is creating a more inclusive innovation economy through a Rec-to-Tech program that will re-invest in the city’s 10 recreational centers, connecting students and parents to the skills needed to participate in the economy of the future. 

Tampa

Tampa is already home to 30,000 technical and scientific consultant and computer design jobs — and that number is growing. To meet future demand and ensure the region has an inclusive growth strategy, the city of Tampa, with 13 university, civic and private sector partners, has announced “Future Innovators of Tampa Bay.” The new six-year initiative seeks to provide the opportunity for every one of the Tampa Bay Region’s 600,000 K-12 students to be trained in digital creativity, invention and entrepreneurship.

These eight cities help demonstrate the innovation we are seeing on the ground now, all throughout the country. The seeds of success have been planted with people, partnerships and public leadership at the fore. Perhaps they didn’t land HQ2 this time, but when we fast forward to 2038 — and the search for Argo AISparkCognition or Welltok’s new headquarters is well underway — the groundwork will have been laid for cities with strong ecosystems already in place to compete on an even playing field.

Report: NYC and Arlington, VA win the contest for Amazon’s split East Coast headquarters

New York City and Arlington, Virginia have reportedly won Amazon’s lengthy and highly-publicized pageant for the locations of its new headquarters, beating out 238 other contestants. According to the Wall Street Journal, which broke the news, an official announcement may come as early as Tuesday.

The offices will be located in Long Island City, across the East River from Manhattan, and Crystal City, a neighborhood in Arlington, which is a 15-20 minute drive from Washington D.C.

Last week, more than a year after the Seattle-based company began asking cities to submit proposals for its second headquarters, nicknamed HQ2, reports emerged that Amazon planned to open two new locations, instead of just one, catching candidates off guard. WSJ reported that the Amazon decided to split a total of 50,000 employees between two new offices because the company believes it can recruit better candidates that way, while also avoiding the traffic, housing, and other potential infrastructure headaches of adding tens of thousands of new employees to one area.

Nonetheless, when it became clear that New York City and Arlington, Virginia were among the top contenders, residents of both areas began to worry about Amazon’s impact on housing costs and commutes, with New Yorkers wondering if the beleaguered New York City subway can handle 25,000 potential new riders. Long Island City community groups have also called on Amazon to pay a “gentrification tax” to help keep local residents from being priced out of their neighborhood by its employees.

As for the other cities that were potential contenders (the 20 finalists included Indianapolis, Denver, Dallas, and Nashville), Steve Case, co-founder of AOL, said on Twitter that he believed the work they put into Amazon’s competitive bidding process can be repurposed to build new startup ecosystems.

My statement on @Amazon’s #HQ2 decision: pic.twitter.com/Ty7220jgFa

— Steve Case (@SteveCase) November 13, 2018

TechCrunch has contacted Amazon for comment.

Xiaomi is opening a retail store in London as it extends its Europe push

Xiaomi’s expansion into Europe continues at speed after the Chinese smartphone maker announced plans to open its first retail store in London.

The company is best known for developing quality Android phones at affordable prices and already it has launched devices in Spain, Italy and France. Now, that foray has touched the UK where Xiaomi launched its Mi 8 Pro device at an event yesterday and revealed that it will open a store at the Westfield mall in London on November 18.

That outlet will become Xiaomi’s first authorized Mi Store. Styled on Apple’s iconic stores, the Mi store will showcase a range of products, not all of which are available in the UK.

Still, Xiaomi has shown a taste of what it plans to offer in the UK by introducing a number of products alongside the Mi 8 Pro this week. Those include its budget tier Redmi 6A phone and, in its accessories range, the Xiaomi Band 3 fitness device and the £399 Mi Electric Scooter. The company said there are more to come.

That product selection will be available via Xiaomi’s own Mi.com store and a range of other outlets, including Amazon, Carphone Warehouse and Three, which will have exclusive distribution of Xiaomi’s smartphones among UK telecom operators.

It’s official, Xiaomi has finally arrived in the UK! We brought our flagship #Mi8Pro which had its global debut outside Greater China. Other products announced include Xiaomi Band 3, our wildly popular fitness band, as well as Mi Electric Scooter. pic.twitter.com/YlOBysFBgM

— Wang Xiang (@XiangW_) November 8, 2018

Xiaomi hasn’t branched out into the U.S. — it does sell a number of accessories — but the European launches mark a new phase of its international expansion to take it beyond Asia. While Xiaomi does claim to be present in “more than 70 countries and regions around the world,” it has recorded most of its success in China, India and pockets of Asia.

CEO Lei Jun has, however, spoken publicly of his goal to sell Xiaomi phones in the U.S by “early 2019” at the latest.

Still, even with its focus somewhat limited, Xiaomi claims it has shipped a record 100 million devices in 2018 to date. The firm also posted a $2.1 billion profit in its first quarter as a public company following its Hong Kong IPO. However, the IPO underwhelmed with Xiaomi going public at $50 billion, half of its reported target, while its shares have been valued at below their IPO price since the middle of September.

How Silicon Valley should celebrate Labor Day

Ask any 25-year old engineer what Labor Day means to him or her, and you might get an answer like: it’s the surprise three-day weekend after a summer of vacationing. Or it’s the day everyone barbecues at Dolores Park. Or it’s the annual Tahoe trip where everyone gets to relive college.

Or simply, it’s the day we get off because we all work so hard.

And while founders and employees in startup land certainly work hard, wearing their 80-hour workweeks as a badge of honor, closing deals on conference calls in an air-conditioned WeWork is a far cry from the backbreaking working conditions of the 1880s, the era when Labor Day was born.

For everyone here in Silicon Valley, we should not be celebrating this holiday triumphantly over beers and hot dogs, complacent in the belief that our gravest labor issues are behind us, but instead use this holiday as a moment to reflect on how much further we have to go in making our workplaces and companies more equitable, diverse, inclusive and ethically responsible.

Bloody Beginnings

On September 5th, 1882, 10,000 workers gathered at a “monster labor festival” to protest the 12-hours per day, seven days a week harsh working conditions they faced in order to cobble together a survivable wage. Even children as “young as 5 or 6 toiled in mills, factories and mines across the country.”

This all erupted in a climax in 1894 when the American Railway Union went on a nationwide strike, crippling the nation’s transportation infrastructure, which included trains that delivered postal mail. President Grover Cleveland declared this a federal crime and sent in federal troops to break up the strike, which resulted in one of the bloodiest encounters in labor history, leaving 30 dead and countless injured.

Labor Day was declared a national holiday a few month later in an effort to mend wounds and make peace with a reeling and restless workforce (it also conveniently coincided with President Cleveland’s reelection bid).

The Battle is Not Yet Won

Today in Silicon Valley, this battle for fair working conditions and a living wage seems distant from our reality of nap rooms and lucrative stock grants.  By all accounts, we have made tremendous strides on a number of critical labor issues. While working long hours is still a cause for concern, most of us can admit that we often voluntarily choose to work more than we have to. Our workplace environments are not perfect (i.e. our standing desks may not be perfectly ergonomic), but they are far from life-threatening or hazardous to our health. And while equal wages are still a concern, earning a living wage is not, particularly if the worst case scenario after “failing” at a startup means joining a tech titan and clocking in as a middle manager with a six-figure salary.

Even though the workplace challenges of today are not as grave as life or death, the fight is not yet over. Our workplaces are far from perfect, and the power dynamic between companies and employees is far from equal.

