As sites like Fab wean themselves off flash sales, with some VCs expressing scepticism towards the longevity of the flash sales model, others remain bullish. Perhaps it’s a case of flash sales working better in some verticals than others. Today, the UK’s SportPursuit, a 1 million member-strong flash sales site for sports enthusiasts, is announcing a series B round of funding.
Led by existing investor, London-based VC firm DFJ Esprit, with participation from Silicon Valley Bank, it’s raised £5 million in new capital (which presumably includes venture debt). Others who participated include angel investors William Reeve (chairman of Graze.com and co-founder of Amazon-owned LOVEFiLM), Alex Chesterman (founder of Zoopla), and Alex Saint (CEO of Secret Escapes). The round brings total raised since the flash sales site launched just over two years ago to ~£6.4 million.
Following the familiar flash sales model — and similar to U.S.-based The Clymb — SportPursuit members are sent time-limited “exclusive” offers, which usually expire after 7 days, for products from leading sports brands such as Marmot, Helly Hansen, Canterbury, Garmin, GoPro and Icebreaker. It counts more than 600 brands in total.
It’s also talking up the sports category as attracting passionate consumers, making the spontaneity and discovery draw of flash sales a good fit. Meanwhile, the company says its Internet-based, data-driven approach allows it to “give each member something new, relevant and interesting every day”, and that this enables brands to use SportPursuit (and flash sales) as a platform for growth.
The new funding will be used to bolster its product line in the UK, bringing on additional brands, as well as for European expansion. Scandinavia is name-checked in particular. Noteworthy, it already claims members outside of the UK, and says it’s shipped products to more than 40 countries.
I’m also told that a third of new sign-ups come through organic member-to-member or word of mouth activity. User acquisition is likely one of the main challenges of operating a vertical flash sales site, along with getting enough new and enticing offers in the pipeline to keep those users converting, of course.
iSocket, which offers tools for selling online ads, is announcing that it has raised $5 million in new funding.
The round was led by Time Warner Investments, with participation from Condé Nast, R&R Venture Partners (a fund created by former Time Warner CEO Dick Parsons and Ronald Lauder), and investor Vivi Nevo.
iSocket focuses on sales where publishers (including TechCrunch) have a direct relationship with the advertiser. The company says those sales can require up to 50 steps to complete, so it offers iSocket for Publishers to automate much of the process.
“We’re very pleased to have Time Warner and Condé Nast, two of the biggest names in publishing, endorsing our model for advertising sales automation,” said CEO Richard Jalichandra in the funding release. (Jalichandra, formerly the CEO of Technorati, joined iSocket last fall.)
In addition to the funding, the company is announcing the launch of iSocket for Advertisers, an ad-buying tool for agencies and brands, as well as the hiring of Kevin McCabe, a former ad executive at Microsoft, as vice president of business development.
Open the app to see what’s new. Check updates that have been posted on the secrets I’ve commented on first. Click through each of them. Go into the main feed, read down to where I last left off. Scroll back to the top, pull down to refresh. Head back to updates.
Lather, rinse, repeat.
That’s been my life over the past week, as Secret has become all-consuming devourer of my time and attention. When I’m reading Secret I’m ignoring everyone and everything else around.
When I’m not reading Secret, I’m thinking about secret.
I’m pretty sure this is how an addict feels, and I’m becoming increasingly concerned that if I don’t stop soon, my abuse of this app will have dire circumstances for my work and social life.
Maybe I’ll open up too much, let slip something really damning in a moment of weakness, and someone will find me out. Maybe my friends will realize that I’m the one trolling them and they’ll cease to be my friends. Maybe people will just get tired of me ignoring them, while I scan for new Secrets over and over again. Maybe I’ll miss an important deadline because I was neck deep in my friends’ gossip.
It’s not even the gossip that gets me, not the mean-spiritedness or the trolling or the braggadocio, not the impossible lies or the regrettable truths.
It’s relating to other human beings in this weird, anonymous state where we’re stripped of all the trappings society defines us by. It’s being just another voice in the darkness, seeking to be heard for who we really are.
