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Propelling deep space flight with a new fuel source, Momentus prepares for liftoff

Mikhail Kokorich, the founder of Momentus, a new Y Combinator-backed propulsion technology developer for space flight, hadn’t always dreamed of going to the moon.

A physicist who graduated from Russia’s top-ranked Novosibirsk University, Kokorich was a serial entrepreneur in who grew up in Siberia and made his name and his first fortunes in the years after the fall of the Soviet Union.

The heart of Momentus’ technology is a new propulsion system that uses water as a propellant instead of chemicals.

Image courtesy Momentus

Using water has several benefits, Kokorich says. One, it’s a fuel source that’s abundant in outer space, and it’s ultimately better and more efficient fuel for flight beyond low earth orbit. “If you move something with a chemical booster stage to the moon. Chemical propulsion is good when you need to have a very high thrust,” according to Kokorich. Once a ship gets beyond gravity’s pull, water simply works better, he says.

Some companies are trying to guide micro-satellites with technologies like Phase 4 which use ionized gases like Xenon, but according to Kokorich those are more expensive and slower. “When ionized propulsion is used for geostationary satellites to orbit, it takes months,” says Kokorich, using water can half the time.

“We can carry ten tons to geostationary orbit and it’s much faster,” says Kokorich.

The company has already signed an agreement with ECM Space, a European launch services provider, which will provide the initial trip for the company’s first test of its propulsion system on a micro-satellite — slated for early 2019.

That first product, “Zeal,” has specific impulses of 150 to 180 seconds and power up to 30 watts.

Kokorich started his first business, Dauria, in the mid-90s amid the collapse of the Soviet Union, selling explosives and engineering services to mining companies in Siberia. Kokorich sold that business and went into retail, eventually building a network of stores that sold home goods and housewares across Russia.

That raked in more millions for Kokorich, who then said he diversified into electronics by buying Russia’s BestBuy chain out bankruptcy. But space was never far from his mind, and, eventually he returned to it.

“In 2011 I hit my middle-aged crisis,” Korkorich says. “So I founded the first private Russian aerospace company.”

That company, Dauria Aerospace, was initially feted by the government, garnering the entrepreneur a place in Skolkovo, and its inaugural cohort of space companies. In an announcement of the successes the space program had achieved in 2014 Kokorich co-authored a piece with the Russian cosmonaut Sergey Zhukov, who remains the executive director of the networking and aerospace programs at the multi-billion-dollar boondoggle startup incubator.

Utilis detects water leaks underground using satellite imagery.

A few months later Kokorich would be in the U.S. working to back the first of what’s now a triumvirate of startups focused on space.

“With all the problems with Russia in the Western world, I moved to the U.S.,” says Kokorich. Dauria had quickly raised $30 million for its work, but as this Moscow Times article notes, stiff competition from U.S. firms and the sanctions leveled against Russia in the wake of its invasion and annexation of Crimea were taking their toll on the entrepreneur’s business. “It was a purely political immigration,” Korkorich says. “I don’t have purely business opportunities, because you have to work with the government [and] because the government would not like me.”

For all of his protestations, Kokorich has maintained several economic ties with partners in Russia. It’s through an investment firm called Oden Holdings Ltd. that Kokorich took an investment stake in the Canadian company Helios Wire, which was one of his first forays into space entrepreneurship outside of Russia. That company makes cryptographically secured applications for the transmission and reception of data from internet-enabled devices.

The second space company that the co-founder has built since moving to the U.S. is the satellite company Astra Digital, which processes data from satellites to make that information more accessible.

Now, with Momentus, Kokorich is turning to the problem of propulsion. “When transportation costs decrease, many business models emerge” Kokorich says. And Kokorich sees Momentus’ propulsion technology driving down the costs of traveling further into space — opening up opportunities for new businesses like asteroid mining and lunar transit.

The Momentus team is already thinking well beyond the initial launch. The company’s eyes are on a prize well beyond geostationary orbit.

Indeed, with water as a power source, the company says it will lay the groundwork for future cislunar and interplanetary rides. The company envisions a future where it will power water prospecting and delivery throughout the solar system, solar power stations, in-space manufacturing and space tourism.

And now, here’s a ‘Trumpy Cat’ augmented reality app from George Takei

Anyone who follows George Takei on Twitter can tell you that Star Trek‘s original Sulu is not a fan of President Donald Trump. But he’s found a new way to express that criticism — not just in tweets, interviews and op-eds, but also in an augmented reality app called House of Cats.

The app was built in partnership with Montreal-based development company BMAD, and it allows users to interact animated animal characters like Trumpy Cat, Meowlania, Vladdy Putin and Lil’ Rocket Pug. They can add their own voice recordings, superimpose the animals on real environments and take photos with them — Takei suggested including Trumpy Cat in photos of real-world protests.

When I asked where the idea came from, Takei had a simple explanation : “The Internet loves the combination of politics and cats.”

While the app looks pretty silly, Takei made the by-now-commonplace observation that satire is having a hard time keeping up with the daily news.

We spoke shortly after Trump had his press conference with Vladimir Putin — setting off this week’s cycle of criticism, denial and missing double negatives — and Takei told me, “No augmented reality could have created the true reality of what we saw this morning: Donald Trump standing shoulder-to-shoulder with Vladimir Putin … his denial of the attack on the core activity of our democratic system.”

Takei added that humor is a key ingredient in getting a serious message out into the world. He’s pointed to his embrace of memes (particularly Grumpy Cat) as one of the main drivers of his popularity on social media, which in turn gives him a bigger platform for his political views.

“I’m a political activist — I have been since I was a teenager, largely because of my childhood incarceration behind American barbed wire fences,” Takei said. He said his social media presence is meant to be an extension of that activism, but, “I notice that if I’m documenting the truth, people are nodding off. [So] I try to kind of inject a little humor into it.”

The app costs 99 cents, and there are plans for subscription content as well. It might seem strange to pay money for a satirical cat app, but keep in mind that some of the profits will go to Refugees International.

“Making a mockery of this particular person is going to be a very effective tool,” Takei said. “We’ll have fun while we also accomplish our mission to make this a better America.”

Apple’s iCloud user data in China is now handled by a state-owned mobile operator

If you’re an Apple customer living in China who didn’t already opt out of having your iCloud data stored locally, here’s a good reason to do so now. That information, the data belonging to China-based iCloud users which includes emails and text messages, is now being stored by a division of China Telecom, the state-owned telco.

The operator’s Tianyi cloud storage business unit has taken the reins for iCloud China, according to a WeChat post from China Telecom. Apple separately confirmed the change to TechCrunch.

Apple’s transition of the data from its own U.S.-based servers to local servers on Chinese soil has raised significant concern among observers who worry that the change will grant the Chinese government easier access to sensitive information. Before a switch announced earlier this year, all encryption keys for Chinese users were stored in the U.S. which meant authorities needed to go through the U.S. legal system to request access to information. Now the situation is based on Chinese courts and a gatekeeper that’s owned by the government.

Apple itself has said it was compelled to make the move in order to comply with Chinese authorities, and that hardly eases the mind.

It’s ironic that the U.S. government has pursued Chinese telecom equipment maker ZTE on account of national security and suspected links to Chinese authorities, and yet one of America’s largest corporates is entrusting user data to a state-owned company in China.

The only plus for Apple users in China is that they can opt out of local data storage by selecting a country other than China for their iCloud account. Since it isn’t clear whether making that change today would see information migrated or deleted from the Chinese server, starting over with a new account is probably the best option at this point.

Hat tip @yuanfenyang

Online learning platform Unacademy gets $21M Series C from Sequoia India, SAIF and Nexus

Unacademy founders Roman Saini, Gaurav Munjal and Hemesh Singh

Bangalore-based Unacademy will add more educators to its online learning platform, which claims to be India’s largest, after closing a $21 million Series C. The funding comes from Sequoia India, SAIF Partners and Nexus Venture Partners, with participation from Blume Ventures (all four firms are returning from Unacademy’s Series B last year).

Originally a YouTube channel created in 2010 by Gaurav Munjal, Unacademy was officially launched as a startup in 2015 by founders Munjal, Roman Saini and Hemesh Singh. It has now raised $38.6 million in total.

While Unacademy offers a wide range of courses, its most popular offerings include preparation for important exams in India. Its platform includes two apps: one that lets educators create lessons and another that allows users to access them. Unacademy says it has 10,000 registered educators and three million users. Last month, the startup claims 3,000 educators were active on the platform and lessons were watched more than 40 million times.

Many lessons are available for free, though last year Unacademy launched a paid service called Plus that gives users access to features like private discussion forums and live video classes for a per-course fee. Unacademy claims it has achieved six times growth in monthly revenue since launching Plus. The premium classes also help it differentiate from other online learning platforms like Mrunal, a popular site that provides free test preparation for Indian students.

In addition to bringing on more teachers, Unacademy will use its new funding to expand key categories like pre-med, the Graduate Aptitude Test in Engineering (GATE) and the Common Admission Test (CAT), which are required by many post-graduate programs.

In a media statement, SAIF partner Alok Goel said “Unacademy has demonstrated tremendous progress towards their goal of delivering personalized learning by connecting great quality educators and students on their platform. The company has diversified across several new domains and has achieved amazing word of mouth among learners.”

Elon Musk tweets he’ll “bet ya a signed dollar” that Thai cave rescuer is a “pedo”

Elon Musk seems not only intent on burning all the goodwill he earned for trying to help last week’s Thai cave rescue, but rolling around in its ashes, too. In a series of extraordinarily offensive, now deleted tweets, the SpaceX and Tesla CEO called a British diver who participated in last week’s dangerous rescue mission a “pedo guy,” adding in another tweet “bet ya a signed dollar it’s true.”

Musk’s tantrum was triggered by an interview the diver, Vern Unsworth, gave CNN International last Friday, in which he called the small submarine Musk had SpaceX engineers build a “PR stunt” and said Musk could stick it “where it hurts.” Though the submarine was intended to help the 12 boys stranded with their soccer coach navigate flooded cave passageways, Unsworth, who helped plan the rescue operation and recruited other cave diving experts, said it “had absolutely no chance of working.”

Unworth added that Musk “had no conception of what the cave passage was like. The submarine, I believe, was about 5 foot 6 long, rigid, so it wouldn’t have gone round corners or round any obstacles. It wouldn’t hadn’t have made the first 50 meters into the cave from the dive start point.” When the reporter mentioned that Musk had gone into the cave on Tuesday, Unsworth said he was “asked to leave very quickly. And so he should have been.”

The rescue mission, made even more challenging by monsoon season, claimed the life of a Thai Navy seal before all boys were saved last week.

This is not the first time that Musk has clashed with a member of the cave rescue team. As confirmation came in that the last group of boys and their coach had been freed on July 10, the head of the rescue mission, Narongsak Osatanakorn, told reporters that “although [Musk’s] technology is good and sophisticated it’s not practical for this mission.”

In response, Musk dismissed the credentials of Ostanakorn, who led the joint command center coordinating the operation and is former acting governor of Chiang Rai, the province where the cave is located. In a tweet he said Ostanakorn was “described inaccurately as ‘rescue chief’” and “is not the subject matter expert” (the Columbus Dispatch reports that Ostanakorn holds a Master’s degree from Ohio State University, where he studied geodetic engineering and surveying).

Though Musk’s tweet about Ostanakorn was sharply criticized, many still gave him credit for his efforts. After all, engineering a submarine in a few days to save a group of children is an impressive and laudable feat. While Musk is known for going on strange Twitter rants, however, his attack on Unsworth is an entirely different stratosphere. In addition to defaming Unsworth in a particularly heinous way, the implication that a British diver would only go to Thailand, one of the world’s top diving destinations, for child sex tourism is problematic and arguably racist, as many have pointed out.

Elon Musk implying that British expats who live in Thailand are all kiddie fiddlers?
Erm… wow… isn’t that kind of a little bit racist?

— Robert Percy (@astweetedbyRP) July 15, 2018

Sure, Elon Musk calling a diver who help rescue 12 boys a ‘pedo’ just because he lives in Thailand is insulting, inflammatory and borderline libelous, but let’s not forget that it is also horrifically racist.

— Bay Area for Bernie (@BayArea4Bernie) July 15, 2018

He didn’t just call the British rescuer in Thailand a pedophile. He called him a pedophile because he couldn’t imagine another reason for a white guy to be in Thailand. Which is a false assumption. Sometimes white guys visit Thailand to show off their useless submarines.

— Kumail Nanjiani (@kumailn) July 15, 2018

TechCrunch has contacted SpaceX for comment on Musk’s remarks.

3D printed guns are now legal… What’s next?

Jon Stokes
Contributor

Jon Stokes is one of the founders of Ars Technica, an author, and a former Wired editor. He currently hacks ruby at Collective Idea, and runs AllOutdoor.com.

On Tuesday, July 10, the DOJ announced a landmark settlement with Austin-based Defense Distributed, a controversial startup led by a young, charismatic anarchist whom Wired once named one of the 15 most dangerous people in the world.

Hyper-loquacious and media-savvy, Cody Wilson is fond of telling any reporter who’ll listen that Defense Distributed’s main product, a gun fabricator called the Ghost Gunner, represents the endgame for gun control, not just in the US but everywhere in the world. With nothing but the Ghost Gunner, an internet connection, and some raw materials, anyone, anywhere can make an unmarked, untraceable gun in their home or garage. Even if Wilson is wrong that the gun control wars are effectively over (and I believe he is), Tuesday’s ruling has fundamentally changed them.

At about the time the settlement announcement was going out over the wires, I was pulling into the parking lot of LMT Defense in Milan, IL.

LMT Defense, formerly known as Lewis Machine & Tool, is as much the opposite of Defense Distributed as its quiet, publicity-shy founder, Karl Lewis, is the opposite of Cody Wilson. But LMT Defense’s story can be usefully placed alongside that of Defense Distributed, because together they can reveal much about the past, present, and future of the tools and technologies that we humans use for the age-old practice of making war.

The legacy machine

Karl Lewis got started in gunmaking back in the 1970’s at Springfield Armory in Geneseo, IL, just a few exits up I-80 from the current LMT Defense headquarters. Lewis, who has a high school education but who now knows as much about the engineering behind firearms manufacturing as almost anyone alive, was working on the Springfield Armory shop floor when he hit upon a better way to make a critical and failure-prone part of the AR-15, the bolt. He first took his idea to Springfield Armory management, but they took a pass, so he rented out a small corner in a local auto repair ship in Milan, bought some equipment, and began making the bolts, himself.

Lewis worked in his rented space on nights and weekends, bringing the newly fabricated bolts home for heat treatment in his kitchen oven. Not long after he made his first batch, he landed a small contract with the US military to supply some of the bolts for the M4 carbine. On the back of this initial success with M4 bolts, Lewis Machine & Tool expanded its offerings to include complete guns. Over the course of the next three decades, LMT grew into one of the world’s top makers of AR-15-pattern rifles for the world’s militaries, and it’s now in a very small club of gunmakers, alongside a few old-world arms powerhouses like Germany’s Heckler & Koch and Belgium’s FN Herstal, that supplies rifles to US SOCOM’s most elite units.

The offices of LMT Defense, in Milan, Ill. (Image courtesy Jon Stokes)

LMT’s gun business is built on high-profile relationships, hard-to-win government contracts, and deep, almost monk-like know-how. The company lives or dies by the skill of its machinists and by the stuff of process engineering — tolerances and measurements and paper trails. Political connections are also key, as the largest weapons contracts require congressional approval and months of waiting for political winds to blow in this or that direction, as countries to fall in and out of favor with each other, and paperwork that was delayed due to a political spat over some unrelated point of trade or security finally gets put through so that funds can be transfered and production can begin.

Selling these guns is as old-school a process as making them is. Success in LMT’s world isn’t about media buys and PR hits, but about dinners in foreign capitals, range sessions with the world’s top special forces units, booths at trade shows most of us have never heard of, and secret delegations of high-ranking officials to a machine shop in a small town surrounded by corn fields on the western border of Illinois.

The civilian gun market, with all of its politics- and event-driven gyrations of supply and demand, is woven into this stable core of the global military small arms market the way vines weave through a trellis. Innovations in gunmaking flow in both directions, though nowadays they more often flow from the civilian market into the military and law enforcement markets than vice versa. For the most part, civilians buy guns that come off the same production lines that feed the government and law enforcement markets.