In tech, we face a myriad of issues that need grassroots, employee-driven movements to effect change. Each of the following issues has complexities and nuances that deserve an article of its own, but I’ve tried to summarize them briefly: 

  1. Equal pay for equal work – while gender wage gaps are better in tech than other industries (4% average in tech vs. 20% average across other industries), the discrepancy in wages for women in technical roles is twice the average for other roles in tech.
  2. Diversity – research shows that diverse teams perform better, yet 76% of technical jobs are still held by men, and only 5% of tech workers are Black or Latino. The more alarming statistic in a recent Atlassian survey is that more than 40% of respondents felt that their company’s diversity programs needed no further improvement.
  3. Inclusion – an inclusive workplace should be a basic fundamental right, but harassment and discrimination still exist. A survey by Women Who Tech found that 53 percent of women working in tech companies reported experiencing harassment (most frequently in the form of sexism, offensive slurs, and sexual harassment) compared to 16 percent of men.
  4. Outsourced / 1099 employees – while corporate employees at companies like Amazon are enjoying the benefits of a ballooning stock, the reality is much bleaker for warehouse workers who are on the fringes of the corporate empire. A new book by undercover journalist James Bloodworth found that Amazon workers in a UK warehouse “use bottles instead of the actual toilet, which is located too far away.” A separate survey conducted found that 55% of these workers suffer from depression, and 80% said they would not work at Amazon again.Similarly, Foxconn is under fire once again for unfair pay practices, adding to the growing list of concerns including suicide, underage workers, and onsite accidents. The company is the largest electronics manufacturer in the world, and builds products for Amazon, Apple, and a host of other tech companies.
  5. Corporate Citizenship & Ethics – while Silicon Valley may be a bubble, the products created here are not. As we’ve seen with Facebook and the Cambridge Analytica breach, these products impact millions of lives. The general uncertainty and uneasiness around the implications of automation and AI also spark difficult conversations about job displacement for entire swaths of the global population (22.7M by 2025 in the US alone, according to Forrester).

Thus, the reversal in sentiment against Silicon Valley this past year is sending a message that should resonate loud and clear — the products we build and the industries we disrupt here in the Valley have real consequences for workers that need to be taken seriously.

Laboring toward a better future

To solve these problems, employees in Silicon Valley needs to find a way to organize. However, there are many reasons why traditional union structures may not be the answer.

The first is simply that traditional unions and tech don’t get along. Specifically, the AFL-CIO, one of the largest unions in America, has taken a hard stance against the libertarian ethos of the Valley, drawing a bright line dividing the tech elite from the working class. In a recent speech about how technology is changing work, the President of the AFL-CIO did not mince words when he said that the “events of the last few years should have made clear that the alternative to a just society is not the libertarian paradise of Silicon Valley billionaires. It is a racist and authoritarian nightmare.”

But perhaps the biggest difference between what an organized labor movement would look like in Silicon Valley and that of traditional organized labor is that it would be a fight not to advance the interest of the majority, but to protect the minority. In the 1880s, poor working conditions and substandard pay affected nearly everyone — men, women, and children. Unions were the vehicles of change for the majority.

But today, for the average male 25-year old engineer, promoting diversity and inclusion or speaking out about improper treatment of offshore employees is unlikely to affect his pay, desirability in the job market, or working conditions. He will still enjoy the privileges of being fawned over as a scarce resource in a competitive job market. But the person delivering the on-demand service he’s building won’t. His female coworker with an oppressive boss won’t. This is why it is ever more important that we wake up and not only become allies or partners, but champions of the causes that affect our less-privileged fellow coworkers, and the people that our companies and products touch.

So this Labor Day, enjoy your beer and hot dog, but take a moment to remember the individuals who fought and bled on this day to bring about a better workplace for all. And on Tuesday, be ready to challenge your coworkers on how we can continue that fight to build more diverse, inclusive, and ethically responsible companies for the future. 

Bernie Sanders’ problem with Amazon

Vermont Senator Bernie Sanders is seeking additional information about the working conditions in Amazon warehouses in advance of legislation he’s preparing to introduce on September 5. 

Income inequality was, after all, the centerpiece of Sanders’ 2016 presidential campaign. It was a populist message that resonated strongly with voters, giving the dark horse candidate a boost among concerned progressives and independents during a tooth and nail primary battle.

But while the message, perhaps, wasn’t enough to put him over the top, it’s a mission that’s remained central to Sanders’ work on Capitol Hill, finding him taking aim at some of the world’s largest corporations. In recent months, Amazon has been in the senator’s sights.

Earlier today, Sanders tweeted out a link asking employees of the online retail giant to share their experiences working for the company. The form allows current and former Amazon employees to share their stories either on the record or anonymously. It asks whether workers “struggle[d] with the demanding working conditions,” and whether they required public assistance.

Are you a current or former Amazon employee? Please share your experiences with Sen. Bernie Sanders . https://t.co/fQzm3SuyXA

— Bernie Sanders (@SenSanders) August 28, 2018

In a phone call today, Sanders told TechCrunch that his office already knows enough about the working conditions in Amazon warehouses, but is seeking additional information as it prepares to introduce legislation on September 5.

“We know that the median salary for Amazon employees is about $28,000,” the Senator told TechCrunch. “And about half the workers who work for Amazon make less than $28,000 a year.”

It’s easy to see why the company has become a prime target for Sanders. A recent SEC filing put the median salary at $28,446 — less than owner Jeff Bezos makes every 10 seconds.

“We have every reason to believe that many, many thousands of Amazon workers in their warehouses throughout the country are earning very low wages,” Sanders explained. “It’s hard to get this information. Amazon has not been very forthcoming. From what information we’ve gathered, one out of three Amazon workers in Arizona, as we understand it, are on public assistance. They are receiving either Medicaid, food stamps or public housing.”

The Senator acknowledges that nothing about what Amazon is doing, on the face of it, is breaking any laws. But the discrepancy between its highest and lowest wage earners is enough for him to call into question why government subsidies are required to buoy those on the bottom rung. This is precisely what the proposed legislation aims to address.

Put simply, Sanders says we have every reason to believe that the richest man in the world can afford to pay employees more.

“The taxpayers in this country should not be subsidizing a guy who’s worth $150 billion, whose wealth is increasing by $260 million every single day,” said Sanders. “That is insane. He has enough money to pay his workers a living wage. He does not need corporate welfare. And our goal is to see that Bezos pays his workers a living wage.”

While Amazon is notoriously tight-lipped about matters these matters, the company has been on the defensive since the senator made it a kind of pet project. Amazon won’t comment directly on the forthcoming legislation until it’s made official, but the company did provide TechCrunch with comment regarding the blowback.

“We encourage anyone to compare our pay and benefits to other retailers,” an Amazon spokesperson told TechCrunch. “Amazon is proud to have created over 130,000 new jobs last year alone. These are good jobs with highly competitive pay and full benefits. In the U.S., the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock, and incentive bonuses, is over $15/hour before overtime. That’s in addition to our full benefits package that includes health, vision and dental insurance, retirement, generous parental leave, and skills training for in-demand jobs through our Career Choice program, which has over 16,000 participants.”

Amazon further suggests that those interested in learning more about warehouse conditions book a tour of one of its fulfillment centers to “see for themselves.” 

A representative from Sanders’ office tells TechCrunch that Amazon invited the senator on a tour of a fulfillment center, and he plans to take the company up on the offer.