Google’s Android OS is the dominant mobile platform by market share, but it’s also increasingly pushing beyond portables and onto a range of other devices types — including, if this crowdfunding campaign delivers on its promises, the boring old wall switches in your home.
bRight Switch is a prototype project that’s within touching distance of its $115,000 Indiegogo crowdfunding goal (with less than a day of its campaign left). Its aim is to replace plain old light switch hardware with what’s basically a small tablet fixed to the wall, expanding the functionality of the switch interface beyond simply just switching your lights on and off.
The bRight Switch actually plugs into a base unit to convert a wall switch from dumb switch to smart screen, but its makers claim the installation process is an easy job for an electrician.
The bRight Switch tablet design is customised for a wall-mounted context to offer features that make sense in such a setting, such as people detection to automatically turn on lights on when someone walks into a room.
Other features the smart switch is set to support include the ability to remotely switch your lights on and off via the Internet and a learning mode that gets to know your routines over time and automatically switches lights on and off based on prior usage.
Also on board is a security feature whereby you can play back footage recorded by the camera on one of the switches in another room. Plus videocalling (via Skype, or similar) and streaming music via Internet radio services such as Pandora.
Other features include a built-in alarm; temperature display; dimmer ability for certain types of bulbs; an intercom feature allowing for chatting between bRight Switches located in different rooms; plus other security features such as setting an alarm to be triggered by motion in a particular room.
The units will also run standard Android apps, so you could presumably fire up Angry Birds on your wall if you’re really bored. bRight Switch’s makers are also planning to supply an open API to encourage developers to create new apps for the wall beyond what they’ve envisaged.
Of course, all these features are aspirations at this point with only a prototype of the bRight Switch in existence. If the device hits its funding target, which at the time of writing is looking pretty likely, its U.S. based makers reckon they can deliver to backers by July.
The switches use Wi-Fi to plug into your home router to support functions such as Skype calling and streaming Internet radio, while the Z-wave wireless protocol is used for talking to lights around your home that are not wired directly to the switch.
How much will this smart light switch set you back? They’re charging $75 per switch for non-Bluetooth switches, and $90 for the Bluetooth version. Or $325/$435 for a five-pack of the two respective options.
What’s the point of the Bluetooth addition? Added functionality such as the ability to link up to external Bluetooth speakers for “full spectrum sound” — or, getting even more customised about home automation, the ability to track your phone (and therefore you) around the house, providing a “custom personalized experience as you move from room to room.”
The bird is the word this week on the TechCrunch Droidcast: That pixelated fowl from Flappy Bird has wormed its way into everyone’s hearts. We discuss the game, and the strange circumstances surrounding its creation and apparent demise. Also, we debate the usefulness and potential of Mozilla’s new Android launcher.
This week is also the 7th Annual Crunchies, our annual awards gala to celebrate startups in Silicon Valley, so next week we’ll likely have updates from that event, where there doubtless will be some tangential Android news on display.
We invite you to enjoy weekly Android podcasts every Sunday at 4:00 p.m. Eastern and 1:00 p.m. Pacific (new time!), in addition to our weekly Gadgets podcast at 3 p.m. Eastern and noon Pacific on Fridays. Subscribe to the TechCrunch Droidcast in iTunes, too, if that’s your fancy.
Intro music by Kris Keyser
Direct download available here.
Google Glass is still months from its public launch, but after the initial hype, most of the recent news around Glass has been negative. It seems like for every positive round of publicity Glass gets, it soon gets hit by something negative soon after.
Just a few days ago, for example, word spread that the New York Police Department was testing Glass. Google itself isn’t working with the NYPD, as far as I can tell, but somebody there probably got Glass through the Explorer program. Still, that story was enough to get the fears around privacy and Glass back into the news cycle (and onto the Drudge Report). Just take a look at the comments on CNN’s story about this if you want to know what people think about Glass.
Google’s problem is that only a very small number of people have ever tried Glass, while everybody seems to have an opinion about it. The company isn’t ready to launch it publicly yet, so since late last year, it’s been taking Glass onto a roadshow around the U.S. This weekend, for example, the team went to Atlanta to give people there a chance to try Glass.
The idea here is simple: let people try it, so they can understand how it works. Too many people still think Glass always records everything around you. They may even believe that it has built-in face recognition or other tools that will invade their privacy. The reality is far less interesting, up to the point where at the Atlanta event, Google now shows off a lot of the sports Glassware and Word Lens so people can see Glass can actually be quite useful outside of showing you the weather and Google+ updates.