All of this is how small arms get made and sold in the present world, and anyone who lived through the heyday of IBM and Oracle, before the PC, the cloud, and the smartphone tore through and upended everything, will recognize every detail of the above picture, down to the clean-cut guys in polos with the company logo and fat purchase orders bearing signatures and stamps and big numbers.

The author with LMT Defense hardware.

Guns, drugs, and a million Karl Lewises

This is the part of the story where I build on the IBM PC analogy I hinted at above, and tell you that Defense Distributed’s Ghost Gunner, along with its inevitable clones and successors, will kill dinosaurs like LMT Defense the way the PC and the cloud laid waste to the mainframe and microcomputer businesses of yesteryear.

Except this isn’t what will happen.

Defense Distributed isn’t going to destroy gun control, and it’s certainly not going to decimate the gun industry. All of the legacy gun industry apparatus described above will still be there in the decades to come, mainly because governments will still buy their arms from established makers like LMT. But surrounding the government and civilian arms markets will be a brand new, homebrew, underground gun market where enthusiasts swap files on the dark web and test new firearms in their back yards.

The homebrew gun revolution won’t create a million untraceable guns so much as it’ll create a hundreds of thousands of Karl Lewises — solitary geniuses who had a good idea, prototyped it, began making it and selling it in small batches, and ended up supplying a global arms market with new technology and products.

In this respect, the future of guns looks a lot like the present of drugs. The dark web hasn’t hurt Big Pharma, much less destroyed it. Rather, it has expanded the reach of hobbyist drugmakers and small labs, and enabled a shadow world of pharmaceutical R&D that feeds transnational black and gray markets for everything from penis enlargement pills to synthetic opioids.

Gun control efforts in this new reality will initially focus more on ammunition. Background checks for ammo purchases will move to more states, as policy makers try to limit civilian access to weapons in a world where controlling the guns themselves is impossible.

Ammunition has long been the crack in the rampart that Wilson is building. Bullets and casings are easy to fabricate and will always be easy to obtain or manufacture in bulk, but powder and primers are another story. Gunpowder and primers are the explosive chemical components of modern ammo, and they are difficult and dangerous to make at home. So gun controllers will seize on this and attempt to pivot to “bullet control” in the near-term.

Ammunition control is unlikely to work, mainly because rounds of ammunition are fungible, and there are untold billions of rounds already in civilian hands.

In addition to controls on ammunition, some governments will also make an effort at trying to force the manufacturers of 3D printers and desktop milling machines (the Ghost Gunner is the latter) to refuse to print files for gun parts.

This will be impossible to enforce, for two reasons. First, it will be hard for these machines to reliably tell what’s a gun-related file and what isn’t, especially if distributors of these files keep changing them to defeat any sort of detection. But the bigger problem will be that open-source firmware will quickly become available for the most popular printing and milling machines, so that determined users can “jailbreak” them and use them however they like. This already happens with products like routers and even cars, so it will definitely happen with home fabrication machines should the need arise.

Ammo control and fabrication device restrictions having failed, governments will over the longer term employ a two-pronged approach that consists of possession permits and digital censorship.

Photo courtesy of Getty Images: Jeremy Saltzer / EyeEm

First, governments will look to gun control schemes that treat guns like controlled substances (i.e. drugs and alchohol). The focus will shift to vetting and permits for simple possession, much like the gun owner licensing scheme I outlined in Politico. We’ll give up on trying to trace guns and ammunition, and focus more on authorizing people to possess guns, and on catching and prosecuting unauthorized possession. You’ll get the firearm equivalent of a marijuana card from the state, and then it won’t matter if you bought your gun from an authorized dealer or made it yourself at home.

The second component of future gun control regimes will be online suppression, of the type that’s already taking place on most major tech platforms across the developed world. I don’t think DefCad.com is long for the open web, and it will ultimately have as hard a time staying online as extremist sites like stormfront.org.

Gun CAD files will join child porn and pirated movies on the list of content it’s nearly impossible to find on big tech platforms like Facebook, Twitter, Reddit, and YouTube. If you want to trade these files, you’ll find yourself on sites with really intrusive advertising, where you worry a lot about viruses. Or, you’ll end up on the dark web, where you may end up paying for a hot new gun design with a cryptocurrency. This may be an ancap dream, but won’t be mainstream or user-friendly in any respect.

As for what comes after that, this is the same question as the question of what comes next for politically disfavored speech online. The gun control wars have now become a subset of the online free speech wars, so whatever happens with online speech in places like the US, UK, or China will happen with guns.

Disney tech smooths out bad CG hair days

Disney is unequivocally the world’s leader in 3D simulations of hair — something of a niche talent in a way, but useful if you make movies like Tangled, where hair is basically the main character. A new bit of research from the company makes it easier for animators to have hair follow their artistic intent while also moving realistically.

The problem Disney Research aimed to solve was a compromise that animators have had to make when making the hair on characters do what the scene requires. While the hair will ultimately be rendered in glorious high-definition and with detailed physics, it’s too computationally expensive to do that while composing the scene.

Should a young warrior in her tent be wearing her hair up or down? Should it fly out when she turns her head quickly to draw attention to the movement, or stay weighed down so the audience isn’t distracted? Trying various combinations of these things can eat up hours of rendering time. So, like any smart artist, they rough it out first:

“Artists typically resort to lower-resolution simulations, where iterations are faster and manual edits possible,” reads the paper describing the new system. “But unfortunately, the parameter values determined in this way can only serve as an initial guess for the full-resolution simulation, which often behaves very different from its coarse counterpart when the same parameters are used.”

The solution proposed by the researchers is basically to use that “initial guess” to inform a high-resolution simulation of just a handful of hairs. These “guide” hairs act as feedback for the original simulation, bringing a much better idea of how the rest will act when fully rendered.

The guide hairs will cause hair to clump as in the upper right, while faded affinities or an outline-based guide (below, left and right) would allow for more natural motion if desired.

And because there are only a couple of them, their finer simulated characteristics can be tweaked and re-tweaked with minimal time. So an artist can fine-tune a flick of the ponytail or a puff of air on the bangs to create the desired effect, and not have to trust to chance that it’ll look like that in the final product.

This isn’t a trivial thing to engineer, of course, and much of the paper describes the schemes the team created to make sure that no weirdness occurs because of the interactions of the high-def and low-def hair systems.

It’s still very early: it isn’t meant to simulate more complex hair motions like twisting, and they want to add better ways of spreading out the affinity of the bulk hair with the special guide hairs (as seen at right). But no doubt there are animators out there who can’t wait to get their hands on this once it gets where it’s going.

Machine learning boosts Swiss startup’s shot at human-powered land speed record

The current world speed record for riding a bike down a straight, flat road was set in 2012 by a Dutch team, but the Swiss have a plan to topple their rivals — with a little help from machine learning. An algorithm trained on aerodynamics could streamline their bike, perhaps cutting air resistance by enough to set a new record.

Currently the record is held by Sebastiaan Bowier, who in 2012 set a record of 133.78 km/h, or just over 83 mph. It’s hard to imagine how his bike, which looked more like a tiny landbound rocket than any kind of bicycle, could be significantly improved on.

But every little bit counts when records are measured down a hundredth of a unit, and anyway, who knows but that some strange new shape might totally change the game?

To pursue this, researchers at the École Polytechnique Fédérale de Lausanne’s Computer Vision Laboratory developed a machine learning algorithm that, trained on 3D shapes and their aerodynamic qualities, “learns to develop an intuition about the laws of physics,” as the university’s Pierre Baqué said.

“The standard machine learning algorithms we use to work with in our lab take images as input,” he explained in an EPFL video. “An image is a very well-structured signal that is very easy to handle by a machine-learning algorithm. However, for engineers working in this domain, they use what we call a mesh. A mesh is a very large graph with a lot of nodes that is not very convenient to handle.”

Nevertheless, the team managed to design a convolutional neural network that can sort through countless shapes and automatically determine which should (in theory) provide the very best aerodynamic profile.

“Our program results in designs that are sometimes 5-20 percent more aerodynamic than conventional methods,” Baqué said. “But even more importantly, it can be used in certain situations that conventional methods can’t. The shapes used in training the program can be very different from the standard shapes for a given object. That gives it a great deal of flexibility.”

That means that the algorithm isn’t just limited to slight variations on established designs, but it also is flexible enough to take on other fluid dynamics problems like wing shapes, windmill blades or cars.

The tech has been spun out into a separate company, Neural Concept, of which Baqué is the CEO. It was presented today at the International Conference on Machine Learning in Stockholm.

A team from the Annecy University Institute of Technology will attempt to apply the computer-honed model in person at the World Human Powered Speed Challenge in Nevada this September — after all, no matter how much computer assistance there is, as the name says, it’s still powered by a human.

The U.S. and ZTE reach a deal that will lift export ban

The United States government has made a deal with Chinese telecommunications giant ZTE that, once completed, will lift the ban preventing the company from working with American suppliers. The agreement eases tensions in the U.S.-China trade war because the seven-year denial order, which the Trump administration imposed in April after ZTE violated sanctions against North Korea and Iran, was a major point of contention between the two countries.

Our statement on #ZTE and the escrow agreement: pic.twitter.com/w0Bbej1mAU

— U.S. Commerce Dept. (@CommerceGov) July 11, 2018

According to a statement from the Commerce Department, once ZTE completes a $400 million escrow payment, the department’s Bureau of Industry and Security (BIS) will lift the ban. The Commerce Department says “the ZTE settlement represents the toughest penalty and strictest compliance regime the Department has ever imposed in such a case. It will deter future bad actors and ensure the Department is able to protect the United States from those that would do us harm.”

Many U.S. lawmakers are still concerned about the security repercussions of the deal, however, and a bipartisan group of senators introduced legislation last week that could potentially restore some of the penalties imposed on ZTE.

The denial order was imposed because the Commerce Department claimed that ZTE violated U.S. laws against selling equipment containing American technology to Iran and North Korea, and not only failed to follow the terms of a 2017 agreement with the Department of Justice, but also lied to the U.S. The ban cut off access to several of ZTE’s key suppliers, including Qualcomm, and was severe enough that it was described as a “death penalty” for the company, which reportedly expected to lose $3 billion as a result.

But ZTE quickly became a pawn in the U.S-China trade wars and the Trump administration said in May that the company could continue buying from U.S. suppliers if it paid a fine of at least $1.3 billion and replaced its senior management and board. ZTE’s new management team was put into place last week, with new CEO Xu Ziyang promising stronger compliance procedures.

Aspire Capital offers fast finance for SMEs in Southeast Asia

Southeast Asia’s digital economy is tipped to grow more than six-fold to reach more than $200 billion per year, according to a report co-authored by Google, with e-commerce accounting for the dominant share. The emergence of e-commerce platforms like Alibaba’s Lazada and U.S.-listed Shopee have enabled online entrepreneurship across the region, but still financial support for online sellers, who are basically SMEs, is lagging.

That’s where Singapore-based Aspire Capital, a six-month-old organization focused on speedy SME lending, is hoping to make a difference.

The company certainly has opportunity. With a cumulative population of over 600 million consumers and a rising middle class, Southeast Asia is increasingly an attractive market for businesses of all kind, and online companies in particular. Chinese giants Alibaba and Tencent have long devoted significant resources to the region where, like India, they see significant growth potential. E-commerce is the clear winner, in terms of size, with the e-Conomy SEA report — a joint research project between Google and Singapore sovereign fund Temasek — forecasting e-commerce revenue will hit $88 billion by 2025 from $10.9 billion in 2017.

Data from the e-Conomy SEA report

The crux of its problem is that online sellers who use Lazada, Shopee or other platforms that are forgoing profit in order to grow, are ironically less able to scale their business since there are few ‘e-commerce friendly’ financing options.

That problem became apparent to Aspire founder and CEO Andrea Baronchelli during a four-year stint with Lazada Singapore where, as CMO, he identified a financing disconnect for Lazada merchants.

“I saw the problem while trying to rally small businesses trying to grow in the digital economy,” Baronchelli told TechCrunch in an interview.

“The problem is really about providing working capital to small business owners. We started with online sellers, but we have expanded a bit as we see demand. There are 65 million small businesses in Southeast Asia, that’s ten times more than the U.S. so we see so much potential,” he added.

Aspire founder and CEO Andrea Baronchelli pictured while at Lazada

Today, Aspire Capital covers Singapore where it has expanded beyond e-commerce merchants to cover other things of SMEs who seek loans, primarily for working capital as Baronchelli explains. So far, he added, it has served loans to over 100 businesses. Typically, its spread goes from as low as SG$5,000 to up to SG$100,000, that’s around $3,600-$73,500 in U.S. terms.

The company was founded in early 2018 and already it has done plenty. It was part of the Y Combinator Winter 2018 cohort and it has closed a $9 million seed round to kick its business off with the working capital that it needs itself.

That round included a range of investors such as Europe-based Hummingbird, New York’s Mark II Capital, ex-Sequoia partner Yinglan Tan’s Insignia Ventures Partners and Y Combinator.

The principle behind the business is to make business financing quick and simple, Baronchelli said.

So rather than stacks of paperwork, SME owners fill out online forms and get a response the same day. Large parts of the application and review process are automated using a proprietary risk assessment engine, but Baronchelli said that ultimately a human makes the final call on whether to accept the application or not.

“We want to really be fast,” Baronchelli explained. “SMEs need quick decisions, they cannot wait three months for a bank. They need super quick, fast and no paperwork.”

The application process for companies seeking loans from Aspire Capital

He paints an example of online merchants who typically buy inventory from China which is sold customers within three to six months. If the business has a track record, it can take a loan to increase its stock and grow its revenues and profit, he explained.

Singapore may be a key market in Southeast Asia, but with a population of just over five million expansion is top of mind for Aspire. Baronchelli said he is doing due diligence on the first market expansion which he expects will happen before the end of this year. He expects that the business will raise further capital, perhaps towards the tail end of this year, which would be used to expand more aggressively across Southeast Asia in 2019.

He is also occupied building out the team. Right now, Aspire has ten people but he is keen to bring in ten to fifteen more staff, particularly on the tech side of the business.

Grab co-founder says Southeast Asia still has plenty of competition despite Uber’s exit

Grab may have bought itself a dominant position in Southeast Asia through its acquisition of Uber’s regional business, but the company still believes there’s competition in the ride-hailing space despite what consumers may feel.

But Grab customers aren’t alone in feeling that the Grab-Uber deal is detrimental, the Competition and Consumer Commission Singapore (CCCS) last week expressed concern that the tie-up is hurting consumers and that a lack of competition will reduce innovation. The watchdog is in the process of an investigation into the deal which could see it dish out fines for Uber and Grab, or potentially unwind the deal in Singapore altogether.

Despite that threat looming, Grab co-founder Hooi Ling Tan told an audience at the Rise conference in Hong Kong that the market, and ride-hailing more generally, remains competitive in Southeast Asia despite Uber’s exit.

“There’s still a lot of existing competition, we don’t foresee it ending ever.. and to be honest we don’t want it to because we continue to learn from them,” Tan said. “We continue to learn from alternative players who take alternative strategies [and] operational tactics.”

Go-Jek, the billion-dollar firm that dominates Indonesia and is plotting a regional expansion to fill Uber’s void, may be the most obvious rival, but Tan said that Grab is competing with more basic forces.

“From day one, our primary competitor has never been other ride-hailing apps, it’s actually been what [Grab CEO Anthony Tan] calls the hand — the hand that waves down a taxi on the side of the road,” Tan, who is not related to the Grab CEO, said. “That market is huge, [and it is something] we’re trying to provide an alternative service to because it isn’t exactly efficient as is.”

10 July 2018; Tan Hooi Ling, left, Co-Founder, Grab, and Kara Swisher, Executive Editor, Recode, on Centre Stage during day one of RISE 2018 at the Hong Kong Convention and Exhibition Centre in Hong Kong. Photo by Stephen McCarthy / RISE via Sportsfile

CCCS, the Singaporean watchdog, doesn’t agree, however. Last week it expressed concern that no other taxi apps rival Grab and that a prohibitive barrier of cost and network effects prevents new entrants from competing squarely. A lack of competition has already led to Grab raising prices, it argued, although Grab has denied doing so.