SAN FERNANDO DE HENARES, SPAIN – 2018/07/16: General view of the Amazon warehouse in San Fernando de Henares.

Of course, the concerns over Amazon’s treatment of workers aren’t new. Mother Jones ran an exposé of what it was like working as an Amazon warehouse slave in 2012. In 2013, Gawker published a series of emails from employees discussing life in fulfillment centers citing things like “unrealistic goals,” “very short breaks” and “below zero temps” in warehouses. A protestor cited by The Guardian in 2014 said it was better to be homeless than work for the retailer. And, most recently, Business Insider documented the “horror stories” faced by the Amazon warehouse workers, including nonstop surveillance and so little ability to take breaks, they couldn’t even use the facilities, when needed.  

Amazon has since been on something of a charm offensive in response to those PR headaches.

Last week, there was the odd phenomenon of an army of Twitter accounts claiming to be warehouse workers who were serving up similar talking points.

“Hello!” one wrote, cheerfully. “I work in an Amazon FC in WA and our wages and benefits are very good. Amazon pays FC employess [sic] ~30% more than traditional retail stores and offers full medical benefits from day 1. Working conditions are very good- clean/well lit- Safety is a top priority at my facility!”

That Amazon positions its own offerings as “highly competitive” can, perhaps, be seen as something of an indictment of larger issues with warehouse fulfillment. While the company is an easy target, it’s certainly not alone. And Sanders notes that his office is casting the net wider than just Amazon. Disney and Walmart have also been targeted by the senator.

In June, Sanders told a crowd at an Anaheim church, “I want to hear the moral defense of a company that makes $9 billion in profits, $400 million for their CEOs and have a 30-year worker going hungry. Tell me how that is right.” 

A month later, he took to Twitter to call out CEO Bob Iger directly, writing, “Does Disney CEO Bob Iger have a good explanation for why he is being compensated more than $400 million while workers at Disneyland are homeless and relying on food stamps to feed their families?”

Does Disney CEO Bob Iger have a good explanation for why he is being compensated more than $400 million while workers at Disneyland are homeless and relying on food stamps to feed their families?

— Bernie Sanders (@SenSanders) July 13, 2018

Earlier this week, however, Disney reached an agreement with the Walt Disney World union to pay workers a $15 minimum wage.

“We’ve seen real progress at the Disney corporation,” Sanders told TechCrunch, “and I believe that Jeff Bezos can play a profound role in American society today if he were to say, ‘yes, I’m the richest guy in the world. I will pay my workers a living wage at least $15 and make sure all of my workers have the security and dignity they need. I will improve conditions.’”

Amazon and Walmart, meanwhile, remain the two key targets for the impending legislation. With Democrats in the minority in the U.S. Senate, it seems unlikely that a hearing will be called where Bezos would be asked to testify à la Mark Zuckerberg, but the senator plans to go ahead with the legislation next week, regardless.  

“That legislation is pretty simple,” explained Sanders. “It says: if you are a large company of 500 or more employees and you’re paying your workers wages that are so low that they have to go on food stamps, Medicaid, public housing, etc., then you have to pay taxes commensurate to how much the government is now spending for that assistance. It’s going to be the employer – the Jeff Bezos, the Walton family – who will pick up the tab for these public assistance programs, rather than the middle class of the country.”

Robotics-as-a-service is on the way and inVia Robotics is leading the charge

The team at inVia Robotics didn’t start out looking to build a business that would create a new kind of model for selling robotics to the masses, but that may be exactly what they’ve done.

After their graduation from the University of Southern California’s robotics program, Lior Alazary, Dan Parks, and Randolph Voorhies, were casting around for ideas that could get traction quickly.

“Our goal was to get something up and running that could make economic sense immediately,’ Voorhies, the company’s chief technology officer, said in an interview.

The key was to learn from the lessons of what the team had seen as the missteps of past robotics manufacturers.

Despite the early success of iRobot, consumer facing or collaborative robots that could operate alongside people had yet to gain traction in wider markets.

Willow Garage, the legendary company formed by some of the top names in the robotics industry had shuttered just as Voorhies and his compatriots were graduating, and Boston Dynamics, another of the biggest names in robotics research, was bought by Google around the same time — capping an six-month buying spree that saw the search giant acquire eight robotics companies.

In the midst of all this we were looking around and we said, ‘God there were a lot of failed robotics companies!’ and we asked ourselves why did that happen?” Voorhies recalled. “A lot of the hardware companies that we’d seen, their plan was: step one build a really cool robot and step three: an app ecosystem will evolve and people will write apps and the robot will sell like crazy. And nobody had realized how to do step 2, which was commercialize the robot.”

So the three co-founders looked for ideas they could take to market quickly.

The thought was building a robot that could help with mobility and reaching for objects. “We built a six-degree-of-freedom arm with a mobile base,” Voorhies said.

However, the arm was tricky to build, components were expensive and there were too many variables in the environment for things to go wrong with the robot’s operations. Ultimately the team at inVia realized that the big successes in robotics were happening in controlled environments. 

“We very quickly realized that the environment is too unpredictable and there were too many different kinds of things that we needed to do,” he said. 

Parks then put together a white paper analyzing the different controlled environments where collaborative robots could be most easily deployed. The warehouse was the obvious choice.

Back in March of 2012 Amazon had come to the same conclusion and acquired Kiva Systems in a $775 million deal that brought Kiva’s army of robots to Amazon warehouses and distribution centers around the world.

“Dan put a white paper together for Lior and I,” Voorhies said, “and the thing really stuck out was eCommerce logistics. Floors tend to be concrete slabs; they’re very flat with very little grade, and in general people are picking things off a shelf and putting them somewhere else.”

With the idea in place, the team, which included technologists Voorhies and Parks, and Lazary, a serial entrepreneur who had already exited from two businesses, just needed to get a working prototype together.

Most warehouses and shipping facilities that weren’t Amazon were using automated storage and retrieval systems, Voorhies said. These big, automated systems that looked and worked like massive vending machines. But those systems, he said, involved a lot of sunk costs, and weren’t flexible or adaptable.

And those old systems weren’t built for random access patterns and multi-use orders which comprise most of the shipping and packing that are done as eCommerce takes off.

With those sunk costs though, warehouses are reluctant to change the model. The innovation that Voorhies and his team came up with, was that the logistics providers wouldn’t have to.

“We didn’t like the upfront investment, not just to install one but just to start a company to build those things,” said Voorhies. “We wanted something we could bootstrap ourselves and grow very organically and just see wins very very quickly. So we looked at those ASRS systems and said why don’t we build mobile robots to do this.”

In the beginning, the team at inVia played with different ways to build the robot.l first there was a robot that could carry several different objects and another that would be responsible for picking.

The form factor that the company eventually decided on was a movable puck shaped base with a scissor lift that can move a platform up and down. Attached to the back of the platform is a robotic arm that can extend forward and backward and has a suction pump attached to its end. The suction pump drags boxes onto a platform that are then taken to a pick and pack employee.

We were originally going to grab individual product.s. Once we started talking to real warehouses more and more we realized that everyone stores everything in these boxes anyway,” said Voorhies. “And we said why don’t we make our lives way easier, why don’t we just grab those totes?” 

Since bootstrapping that initial robot, inVia has gone on to raise $29 million in financing to support its vision. Most recently with a $20 million round which closed in July.