At its roadshows, Google lets you try Glass, but it also ensures that local politicians get a chance to try it. It’s pretty easy for somebody who wants to make his name in politics to take on Google without ever trying Glass, after all, and get his 15 minutes of fame on local news (and maybe a few minutes on cable news, too).
To change public perception of Glass (if that’s indeed still a possibility), Google needs to expand this kind of program before public launch. Until then, Glass will remain a privacy invading, face tagging, covert photo-taking headset for most.
Lynn Rothschild has short brown hair and smiley eyes. She cracks jokes about biology and microscopes with ease. Diana Gentry, her decades-younger Ph.D. student, loves classic video games and vegetarian cooking. She lives near Silicon Valley. The two colleagues have a funny banter, and have spent holidays together. But they share one unique goal.
They’re trying to 3D-print wood in space.
The Stanford University researchers have been working long hours honing a three-dimensional printing process to make biomaterials like wood and enamel out of mere clumps of cells. Pundits say such 3D bioprinting has vast potential, and could one day be widely used to transform specially engineered cells into structural beams, food, and human tissue. Rothschild and Gentry don’t only see these laboratory-created materials helping only doctors and Mars voyagers. They also envision their specific research – into so-called “synthetic biomaterials” – changing the way products like good-old-fashioned wooden two-by-fours are made and used by consumers.
Here’s their plan: Rothschild, an evolutionary biologist who works for NASA and teaches astrobiology at Stanford, and Gentry, her doctoral advisee who is trained in biology and mechanical engineering, are working with $100,000 they received last fall from the space agency’s Innovative Advanced Concept Program. They say they’re on track to prove their concept by October: a three-dimensional printing process that yields arrays of cells that can excrete non-living structural biomaterials like wood, mineral parts of bone and tooth enamel. They’re building a massive database of cells already in nature, refining the process of engineering select cells to make and then excrete (or otherwise deliver) the desired materials, and tweaking hardware that three-dimensionally prints modified cells into arrays that yield the non-living end products.
In short, your 3D printer could soon be your hardware store, your butcher, and your dentist.
“Cells produce an enormous array of products on the Earth, everything from wool to silk to rubber to cellulose, you name it, not to mention meat and plant products and the things that we eat,” Rothschild said. “Many of these things are excreted (from cells). So you’re not going to take a cow or a sheep or a probably not a silk worm or a tree to Mars. But you might want to have a very fine veneer of either silk or wood. So instead of taking the whole organism and trying to make something, why couldn’t you do this all in a very precise way – which actually may be a better way to do it on Earth as well – so that you’re printing an array of cells that then can secrete or produce these products?”
Rothschild and Gentry’s setup is different from using basic 3D printers that deliver final products. Instead, the NASA-funded researchers are using 3D printing as an enabling technology of sorts. Their setup involves putting cells in a gelling solution with some sort of chemical signaling and support into a piezoelectric print head that spits out cells that form a gel-based 3D pattern.
This team is by no means the only one experimenting with 3D cellular printing. The publicly traded San Francisco company Organovo is using a lower-resolution type of printing to create living tissue for medical research and therapeutic applications. Columbia, Mo.-based firm Modern Meadow is developing processes to 3D print leather and edible meat. A Cornell University team last year unveiled a 3D printed synthetic ear. Academic researchers across the globe have been logging multiple related advancements, including making synthetic spider silk from bacteria.
Andrew Hessel, a biotechnology analyst who is a distinguished researcher with San Rafael, Calif.-based Autodesk Inc., said the emerging field of 3D bioprinting is a “pretty wide open space” with different researchers “all dancing on multiple fronts at once.” And the research is not without controversy. Information-technology research firm Gartner, Inc. recently predicted 3D printing of living tissue and organs will soon spur a major ethical debate.
Hessel said the most-complex 3D bioprinting research is being done with the actual engineering of cells. Companies like Organovo, for example, aren’t actually engineering the cells, and instead are differentiating and laying them in a way that they can mature and grow in to functional tissue.