Tan didn’t comment directly on the regulator’s comments, but she did say at a subsequent press briefing that regulating ride-hailing is a tricky process.

“We’re all trying to figure out what’s the right way to balance the needs of the consumer and need to create an environment that’s supportive of innovation,” she said. “Together we’re trying to figure things out, we make mistakes together but are 100 percent combined in terms of our intent.”

An entity with which Grab is more unexpectedly combined with is Uber, and Tan’s comments certainly paint the relationship between the once-sworn enemies as a very pally one.

“The partnership makes a tonne of sense to us because we saw [Uber] as really true potential partners,” Tan said. “For example some of the things that they’ve been helping us a lot on… they have Uber Eats in Southeast Asia, which we didn’t have, and since we’ve helped take over their operations we’ve helped them expand it from two countries to six countries right now with a bunch more growth expansion plans.

“They’ve also had some of the best technology know-how, whether it’s mapping or just basic scaling infrastructure, those are some of the other things we’ve continued learned from them,” she added.

Tan said that Uber and Grab are educating each other on how their respective businesses are developing, and on that note Grab today went beyond ride-hailing with the launch of its “super app” that integrates third-party services. Uber has embraced scooters with its acquisition of Jump Bikes, but it will take some imagining for the ride-hailing giant to adopt non-transportation services like Grab’s push into payment and financial services.

But then that’s entirely the point of its Southeast Asia exit. It’s widely-believed that Uber left Southeast Asia’s loss-making market to clean its balance sheet ahead of a future IPO. Nonetheless, it got a solid 27.5 percent share in Grab in return and with the Singapore-based firm in the process of raising capital at a valuation of over $10 billion, Uber is already reaping the rewards on paper.

Grab raised $1 billion from Toyota last month and that is the first tranche of a larger fundraising effort to support the one-stop “super app” strategy in Southeast Asia’s post-Uber world.

Elon Musk says SpaceX is working on a kid-size submarine to extract those boys in Thailand

Over the last couple of days, serial entrepreneur Elon Musk has been tweeting about how to potentially help the 12 young soccer players and their coach who began exploring a cave in Thailand on June 23rd, quickly becoming trapped there by rising floodwaters.

Now, suggests Musk, working with cave experts in Thailand, he and engineers from his rocket company, SpaceX, have decided on the “primary path” to attempt to freeing the group: a “tiny, kid-size submarine” that uses the “liquid oxygen transfer tube” of SpaceX’s Falcon rocket as the hull.

It’s “[l]ight enough to be carried by two divers, small enough to get through narrow gaps. Extremely robust,” Musk tweeted a couple of hours ago, adding that construction on the vehicle will be “complete in about 8 hours” after which it will be sent on a 17-hour flight to Thailand. (SpaceX is based in Hawthorne, California, outside of L.A.)

Whether the creation is made and shipped out remains to be seen, but Musk suggested on Twitter that it would be “[f]itted for a kid or small adult to minimize open air” with “[s]egmented compartments to place rocks or dive weights” and “adjust buoyancy.”

Musk had tweeted last night that both SpaceX and his much newer, tunnel boring company, Boring Company, would be sending engineers to Thailand today to see how they could help.

If SpaceX is able to create an escape pod that works, Musk — who enjoys a kind of cult status in the business world for building superior products in challenging, capital-intensive industries — will only further burnish his reputation as a kind of Tony Stark figure. Indeed, his Twitter feed is currently filled with adoring comments relating to his interest in rescuing the soccer team.

It’s a daunting challenge. As reported in the New York Times, the cave complex has never been fully mapped and it features different waterways that don’t appear to be directly linked. Rescue attempts have already led to one fatality, that of former Thai Navy SEAL diver Saman Gunan, who brought tanks of air to the boys and their coach, then lost consciousness in one of its passageways on his swim out of the complex.

Some good feedback from cave experts in Thailand. Iterating with them on an escape pod design that might be safe enough to try. Also building an inflatable tube with airlocks. Less likely to work, given tricky contours, but great if it does.

— Elon Musk (@elonmusk) July 7, 2018

Got more great feedback from Thailand. Primary path is basically a tiny, kid-size submarine using the liquid oxygen transfer tube of Falcon rocket as hull. Light enough to be carried by 2 divers, small enough to get through narrow gaps. Extremely robust.

— Elon Musk (@elonmusk) July 7, 2018

Construction complete in about 8 hours, then 17 hour flight to Thailand

— Elon Musk (@elonmusk) July 7, 2018

Update: The original version of this story included a short reference to a contest that Musk is not involved in. Thanks to a reader for flagging this for us.

California’s new online cancellation law benefits many disgruntled subscribers in other places, too

A new California law that went into effect on July 1 will make it much easier for people to cancel subscriptions online. Since the bill, sponsored by State Sen. Bob Hertzberg (D-Van Nuys), includes all services that have paying customers in the state, it will also benefit dissatisfied customers in many places outside California.

The legislation, California Senate Bill No. 313, covers “any business that makes an automatic renewal or continuous service offer to a consumer in this state,” so that includes a very wide range of services, including newspapers and magazines, subscription boxes, streaming services and more. Not only that, but if you made the subscription online, the law stipulates that you are also allowed to cancel it online. In other words, you can no longer be forced to call a customer service phone number to stop the service, a task that is usually much more frustrating and time-consuming than signing up in the first place.

The bill also requires more transparency in how companies present promotional offers. For example, if they lure in users with a free trial or gift, then they also need to include a “clear and conspicuous explanation” in the offer of how much customers will be charged after the trial ends or if the pricing will change. It also needs to tell you how to cancel (and actually allow you to do so) before you are charged.

If you sign up for a subscription at a promotional or discounted price that is only valid for a certain amount of time, the company must get your consent again before charging your debit or credit card when the price returns to its normal rate.

According to Nieman Lab, many news organizations in California are already making changes to their systems to comply with the new law.

All charges against ex-Vungle CEO Zain Jaffer, including lewd act on a child, dismissed by judge

All charges against former Vungle CEO Zain Jaffer, including a sexual abuse of a child, have been dropped. According to a statement from Jaffer’s representatives, San Mateo County Judge Stephanie Garratt dismissed the charges today. Jaffer was arrested last October and charged with several serious offenses, including a lewd act on one of his children, child abuse and battery on a police officer.

The dismissal is confirmed by San Mateo County Superior Court’s online records. The case (number 17NF012415A) had been scheduled to go to jury trial in late August.

Jaffer, whose full name is Zainali Jaffer, said in a statement that:

Being wrongfully accused of these crimes has been a terrible experience, which has had a deep and lasting impact on my family and the employees of my business. Those closest to me knew I was innocent and were confident that all of the charges against me would eventually be dismissed. I want to thank the San Mateo County District Attorney’s Office for carefully reviewing and considering all of the information and evidence in this case and dropping all the charges. I am also incredibly grateful for the continued and unwavering support of my wife and family, and look forward to spending some quality time with them.

Vungle, the fast-rising mobile ad startup Jaffer co-founded in 2011, removed him from the company immediately after they learned about the charges in October. TechCrunch has contacted Vungle and the San Mateo County District Attorney’s Office for comment.

The five best reasons you don’t want to miss Disrupt SF this September

TechCrunch’s Disrupt SF (Sept. 5-7) is our most ambitious event ever. And if we’re sure of one thing, it’s that people in the startup scene will extract more insights and inspiration from this Disrupt than any before. Here’s why…

  1. More, better programming. For the first time ever at Disrupt, we have two stages, plus two additional off-stage “Q&A” areas where Disrupt attendees can ask questions directly to speakers. Sequoia’s Doug Leone, Bumble’s Whitney Wolfe Herd, Sinovation’s Dr. Kai-Fu Lee,  23andMe’s Anne Wojcicki are just a few of the stellar interviews TechCrunch editors will conduct on stage. Disrupt will be live streamed, but only Disrupt pass holders will be able to catch sessions they missed via video-on-demand.
  2. Precision-guided networking. We spent years refining CrunchMatch, TechCrunch’s founder-investor matching and meeting system, and we’ve got it down to a science that has already produced thousands of meetings. Investors, use the CrunchMatch/Brella app to find the the founders and startup ideas you’re looking for, request a meeting, get the thumbs up, and boom you have a time and an assigned meeting table in the CrunchMatch meeting area.
  3. Startup Battlefield and Startup Alley. We’ve already selected the 20 startups that will compete in Startup Battlefield, and though the list is under wraps until the start of Disrupt, trust us it’s an amazing field of contestants – the fruits of a very deep, global recruitment effort. And Startup Alley will have more than 1,000 companies exhibiting across a dozen tracks – AI, mobility, blockchain, fintech – and each has Top Picks – the standouts that TechCrunch’s editors chose to exhibit free of charge. (Learn more about exhibiting in Startup Alley.)
  4. Comfortable digs. We built past Disrupts in pier warehouses, but this year we’re moving to the glistening, super comfortable Moscone West, where we have 3x the floorspace, which means spacious, sunny lounge areas where attendees can relax, charge gear and catch up with fellow attendees.
  5. The right pass for you. For the first time, Disrupt is offering passes with features and prices designed to suit different attendees, like founders, investors, all around innovators and more. Plus, passes come with access to discounted San Francisco hotel rooms. Right now, early birds prices apply, so do don’t wait. Get your pass now.

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.

 

Redbox lands deal with Warner to rent DVDs on the same day they go on sale in physical stores

DVD and Blu-ray rental kiosk operator Redbox announced a deal with Warner Bros. today that allows it to begin offering new releases on the same day they go on sale in physical retail stores. Redbox’s former agreement with the studio meant they had to wait until seven days after the home-video release. In a statement, Redbox said this deal also maintains the availability of new releases in Redbox On Demand, its streaming rental service.

According to Variety, this means Redbox now has same-day deals with almost all of the major studios. In addition to Warner Bros., they include Sony Pictures Entertainment, Universal Pictures and Lionsgate (its deal with 20th Century Fox is similar to its previous one with Warner Bros ., in that it allows Redbox to rent its movies seven days after their home-video release). One notable exception is Disney, which Redbox has not had a distribution deal with since 2012. This is likely due to an ongoing legal dispute involving digital download codes for Disney content.

Redbox now operates more than 41,500 kiosks, which it said in its announcement is “more locations than Starbucks and McDonalds in the U.S. combined.”

While the idea of waiting for DVD rentals might seem quaint in the age of on-demand and streaming everything, many Americans still rent discs. According to the NPD Group, nearly a third of people it surveyed in the United States last year said they rent DVDs and Blu-rays in addition to using a subscription service like Netflix. Despite reporting declining revenue before its parent company, Outerwall, agreed to be taken private in July 2016, Redbox doubled down on kiosks last year, adding 1,500 with plans to add more this year.

Facebook’s new AI research is a real eye-opener

There are plenty of ways to manipulate photos to make you look better, remove red eye or lens flare, and so on. But so far the blink has proven a tenacious opponent of good snapshots. That may change with research from Facebook that replaces closed eyes with open ones in a remarkably convincing manner.

It’s far from the only example of intelligent “in-painting,” as the technique is called when a program fills in a space with what it thinks belongs there. Adobe in particular has made good use of it with its “context-aware fill,” allowing users to seamlessly replace undesired features, for example a protruding branch or a cloud, with a pretty good guess at what would be there if it weren’t.

But some features are beyond the tools’ capacity to replace, one of which is eyes. Their detailed and highly variable nature make it particularly difficult for a system to change or create them realistically.

Facebook, which probably has more pictures of people blinking than any other entity in history, decided to take a crack at this problem.

It does so with a Generative Adversarial Network, essentially a machine learning system that tries to fool itself into thinking its creations are real. In a GAN, one part of the system learns to recognize, say, faces, and another part of the system repeatedly creates images that, based on feedback from the recognition part, gradually grow in realism.

From left to right: “Exemplar” images, source images, Photoshop’s eye-opening algorithm, and Facebook’s method.

In this case the network is trained to both recognize and replicate convincing open eyes. This could be done already, but as you can see in the examples at right, existing methods left something to be desired. They seem to paste in the eyes of the people without much consideration for consistency with the rest of the image.

Machines are naive that way: they have no intuitive understanding that opening one’s eyes does not also change the color of the skin around them. (For that matter, they have no intuitive understanding of eyes, color, or anything at all.)

What Facebook’s researchers did was to include “exemplar” data showing the target person with their eyes open, from which the GAN learns not just what eyes should go on the person, but how the eyes of this particular person are shaped, colored, and so on.

The results are quite realistic: there’s no color mismatch or obvious stitching because the recognition part of the network knows that that’s not how the person looks.

In testing, people mistook the fake eyes-opened photos for real ones, or said they couldn’t be sure which was which, more than half the time. And unless I knew a photo was definitely tampered with, I probably wouldn’t notice if I was scrolling past it in my newsfeed. Gandhi looks a little weird, though.

It still fails in some situations, creating weird artifacts if a person’s eye is partially covered by a lock of hair, or sometimes failing to recreate the color correctly. But those are fixable problems.

You can imagine the usefulness of an automatic eye-opening utility on Facebook that checks a person’s other photos and uses them as reference to replace a blink in the latest one. It would be a little creepy, but that’s pretty standard for Facebook, and at least it might save a group photo or two.

UK report warns DeepMind Health could gain ‘excessive monopoly power’

DeepMind’s foray into digital health services continues to raise concerns. The latest worries are voiced by a panel of external reviewers appointed by the Google-owned AI company to report on its operations after its initial data-sharing arrangements with the U.K.’s National Health Service (NHS) ran into a major public controversy in 2016.

The DeepMind Health Independent Reviewers’ 2018 report flags a series of risks and concerns, as they see it, including the potential for DeepMind Health to be able to “exert excessive monopoly power” as a result of the data access and streaming infrastructure that’s bundled with provision of the Streams app — and which, contractually, positions DeepMind as the access-controlling intermediary between the structured health data and any other third parties that might, in the future, want to offer their own digital assistance solutions to the Trust.

While the underlying FHIR (aka, fast healthcare interoperability resource) deployed by DeepMind for Streams uses an open API, the contract between the company and the Royal Free Trust funnels connections via DeepMind’s own servers, and prohibits connections to other FHIR servers. A commercial structure that seemingly works against the openness and interoperability DeepMind’s co-founder Mustafa Suleyman has claimed to support.

There are many examples in the IT arena where companies lock their customers into systems that are difficult to change or replace. Such arrangements are not in the interests of the public. And we do not want to see DeepMind Health putting itself in a position where clients, such as hospitals, find themselves forced to stay with DeepMind Health even if it is no longer financially or clinically sensible to do so; we want DeepMind Health to compete on quality and price, not by entrenching legacy position,” the reviewers write.

Though they point to DeepMind’s “stated commitment to interoperability of systems,” and “their adoption of the FHIR open API” as positive indications, writing: “This means that there is potential for many other SMEs to become involved, creating a diverse and innovative marketplace which works to the benefit of consumers, innovation and the economy.”

“We also note DeepMind Health’s intention to implement many of the features of Streams as modules which could be easily swapped, meaning that they will have to rely on being the best to stay in business,” they add. 

However, stated intentions and future potentials are clearly not the same as on-the-ground reality. And, as it stands, a technically interoperable app-delivery infrastructure is being encumbered by prohibitive clauses in a commercial contract — and by a lack of regulatory pushback against such behavior.

The reviewers also raise concerns about an ongoing lack of clarity around DeepMind Health’s business model — writing: “Given the current environment, and with no clarity about DeepMind Health’s business model, people are likely to suspect that there must be an undisclosed profit motive or a hidden agenda. We do not believe this to be the case, but would urge DeepMind Health to be transparent about their business model, and their ability to stick to that without being overridden by Alphabet. For once an idea of hidden agendas is fixed in people’s mind, it is hard to shift, no matter how much a company is motivated by the public good.”

We have had detailed conversations about DeepMind Health’s evolving thoughts in this area, and are aware that some of these questions have not yet been finalised. However, we would urge DeepMind Health to set out publicly what they are proposing,” they add. 