“E-commerce industry growth is driving the need for more warehouse automation to fulfill demand, and AI-driven robots can deliver that automation with the flexibility to scale across varied workflows. Our investment in inVia Robotics reflects our conviction in AI as a key enabler for the supply chain industry,” said Daniel Gwak, Co-Head, AI Investments at Point72 Ventures, the early stage investment firm formed by the famed hedge fund manager, Steven Cohen.

Given the pressures on shipping and logistics companies, it’s no surprise that the robotics and automation are becoming critically important strategic investments, or that venture capital is flooding int the market. In the past two months alone, robotics companies targeting warehouse and retail automation have raised nearly $70 million in new financing. They include the recent raised $17.7 million for the French startup Exotec Solutions and Bossa Nova’s $29 million round for its grocery store robots.

Then there are warehouse-focused robotics companies like Fetch Robotics, which traces its lineage back to Willow Garage and Locus Robotics, which is linked to the logistics services company Quiet Logistics.

“Funding in robotics has been incredible over the past several years, and for good reason,” said John Santagate, Research Director for Commercial Service Robotics at Research and Analysis Firm IDC, in a statement. “The growth in funding is a function of a market that has become accepting of the technology, a technology area that has matured to meet market demands, and vision of the future that must include flexible automation technology. Products must move faster and more efficiently through the warehouse today to keep up with consumer demand and autonomous mobile robots offer a cost-effective way to deploy automation to enable speed, efficiency, and flexibility.”

The team at inVia realized it wasn’t enough to sell the robots. To give warehouses a full sense of the potential cost savings they could have with inVia’s robots, they’d need to take a page from the software playbook. Rather than selling the equipment, they’d sell the work the robots were doing as a service.

“Customers will ask us how much the robots cost and that’s sort of irrelevant,” says Voorhies. “We don’t want customers to think about those things at all.”

Contracts between inVia and logistics companies are based on the unit of work done, Voorhies said. “We charge on the order line,” says Voorhies. “An order line is a single [stock keeping unit] that somebody would order regardless of quantity… We’re essentially charging them every time a robot has to bring a tote and present it in front of a person. The faster we’re able to do that and the less robots we can use to present an item the better our margins are.”

It may not sound like a huge change, but those kinds of efficiencies matter in warehouses, Voorhies said. “If you’re a person pushing a cart in a warehouse that cart can have 35 pallets on it. With us, that person is standing still, and they’re really not limited to a single cart. They are able to fill 70 orders at the same time rather than 55,” he said.

At Rakuten logistics, the deployment of inVia’s robots are already yielding returns, according to Michael Manzione, the chief executive officer of Rakuten Super Logistics.

“Really [robotics] being used in a fulfillment center is pretty new,” said Manzione in an interview. “We started looking at the product in late February and went live in late March.”

For Manzione, the big selling point was scaling the robots quickly, with no upfront cost. “The bottom line is ging to be effective when we see planning around the holiday season,” said Manzione. “We’re not planning on bringing in additional people, versus last year when we doubled our labor.”

As Voorhies notes, training a team to work effectively in a warehouse environment isn’t easy.

The big problem is that it’s really hard to hire extra people to do this. In a warehouse there’s a dedicated core team that really kicks ass and they’re really happy with those pickers and they will be happy with what they get from whatever those people can sweat out in a shift,” Voorhies said. “Once you need to push your throughput beyond what your core team can do it’s hard to find people who can do that job well.” 

Amazon launches grocery pickup at select Whole Foods

Amazon today is continuing to make good on its Whole Foods acquisition by introducing a new grocery pickup service at select Whole Foods locations in the U.S. The service, which is available only to Prime members, will initially be available at stores in Sacramento and Virginia Beach, but will expand to more cities through the year. Customers will be able to place their orders using Amazon’s Prime Now app or on the web via PrimeNow.com, then pick up in as little as 30 minutes, Amazon says.

Customers will be able to shop Whole Foods’ fresh and organic produce, bakery, dairy, meat and seafood, floral, and other staples, then pick up their order in an hour from their local Whole Foods Market.

This is the same selection of the thousands of items that customers can order for delivery. The majority of in-store items are available across both pickup and delivery services, we understand.

For orders over $35, the grocery pickup service is free. Under $35, the pickup fee is $1.99.

If customers want to get their order more quickly, they have the option of pay an additional $4.99 for a 30-minute pickup instead.

Once they arrive at the store, customers will park in a designated spot and a Prime Now shopper will then bring the groceries out to their car – the customer can stay in their vehicle. The Prime Now app also has a feature that lets the customer alert the store they’re on the way, so the order will be sure to be ready when they arrive.

The pickup service, like Whole Foods delivery, will be offered from 8 AM to 10 PM.

“Pickup from Whole Foods Market is a perfect option for customers who want to grab healthy and organic groceries at their convenience, all without leaving their car,” said Stephenie Landry, Worldwide Vice President of Prime Now, AmazonFresh and Amazon Restaurants, in a statement about the launch.

Amazon already offers grocery delivery from Whole Foods Market across dozens of cities, but this is the first time it has offered grocery pickup.

The move is a direct challenge to rival Walmart, which has been steadily rolling out a grocery pickup service of its own for years. Today, that service is available at 1,800 Walmart locations in the U.S., with plans to reach 2,200 by year-end, Walmart confirmed to us.

Walmart’s grocery pickup service offers shoppers the same general value proposition as Amazon’s. That is, you can shop online for your groceries, drive to the store, then have someone bring them out to you.  Walmart’s service has been especially well-received by parents with small children, who don’t like the hassle of bringing them into the store for grocery shopping, as well as by others who just don’t have a lot of time to grocery shop.

The service has made sense for Walmart’s more value-minded customers, too. With grocery pickup, shopping can be more affordable because there’s not the overhead of running a delivery service – as with Instacart and Target-owned Shipt, where it’s costlier to use the app than to shop yourself. (Plus, you have to tip).

In addition to not marking up the grocery prices, Amazon notes that Prime members can also receive the same 10 percent off sale items they would otherwise get if shopping in the store, and they’ll enjoy the deeper discounts on select items. These savings are available in-store, or when using grocery pickup or delivery.

Alongside this launch, Amazon is also adding a new way to use Alexa for voice shopping from Whole Foods.

Prime members in supported regions can add Whole Foods Market groceries to their Prime Now cart with simple voice commands. For example: “Alexa, add eggs to my Whole Foods cart.”

Alexa will pick the best available match for your request, considering users’ order history and purchasing behavior of other customers when it adds an item to the cart.

But customers will review these cart additions when they go online later to complete their order and checkout. It’s easy to swap the item in the cart for another one at that time.

A report released this week by The Information claimed that few Alexa owners were actively voice shopping using their Alexa devices, but this data seemed to overlook Alexa’s list-making capabilities. That is, people are more likely using Alexa to add items to an in-app shopping list, which they later revisit when they’re back on their phone or computer to complete the purchase. This behavior feels more natural, as shopping often requires a visual confirmation of the product being ordered and its current pricing.

It’s not surprising that people aren’t using Alexa to transact directly through the voice platform, but it is a bit far-fetched to claim that Alexa isn’t providing a lift to Amazon’s bottom line. In addition to list-making, Alexa also helps to upsell customers on Prime memberships, and its other subscription services, including Prime Music Unlimited, the number 3 music service behind Spotify and Apple Music, as well as Audible subscriptions.

Plus, Alexa controls the smart home, and Amazon has acquired smart home device makers and sells its own smart home hardware. It also offers installation services. Those sales, like music or audiobooks, also aren’t directly flowing through Alexa, but Alexa’s existence helps to boost them.