Other groups are focused on finding ways to manipulate the print modules so they can manipulate the cells faster and cheaper.
And then, Hessel said, are the researchers like Rothschild and Gentry, “who are really just learning how to manipulate cells to do completely new things.” They are using 3D printers because they are the best way to pick and place specific materials on a growth plate.
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“3D printing was not designed for mass production, like making computer chips,” Chen said. “It was designed for personalized, patient-specific products or customer-specific production. So I think it’s a perfect fit for medical, because everybody’s different, for each disease case is different.”
Still, full-blown 3D bioprinting is not yet reality. Hessel said researchers are struggling with generating large amounts of bio-based materials in a way where 3D printers can deposit them and really have functional output. Gentry, indeed, said one of her team’s biggest challenges relates to demonstrating and quantifying the actual material yield.
Nonetheless, Gentry is optimistic. She sees their work as not only making structural biomaterials through 3D printing, but making them better.
“If you looked at a piece of plastic, by in large, a small piece of it is just like a large piece of it; this is not true of most biomaterials,” Gentry said. “They have very interesting properties and structures on a micro or sometime molecular scale that stack and create these sort of emergent macro-scale properties. So they behave differently in different directions. We are trying to show that we can manufacture these materials so that those really fine-grained properties work for us.”
She envisions products like wood reinforced with carbon fiber, or equipped with copper nano-wires that change its electrical conductivity, sitting someday on hardware store shelves.
“I want to see if I can add a new class of materials to the palette of materials that people make things out of,” she said.
Yesterday, the developer behind Flappy Bird said he would be removing the remarkably/mysteriously successful game from the App Store in just 22 hours.
Sure enough, the game appears to be gone. And in its spot on the #1 spot on the iOS leaderboard? A Flappy Birds clone.
Flappy Bird’s developer, Dong Nguyen of Vietnam, suggested that the many pressures of success had become overwhelming.
I am sorry 'Flappy Bird' users, 22 hours from now, I will take 'Flappy Bird' down. I cannot take this anymore.—
Dong Nguyen (@dongatory) February 08, 2014
It is not anything related to legal issues. I just cannot keep it anymore.—
Dong Nguyen (@dongatory) February 08, 2014
He later followed up to clarify that the game was not being removed for legal reasons, nor would he sell Flappy Birds to someone else.
According to an interview with The Verge last week, Dong Nguyen disclosed that the game was making upwards of $50K per day in ad revenue.
Many internet commenters had suggested that the tweet was something of a ploy to bump downloads up even higher; that Dong would have a “last minute change of heart” after the tweet lead to a surge of downloads and further secured the game its #1 spot. Given that the game is seemingly gone from both the iOS and Android stores (with a million clones left in its wake), that doesn’t appear to be the case.
The strikingly-similar game that now takes its place aboard the iOS App Store’s free games chart is called “Ironpants”, and the concepts are essentially identical: You’re controlling a flying thing. Tap to make flying thing go up. If your character touches anything, you lose. You’re a superhero instead of a bird, you’re dodging crates instead of Mario-inspired pipes — but at its core, it’s pretty much the same game. The main difference I’ve noticed so far: the ads are significantly more in-your-face.
For the curious: according to App Annie, Ironpants was first added to the app store on January 27th of 2014, 10 days after Flappy Bird first reached the number 1 spot (January 17th) and roughly 2 weeks before Flappy Bird was removed (February 9th.)
Could the bird return, if Nguyen does decide to bring it back? It’s feasible. It depends on how it was “removed” from the App Store. If the app package was removed from iTunes Connect entirely, Nguyen would need to resubmit it and wait for Apple’s approval, and it will have lost its previous download count, reviews, etc. If he just turned off its country-by-country availability, bringing the game back could be a matter of ticking a few check boxes.
If you’d downloaded Flappy Bird before it got the self-dropped App Store ax, you should still be able to download it indefinitely if you ever delete it from your phone. The download button will be hiding in your iCloud “Purchased” list, which is in turn tucked away into the Updates screen in the app store.