DeepMind has suggested it wants to build healthcare AIs that are capable of charging by results. But Streams does not involve any AI. The service is also being provided to NHS Trusts for free, at least for the first five years — raising the question of how exactly the Google-owned company intends to recoup its investment.

Google of course monetizes a large suite of free-at-the-point-of-use consumer products — such as the Android mobile operating system; its cloud email service Gmail; and the YouTube video sharing platform, to name three — by harvesting people’s personal data and using that information to inform its ad targeting platforms.

Hence the reviewers’ recommendation for DeepMind to set out its thinking on its business model to avoid its intentions vis-a-vis people’s medical data being viewed with suspicion.

The company’s historical modus operandi also underlines the potential monopoly risks if DeepMind is allowed to carve out a dominant platform position in digital healthcare provision — given how effectively its parent has been able to turn a free-for-OEMs mobile OS (Android) into global smartphone market OS dominance, for example.

So, while DeepMind only has a handful of contracts with NHS Trusts for the Streams app and delivery infrastructure at this stage, the reviewers’ concerns over the risk of the company gaining “excessive monopoly power” do not seem overblown.

They are also worried about DeepMind’s ongoing vagueness about how exactly it works with its parent Alphabet, and what data could ever be transferred to the ad giant — an inevitably queasy combination when stacked against DeepMind’s handling of people’s medical records.

“To what extent can DeepMind Health insulate itself against Alphabet instructing them in the future to do something which it has promised not to do today? Or, if DeepMind Health’s current management were to leave DeepMind Health, how much could a new CEO alter what has been agreed today?” they write.

“We appreciate that DeepMind Health would continue to be bound by the legal and regulatory framework, but much of our attention is on the steps that DeepMind Health have taken to take a more ethical stance than the law requires; could this all be ended? We encourage DeepMind Health to look at ways of entrenching its separation from Alphabet and DeepMind more robustly, so that it can have enduring force to the commitments it makes.”

Responding to the report’s publication on its website, DeepMind writes that it’s “developing our longer-term business model and roadmap.”

“Rather than charging for the early stages of our work, our first priority has been to prove that our technologies can help improve patient care and reduce costs. We believe that our business model should flow from the positive impact we create, and will continue to explore outcomes-based elements so that costs are at least in part related to the benefits we deliver,” it continues.

So it has nothing to say to defuse the reviewers’ concerns about making its intentions for monetizing health data plain — beyond deploying a few choice PR soundbites.

On its links with Alphabet, DeepMind also has little to say, writing only that: “We will explore further ways to ensure there is clarity about the binding legal frameworks that govern all our NHS partnerships.”

“Trusts remain in full control of the data at all times,” it adds. “We are legally and contractually bound to only using patient data under the instructions of our partners. We will continue to make our legal agreements with Trusts publicly available to allow scrutiny of this important point.”

“There is nothing in our legal agreements with our partners that prevents them from working with any other data processor, should they wish to seek the services of another provider,” it also claims in response to additional questions we put to it.

We hope that Streams can help unlock the next wave of innovation in the NHS. The infrastructure that powers Streams is built on state-of-the-art open and interoperable standards, known as FHIR. The FHIR standard is supported in the UK by NHS Digital, NHS England and the INTEROPen group. This should allow our partner trusts to work more easily with other developers, helping them bring many more new innovations to the clinical frontlines,” it adds in additional comments to us.

“Under our contractual agreements with relevant partner trusts, we have committed to building FHIR API infrastructure within the five year terms of the agreements.”

Asked about the progress it’s made on a technical audit infrastructure for verifying access to health data, which it announced last year, it reiterated the wording on its blog, saying: “We will remain vigilant about setting the highest possible standards of information governance. At the beginning of this year, we appointed a full time Information Governance Manager to oversee our use of data in all areas of our work. We are also continuing to build our Verifiable Data Audit and other tools to clearly show how we’re using data.”

So developments on that front look as slow as we expected.

The Google-owned U.K. AI company began its push into digital healthcare services in 2015, quietly signing an information-sharing arrangement with a London-based NHS Trust that gave it access to around 1.6 million people’s medical records for developing an alerts app for a condition called Acute Kidney Injury.

It also inked an MoU with the Trust where the pair set out their ambition to apply AI to NHS data sets. (They even went so far as to get ethical signs-off for an AI project — but have consistently claimed the Royal Free data was not fed to any AIs.)

However, the data-sharing collaboration ran into trouble in May 2016 when the scope of patient data being shared by the Royal Free with DeepMind was revealed (via investigative journalism, rather than by disclosures from the Trust or DeepMind).

None of the ~1.6 million people whose non-anonymized medical records had been passed to the Google-owned company had been informed or asked for their consent. And questions were raised about the legal basis for the data-sharing arrangement.

Last summer the U.K.’s privacy regulator concluded an investigation of the project — finding that the Royal Free NHS Trust had broken data protection rules during the app’s development.

Yet despite ethical questions and regulatory disquiet about the legality of the data sharing, the Streams project steamrollered on. And the Royal Free Trust went on to implement the app for use by clinicians in its hospitals, while DeepMind has also signed several additional contracts to deploy Streams to other NHS Trusts.

More recently, the law firm Linklaters completed an audit of the Royal Free Streams project, after being commissioned by the Trust as part of its settlement with the ICO. Though this audit only examined the current functioning of Streams. (There has been no historical audit of the lawfulness of people’s medical records being shared during the build and test phase of the project.)

Linklaters did recommend the Royal Free terminates its wider MoU with DeepMind — and the Trust has confirmed to us that it will be following the firm’s advice.

“The audit recommends we terminate the historic memorandum of understanding with DeepMind which was signed in January 2016. The MOU is no longer relevant to the partnership and we are in the process of terminating it,” a Royal Free spokesperson told us.

So DeepMind, probably the world’s most famous AI company, is in the curious position of being involved in providing digital healthcare services to U.K. hospitals that don’t actually involve any AI at all. (Though it does have some ongoing AI research projects with NHS Trusts too.)

In mid 2016, at the height of the Royal Free DeepMind data scandal — and in a bid to foster greater public trust — the company appointed the panel of external reviewers who have now produced their second report looking at how the division is operating.

And it’s fair to say that much has happened in the tech industry since the panel was appointed to further undermine public trust in tech platforms and algorithmic promises — including the ICO’s finding that the initial data-sharing arrangement between the Royal Free and DeepMind broke U.K. privacy laws.

The eight members of the panel for the 2018 report are: Martin Bromiley OBE; Elisabeth Buggins CBE; Eileen Burbidge MBE; Richard Horton; Dr. Julian Huppert; Professor Donal O’Donoghue; Matthew Taylor; and Professor Sir John Tooke.

In their latest report the external reviewers warn that the public’s view of tech giants has “shifted substantially” versus where it was even a year ago — asserting that “issues of privacy in a digital age are if anything, of greater concern.”

At the same time politicians are also gazing rather more critically on the works and social impacts of tech giants.

Although the U.K. government has also been keen to position itself as a supporter of AI, providing public funds for the sector and, in its Industrial Strategy white paper, identifying AI and data as one of four so-called “Grand Challenges” where it believes the U.K. can “lead the world for years to come” — including specifically name-checking DeepMind as one of a handful of leading-edge homegrown AI businesses for the country to be proud of.

Still, questions over how to manage and regulate public sector data and AI deployments — especially in highly sensitive areas such as healthcare — remain to be clearly addressed by the government.

Meanwhile, the encroaching ingress of digital technologies into the healthcare space — even when the techs don’t even involve any AI — are already presenting major challenges by putting pressure on existing information governance rules and structures, and raising the specter of monopolistic risk.

Asked whether it offers any guidance to NHS Trusts around digital assistance for clinicians, including specifically whether it requires multiple options be offered by different providers, the NHS’ digital services provider, NHS Digital, referred our question on to the Department of Health (DoH), saying it’s a matter of health policy.

The DoH in turn referred the question to NHS England, the executive non-departmental body which commissions contracts and sets priorities and directions for the health service in England.

And at the time of writing, we’re still waiting for a response from the steering body.

Ultimately it looks like it will be up to the health service to put in place a clear and robust structure for AI and digital decision services that fosters competition by design by baking in a requirement for Trusts to support multiple independent options when procuring apps and services.

Without that important check and balance, the risk is that platform dynamics will quickly dominate and control the emergent digital health assistance space — just as big tech has dominated consumer tech.

But publicly funded healthcare decisions and data sets should not simply be handed to the single market-dominating entity that’s willing and able to burn the most resource to own the space.

Nor should government stand by and do nothing when there’s a clear risk that a vital area of digital innovation is at risk of being closed down by a tech giant muscling in and positioning itself as a gatekeeper before others have had a chance to show what their ideas are made of, and before even a market has had the chance to form. 

Amazon starts shipping its $249 DeepLens AI camera for developers

Back at its re:Invent conference in November, AWS announced its $249 DeepLens, a camera that’s specifically geared toward developers who want to build and prototype vision-centric machine learning models. The company started taking pre-orders for DeepLens a few months ago, but now the camera is actually shipping to developers.

Ahead of today’s launch, I had a chance to attend a workshop in Seattle with DeepLens senior product manager Jyothi Nookula and Amazon’s VP for AI Swami Sivasubramanian to get some hands-on time with the hardware and the software services that make it tick.

DeepLens is essentially a small Ubuntu- and Intel Atom-based computer with a built-in camera that’s powerful enough to easily run and evaluate visual machine learning models. In total, DeepLens offers about 106 GFLOPS of performance.

The hardware has all of the usual I/O ports (think Micro HDMI, USB 2.0, Audio out, etc.) to let you create prototype applications, no matter whether those are simple toy apps that send you an alert when the camera detects a bear in your backyard or an industrial application that keeps an eye on a conveyor belt in your factory. The 4 megapixel camera isn’t going to win any prizes, but it’s perfectly adequate for most use cases. Unsurprisingly, DeepLens is deeply integrated with the rest of AWS’s services. Those include the AWS IoT service Greengrass, which you use to deploy models to DeepLens, for example, but also SageMaker, Amazon’s newest tool for building machine learning models.

These integrations are also what makes getting started with the camera pretty easy. Indeed, if all you want to do is run one of the pre-built samples that AWS provides, it shouldn’t take you more than 10 minutes to set up your DeepLens and deploy one of these models to the camera. Those project templates include an object detection model that can distinguish between 20 objects (though it had some issues with toy dogs, as you can see in the image above), a style transfer example to render the camera image in the style of van Gogh, a face detection model and a model that can distinguish between cats and dogs and one that can recognize about 30 different actions (like playing guitar, for example). The DeepLens team is also adding a model for tracking head poses. Oh, and there’s also a hot dog detection model.

But that’s obviously just the beginning. As the DeepLens team stressed during our workshop, even developers who have never worked with machine learning can take the existing templates and easily extend them. In part, that’s due to the fact that a DeepLens project consists of two parts: the model and a Lambda function that runs instances of the model and lets you perform actions based on the model’s output. And with SageMaker, AWS now offers a tool that also makes it easy to build models without having to manage the underlying infrastructure.

You could do a lot of the development on the DeepLens hardware itself, given that it is essentially a small computer, though you’re probably better off using a more powerful machine and then deploying to DeepLens using the AWS Console. If you really wanted to, you could use DeepLens as a low-powered desktop machine as it comes with Ubuntu 16.04 pre-installed.

For developers who know their way around machine learning frameworks, DeepLens makes it easy to import models from virtually all the popular tools, including Caffe, TensorFlow, MXNet and others. It’s worth noting that the AWS team also built a model optimizer for MXNet models that allows them to run more efficiently on the DeepLens device.

So why did AWS build DeepLens? “The whole rationale behind DeepLens came from a simple question that we asked ourselves: How do we put machine learning in the hands of every developer,” Sivasubramanian said. “To that end, we brainstormed a number of ideas and the most promising idea was actually that developers love to build solutions as hands-on fashion on devices.” And why did AWS decide to build its own hardware instead of simply working with a partner? “We had a specific customer experience in mind and wanted to make sure that the end-to-end experience is really easy,” he said. “So instead of telling somebody to go download this toolkit and then go buy this toolkit from Amazon and then wire all of these together. […] So you have to do like 20 different things, which typically takes two or three days and then you have to put the entire infrastructure together. It takes too long for somebody who’s excited about learning deep learning and building something fun.”

So if you want to get started with deep learning and build some hands-on projects, DeepLens is now available on Amazon. At $249, it’s not cheap, but if you are already using AWS — and maybe even use Lambda already — it’s probably the easiest way to get started with building these kind of machine learning-powered applications.

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.

“Social selling” startup Meesho lands $11.5M Series B led by Sequoia India

Y Combinator alum Meesho, one of several “social selling” startups gaining speed in India, will add more features to its e-commerce platform after closing a $11.5 million Series B led by Sequoia India. Existing investors SAIF Partners, Y Combinator and Venture Highway also returned for the round, which brings the Bangalore-based startup’s total funding so far to $15 million. Its last round of funding, a $3.4 million Series A, was announced last October.

Like social selling competitors including GlowRoad and Zepo, Meesho’s model combines dropshipping from its wholesale partners with a comprehensive suite of e-commerce tools and services. This reduces overhead while making it easy for sellers, who Meesho says includes many housewives, students and retirees, to set up an online business through WhatsApp, Facebook and other social media.

Meesho’s tools include an online platform that allows sellers to manage purchases and process payments, as well as a network of wholesale suppliers (its main categories are currently fashion and lifestyle items) and logistics providers. In other words, it offers almost everything its vendors need to start selling online. This leaves vendors responsible for customer acquisition, picking what items they want to include in their online shops and marketing them.

This reselling model appeals to small stores, as well as individuals, who want to make more money but don’t want the expense of setting up an e-commerce business from scratch and carrying inventory. Meesho’s rivals include e-commerce startups like GlowRoad, Shopmatic and Zepo, which have also recently raised large funding rounds. All of these companies attract sellers by offering a significant amount of help with order management, payment processing, fulfillment and logistics.

In order to differentiate, chief executive officer Vidit Aatrey, who co-founded Meesho in 2015 with Sanjeev Barnwal, its chief technology officer, tells TechCrunch it focuses on product quality, pricing and personalization to help resellers improve their sales and customer service. Meesho claims that more than 800,000 resellers have used its platform and that a “typical” reseller earns between 20,000 to 25,000 rupees per month (about $298 to $373).

In a press statement about the funding, Sequoia India managing director Mohit Bhatnagar said “Social commerce is the future of e-commerce in India. People buy from people they trust, and that’s what Meesho enables.  Entrepreneurs, many of them women, use the Meesho platform to recommend, customize and sell to their family and friends. Social selling is a huge trend and Sequoia India is excited to partner with Meesho, which is the early leader in this space.”

Aatrey says Meesho’s Series B capital will be used to hire more people for its tech and product teams in order to build a suite of new customer acquisition and selling tools. The startup also plans to add more personalization options for its resellers and product categories.

Real estate property manager and developer JLL launches a $100 million tech investment fund

The multi-billion dollar real estate developer and property manager JLL is getting into the tech investment game with the launch of a new $100 million fund run by corporate subsidiary JLL Spark.

Initially envisioned as a technology-focused business unit of the multinational real estate company, the firm eventually turned to the more traditional venture capital investment model as a way to get more exposure to all of the new technologies that are coming to market, according to JLL SPark’s co-chief executive Mihir Shah.

For Shah and his co-founder Yishai Lerner running the real estate company’s investment firm is the first foray by either executive into the world of real estate or property technology. But both men have been working in the startup world of the Bay Area for at over a decade.

In fact, the two serial entrepreneurs launched one of their first companies from the TechCrunch 50 conference way back in 2007 (it was a mobile app that mimicked Yelp).

The two eventually sold their mobile review business to GroupOn and began doing some angel investing. It was during that venture into the wild world of seed stage prospecting that Shah got bitten by the real estate bug while trying to buy some commercial real estate.

“I was looking at the process and was thinking ‘Wow! That is not a modern process,’” Shah said.

Unbeknownst to Shah, at the same time he was looking for commercial real estate, the commercial real estate industry was looking for someone like him.

JLL had put out feelers and hired head hunters to find someone who could take the lead at the firm’s burgeoning technology practice, Shah said.