Amazon’s new Whole Foods/Alexa integration will also capitalize on the more common behavior of list-making, rather than direct check out and purchase.

Amazon declined to say which other markets would receive Whole Foods grocery pickup next, how many it expects to support by year-end, or what factors it’s considering as to where to roll out next. It would only say that it will reach more customers this year.

However, as the grocery pickup and delivery services expand, customers can find out if it’s arrived in their area by saying, “Alexa, shop Whole Foods Market.”

Amazon’s Echo Spot is apparently free right now (Update: aaand it’s gone)

Update: Nothing gold can stay, Ponyboy. It was fun while it lasted, but both Spots are back to their original $129 asking price — and the white version still appears to be totally sold out. It looks as if the whole thing was a pricing mistake, rather than extra generosity on the part of Jeff B. So, nice work if you nabbed one in time. Keep those fingers crossed that it actually gets delivered. 

I like the Spot. It’s my favorite Echo. And due to what may well just be an error on Amazon’s part, the screen-sporting smart speaker is currently showing up for $0.00 — for those who can access it, at least. Some users are already registering it as Out of Stock.

The black version of the device is still listed as $99 — a much less killer deal, but still $29 down from the original asking price. It could be a pricing error, or maybe Amazon is trying to get rid of that old stock for some reason. Heck, maybe the company just really wants to get the Alexa delivery system in as many homes as humanly possible. This is certainly one way to do it. 

Chances seem decent it may never even ship — those who did order one (or three or four) are seeing a still pending delivery date. In either case, we’ve reached out to Amazon and will update when we hear back. 

Apple’s Shortcuts will flip the switch on Siri’s potential

Matthew Cassinelli
Contributor

Matthew Cassinelli is a former member of the Workflow team and works as an independent writer and consultant. He previously worked as a data analyst for VaynerMedia.

At WWDC, Apple pitched Shortcuts as a way to ”take advantage of the power of apps” and ”expose quick actions to Siri.” These will be suggested by the OS, can be given unique voice commands, and will even be customizable with a dedicated Shortcuts app.

But since this new feature won’t let Siri interpret everything, many have been lamenting that Siri didn’t get much better — and is still lacking compared to Google Assistant or Amazon Echo.

But to ignore Shortcuts would be missing out on the bigger picture. Apple’s strengths have always been the device ecosystem and the apps that run on them.

With Shortcuts, both play a major role in how Siri will prove to be a truly useful assistant and not just a digital voice to talk to.

Your Apple devices just got better

For many, voice assistants are a nice-to-have, but not a need-to-have.

It’s undeniably convenient to get facts by speaking to the air, turning on the lights without lifting a finger, or triggering a timer or text message – but so far, studies have shown people don’t use much more than these on a regular basis.

People don’t often do more than that because the assistants aren’t really ready for complex tasks yet, and when your assistant is limited to tasks inside your home or commands spoken inton your phone, the drawbacks prevent you from going deep.

If you prefer Alexa, you get more devices, better reliability, and a breadth of skills, but there’s not a great phone or tablet experience you can use alongside your Echo. If you prefer to have Google’s Assistant everywhere, you must be all in on the Android and Home ecosystem to get the full experience too.

Plus, with either option, there are privacy concerns baked into how both work on a fundamental level – over the web.

In Apple’s ecosystem, you have Siri on iPhone, iPad, Apple Watch, AirPods, HomePod, CarPlay, and any Mac. Add in Shortcuts on each of those devices (except Mac, but they still have Automator) and suddenly you have a plethora of places to execute these all your commands entirely by voice.

Each accessory that Apple users own will get upgraded, giving Siri new ways to fulfill the 10 billion and counting requests people make each month (according to Craig Federighi’s statement on-stage at WWDC).

But even more important than all the places where you can use your assistant is how – with Shortcuts, Siri gets even better with each new app that people download. There’s the other key difference: the App Store.

Actions are the most important part of your apps

iOS has always had a vibrant community of developers who create powerful, top-notch applications that push the system to its limits and take advantage of the ever-increasing power these mobile devices have.

Shortcuts opens up those capabilities to Siri – every action you take in an app can be shared out with Siri, letting people interact right there inline or using only their voice, with the app running everything smoothly in the background.

Plus, the functional approach that Apple is taking with Siri creates new opportunities for developers provide utility to people instead of requiring their attention. The suggestions feature of Shortcuts rewards “acceleration”, showing the apps that provide the most time savings and use for the user more often.

This opens the door to more specialized types of apps that don’t necessarily have to grow a huge audience and serve them ads – if you can make something that helps people, Shortcuts can help them use your app more than ever before (and without as much effort). Developers can make a great experience for when people visit the app, but also focus on actually doing something useful too.

This isn’t a virtual assistant that lives in the cloud, but a digital helper that can pair up with the apps uniquely taking advantage of Apple’s hardware and software capabilities to truly improve your use of the device.

In the most groan-inducing way possible, “there’s an app for that” is back and more important than ever. Not only are apps the centerpiece of the Siri experience, but it’s their capabilities that extend Siri’s – the better the apps you have, the better Siri can be.

Control is at your fingertips

Importantly, Siri gets all of this Shortcuts power while keeping the control in each person’s hands.

All of the information provided to the system is securely passed along by individual apps – if something doesn’t look right, you can just delete the corresponding app and the information is gone.

Siri will make recommendations based on activities deemed relevant by the apps themselves as well, so over-active suggestions shouldn’t be common (unless you’re way too active in some apps, in which case they added Screen Time for you too).

Each of the voice commands is custom per user as well, so people can ignore their apps suggestions and set up the phrases to their own liking. This means nothing is already “taken” because somebody signed up for the skill first (unless you’ve already used it yourself, of course).

Also, Shortcuts don’t require the web to work – the voice triggers might not work, but the suggestions and Shortcuts app give you a place to use your assistant voicelessly. And importantly, Shortcuts can use the full power of the web when they need to.

This user-centric approach paired with the technical aspects of how Shortcuts works gives Apple’s assistant a leg up for any consumers who find privacy important. Essentially, Apple devices are only listening for “Hey Siri”, then the available Siri domains + your own custom trigger phrases.

Without exposing your information to the world or teaching a robot to understand everything, Apple gave Siri a slew of capabilities that in many ways can’t be matched. With Shortcuts, it’s the apps, the operating system, and the variety of hardware that will make Siri uniquely qualified come this fall.

Plus, the Shortcuts app will provide a deeper experience for those who want to chain together actions and customize their own shortcuts.

There’s lots more under the hood to experiment with, but this will allow anyone to tweak & prod their Siri commands until they have a small army of custom assistant tasks at the ready.

Hey Siri, let’s get started

Siri doesn’t know all, Can’t perform any task you bestow upon it, and won’t make somewhat uncanny phone calls on your behalf.

But instead of spending time conversing with a somewhat faked “artificial intelligence”, Shortcuts will help people use Siri as an actual digital assistant – a computer to help them get things done better than they might’ve otherwise.

With Siri’s new skills extendeding to each of your Apple products (except for Apple TV and the Mac, but maybe one day?), every new device you get and every new app you download can reveal another way to take advantage of what this technology can offer.

This broadening of Siri may take some time to get used to – it will be about finding the right place for it in your life.

As you go about your apps, you’ll start seeing and using suggestions. You’ll set up a few voice commands, then you’ll do something like kick off a truly useful shortcut from your Apple Watch without your phone connected and you’ll realize the potential.