Gillmor Gang – Robert Scoble, Kevin Marks, Keith Teare, and Steve Gillmor. Live recording session has concluded for today. Find us on Facebook at Facebook.com/GillmorGang
Late in 2013, I stumbled upon two bootstrapped entrepreneurs with deep backgrounds in mobile development — Timothy Lee and Nathan Esquenazi — who were on very focused, technical, educational mission: To take some of the best web developers and train them to develop for mobile platforms. Everyone knows it’s impossible to find good mobile engineers across iOS and Android, and with talent either locked up in big companies or fragmented across so many startups, their startup was born: CodePath, an intense, live, workshop-style bootcamp for engineers to work on mobile development projects. For this weekly mobile column, I invited the CodePath founders share their vision, as well as to explain the program to engineers and companies who may be interested.
How was CodePath formed, and what’s your mission?
Our mission is to empower software developers, free of charge, to continuously expand their skillsets across new specializations and platforms. To start, we have designed an accelerated program that effectively ramps up engineers in iOS and Android development. The programs we offer are supported by paid training and sponsorship from mobile startups.
CodePath was formed largely out of our shared passion for teaching and curriculum development. About a year ago after our startup was acquired, we had the opportunity to design and develop a project-based mobile curriculum for Yahoo. We ran hundreds of engineers there through this program and saw the opportunity to bring this unique format and structure to the startup community at large.
Why is the program restricted to developers with a CS background?
Fortunately, there are a wealth of great programs and low cost curriculums that already exist for junior or aspiring developers. However, not many companies are addressing the needs of the professional developer community. We find that there are many inefficiencies in the way that developers today ramp up on the latest technology stacks. In addition, seasoned developers often find transitioning out of their existing specialties to be quite difficult. While we strive to keep our curriculum as open as possible to everyone today, there’s an incredible value in initially focusing our programs towards the professional audience.
Don’t the plethora of online coding courses provide enough tools for people to learn these skills?
There is definitely an almost overwhelming amount of online resources and we certainly don’t miss developing in a pre-Stack Overflow era. However, there are many advantages to learning within a structured, accelerated program with an emphasis on best practices and standards. We think the programs are valuable in part for the same reason people find value from a personal trainer at the gym or for the same reasons an athlete has a coach. We think the weekly code reviews, well-designed curriculum and peer collaboration on real projects can make the learning process considerably more fun and effective.
How do the iOS courses differ from the Android courses?
The courses are more similar than they are different. First and foremost our programs are about creating an effective learning environment and connecting talented engineers together so they can build interesting products. Both courses give engineers a chance to ramp up on the respective platforms, adopt the best practices surrounding mobile development, and explore how to design enjoyable user experiences. The iOS course is focused around the latest iOS 7 technologies and techniques. The Android course is focused on introducing the world of modern Android development with KitKat. In that sense, the development environments, tools, and platforms are what separate the two courses while the spirit and the format remain the same.
Do you plan to extend to Glass, or other wearable platforms?
Absolutely, we think part of the strength of Android in particular is the proliferation of Android-based devices that extend far beyond the phone. Automobiles, eyewear, tablets and even military helmets are quickly becoming a part of the Android ecosystem and we are interested in actively encouraging exploration of those platforms as they are adopted.
How do larger companies who want to hire mobile talent get placements, and how do they get involved in Code Path?
We are currently exploring the various ways our programs can provide value to companies. We think increasing the pool of talented iOS and Android engineers is in the best interest of many local companies. We have been working with companies like Yahoo, Hulu, Zendesk, MyFitnessPal, and Riviera Partners to sponsor our past CodePath programs. For companies that need mobile training for their engineers, we allow them to reserve paid seats in our San Francisco courses. Any company interested in getting involved as a sponsor or inquiring about mobile training should contact us at email@example.com to learn more.
What are some key stats around the program so far? Are you thinking of expanding beyond the Bay Area?
Right now we are very focused on providing the best programs that we can within San Francisco but we are committed to expanding these programs in time to other cities. Here are a few of our key stats:
The average participant has a CS degree and 4 years of professional experience
CodePath has a diverse group of students and about 30% of our alumni are female engineers
Over 100 engineers have taken our program in San Francisco in small cohorts of 15-30
CodePath has trained 200+ engineers at Yahoo and helped many transition to the mobile team
Our current volunteer mobile mentors include senior iOS and Android developers from Nest, Climate Corporation, Edmodo, Couple.me, Klout, Couchsurfing, and FlipBoard
Why does mobile development pose such a challenge, even for adept web developers?