“They had all sorts of internal initiatives bringing in new technology companies and services to their existing clients,” Shah said. “They understood that technology was going to transform all aspects of the industry.”

One of the first steps that JLL had taken was to acquire Stessa, which developed and sold asset management software for the real estate industry. But Shah and Lerner quickly realized that the buy and build strategy wouldn’t be robust enough for JLL’s needs.

“Over the last six months we saw how much innovation was happening in the proptech space and we thought it made more sense to launch a venture fund,” Shah said.

The firm will invest anywhere from a few hundred thousand dollars to a few million into seed stage or Series A companies with the option to dabble in later stage deals, according to Shah. The firm has made two investments so far — neither one of them in startups.

The commitments have been in one accelerator program, the New York-based Metaprop, which focuses on real estate tech investment, and Navitas Capital, which is billed as a later stage investor in the same space.

Both investments appear to be geared toward educating the firm’s two principals on the market and what’s already happening in the space.

The benefit that a corporate firm like JLL can provide to startups is the access to pilot projects where companies can deploy their technologies and, indeed, that’s the pitch that Shah makes to potential portfolio companies.

“Money is not enough,” he said. “There’s a lot of products out there, but they’re struggling with distribution.” JLL has designated a few buildings in top cities around the world to fast track new technologies and provide trial spaces for them to develop, Shah told me. “Our value as a strategic is to build that bridge and make that connection.”

“Creating this $100 million venture fund through JLL Spark allows us to continue to lead the real estate industry in bringing the best proptech ideas to reality,” said Christian Ulbrich, JLL’s Global chief executive. “It complements and expands our substantial ongoing investments in innovative, cutting-edge digital solutions, which is a core part of our Beyond strategic vision and commitment to achieve ambitions for our clients.”

 

ASUS’ new ZenBook Pro features a 5.5-inch touchscreen instead of a touchpad

The ASUS event today at Computex in Taipei, Taiwan had three main hooks: health, ergonomics and, most importantly, second screens. The headliner was the premium ZenBook Pro 14 and 15 (pictured above), the latest versions of ASUS’ premium notebook that feature a touchscreen where the touchpad would usually be

Meant to increase the laptops’ multitasking possibilities, the 5.5-inch ScreenPad functions as a second screen for things like messaging or apps including a calculator, a video and music player or calendar. It can also be used as a launchpad for apps on the ZenBook Pro’s main display or serve as a function command screen for Microsoft Office programs.

During his presentation, ASUS global PC and phone marketing senior director Marcel Campos said the ZenBook Pro 15 was designed with three kinds of professionals in mind: video makers, photographers and 3D designers. It has a 15.6-inch 4K UHD NanoEdge display with Delta E<2 Color Accuracy (ASUS says the Pro 15’s display has been validated by Pantone) and runs on an Intel Core i9 processor, 16GB of memory, a 1TB PCIe SSD and a GTX 1050 Ti graphics card. The Pro 15 is 18.9mm thick and weighs 1.88 kg. It will go on sale in mid-July starting at $2,299.

The 14-inch ASUS Zenbook Pro 14 also has a 5.5-inch ScreenPad and boosts an Intel Core i7 processor, 16GB of memory, a 1TB PCIe SSD and GTX 1050 MAX-Q GPU. It is 17.9 mm thick and weights in at 1.6kg.

Both of the latest Zenbook Pro models are built with a new hinge design ASUS calls ErgoLift, which props the laptop’s keyboards up at 5.5 degree angle when it is opened. ErgoLift is also built into the latest models of ASUS’ Zenbook and VivoBook series.

ASUS ZenBook S

The ZenBook S is 12.9-mm thick and weighs 1 kg and runs on an Intel Core i7 processor, with 16GB of memory, a 1TB PCIe SSD and up to 13.5 hours of battery life. It has a 4K UHD, 331ppi NanoEdge display and 2 USB-C drives. ASUS claims up to 13.5 hours of battery, which will be released on June 11 for $1,199.

ASUS VivoBook S15

The latest iterations of the VivoBook series, the 14-inch screen S14 and 15.6-inch S15, will come in 5 colors and also feature ErgoLift hinges. The S14 weights 1.4 kg and is 18-mm thick, while the S15 is 1.8 kg, 18-mm. Both have Intel Core i7-8550U or Intel Core i3-8130U processors, a NVIDIA GeForce MX150 or MX130 GPU and up to 16 GB of memory. The S15 will launch in the United States for $699 later this year.

ASUS VivoWatch

Other notable launches by ASUS include a blood pressure monitor that the company says is not a smartwatch or fitness tracker, even though it looks a lot like one. Called the ASUS VivoWatch, the wearable delivers real-time blood pressure data in 15 seconds, has a Gorilla Glass screen and ECG sensor on front of device and claims non-stop 28 day battery life.

Like last year, ASUS didn’t debut new ZenFones, though it did show off a collaboration with Intel and Microsoft called Project Precog, the main fruit of which will be a dual-screen laptop with AI-powered features that is supposed to launch next year. ASUS also held an event on Monday before the official start of Computex today, focusing on its Republic of Gamers line of PCs and peripherals. There it debuted the ROG phone, a rival to the Razer Phone for gamers, that also has a 90Hz display, meant for smoother display of animations, and a 2.96GHz Qualcomm Snapdragon 845 chip. This was in addition to new gaming laptops, the Strix Scar II, which starts at $1,999, and the Strik Hero II, which will start at $1,699. Both have six-core Intel Coffee Lake Core i7-8750H or Core i5-8300H processors, 15.6-inch 144Hz 1080p “IPS-level” displays, up to 32GB of RAM, with a standard GPU of GTX 1060.

It’s OK to leave Facebook

The slow-motion privacy train wreck that is Facebook has many users, perhaps you, thinking about leaving or at least changing the way you use the social network. Fortunately for everyone but Mark Zuckerberg, it’s not nearly has hard to leave as it once was. The main thing to remember is that social media is for you to use, and not vice versa.

Social media has now become such an ordinary part of modern life that, rather than have it define our interactions, we can choose how we engage with it. That’s great! It means that everyone is free to design their own experience, taking from it what they need instead of participating to an extent dictated by social norms or the progress of technology.

Here’s why now is a better time than ever to take control of your social media experience. I’m going to focus on Facebook, but much of this is applicable to Instagram, Twitter, LinkedIn, and other networks as well.

Stalled innovation means a stable product

The Facebooks of 2005, 2010, and 2015 were very different things and existed in very different environments. Among other things over that eventful ten-year period, mobile and fixed broadband exploded in capabilities and popularity; the modern world of web-native platforms matured and became secure and reliable; phones went from dumb to smart to, for many, their primary computer; and internet-based companies like Google, Facebook, and Amazon graduated from niche players to embrace and dominate the world at large.

It’s been a transformative period for lots of reasons and in lots of ways. And products and services that have been there the whole time have been transformed almost continuously. You’d probably be surprised at what they looked like and how limited they were not long ago. Many things we take for granted today online were invented and popularized just in the last decade.

But the last few years have seen drastically diminished returns. Where Facebook used to add features regularly that made you rely on it more and more, now it is desperately working to find ways to keep people online. Why is that?

Well, we just sort of reached the limit of what a platform like Facebook can or should do, that’s all! Nothing wrong with that.

It’s like improving a car — no matter how many features you add or engines you swap in, it’ll always be a car. Cars are useful things, and so is Facebook. But a car isn’t a truck, or a bike, or an apple, and Facebook isn’t (for example) a broadcast medium, a place for building strong connections, or a VR platform (as hard as they’re trying).

The things that Facebook does well and that we have all found so useful — sharing news and photos with friends, organizing events, getting and staying in contact with people — haven’t changed considerably in a long time. And as the novelty has worn off those things, we naturally engage in them less frequently and in ways that make more sense to us.

Facebook has become the platform it was intended to be all along, with its own strengths and weaknesses, and its failure to advance beyond that isn’t a bad thing. In fact, I think stability is a good thing. Once you know what something is and will be, you can make an informed choice about it.

The downsides have become obvious

Every technology has its naysayers, and social media was no exception — I was and to some extent remain one myself. But over the years of changes these platforms have gone through, some fears were shown to be unfounded or old-fashioned.

The idea that people would cease interacting in the “real world” and live in their devices has played out differently from how we expected, surely; trying to instruct the next generation on the proper way to communicate with each other has never worked out well for the olds. And if you told someone in 2007 that foreign election interference would be as much a worry for Facebook as oversharing and privacy problems, you might be met with incredulous looks.

Other downsides were for the most part unforeseen. The development of the bubble or echo chamber, for instance, would have been difficult to predict when our social media systems weren’t also our news-gathering systems. And the phenomenon of seeing only the highlights of others’ lives posted online, leading to self esteem issues in those who view them with envy, is an interesting but sad development.

Whether some risk inherent to social media was predicted or not, or proven or not, people now take such risks seriously. The ideas that one can spend too much time on social networks, or suffer deleterious effects from them, or feel real pain or turmoil because of interactions on them are accepted (though sadly not always without question).

Taking the downsides of something as seriously as the upsides is another indicator of the maturity of that thing, at least in terms of how society interacts with it. When the hype cycle winds down, realistic judgment takes its place and the full complexities of a relationship like the one between people and social media can be examined without interference.

Between the stability of social media’s capabilities and the realism with which those capabilities are now being considered, choice is no longer arbitrary or absolute. Your engagement is not being determined by them any more.

Social media has become a rich set of personal choices

Your experience may differ from mine here, but I feel that in those days of innovation among social networks your participation was more of a binary. You were either on or you were off.

The way they were advancing and changing defined how you engaged with them by adding and opting you into features, or changing layouts and algorithms. It was hard to really choose how to engage in any meaningful way when the sands were shifting under your feet (or rather, fingertips). Every few months brought new features and toys and apps, and you sort of had to be there, using them as proscribed, or risk being left behind. So people either kept up or voluntarily stayed off.

Now all that has changed. The ground rules are set, and have been for long enough that there is no risk that if you left for a few months and come back, things would be drastically different.

As social networks have become stable tools used by billions, any combination or style of engagement with them has become inherently valid.

Your choice to engage with Facebook or Instagram does not boil down to simply whether you are on it or not any more, and the acceptance of social media as a platform for expression and creation as well as socializing means that however you use it or present on it is natural and no longer (for the most part) subject to judgment.

That extends from choosing to make it an indispensable tool in your everyday life to quitting and not engaging at all. There’s no longer an expectation that the former is how a person must use social media, and there is no longer a stigma to the latter of disconnectedness or Luddism.

You and I are different people. We live in different places, read different books, enjoy different music. We drive different cars, prefer different restaurants, like different drinks. Why should we be the same in anything as complex as how we use and present ourselves on social media?

It’s analogous, again, to a car: you can own one and use it every day for a commute, or use it rarely, or not have one at all — who would judge you? It has nothing to do with what cars are or aren’t, and everything to do with what a person wants or needs in the circumstances of their own life.

For instance, I made the choice to remove Facebook from my phone over a year ago. I’m happier and less distracted, and engage with it deliberately, on my terms, rather than it reaching out and engaging me. But I have friends who maintain and derive great value from their loose network of scattered acquaintances, and enjoy the immediacy of knowing and interacting with them on the scale of minutes or seconds. And I have friends who have never been drawn to the platform in the first place, content to select from the myriad other ways to stay in touch.

These are all perfectly good ways to use Facebook! Yet only a few years ago the zeitgeist around social media and its exaggerated role in everyday life — resulting from novelty for the most part — meant that to engage only sporadically would be more difficult, and to disengage entirely would be to miss out on a great deal (or fear that enough that quitting became fraught with anxiety). People would be surprised that you weren’t on Facebook and wonder how you got by.

Try it and be delighted

Social networks are here to improve your life the same way that cars, keyboards, search engines, cameras, coffee makers, and everything else are: by giving you the power to do something. But those networks and the companies behind them were also exerting power over you and over society in general, the way (for example) cars and car makers exerted power over society in the ’50s and ’60s, favoring highways over public transportation.

Some people and some places, more than others, are still subject to the influence of car makers — ever try getting around L.A. without one? And the same goes for social media — ever try planning a birthday party without it? But the last few years have helped weaken that influence and allow us to make meaningful choices for ourselves.

The networks aren’t going anywhere, so you can leave and come back. Social media doesn’t control your presence.

It isn’t all or nothing, so you can engage at 100 percent, or zero, or anywhere in between. Social media doesn’t decide how you use it.

You won’t miss anything important, because you decide what is important to you. Social media doesn’t share your priorities.

Your friends won’t mind, because they know different people need different things. Social media doesn’t care about you.

Give it a shot. Pick up your phone right now and delete Facebook. Why not? The absolute worst that will happen is you download it again tomorrow and you’re back where you started. But it could also be, as it was for me and has been for many people I’ve known, like shrugging off a weight you didn’t even realize you were bearing. Try it.

Ticketfly’s website is offline after a hacker got into its homepage and database

Following what it calls a “cyber incident,” the event ticket distributor Ticketfly took its homepage offline on Thursday morning. The company left this message on its website, which remains nonfunctional hours later:

Following a series of recent issues with Ticketfly properties, we’ve determined that Ticketfly has been the target of a cyber incident. Out of an abundance of caution, we have taken all Ticketfly systems temporarily offline as we continue to look into the issue. We are working to bring our systems back online as soon as possible. Please check back later.

For information on specific events please check the social media accounts of the presenting venues/promoters to learn more about availability/status of upcoming shows. In many cases, shows are still happening and tickets may be available at the door.

Before Ticketfly regained control of its site, a hacker calling themselves IsHaKdZ hijacked it to display apparent database files along with a Guy Fawkes mask and an email contact.

I sent an email yesterday reporting that the ticketfly website was hacked. All of the user data and site is completely downloadable. They need to come clean on the fact that your data was comprised and still is downloadable at this very moment! #ticketfly #cybercrime #wordpress pic.twitter.com/Ur0AsZpDij

— Michael Villado (@mvillado) May 31, 2018

According to correspondence with Motherboard, the hacker apparently demanded a single bitcoin (worth $7,502, at the time of writing) to divulge the vulnerability that left Ticketfly open to attack. Motherboard reports that it was able to verify the validity of at least six sets of user data listed in the hacked files, which included names, addresses, email addresses and phone numbers of Ticketfly customers, as well as some employees. We’ll update this story as we learn more.

Update: Ticketfly has added an FAQ page on the incident. The company notes that the event “resulted in the compromise of some client and customer information” and is conducting an investigation as it works to get its site back online.

Uber is looking at adding benefits and insurance for drivers

At the Code Conference tonight, Uber CEO Dara Khosrowshahi spoke about the company’s relationship with drivers, autonomous driving, uberEATS having a $6 billion bookings run rate, taking over as CEO and flying taxis, obviously.

Just this week, San Francisco City Attorney Dennis Herrera sent subpoenas to Uber and Lyft seeking information on driver pay, benefits and classification info. Uber wasn’t available for comment at the time, but now it seems that the company is looking at ways to offer benefits and insurance to drivers. Specifically, Uber is looking at an economically-sound way to offer drivers a benefits and insurance package so that “this can be a safer way of living,” Khosrowshahi said.

And despite what former Uber CEO Travis Kalanick said in the past about needing to get rid of the driver, Khosrowshahi said he disagrees.

“The face of Uber is the person sitting in the front seat,” Khosrowshahi said. He added that it usually is a man driving, but that he would “love to have more women sitting in the front seat” because it’s a “great form of employment.”

Still, Uber is moving ahead with autonomous driving. That’s in light of the fatal car accident in Tempe, Arizona involving one of Uber’s autonomous vehicles.

“We will get back on the road over the summer,” Khosrowshahi said.

Uber also envisions licensing its technology — once it’s safe enough — to third-parties and original equipment manufacturers (OEMs). Despite the high-profile lawsuit between Uber and Waymo over self-driving car technology, Khosrowshahi said he’d welcome Waymo to put its cars into its network. Regarding Uber’s relationship with Waymo, Khosrowshahi said it’s “getting better.”

In addition to Uber’s core driver business and autonomous driving, it has several other things going on for it. One of those is uberEATS, which Khosrowshahi said has a $6 billion run rate, is growing 200 percent and is the biggest food delivery company in the world, with the exception of those in China.