This is a real digital assistant, your apps know how to work with it, and it’s already on many of your Apple devices. Now, it’s time to actually make use of it.

Big tech companies are looking at Hollywood as the next stage in their play for the cloud

This week, both Microsoft and Google made moves to woo Hollywood to their cloud computing platforms in the latest act of the unfolding drama over who will win the multi-billion dollar business of the entertainment industry as it moves to the cloud.

Google raised the curtain with a splashy announcement that they’d be setting up their fifth cloud region in the U.S. in Los Angeles. Keeping the focus squarely on tools for artists and designers the company talked up its tools like Zync Render, which Google acquired back in 2014, and Anvato, a video streaming and monetization platform it acquired in 2016.

While Google just launched its LA hub, Microsoft has operated a cloud region in Southern California for a while, and started wooing Hollywood last year at the National Association of Broadcasters conference, according to Tad Brockway, a general manager for Azure’s storage and media business.

Now Microsoft has responded with a play of its own, partnering with the provider of a suite of hosted graphic design and animation software tools called Nimble Collective.

Founded by a former Pixar and DreamWorks animator, Rex Grignon, Nimble launched in 2014 and has raised just under $10 million from investors including the UCLA VC Fund and New Enterprise Associates, according to Crunchbase.

“Microsoft is committed to helping content creators achieve more using the cloud with a partner-focused approach to this industries transformation,” said Tad Brockway, General Manager, Azure Storage, Media and Edge at Microsoft, in a statement. “We’re excited to work with innovators like Nimble Collective to help them transform how animated content is produced, managed and delivered.”

There’s a lot at stake for Microsoft, Google and Amazon as entertainment companies look to migrate to managed computing services. Tech firms like IBM have been pitching the advantages of cloud computing for Hollywood since 2010, but it’s only recently that companies have begun courting the entertainment industry in earnest.

While leaders like Netflix migrated to cloud services in 2012 and 21st Century Fox worked with HP to get its infrastructure on cloud computing, other companies have lagged. Now companies like Microsoft, Google, and Amazon are competing for their business as more companies wake up to the pressures and demands for more flexible technology architectures.

As broadcasters face more demanding consumers, fragmented audiences, and greater time pressures to produce and distribute more content more quickly, cloud architectures for technology infrastructure can provide a solution, tech vendors argue.

Stepping into the breach, cloud computing and technology service providers like Google, Amazon, and Microsoft are trying to buy up startups servicing the entertainment market specifically, or lock in vendors like Nimble through exclusive partnerships that they can leverage to win new customers. For instance, Microsoft bought Avere Systems in January, and Google picked up Anvato in 2016 to woo entertainment companies.

The result should be lower cost tools for a broader swath of the market, and promote more cross-pollination across different geographies, according to Grignon, Nimble’s chief executive.

“That worldwide reach is very important,” Grignon said. “In media and entertainment there are lots of isolated studios around the world. We afford this pathway between the studio in LA and the studio in Bangalore. We open these doorways.”

There are other, more obvious advantages as well. Streaming — exemplified by the relationship between Amazon and Netflix is well understood — but the possibility to bring costs down by moving to cloud architectures holds several other distribution advantages as well as simplifying processes across pre- and post-production, insiders said.

 

After report on “appalling” conditions, Foxconn will investigate plant that makes Amazon devices

Foxconn Technology Group says it is investigating a factory it operates that makes Amazon devices, including Kindles, after an in-depth report by advocacy group China Labor Watch criticized its “appalling working conditions,” including excessive hours and over-reliance on temporary workers.

“We are carrying out a full investigation of the areas raised by the report, and if found to be true, immediate actions will be taken to bring the operations into compliance with our Code of Conduct,” Taiwan-based Foxconn, also known as Hon Hai Precision Industry Co., Ltd., told Reuters.

New York-based China Labor Watch says its investigators were sent to the factory, which is located in south central China in Hunan Province’s Hengyang city and also makes Amazon’s Echo Dot Bluetooth speakers and tablets, from August 2017 to April 2018.

During that time, the group says it found that dispatch, or temporary, workers made up more than 40% of the workforce, far exceeding the 10% limit set by Chinese law. Dispatch workers were also treated very differently than regular workers, receiving far less safety training and no overtime wages. Instead, dispatch workers were paid the same rate, or 14.5 RMB ($2.26) an hour for both normal and overtime hours.

Though regular workers were better compensated in terms of wages and benefits, China Labor Watch says both groups were subjected to long hours and low wages, with workers putting in more than 100 overtime hours during peak season, even though the legal limit is 36 hours, and some working consecutively for 14 days. Workers on average earned wages between 2000 to 3000 RMB ($312.12 to $468.19), significantly less than Hengyang’s monthly average wage of 4,647 RMB ($725.22), but often had their overtime hours as punishment for taking leave or having unexcused absences.

The report also claimed that the factory had poor fire safety in its dormitories, lack of sufficiently protective equipment, verbally abusive managers and the “absence of a functioning labor union.”

“Amazon has the ability to not only ensure its supplier factories respects the rights of workers but also that there is equal pay for equal work,” said China Labor Watch on its site. “Amazon’s profits have come at the expense of workers who labor in appalling working conditions and have no choice but to work excessive overtime hours to sustain a livelihood.”

In a press statement, Amazon said it audited the Hengyang factory most recently in March 2018 and asked them to address “issues of concern” related to dispatch workers and overtime.

“Amazon takes reported violations of our Supplier Code of Conduct extremely seriously. Amazon regularly assesses suppliers, using independent auditors as appropriate, to monitor continued compliance and improvement. In the case of the Foxconn Hengyang factory, Amazon completed its most recent audit in March 2018 and identified two issues of concern. We immediately requested a corrective action plan from Foxconn Hengyang detailing their plan to remediate the issues identified, and we are conducting regular assessments to monitor for implementation and compliance with our Supplier Code of Conduct. We are committed to ensuring that these issues are resolved.”

This is, of course, not the first time labor issues at Foxconn, one of the largest electronic OEMs in the world and the main supplier of Apple’s iPhones, have been scrutinized. Most notably, conditions at its Longhua district factory in Shenzhen were blamed for a series of worker suicides in 2010. Serious fires have also broken out at several of its facilities, including one that resulted in three deaths at a factory that made iPad 2s.

TechCrunch has contacted Foxconn for comment.

How did Thumbtack win the on-demand services market?

Earlier today, the services marketplace Thumbtack held a small conference for 300 of its best gig economy workers at an event space in San Francisco.

For the nearly ten-year-old company the event was designed to introduce some new features and a redesign of its brand that had softly launched earlier in the week. On hand, in addition to the services professionals who’d paid their way from locations across the U.S. were the company’s top executives.

It’s the latest step in the long journey that Thumbtack took to become one of the last companies standing with a consumer facing marketplace for services.

Back in 2008, as the global financial crisis was only just beginning to tear at the fabric of the U.S. economy, entrepreneurs at companies like Thumbtack andTaskRabbit were already hard at work on potential patches.

This was the beginning of what’s now known as the gig economy. In addition to Thumbtack and TaskRabbit, young companies like Handy, Zaarly, and several others — all began by trying to build better marketplaces for buyers and sellers of services. Their timing, it turns out, was prescient.

In snowy Boston during the winter of 2008, Kevin Busque and his wife Leah were building RunMyErrand, the marketplace service that would become TaskRabbit, as a way to avoid schlepping through snow to pick up dog food .

Meanwhile, in San Francisco, Marco Zappacosta, a young entrepreneur whose parents were the founders of Logitech, and a crew of co-founders including were building Thumbtack, a professional services marketplace from a home office they shared.

As these entrepreneurs built their businesses in northern California (amid the early years of a technology renaissance fostered by patrons made rich from returns on investments in companies like Google and Salesforce.com), the rest of America was stumbling.

In the two years between 2008 and 2010 the unemployment rate in America doubled, rising from 5% to 10%. Professional services workers were hit especially hard as banks, insurance companies, realtors, contractors, developers and retailers all retrenched — laying off staff as the economy collapsed under the weight of terrible loans and a speculative real estate market.

Things weren’t easy for Thumbtack’s founders at the outset in the days before its $1.3 billion valuation and last hundred plus million dollar round of funding. “One of the things that really struck us about the team, was just how lean they were. At the time they were operating out of a house, they were still cooking meals together,” said Cyan Banister, one of the company’s earliest investors and a partner at the multi-billion dollar venture firm, Founders Fund.

“The only thing they really ever spent money on, was food… It was one of these things where they weren’t extravagant, they were extremely purposeful about every dollar that they spent,” Banister said. “They basically slept at work, and were your typical startup story of being under the couch. Every time I met with them, the story was, in the very early stages was about the same for the first couple years, which was, we’re scraping Craigslist, we’re starting to get some traction.”

The idea of powering a Craigslist replacement with more of a marketplace model was something that appealed to Thumbtack’s earliest investor and champion, the serial entrepreneur and angel investor Jason Calcanis.

Thumbtack chief executive Marco Zappacosta

“I remember like it was yesterday when Marco showed me Thumbtack and I looked at this and I said, ‘So, why are you building this?’ And he said, ‘Well, if you go on Craigslist, you know, it’s like a crap shoot. You post, you don’t know. You read a post… you know… you don’t know how good the person is. There’re no reviews.’” Calcanis said. “He had made a directory. It wasn’t the current workflow you see in the app — that came in year three I think. But for the first three years, he built a directory. And he showed me the directory pages where he had a photo of the person, the services provided, the bio.”

The first three years were spent developing a list of vendors that the company had verified with a mailing address, a license, and a certificate of insurance for people who needed some kind of service. Those three features were all Calcanis needed to validate the deal and pull the trigger on an initial investment.

“That’s when I figured out my personal thesis of angel investing,” Calcanis said.

“Some people are market based; some people want to invest in certain demographics or psychographics; immigrant kids or Stanford kids, whatever. Mine is just, ‘Can you make a really interesting product and are your decisions about that product considered?’ And when we discuss those decisions, do I feel like you’re the person who should build this product for the world And it’s just like there’s a big sign above Marco’s head that just says ‘Winner! Winner! Winner!’”

Indeed, it looks like Zappacosta and his company are now running what may be their victory lap in their tenth year as a private company. Thumbtack will be profitable by 2019 and has rolled out a host of new products in the last six months.

Their thesis, which flew in the face of the conventional wisdom of the day, was to build a product which offered listings of any service a potential customer could want in any geography across the U.S. Other companies like Handy and TaskRabbit focused on the home, but on Thumbtack (like any good community message board) users could see postings for anything from repairman to reiki lessons and magicians to musicians alongside the home repair services that now make up the bulk of its listings.

“It’s funny, we had business plans and documents that we wrote and if you look back, the vision that we outlined then, is very similar to the vision we have today. We honestly looked around and we said, ‘We want to solve a problem that impacts a huge number of people. The local services base is super inefficient. It’s really difficult for customers to find trustworthy, reliable people who are available for the right price,’” said Sander Daniels, a co-founder at the company. 

“For pros, their number one concern is, ‘Where do I put money in my pocket next? How do I put food on the table for my family next?’ We said, ‘There is a real human problem here. If we can connect these people to technology and then, look around, there are these global marketplace for products: Amazon, Ebay, Alibaba, why can’t there be a global marketplace for services?’ It sounded crazy to say it at the time and it still sounds crazy to say, but that is what the dream was.”

Daniels acknowledges that the company changed the direction of its product, the ways it makes money, and pivoted to address issues as they arose, but the vision remained constant. 

Meanwhile, other startups in the market have shifted their focus. Indeed as Handy has shifted to more of a professional services model rather than working directly with consumers and TaskRabbit has been acquired by Ikea, Thumbtack has doubled down on its independence and upgrading its marketplace with automation tools to make matching service providers with customers that much easier.

Late last year the company launched an automated tool serving up job requests to its customers — the service providers that pay the company a fee for leads generated by people searching for services on the company’s app or website.

Thumbtack processes about $1 billion a year in business for its service providers in roughly 1,000 professional categories.

Now, the matching feature is getting an upgrade on the consumer side. Earlier this month the company unveiled Instant Results — a new look for its website and mobile app — that uses all of the data from its 200,000 services professionals to match with the 30 professionals that best correspond to a request for services. It’s among the highest number of professionals listed on any site, according to Zappacosta. The next largest competitor, Yelp, has around 115,000 listings a year. Thumbtack’s professionals are active in a 90 day period.

Filtering by price, location, tools and schedule, anyone in the U.S. can find a service professional for their needs. It’s the culmination of work processing nine years and 25 million requests for services from all of its different categories of jobs.

It’s a long way from the first version of Thumbtack, which had a “buy” tab and a “sell” tab; with the “buy” side to hire local services and the “sell” to offer them.

“From the very early days… the design was to iterate beyond the traditional model of business listing directors. In that, for the consumer to tell us what they were looking for and we would, then, find the right people to connect them to,” said Daniels. “That functionality, the request for quote functionality, was built in from v.1 of the product. If you tried to use it then, it wouldn’t work. There were no businesses on the platform to connect you with. I’m sure there were a million bugs, the UI and UX were a disaster, of course. That was the original version, what I remember of it at least.”

It may have been a disaster, but it was compelling enough to get the company its $1.2 million angel round — enough to barely develop the product. That million dollar investment had to last the company through the nuclear winter of America’s recession years, when venture capital — along with every other investment class — pulled back.

“We were pounding the pavement trying to find somebody to give us money for a Series A round,” Daniels said. “That was a very hard period of the company’s life when we almost went out of business, because nobody would give us money.”

That was a pre-revenue period for the company, which experimented with four revenue streams before settling on the one that worked the best. In the beginning the service was free, and it slowly transitioned to a commission model. Then, eventually, the company moved to a subscription model where service providers would pay the company a certain amount for leads generated off of Thumbtack.

“We weren’t able to close the loop,” Daniels said. “To make commissions work, you have to know who does the job, when, for how much. There are a few possible ways to collect all that information, but the best one, I think, is probably by hosting payments through your platform. We actually built payments into the platform in 2011 or 2012. We had significant transaction volume going through it, but we then decided to rip it out 18 months later, 24 months later, because, I think we had kind of abandoned the hope of making commissions work at that time.”

While Thumbtack was struggling to make its bones, Twitter, Facebook, and Pinterest were raking in cash. The founders thought that they could also access markets in the same way, but investors weren’t interested in a consumer facing business that required transactions — not advertising — to work. User generated content and social media were the rage, but aside from Uber and Lyft the jury was still out on the marketplace model.