Uber also recently acquired JUMP Bikes for about $200 million, launched UberRENT, announced a public transportation partnership with Masabi and is working on flying cars via its Elevate program.

Just like residential and buildings have gone three-dimensional, Khosrowshahi said, “you’re going to have to build a third-dimension in terms of transportation.”

For Uber, Elevate is its “big bet” on that third-dimension of transportation, he said. The big plan with all of these modes of transportations — whether that’s bike-sharing, ride-sharing, flight-sharing or whatnot — is to become a multi-modal transportation service.

“We want to be the Amazon for transportation,” Khosrowshahi said.

Earlier in the conversation, Khosrowshahi shed some light into how he had no idea he’d get the chief executive officer job at Uber. In fact, he said that while his wife thought he would get the job, he wasn’t as optimistic.

He also spoke about his relationship with Kalanick and how, early on, Khosrowshahi asked for space and Kalanick respected that.

“I consult with him the way I consult with the board,” Khosrowshahi said.

Moving forward, Khosrowshahi still has his eyes set on the second half of 2019 to go public.

“We’re on track,” he said.

Facebook didn’t see Cambridge Analytica breach coming because it was focused ‘on the old threat’

In light of the massive data scandal involving Cambridge Analytica around the 2016 U.S. presidential election, a lot of people wondered how something like that could’ve happened. Well, Facebook didn’t see it coming, Facebook COO Sheryl Sandberg said at the Code conference this evening.

“If you go back to 2016 and you think about what people were worried about in terms of nations, states or election security, it was largely spam and phishing hacking,” Sandberg said. “That’s what people were worried about.”

She referenced the Sony email hack and how Facebook didn’t have a lot of the problems other companies were having at the time. Unfortunately, while Facebook was focused on not screwing up in that area, “we didn’t see coming a different kind of more insidious threat,” Sandberg said.

Sandberg added, “We realized we didn’t see the new threat coming. We were focused on the old threat and now we understand that this is the kind of threat we have.”

Moving forward, Sandberg said, Facebook now understands the threat and that it’s better able to meet those threats leading in to future elections. On stage, Sandberg also said Facebook was not only late to discovering Cambridge Analytica’s unauthorized access to its data, but that Facebook still doesn’t know exactly what data Cambridge Analytica accessed. Facebook was in the midst of conducting its own audit when the U.K. government decided to conduct one of their own, therefore putting Facebook’s on hold.

“They didn’t have any data that we could’ve identified as ours,” Sandberg said. “To this day, we still don’t know what data Cambridge Analytica had.”

Customer opinions of ISPs somehow drop even lower

Disliking one’s internet provider is such a common condition that it’s hard to imagine that ISPs have anywhere to go but up in the eyes of their customers. Nope! There are new lows ahead, if the latest American Customer Satisfaction Index is any indication. Charts ahead!

The ACSI compiles thousands of interviews with consumers and produce a score for various companies and industries based on a number of metrics. And this year, internet providers fell from last place to last place minus.

(Note: Verizon owns Oath, which owns TechCrunch. Believe me, it doesn’t affect our coverage.)

“An all-time low for the industry that along with subscription TV already had the poorest customer satisfaction among all industries tracked by the ACSI,” the report reads. “Customers are unhappy with the high price of poor service, but many households have limited alternatives as more than half of all Americans have only one choice for high speed broadband.”

Despite what the FCC and broadband companies like to say, few people have more than one good choice for internet provider, unlike even other industries that are dominated by a handful of companies, like mobile. And the service people do have access to isn’t inspiring loyalty.

Pretty much every category saw a drop, despite ardent promises from the likes of Comcast and Cox to improve their customer service and simplify bills and offers.

A sample of ratings the ISPs received – dark blue is the latest.

I myself actually just had a good interaction with Comcast, but because it was just a nice customer service agent helping me navigate the company’s labyrinth of misleading offers and upsells, I consider it as breaking even. Or it would have if my bill hadn’t just nearly doubled without any notification, so in the end it’s probably a negative.

Streaming services and video on demand were included in the survey for the first time this year, and did fairly well. Netflix, PlayStation Vue and Twitch were well thought of, and even the worst-ranked service, Sony’s Crackle, beats most of the perennially disliked pay TV providers. Strangely enough, most of the latter are the very same providers are often the same as the perennially disliked broadband providers. Coincidence? You be the judge.

Worse than social media? These days that’s quite a feat.

Overall, those companies are at the very bottom of the list, below even airlines and insurance companies — and ironically, the TVs that are used to watch the content are at the very top of the heap. Time to step up your game, ISPs.

Twitter will give political candidates a special badge during US midterm elections

Ahead of 2018 U.S. midterm elections, Twitter is taking a visible step to combat the spread of misinformation on its famously chaotic platform. In a blog post this week, the company explained how it would be adding “election labels” to the profiles of candidates running for political office.

“Twitter has become the first place voters go to seek accurate information, resources, and breaking news from journalists, political candidates, and elected officials,” the company wrote in its announcement. “We understand the significance of this responsibility and our teams are building new ways for people who use Twitter to identify original sources and authentic information.”

These labels feature a small government building icon and text identifying the position a candidate is running for and the state or district where the race is taking place. The label information included in the profile will also appear elsewhere on Twitter, even when tweets are embedded off-site.

The labels will start popping up after May 30 and will apply to candidates in state governor races as well as those campaigning for a seat in the Senate or the House of Representatives.

Twitter will partner with nonpartisan political nonprofit Ballotpedia to create the candidate labels. In a statement announcing its partnership, Ballotpedia explains how that process will work:

Ballotpedia covers all candidates in every upcoming election occurring within the 100 most-populated cities in the U.S., plus all federal and statewide elections, including ballot measures. After each state primary, Ballotpedia will provide Twitter with information on gubernatorial and Congressional candidates who will appear on the November ballot. After receiving consent from each candidate, Twitter will apply the labels to each candidate profile.

The decision to create a dedicated process to verify political profiles is a step in the right direction for Twitter. With major social platforms still in upheaval over revelations around foreign misinformation campaigns during the 2016 U.S. presidential election, Twitter and Facebook need to take decisive action now if they intend to inoculate their users against a repeat threat in 2018.

Take a look at your Twitter timeline 10 years ago

Here’s a fun thing for a Friday: go back and see what your Twitter timeline looked like 10 years ago.

Twitter has pretty powerful search settings, but Andy Baio — of Kickstarter fame and more — did the heavy-lifting for us all by sharing a link that let’s you look at your timeline exactly a decade ago, assuming you followed the same people.

Try it here. (The search will work even if you didn’t have an account 10 years ago.)

Want to see what your Twitter timeline would’ve looked like 10 years ago today, if you followed all the same people you do now? https://t.co/41a6iQcYhc

— Andy Baio (@waxpancake) May 24, 2018

The mix is eerily quiet, with far fewer retweets and likes than the current time — Twitter hadn’t yet introduced the ‘automatic’ retweet, people were still doing it manually — and no nested replies or link previews, while there are ghosts of once-major social media services, such as TwitPic, TinyURL.

Certainly, it’s a fun way to see how Twitter has morphed, both in terms of features and the actual dialogue of users. The latter, in my experience at least, seems more driven by status update-style tweets than discussions or dialogue and there’s precious little content from media at that time, too. Given how things are today, with polarized opinions and armies of trolls, perhaps the old days of Twitter did have their benefits.

You can, of course, tweak the settings to change the date, language and more to explore past Twitter.

Enjoy — and maybe retweet a decade-old tweet or two while you’re there.

Twitter of 10 years ago is so bizarre. No one had figured out how to use the platform yet, and it feels super rigid and awkward. Also the absence of media is felt.

— Chris Franklin (@Campster) May 25, 2018

❤ How innocent we were.

⏳ Twitter advanced search lets you go back in time! Here’s your current feed, but 10 years ago (works even if you weren’t on Twitter 10 years ago!): https://t.co/4Y63uPyqWo pic.twitter.com/f0xA7Vb6um

— Jonathan Howard (@staringispolite) May 24, 2018

10 years ago twitter ruled. https://t.co/OeY1CkMapG pic.twitter.com/jK24h28SV8

— drew olanoff (@yoda) May 24, 2018

Facebook is updating how you can authenticate your account logins

You’ll soon have more options for staying secure on Facebook with two-factor authentication.

Facebook is simplifying the process for two-factor verification on its platform so you won’t have to give the company your phone number just to bring additional security to your device. The company announced today that it is adding support for third-party authentication apps like Duo Security and Google Authenticator while streamlining the setup process to make it easier to get moving with it in the first place.

Two-factor authentication is a pretty widely supported security strategy that adds another line of defense for users so they aren’t screwed if their login credentials are compromised. SMS isn’t generally considered the most secure method for 2FA because it’s possible for hackers to take control of your SIM and transfer it to a new phone through a process that relies heavily on social engineering, something that isn’t as much of a risk when using hardware-based authentication devices or third-party apps.

Back in March, Facebook CSO Alex Stamos notably apologized after users started complaining that Facebook was spamming them on the phone numbers with which they had signed up for two-factor authentication. They insisted that it won’t happen again, but it also definitely won’t if they don’t have your number to begin with.

The new functionality is available in the “Security and Login” tab in your Facebook settings.

Subscription video services’ recommendations aren’t working, study claims

Streaming video services invest heavily in technology to improve their ability to show users a set of personalized recommendations about what to what next. But according to a new research study released today by UserTesting, it seems that consumers aren’t watching much recommended content – in fact, only 29 percent of the study’s participants said they actually watched something the service recommended.

On some services, those figures were extremely low – for example, only 6 percent of HBO NOW users said they watched recommended content.

That’s probably because consumers found it difficult to locate HBO NOW’s recommendations in the first place. The service was given a low 16.8 “customer experience” score on this front, the study says. That’s a much lower score than all other services analyzed, including Netflix, Amazon Prime Video, Hulu and YouTube TV – all of which had scores in the 80’s. (See first chart, below).

To be fair, HBO NOW doesn’t really do recommendations in the same way as the others.

Its app offers a “Featured” selection of content for all users, and, if you scroll down further, there are a couple of editorial collections, like “Essential HBO” or “14 Hidden Gems You Missed the First Time.” A separate “Collections” section includes more of these suggestions, like “New Movies,” “Just Added,” “Last Chance” and others.

The lack of personalized, easily located recommendations also impacted HBO NOW’s overall score in the UserTesting study, which rated the services across a variety of metrics including availability of content, friction-free viewing, ease of scrubbing and episode scanning, and other factors. HBO NOW was also was dinged by survey respondents for lagging, freezing and buffering issues, though they said they appreciated its clean design.

Netflix’s overall score was 89.5, making it the highest-rated streaming service among those analyzed due to having the most relevant recommendations, overall high ease-of-use, and a speedy service. It was followed by Hulu (86.8), Amazon Prime (85), YouTube TV (80.7), and then HBO NOW (71.8).

Coincidentally, Netflix also just beat HBO in a survey related to consumer appreciation for original programming, put out by Morgan Stanley. 39 percent of respondents in that survey said Netflix had the “best original programming” compared with HBO’s second place rank of 14 percent.

UserTesting’s study also backed up earlier research from Deloitte, as it found that subscription video customers are having to subscribe to more than one service in order to find all the content they want to watch.

More than half said they subscribe to at least two apps. For example, 90 percent of HBO NOW customers also subscribed to Netflix, while 80 percent subscribed to Amazon Prime.

The study additionally found that much of viewing (45%) takes place on TV or via streaming media devices like Roku, Apple TV, or Amazon Fire TV. 37 percent preferred laptops, and 11 percent said their smartphone or tablet was their primary streaming device. For some services, TV viewing is even higher – Hulu recently said that the majority – 78 percent – takes place on TVs.

UserTesting’s study involved 500 subscription video customers, 74 percent of whom said they watched streaming media every day. The full report is available here.

 

 

Microsoft acquires conversational AI startup Semantic Machines to help bots sound more lifelike

Microsoft announced today that it has acquired Semantic Machines, a Berkeley-based startup that wants to solve one of the biggest challenges in conversational AI: making chatbots sound more human and less like, well, bots.

In a blog post, Microsoft AI & Research chief technology officer David Ku wrote that “with the acquisition of Semantic Machines, we will establish a conversational AI center of excellence in Berkeley to push forward the boundaries of what is possible in language interfaces.”

According to Crunchbase, Semantic Machines was founded in 2014 and raised about $20.9 million in funding from investors including General Catalyst and Bain Capital Ventures.

In a 2016 profile, co-founder and chief scientist Dan Klein told TechCrunch that “today’s dialog technology is mostly orthogonal. You want a conversational system to be contextual so when you interpret a sentence things don’t stand in isolation.” By focusing on memory, Semantic Machines’ AI can produce conversations that not only answer or predict questions more accurately, but also flow naturally.

Instead of building its own consumer products, Semantic Machines focused on enterprise customers. This means it will fit in well with Microsoft’s conversational AI-based products, including Microsoft Cognitive Services and Azure Bot Service, which are used by one million and 300,000 developers, respectively, and virtual assistants Cortana and Xiaolce.

Shared housing startups are taking off

When young adults leave the parental nest, they often follow a predictable pattern. First, move in with roommates. Then graduate to a single or couple’s pad. After that comes the big purchase of a single-family home. A lawnmower might be next.

Looking at the new home construction industry, one would have good reason to presume those norms were holding steady. About two-thirds of new homes being built in the U.S. this year are single-family dwellings, complete with tidy yards and plentiful parking.

In startup-land, however, the presumptions about where housing demand is going looks a bit different. Home sharing is on the rise, along with more temporary lease options, high-touch service and smaller spaces in sought-after urban locations.

Seeking roommates and venture capital

Crunchbase News analysis of residential-focused real estate startups uncovered a raft of companies with a shared and temporary housing focus that have raised funding in the past year or so.

This isn’t a U.S.-specific phenomenon. Funded shared and short-term housing startups are cropping up across the globe, from China to Europe to Southeast Asia. For this article, however, we’ll focus on U.S. startups. In the chart below, we feature several that have raised recent rounds.

Notice any commonalities? Yes, the startups listed are all based in either New York or the San Francisco Bay Area, two metropolises associated with scarce, pricey housing. But while these two metro areas offer the bulk of startups’ living spaces, they’re also operating in other cities, including Los Angeles, Seattle and Pittsburgh.

From white picket fences to high-rise partitions

The early developers of the U.S. suburban planned communities of the 1950s and 60s weren’t just selling houses. They were selling a vision of the American Dream, complete with quarter-acre lawns, dishwashers and spacious garages.

By the same token, today’s shared housing startups are selling another vision. It’s not just about renting a room; it’s also about being part of a community, making friends and exploring a new city.

One of the slogans for HubHaus is “rent one of our rooms and find your tribe.” Founded less than three years ago, the company now manages about 80 houses in Los Angeles and the San Francisco Bay Area, matching up roommates and planning group events.

Starcity pitches itself as an antidote to loneliness. “Social isolation is a growing epidemic—we solve this problem by bringing people together to create meaningful connections,” the company homepage states.

The San Francisco company also positions its model as a partial solution to housing shortages as it promotes high-density living. It claims to increase living capacity by three times the normal apartment building.

Costs and benefits

Shared housing startups are generally operating in the most expensive U.S. housing markets, so it’s difficult to categorize their offerings as cheap. That said, the cost is typically lower than a private apartment.

Mostly, the aim seems to be providing something affordable for working professionals willing to accept a smaller private living space in exchange for a choice location, easy move-in and a ready-made social network.

At Starcity, residents pay $2,000 to $2,300 a month, all expenses included, depending on length of stay. At HomeShare, which converts two-bedroom luxury flats to three-bedrooms with partitions, monthly rents start at about $1,000 and go up for larger spaces.

Shared and temporary housing startups also purport to offer some savings through flexible-term leases, typically with minimum stays of one to three months. Plus, they’re typically furnished, with no need to set up Wi-Fi or pay power bills.

Looking ahead

While it’s too soon to pick winners in the latest crop of shared and temporary housing startups, it’s not far-fetched to envision the broad market as one that could eventually attract much larger investment and valuations. After all, Airbnb has ascended to a $30 billion private market value for its marketplace of vacation and short-term rentals. And housing shortages in major cities indicate there’s plenty of demand for non-Airbnb options.

While we’re focusing here on residential-focused startups, it’s also worth noting that the trend toward temporary, flexible, high-service models has already gained a lot of traction for commercial spaces. Highly funded startups in this niche include Industrious, a provider of flexible-term, high-end office spaces, Knotel, a provider of customized workplaces, and Breather, which provides meeting and work rooms on demand. Collectively, those three companies have raised about $300 million to date.

At first glance, it may seem shared housing startups are scaling up at an off time. The millennial generation (born roughly 1980 to 1994) can no longer be stereotyped as a massive band of young folks new to “adulting.” The average member of the generation is 28, and older millennials are mid-to-late thirties. Many even own lawnmowers.

No worries. Gen Z, the group born after 1995, is another huge generation. So even if millennials age out of shared housing, demographic forecasts indicate there will plenty of twenty-somethings to rent those partitioned-off rooms.

NASA’s newest planet-hunting satellite takes a stellar first test image

TESS, the satellite launched by NASA last month that will search thousands of stars for Earth-like exoplanets, has just sent back its first test image. It’s just a quick one, not “science-quality,” but it does give you an idea of the scale of the mission: the area TESS will eventually document is 400 times the area covered by this shot.

What you see above is the star field around the constellation Centaurus; this 2-second exposure captured more than 200,000 stars. That’s just in one image from one of the four cameras on board; the Transiting Exoplanet Survey Satellite will employ all four during its mission, watching individual regions of space for 27 days straight over the course of two orbits.

Here’s a crop from the center:

Repeated high-resolution imagery of these star fields will let the team on the ground watch for any that dim briefly, indicating that a planet may be passing in between the star and our solar system. This will let it watch far, far more stars than the otherwise similar Kepler mission, which even by looking at only dim stars with a relatively narrow field of view, found evidence of thousands of exoplanets for scientists to pore over.

TESS just yesterday received a gravity assist from the moon, putting it near its final orbit. A last engine burn on May 30 will complete that maneuver and the satellite will enter into the highly eccentric, as yet untried orbit designed by its creators.

Once that orbit is attained and all systems are go, new imagery will come in about every two weeks when TESS is at its closest point to Earth. “First light,” or the first actual fully calibrated, usable image from the satellite, is expected some time in June.

Elon Musk details his plan to rid LA of traffic with $1 rides on the Boring Co. ‘Loop’

This evening, Boring Company executives Elon Musk and Steve Davis offered a few more details about their plans to revolutionize LA urban transit, introducing the “Loop” which would eventually be composed of all-electric pods that transport up to 16 passengers at a time. Musk theorizes that the Loop could take Los Angeles residents from downtown LA to any terminal at the LAX airport within 8 minutes for about $1.

Much of the focus of the presentation was to assure the public that the Boring Company’s efforts would not be disruptive to the public or heavily stress the city’s existing highway systems. While the company has been best known for its hat and flamethrower sales, its most daunting challenge is courting public opinion for its plans to upgrade LA’s transport infrastructure.

The odd little presentation held at an LA synagogue started about 25 minutes behind schedule after a late arrival from Elon Musk who ironically said he got stuck in traffic. Musk offered a few minutes of eccentric discussion about why flying cars couldn’t solve the problem of “soul-destroying traffic.” Tunnels, on the other hand, Musk detailed were “way less nerve-racking than flying cars” and still “so fun.”

Alongside the execs onstage was Boring Company “mascot” Gary the snail.

Musk said that Boring Company Loop’s vision of the future would be much more congruous with city life than subways, and that while it was very difficult to weave large stations into a city, building many more parking spot-sized stations could theoretically be much more effective. Musk also noted that he hoped the Loop would supplement existing transport systems and connect public transport lines.

To get moving towards this “Loop” vision, the company will begin with a 2.7 mile test tunnel on private property with private funds. Just last month, SEC documents were filed detailing that Musk’s Boring Company had raised just shy of $113 million.

Once the test site has been completed, Musk suggested that they would begin offering free rides which he hoped the company could make as fun as a Disney theme park, joking that guests could “bring [their] flamethrowers.”

As Musk has previously noted, the Boring Company’s focus will prioritize pedestrian traffic rather than pods that house vehicles. While the executives were sure to distinguish the difference between the “Loop” and the Hyperloop, Musk also theorized that the two systems could eventually be seamlessly connected so riders could travel within the city and between cities with minimal friction.

Musk was notably asked during a Q&A about whether the Boring Company would do a full environmental impact report. He noted that they would but given the length of the process would do so once moving towards a larger-scale project rather than on one of the test tunnels.

It’s clear from the presentation that things are very much in their early stages, but Musk and Davis seemed to do a good job assuring the public that they would be moving with the bureaucracy on this project rather than trying to push their vision forward quickly and recklessly.

Facebook launches Youth Portal to educate teens on the platform, how their data is being used

There’s probably an important gap in attention being paid at internet companies to young kids that are good targets for parental controls and older ones who are having to learn to use the internet in a responsible way on their own.

Today, Facebook is releasing a new Youth Portal that offers some guidance to teens on how to navigate the service, how to stay secure, while also helping them understand how their data is used. Facebook says that that they began showing tips for teens in the newsfeed earlier this month related to some of these topics.

While many of the sections in the portal are devoted to basic topics like how to unfriend or block someone, a bit of the information is structured in more of a journalistic format focused on helping Gen Z users start their internet usage off on the right foot in a way that older generations haven’t.

In a “Guiding Principles” section, the tips are structured after oft-quoted real world advice:

Think (for 5 seconds) before you speak

Before you post publicly, pause and ask yourself, “Would I feel comfortable reading this out loud to my parents and grandparents?” There will always be people at your school who are social media oversharers (and adults in your life who are, too). Resist the urge, ignore their noise and save the juicy details for your close friends only.

One of the more useful things it does is organize information related to Facebook’s data policy in a more accessible way that admittedly may not answer every single question but also doesn’t overwhelm young users who may just be looking for the basics. It generally aims to address stuff like what data Facebook collects and how they use that information.

At the end of the day, it’s just an information page. The Youth Portal won’t directly curb how Facebook approach cyber-bullying or abuse, but the hub does organize a lot of information that pops up on the site while you’re using it into a single place where someone can just blaze through it in a single go.

More importantly it’s just a nice resource for Facebook to refer younger users to when there’s an issue that’s more likely to get looked at then the Terms of Service-style help pages that generally hold this information.

The Youth Portal goes live today in 60 languages.

Xiaomi is bringing its smart home devices to the US — but still no phones yet

Xiaomi, the Chinese smartphone maker that’s looking to raise as much as $10 billion in a Hong Kong IPO, is continuing to grow its presence in the American market after it announced plans to bring its smart home products to the U.S..

The company is best known for its well-priced and quality smartphones, but Xiaomi offers hundreds of other products which range from battery chargers to smart lights, air filter units and even Segway. On the sidelines of Google I/O, the company quietly made a fairly significant double announcement: not only will it bring its smart home products to the U.S., but it is adding support for Google Assistant, too.

The first products heading Stateside include the Mi Bedside Lamp, Mi LED Smart Bulb and Mi Smart Plug, Xiaomi’s head of international Wan Xiang said, but you can expect plenty more to follow. Typically, Xiaomi sells to consumers in the U.S. via Amazon and also its Mi.com local store, so keep an eye out there.

Xiaomi just announced during #io8 that our smart home products will work with the Google Assistant. The initial selection of compatible products includes Mi Bedside Lamp, Mi LED Smart Bulb and Mi Smart Plug, which will be coming to the U.S soon! https://t.co/f65lj2jNej pic.twitter.com/nEXMiIyyZ8

— Wang Xiang (@XiangW_) May 10, 2018

Smartphones, however, are a different question.

Xiaomi CEO Lei Jun — who stands to become China’s richest man thanks to the IPO — previously said the company is looking to bring its signature phones to the U.S. by early 2019 at the latest.

There’s no mention of that in Xiaomi’s IPO prospectus, which instead talks of plans to move into more parts of Europe and double down on Russia and Southeast Asia. Indeed, earlier this week, Xiaomi announced plans to expand beyond Spain and into France and Italy in Europe, while it has also inked a carrier deal with Hutchinson that will go beyond those markets into the UK and other places.

You can expect that it will take its time in the U.S., particularly given the concerns around Chinese OEMs like Huawei — which has been blacklisted by carriers — and ZTE, which has had its telecom equipment business clamped down on by the U.S. government.

Hat tip Android Police

Nintendo’s $20 charging stand finally fixes the Switch’s kickstand problem

Versatility has also been on of the Switch’s best features. The latest Nintendo system is a fascinating hybrid device that skirts the line between home and portable gaming. Still, there are some in-between scenarios the console didn’t get quite right out of the box.

The kickstand problem has plagued the otherwise well-received device since its earliest days. It falls over often, it’s puts the device at a weird angle, and worst of all, the charging port is on the bottom, so you can’t play the system in table top mode while it’s plugged it.

Just ahead of E3, the company’s showing off a $20 solution. The simply named Adjustable Charging Stand props the system, while keeping it plugged in, via an AC adapter port on the side.

An adjustable kickstand on the back, meanwhile, means you can change the viewing angle, depending on the height of the surface it’s on. That’s good news for those times when you don’t have a TV set to plug into, but still want to pull out the Joy-Cons to get the full experience — be it on a desk or an airport tray table. 

The peripheral hits stores July 13.

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.”

DocuSign raises $629 million after pricing IPO

DocuSign priced its IPO Thursday evening at $29 per share, netting the company $629 million.

It was a better price than the e-signature company had been expecting. The initially proposed price range was $24 to $26 and then that was raised to $26 to $28.

The price gives the company a valuation of $4.4 billion on the eve of its public debut, above the $3 billion the company had raised for its last private round.

The IPO has been a long-time coming. Founded in 2003, DocuSign had raised over $500 million over the course of 15 years.

The company brought in $518.5 million in revenue for its fiscal year ending in 2018. This is up from $381.5 million last year and $250.5 million the year before. Losses for this year were $52.3 million, down from $115.4 million last year and, $122.6 million for 2016.

“We have a history of operating losses and may not achieve or sustain profitability in the future,” the company warned in the requisite “risk factors” section of the prospectus.

The filing reveals that Sigma Partners is the largest shareholder, owning 12.9% of the company. Ignition Partners owns 11.7% and Frazier Technology Ventures owns 7.2%.

DocuSign, competes HelloSign and Adobe Sign, among others, but has managed to sign up many of the largest enterprises. T-Mobile, Salesforce, Morgan Stanley and Bank of America are amongst its clients. It has a tiered business model, with companies paying more for added services.

HelloSign COO Whitney Bouck said that “this space is changing the way business is done at its foundation — we are finally realizing the future of digital business and exactly how much more profitable it can be by removing the friction caused by outdated technology and processes.” But she said that DocuSign should be wary of competitive “more nimble vendors that can provide more innovative, faster, and more user-friendly solutions at a cheaper price.”

DocuSign has gone through several management changes over the years.  Dan Springer took over as CEO in early 2017, after running Responsys, which went public and then was later bought by Oracle for $1.5 billion. Chairman Keith Krach had been running the company since 2011. He was previously CEO of Ariba, which was acquired by SAP for $4.3 billion.

Y Combinator is going after Chinese startups with its first official event in China

High-profile U.S. startup accelerator Y Combinator is making a push to bring more China-based startups into its program after it announced its first official event in the country.

YC has made a push to include startups from outside of North America in recent years. That has seen it bring in companies from the likes of India, Southeast Asia and Africa, but China remains underrepresented. According to YC’s own data, fewer than 10 Chinese companies have passed through its corridors. YC counts over 1,400 graduates.

“Startup School Beijing” is scheduled for May 19 in the Chinese capital at Tsinghua University. The event will be free to attend — though attendees might apply for a ticket — with the goal of showing the benefits of participation in its U.S. program.

To help make its case, the organization has pulled in star graduates like Airbnb and Stripe while its president Sam Altman himself is scheduled to appear.

The event will include sessions with graduates, YC partners and “live on-stage office hours.” That’ll see three companies picked from the audience to get advice and tips from the attending partners, as happens in the program. Sessions will be in both English and Chinese with live translations available.

YC partner Eric Migicovsky, who founded Pebble, is leading the event, which will include the following speakers:

In addition to helping U.S. hardware founders, Migicovsky was brought on specifically to make inroads into China and he is optimistic that there is strong demand.

“We’re hosting Startup School in Beijing to meet local entrepreneurs and start a dialogue about how YC can help,” he told TechCrunch. “The event and the founders we meet will help to inform our strategy going forward. Naturally, we hope to find Chinese startups to apply to our core Y Combinator program in Silicon Valley.”

YC officially announced the event today but the organization’s brand is so strong that word already got out in local media once it began sending out invitations, as our Chinese partner Technode reported.

Looks like Google is changing Android’s gun emoji into a water gun

Back in 2016, Apple swapped out the graphic used for its gun emoji, replacing the realistically drawn handgun with a bright green water gun.

Just a few days ago, Twitter followed suit.

And now, it seems, so will Google . The gun emoji on Android will likely soon appear as a bright orange and yellow super soaker lookalike.

As first noted by Emojipedia, Google has just swapped the graphics in its open Noto Emoji library on GitHub. These are the Emoji that Android uses by default, so the same change will presumably start to roll out there before too long.

At this point, Google making this change seemed inevitable. It seemed likely to happen as soon Apple made the jump; once others started following suit (Twitter earlier this week, and Samsung with the release of the Galaxy S9) it became a certainty.

It’s a matter of clarity in communication. If a massive chunk of people (iOS users) can send a cartoony water toy in a message that another massive chunk of people (Android users) receive as a realistically drawn handgun, there’s room for all sorts of trouble and confusion. Apple wasn’t going to reverse course on this one — and now that others have made the change, Google would’ve been the odd one out.

The makers of the virtual influencer, Lil Miquela, snag real money from Silicon Valley

Brud, the actual company behind one of Instagram’s most popular virtual influencers (it’s a thing), has raised millions of dollars from Silicon Valley investors because this is 2018 and everything is awful.

Last week, the Los Angeles-based startup led by Trevor McFedries, outed itself as the collective consciousness behind the virtual celebrity Lil Miquela and her less well known contemporaries Blawko22 and BermudaisBae in a choreographed melodrama worthy of Los Angeles’ best reality television.

i am deeply invested in the drama surrounding lil miquela and now you all have to be too. sorry!!! https://t.co/ta1T4rDFGz

— maya kosoff (@mekosoff) April 19, 2018

The subject of numerous glowing profiles in online and print fashion and lifestyle magazines (including, most recently, in High Snobiety), Lil Miquela’s stardom (and her fellow avatars) fascinated because the characters’ creators coyly toed the line around “her” self-awareness and their own. In the process, they created a sensation that’s become well-known worldwide.

It’s less well-known that the company is backed by some of the biggest names in venture capital investment — firms like Sequoia Capital. Our sources put the company’s funding somewhere around $6 million in its recent funding round.

There are other notable investors from Silicon Valley and New York rumored to be in the round — like New York’s BoxGroup and the Bay Area’s SV Angel. Sequoia declined to comment for this article and Box Group’s David Tisch did not respond to a request for comment.

All of the virtual drama with Miquela started late last week when news outlets (including TechCrunch) reported that Miquela’s Instagram account (or that of her handlers) was hacked by operators of a social media account belonging to another virtual personality known as “Bermudaisbae” (a more right wing social media persona with fewer followers).

McFedries, brud‘s founder and chief executive, confirmed that the Miquela account had been hacked in a text exchange with me, writing, “some redditor idiots hacked the page we think.”

That was a lie.

The account “hack” was architected by brud as part of an ongoing virtual reality drama playing out on Instagram and other social media platforms between avatars it had developed, all designed to attract media attention, according to people with knowledge of brud and its plans. It worked. 

McFedries has not responded to further requests for comment after confirming that the Miquela account was “good”.

One Los Angeles investor familiar with the company said brud was “using conflict to introduce new characters… same as the Kardashians always have.”