“For our company that was not a Facebook or a Twitter or Pinterest, at that time, at least, that we needed revenue to show that we’re going to be able to monetize this,” Daniels said. “We had figured out a way to sign up pros at enormous scale and consumers were coming online, too. That was showing real promise. We said, ‘Man, we’re a hot ticket, we’re going to be able to raise real money.’ Then, for many reasons, our inexperience, our lack of revenue model, probably a bunch of stuff, people were reluctant to give us money.”

The company didn’t focus on revenue models until the fall of 2011, according to Daniels. Then after receiving rejection after rejection the company’s founders began to worry. “We’re like, ‘Oh, shit.’ November of 2009 we start running these tests, to start making money, because we might not be able to raise money here. We need to figure out how to raise cash to pay the bills, soon,” Daniels recalled. 

The experience of almost running into the wall put the fear of god into the company. They managed to scrape out an investment from Javelin, but the founders were convinced that they needed to find the right revenue number to make the business work with or without a capital infusion. After a bunch of deliberations, they finally settled on $350,000 as the magic number to remain a going concern.

“That was the metric that we were shooting towards,” said Daniels. “It was during that period that we iterated aggressively through these revenue models, and, ultimately, landed on a paper quote. At the end of that period then Sequoia invested, and suddenly, pros supply and consumer demand and revenue model all came together and like, ‘Oh shit.’”

Finding the right business model was one thing that saved the company from withering on the vine, but another choice was the one that seemed the least logical — the idea that the company should focus on more than just home repairs and services.

The company’s home category had lots of competition with companies who had mastered the art of listing for services on Google and getting results. According to Daniels, the company couldn’t compete at all in the home categories initially.

“It turned out, randomly … we had no idea about this … there was not a similarly well developed or mature events industry,” Daniels said. “We outperformed in events. It was this strategic decision, too, that, on all these 1,000 categories, but it was random, that over the last five years we are the, if not the, certainly one of the leading events service providers in the country. It just happened to be that we … I don’t want to say stumbled into it … but we found these pockets that were less competitive and we could compete in and build a business on.”

The focus on geographical and services breadth — rather than looking at building a business in a single category or in a single geography meant that Zappacosta and company took longer to get their legs under them, but that they had a much wider stance and a much bigger base to tap as they began to grow.

“Because of naivete and this dreamy ambition that we’re going to do it all. It was really nothing more strategic or complicated than that,” said Daniels. “When we chose to go broad, we were wandering the wilderness. We had never done anything like this before.”

From the company’s perspective, there were two things that the outside world (and potential investors) didn’t grasp about its approach. The first was that a perfect product may have been more competitive in a single category, but a good enough product was better than the terrible user experiences that were then on the market. “You can build a big company on this good enough product, which you can then refine over the course of time to be greater and greater,” said Daniels.

The second misunderstanding is that the breadth of the company let it scale the product that being in one category would have never allowed Thumbtack to do. Cross selling and upselling from carpet cleaners to moving services to house cleaners to bounce house rentals for parties — allowed for more repeat use.

More repeat use meant more jobs for services employees at a time when unemployment was still running historically high. Even in 2011, unemployment remained stubbornly high. It wasn’t until 2013 that the jobless numbers began their steady decline.

There’s a question about whether these gig economy jobs can keep up with the changing times. Now, as unemployment has returned to its pre-recession levels, will people want to continue working in roles that don’t offer health insurance or retirement benefits? The answer seems to be “yes” as the Thumbtack platform continues to grow and Uber and Lyft show no signs of slowing down.

“At the time, and it still remains one of my biggest passions, I was interested in how software could create new meaningful ways of working,” said Banister of the Thumbtack deal. “That’s the criteria I was looking for, which is, does this shift how people find work? Because I do believe that we can create jobs and we can create new types of jobs that never existed before with the platforms that we have today.”

Amazon partners with French retailer Monoprix to launch Prime Now grocery deliveries in Paris

Amazon’s business in France is taking a big step forward after announcing a new deal today with retail giant Monoprix to deliver groceries through Prime Now. The service will begin serving Prime Now members in Paris this year and include products carried by Monoprix, including its own branded items and fresh produce.

Monoprix’s website already offers services including home deliveries in some areas and “click and collect,” which lets shoppers pre-order items online before picking them up at a nearby store.

Frédéric Duval, Amazon France’s country manager, told Journal du Dimanche earlier this month that the company wanted to launch grocery delivery there, though at the time he didn’t specify who Amazon would partner with. Monoprix competitors Systeme U, Leclerc and Intermarche were reportedly also considered potential candidates, while struggling big box store operator Carrefour was speculated to be an acquisition target.

Monoprix is owned by Casino Group, a French retail conglomerate that operates stores, including supermarkets, convenience stores and restaurants, in France, Latin America and Southeast Asia. It generated 38 billion Euros in consolidated net sales last year.

In press statement, Duval said “This commercial partnership, which further enlarges Prime Now service selection, will enable Amazon Prime customers to benefit from ultra-fast deliveries for their Monoprix orders.”

Netflix’s ‘Icarus’ wins the Oscar for Best Documentary Feature

Icarus It was a quiet Oscar ceremony for the big streaming services, but Netflix’s doping film Icarus (directed by Bryan Fogel) did win the award for best documentary feature. The Big Sick, distributed by Amazon Studios, was nominated for best original screenplay, while Netflix’s Mudbound was nominated for best adapted screenplay, cinematography (amazingly, Rachel Morrison is the first… Read More

Amazon’s Prime Rewards Visa cardholders now get 5% back at Whole Foods if they pay for Prime

 Amazon has already rolled out price cuts for Whole Foods shoppers as a result of its acquisition of the grocery chain. It has also rolled up its Treasure Truck deals service to Whole Foods locations, and began delivering Whole Foods groceries through Prime. Now, it’s offering Prime members 5 percent back at Whole Foods when they shop using the Amazon Prime Rewards Visa card, too. The… Read More

Google declares war against Alexa and Siri at CES 2018

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It’s an artificial intelligence showdown.

This year at CES, the world’s largest electronics trade show (running Jan. 9-12), thousands of companies will travel to Las Vegas to show off their newest products and build new partnerships. But this time around, one unusual exhibitor stands out from the rest: Google.

It’s the first time in many years that Google will have its own, large, standalone booth in the middle of the convention center. But the search giant has gone far beyond buying space on the showroom floor. It’s also commissioned several large advertisements around the city, including one you simply can’t miss. Read more…

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Amazon drops David O. Russell show as Weinstein fallout continues

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Amazon says Whole Foods deal will close Monday

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Amazon's new Prime Now warehouse in Singapore is absolutely massive

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After years of preparation, Amazon has finally launched its same-day Prime Now delivery service in Singapore.

The service brings two-hour, and even one-hour deliveries, for tens of thousands of household items, from eggs and cold beer to diapers and detergent.

To achieve the rapid delivery times, Amazon’s opened its largest Prime Now warehouse to date, at 100,000 square feet of space near the Jurong district.

Image: VICTORIA HO/MASHABLE

The hotly anticipated launch lit up social media this week, as chatter grew about the service coming to rival local incumbents, as well as China’s Alibaba, which recently bought a presence here by scooping up Southeast Asia’s Lazada. Read more…

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Will Blue Apron’s rebound continue?

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The Amazon Echo now doubles as a home intercom system

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In wake of Amazon/Whole Foods deal, Instacart has a challenging opportunity

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The most obvious victim of the deal was Instacart, in which Whole Foods invested and with whom Whole Foods has a five-year contract.
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Crunch Report | Amazon Bids to Buy Whole Foods for $13.7 Billion

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