The investor added that two years into the development of the Miquela persona, brud‘s founders knew that the fad could lose some of its luster as the is-she-or-Isn’t-she-real tension dissipates under the weight of continuously thwarted expectations — like a post-modern twist on the will-or-won’t-they dramatic tension defining most sitcoms since Cheers.

“People aren’t going to buy that she’s human so they make it seem as if she’s had an existential crisis and now she is the first in a breed of conscious AR characters that they will build a world around,” this investor wrote. “[Manufacturing] social influence.”

Blawko22 and Lil Miquela imposed over a gas station exterior simulating a pit stop on the road to Coachella

For his part, the 33-yar-old McFedries had been manufacturing social influence in Los Angeles through his talents as a dj, producer and director before entering the startup world.

First under the name of DJ Skeet Skeet and then as DJ Skeeter, and, finally, Yung Skeeter, McFedries has worked or performed with a number of the world’s best selling recording artists including Chris Brown, Ke$ha, and Katy Perry (and — interestingly — more obscure acts like Bonde do Role).  

Working as an an “artist advocate” for Spotify, a DJ for a radio show on iHeartRadio, and as a spokesman for VitaminWater sustained McFedries along with managing the career of BANKS and executive producing her first album and a single on Azealia Banks’ 2014 record “Broke with Expensive Taste” — at least according to a Wikipedia page on Yung Skeeter. 

Around this time McFedries also began investing in companies, according to AngelList.

Roughly two years after the Banks record release, Lil Miquela made her first appearance on Instagram. And the rest is history as written in Internet archives and memes. Ephemeral, but infinite.

The project that brud seems to be pursuing — turning celebrity into a virtual commodity; commenting on the unreality of the “real” entertainment industry by literally creating an unreal celebrity — is fascinating.

There’s certainly a valid criticism to be made about the ways in which celebrity operates, the ways in which our “social” media has corroded society, and the unbridled power of these platforms to transform messengers and their messages into movements.

Perhaps brud wants to make these critiques through its very existence — or at least use its low-brow as high-brow (or is it vice versa?) intellectual appeal as a veneer over the more crass (but potentially honest) mission of selling more shit more effectively through the use of spokespeople whose views only change when their creators want them to (it worked for Hollywood’s star system). That at least gets sponsors and advertisers out of the potentially messy situations that can come from working with spokespeople whose actions can’t be controlled by software — or an ingenious marketing team.

In the High Snobiety profile-as-honors-senior-English-thesis on Lil Miquela published yesterday, the avatar’s own spokesperson was quoted as saying:

“The internet is endlessly powerful, and that power has been wielded in many ways. It feels like we’re not going to put the genie back in the bottle, so we’ve got to learn how to leverage these tools in positive ways. I’ve used my platform to raise real money for important organizations throughout LA and I’ve seen lives changed as a result. I think the only chance we’ve got is to collectively teach our loved ones how to think critically and how to spot misinformation. I know that we can manifest the change we want to see, and the internet can be a part of that.”

It’s a lofty goal backed by a number of inarguably good works. However, lying to reporters may not be the best way to continue trying to achieve it.

Omnidrive’s Online Storage Actually Works

I’ve been talking to Nik Cubrilovic, the founder of Sydney, Australia based Omnidrive, since I posted about the need for a good online storage service in November (see no. 1 in that post).

I’ve had the chance to test it over the last few days. It’s pre-beta but will be launching soon. They’ve solved a lot of the problems associated with storage away from the network, and has both an online and a desktop interface.

Omnidrive will have a free version with a gig or so of storage, and paid plans after that. The feature set is awesome – it has everything you could ask for, including dealing with massive file uploads in the background. Full review coming soon – sign up for the beta announcement on the site.

Pivotal CEO talks IPO and balancing life in Dell family of companies

Pivotal has kind of a strange role for a company. On one hand its part of the EMC federation companies that Dell acquired in 2016 for a cool $67 billion, but it’s also an independently operated entity within that broader Dell family of companies — and that has to be a fine line to walk.

Whatever the challenges, the company went public yesterday and joined VMware as a  separately traded company within Dell. CEO Rob Mee says the company took the step of IPOing because it wanted additional capital.

“I think we can definitely use the capital to invest in marketing and R&D. The wider technology ecosystem is moving quickly. It does take additional investment to keep up,” Mee told TechCrunch just a few hours after his company rang the bell at the New York Stock Exchange.

As for that relationship of being a Dell company, he said that Michael Dell let him know early on after the EMC acquisition that he understood the company’s position. “From the time Dell acquired EMC, Michael was clear with me: You run the company. I’m just here to help. Dell is our largest shareholder, but we run independently. There have been opportunities to test that [since the acquisition] and it has held true,” Mee said.

Mee says that independence is essential because Pivotal has to remain technology-agnostic and it can’t favor Dell products and services over that mission. “It’s necessary because our core product is a cloud-agnostic platform. Our core value proposition is independence from any provider — and Dell and VMware are infrastructure providers,” he said.

That said, Mee also can play both sides because he can build products and services that do align with Dell and VMware offerings. “Certainly the companies inside the Dell family are customers of ours. Michael Dell has encouraged the IT group to adopt our methods and they are doing so,” he said. They have also started working more closely with VMware, announcing a container partnership last year.

Photo: Ron Miller

Overall though he sees his company’s mission in much broader terms, doing nothing less than helping the world’s largest companies transform their organizations. “Our mission is to transform how the world builds software. We are focused on the largest organizations in the world. What is a tailwind for us is that the reality is these large companies are at a tipping point of adopting how they digitize and develop software for strategic advantage,” Mee said.

The stock closed up 5 percent last night, but Mee says this isn’t about a single day. “We do very much focus on the long term. We have been executing to a quarterly cadence and have behaved like a public company inside Pivotal [even before the IPO]. We know how to do that while keeping an eye on the long term,” he said.

Orchid Labs is in the process of raising $125 million for its surveillance-free layer atop the internet

Orchid Labs, a San Francisco-based startup that’s developing a a surveillance-free layer on top of the internet, has raised a bunch of funding, according to a newly processed SEC filing that shows the year-old startup has closed on $36.1 million. The money comes just five months after Orchid closed on a separate, $4.5 million in funding from investors, including Yes VC, cofounded by serial entrepreneurs Caterina Fake and Jyri Engeström.

Others of its earliest backers include Andreessen Horowitz, DFJ, MetaStable, Compound, Box Group, Blockchain Capital, and Sequoia Capital, according to its site.

The stated goal of the Orchid is to provide anonymized internet access to people across the globe, particularly individuals who live in countries with excessive government oversight of their browsing and shopping. Part of the point also seems to be to insulate users from the many companies that now harvest and sell their data, including walled gardens like Facebook and other giants like AT&T.

In a word where one assumes the Cambridge Analytica scandal is merely the tip of the iceberg when it comes to data abuse, it’s easy to see the project’s appeal. So far, says the filing, the company has raised that $36.1 million via a SAFT agreement, an investment contract offered by cryptocurrency developers to accredited investors (42 of them in this case).

But the filing shows a target of $125,595,882 million, and based how hot particular blockchain ideas are getting, and how aggressively they’re being funded (see the Basis deal earlier this week), you can imagine more money will flow to the company if it hasn’t already. That’s also an awfully specific target on its filing.

We’ve reached out to the company for more information. You can also check out its white paper if you’re curious.

In the meantime, it’s worth noting that Orchid has five founders with varied and interesting backgrounds. They include Stephen Bell, who spent seven years as a managing director at Trilogy Ventures, shopping for opportunities in China, before returning to the states in 2015; Steve Waterhouse, long an investor with the digital currencies-focused firm Pantera Capital; former Ethereum Foundation developer Gustav Simonsson; software engineer Jay Freeman; and Brian Fox, who is credited with building the first interactive online banking software for Wells Fargo in 1995 and who was the first employee of the legendary programmer Richard Stallman’s Free Software Foundation, among other things.

Between the money involved, the mission, and the founders, this one looks like a Big Deal. Stay tuned.

Russia’s Telegram ban that knocked out 15M Google, Amazon IP addresses had a precedent in Zello

Russia blocking access to Telegram after the messaging app refused to give it access to encrypted messages has picked up an unintended casualty: we’re now up to over 15 million IP addresses from Amazon and Google getting shut down by the regulators in the process, taking various other (non-Telegram) services down with it.

Telegram’s CEO Pavel Durov earlier today said that its reach in the country has yet to see an impact from the ban 24 hours on, with VPNs, proxies and third-party cloud services stepping in to pick up the slack for its roughly 14 million users in the country, and third parties refusing to buckle under requests from Roskomnadzor, the regulator, to remove the app from its stores and servers.

“Thank you for your support and loyalty, Russian users of Telegram. Thank you, Apple, Google, Amazon, Microsoft — for not taking part in political censorship,” Durov noted.

But Telegram’s Russia crisis is not the first time that an app banned by the Russian government has had to rely on third-party support to navigate its position with users. A recent precedent involving a much smaller communications app sheds some light on how all of this works. And ironically, its own run-in may have been the reason for why the government moved so quickly to block so many IP addresses around Telegram’s, affecting more than just the app itself.

A little over a year ago, the walkie-talkie app Zello received a notice from the Russian regulator Roskomnadzor. Zello was informed that it would be banned unless it started to host records of the conversations that were taking place on the app on Russian servers — in compliance with a hosting requirement that Russia put in place for ISPs back in 2014 as part of its efforts to tighten its control of digital information in the name of national security.

You might remember the name Zello from its bump of attention when a wave of people hit by Hurricane Harvey in Texas used it to communicate with each other when voice services went down or became too clumsy to use, but mobile internet connections stayed up. “Voice is how we most naturally communicate, and push-to-talk and radio-style communication is instant, no dialling or waiting,” said Zello CEO Bill Moore. “It can be with one person or large groups and build relationships and to solve problems.”

The startup itself is based out of Austin, Texas and has around 120 million registered users, with around four million monthly active users.

Moore — who had in the past also founded and run another Texas startup, TuneIn — said in an interview this week that Zello’s run-in with Russia started about a year ago, when the regulator started to block the application in Spring 2017, after Zello refused to cooperate with the hosting requirement, both on grounds of cost and principle.

(Cost: because it’s a small startup. And principle: because Zello is built in a way where messages are stored locally, both for direct messages and those sent in more widely-distributed channels, the feature that Moore believes might have been “why Zello annoyed Russia,” because protestors used these channels to coordinate activities.”)

Instead of buckling and leaving Russia, Zello decided to use to some software it had written years before, when the app had been issued with a block in Venezuela after it ran afoul of the government there — software “that let us change IP addresses for our service,” as Moore describes it. The change in IP addresses essentially meant that as Zello was shut down in one place, it was able to hop to another, using services from either AWS or Google Cloud.

Moore said that Zello — which originally hosted its service on IBM’s cloud before the ban — used its IP hopping tactic for nearly a year, moving first across IP addresses on Amazon and then hopping to Google Cloud when Amazon got too hot. By the time Zello started using Google Cloud, the government was well on to Zello’s ways, and it took only about 10 days before Google asked Zello to stop, Zello’s CTO and founder Alexey Gavrilov added.

“About a month ago, the press in Russia began to report that Roskomnadzor was threatening to block millions of addresses if that’s what it took to get Zello [to retreat]. That was when Amazon said, ‘you need to stop changing IP addresses,’” Gavrilov said. “We tried to get Amazon to reconsider, making the case that by asking us to stop, it is are really acting the same way that ISPs do that are controlled by Russia. Zello is not damaging, but Russia is by blocking. It’s not wise to go along with that threat.”

His argument echoes what Durov has been saying in defense of Telegram, although it didn’t appear to wash for the smaller app. “We lost that debate,” Gavrilov said.

Moore and Gavrilov say they believe Telegram may be using a similar kind of approach to move around Amazon- and Google-based IP addresses (I’ve tried to contact Durov to ask about this but have not had a reply; Google and Amazon also have not replied to my emails). However, now, with the Russian authorities well aware of the tactic, it simply decided to block large swathes of IPs to act more quickly, rather than negotiate with cloud companies to pick out which IP addresses were actually being used.

Partly because of the size of the service in question, and partly because of the blanket blocking, the difference between the IP addresses being blocked varied from just over 2,000 for Zello to more than 15 million by the time Telegram attempted its own IP hops.

Zello still believes that it was not in the wrong in its own encounters with the Russian government, although its appeals to Amazon and Google, and eventually Apple and others who host the app on their stores, ultimately didn’t wash.

“We believe that Zello doesn’t violate Russian law because originally the hosting requirement was written for ISPs, and Zello is not an ISP,” Moore said. “We cooperate with law enforcement on a consistent basis and do what we can under the law.” But like Telegram, Zello takes the view that the medium should not be attacked because of how it is used. “Terrorists drink water, but I don’t think we should outlaw water, either,” is how Moore describes his stance.

Since about two weeks ago, the only way that people in Russia can use Zello is by way of VPN proxies. Zello has a fairly even distribution of its several millon monthly active users across several countries, including the U.S., Mexico, Brazil, and Hong Kong. Russia had been one of its top markets until this happened, but the cost to Zello has been about half of its active users in the country, which now stand at 200,000.

“We don’t like to think about how we’ve lost half our users there,” Gavrilov said. “We like to think about how many we’ve managed to keep.”

Zello has always been ad-free and free to use by regular consumers. Moore said that the company is profitable, making its revenues through a premium tier for businesses to have their own private channels. So far, Zello is completely bootstrapped, although Moore said that it is likely it will want to raise money eventually to grow its consumer business.

Neither CTO nor CEO think that Russian bans impact the company’s wider business.

“In my opinion, incidents like these only help companies like Telegram and Zello on the global market,” Gavrilov (a native of Russia) said. “Realistically, Russia is a small share of the Telegram user base, and standing up to the demands in Russia just communicates to everyone else that you can trust these people. That only makes it more valuable.”

Minds aims to decentralize the social network

Decentralization is the buzzword du jour. Everything – from our currencies to our databases – are supposed to exist, immutably, in this strange new world. And Bill Ottman wants to add our social media to the mix.

Ottman, an intense young man with a passion to fix the world, is the founder of Minds.com, a New York-based startup that has been receiving waves of new users as zealots and the the not-so-zealous have been leaving other networks. In fact, Zuckerberg’s bad news is music to Ottman’s ears.

Ottman started Minds in 2011 “with the goal of bringing a free, open source and sustainable social network to the world,” he said. He and his CTO, Mark Harding, have worked in various non-profits including Code To Inspire, a group that teaches Afghani women to code. He said his vision is to get us out from under social media’s thumb.

“We started Minds in my basement after being disillusioned by user abuse on Facebook and other big tech services. We saw spying, data mining, algorithm manipulation, and no revenue sharing,” he said. “To us, it’s inevitable that an open source social network becomes dominant, as was the case with Wikipedia and proprietary encyclopedias.”

His efforts have paid off. The team now has over 1 million registered users and over 105,000 monthly active users. They are working on a number of initiatives, including an ICO, and the site makes money through “boosting” – essentially the ability to pay to have a piece of content float higher in the feed.

The company raised $350K in 2013 and then a little over a million dollars in a Reg CF Equity Crowdfunding raise.

Unlike Facebook, Minds is built on almost radical transparency. The code is entirely open source and it includes encrypted messenger services and optional anonymity for users. The goal, ultimately, is to have the data be decentralized and any user should be able to remove his or her data. It’s also non-partisan, a fact that Ottman emphasized.

“We are not pushing a political agenda, but are more concerned with transparency, Internet freedom and giving control back to the user,” he said. “It’s a sad state of affairs when every network that cares about free speech gets lumped in with extremists.”

He was disappointed, for example, when people read that Reddit’s choice to shut down toxic sub-Reddits was a success. It wasn’t, he said. Instead, those users just flocked to other, more permissive sites. However, he doesn’t think those sites have be cesspools of hate.

“We are a community-owned social network dedicated to transparency, privacy and rewarding people for their contributions. We are called Minds because it’s meant to be a representation of the network itself,” he said. “Our mission is Internet freedom with privacy, transparency, free speech within the law and user control. Additionally, we want to provide our users with revenue opportunity and the ability to truly expand their reach and earn rewards for their contributions to the network.”