As an experienced engineer, learning the nooks and crannies of any new framework takes a significant time investment. One difference in web and mobile is there is not really a distinction between a front-end mobile developer and a back-end mobile developer. A successful mobile developer must be full stack and must consider user interaction as much as technical implementation. As part of our program, we emphasize the level of visual detail required to create polished mobile experiences, which is often a new challenge for web developers that are currently focused on scalability and infrastructure. One other challenge is the difference in architecting, testing and deploying for embedded devices as opposed to applications in the cloud.
As a two-person bootstrapped company, how will Code Path grow?
Right now we rely on people to spread the word about our mobile courses to friends and colleagues. If you know any engineers interested in learning iOS or Android, have them sign up for the next program starting in March. If you know of companies that have mobile training needs or would be interested in sponsoring our initiatives, we’d love to meet them. If you are a mobile engineer interested in mentoring or teaching, we definitely want to talk with you. Feel free to reach out to us for any reason at firstname.lastname@example.org.
Editor’s note: Tomio Geron is head of content at startup Exitround and was previously a staff reporter for Forbes and Dow Jones VentureWire. This is part of a series of posts on the tech M&A market. Follow him on Twitter @tomiogeron.
As a founder, Kristian Segerstrale has had two successful outcomes. An expert in gaming, he cofounded Macrospace, which merged with Sorrent then was renamed Glu Mobile. He also was cofounder and CEO of Playfish, which was acquired in 2009 by EA for $400 million. He is now a co-founder at Initial Capital, which led the seed round in Supercell among others.
I caught up with Segerstrale to get his thoughts on how to manage acquisitions and make them successful. There are many facets of an acquisition, but Segerstrale focuses on the individual people involved and the often-overlooked things that can keep a team from leaving after an acquisition.
First, when you combine your company with someone else’s, you are getting married in a very real sense. It pays to spend a lot of time courting first. “Spend as much time with the acquirer as possible, specifically the CEO,” Segerstrale says. “You should talk about the business, but more importantly about values and culture to understand whether the companies are likely to be successful working together.”
It’s worth it to invest this time before an acquisition. If you don’t, you could end up being acquired and spending a couple “miserable” years with a company watching your baby gradually wither to nothing as a result of a poor fit, he says. “I’ve seen it happen, and I know that’s a horrible place to be.”Up Close And Personal
Getting to know all levels of the buying company is critical. Not just the senior level management but as many of the people in the company you’ll be interacting with as possible. This can help you stay in control after the acquisition and help you decide which departments you would work with more closely and which to avoid. If necessary, find a way to split the task with a co-founder so that one of you can run your company, leaving the other to explore how to best leverage people and resources within the company you’ll be joining.
Ultimately, what keeps founders and employees happy after they’re acquired is not just the financial considerations but other things like finding a meaningful way to contribute to a company’s direction and learning interesting things. “For entrepreneurs,” Segerstrale says, ”at least as important as the monetary dreams and aspirations of an acquisition is: does the buyer have similar approaches to company-building and long-term vision?”Talent
Segerstrale also says that talent determines outcomes in rapidly changing marketplaces, which is where acquisitions most often occur. As CEO on either side of the transaction, you should look at everything through the lens of your key talent. Acquisitions often fail because the combined new management team fails to get the key talent engaged, he says.
“When you structure your deal, keep in mind your star coder, artist or architect. How can you set everything up, financially and otherwise, to keep your star talent as long as possible? How can you make life post-acquisition as exciting as it can be?”
Founders have to give employees something to believe in. Explain your new vision and how this is an exciting thing and make it real to your key talent. Star talent values the autonomy and impact they have at startups. Find a way to preserve that in the new set up and you will have the best chance at keeping them for as long as possible.
“There are often a lot of empty words in acquisitions,” Segerstrale says. “Employees are going to look at you and try and figure out if you’re still calling the shots or not. Make sure you do. They’ll hear from the acquiring company CEO also so those messages have to match.”Culture
No financial retention package can replace or replicate the intrinsic motivation of a hungry startup. Sometimes it can be hard to get the buyer to agree to some of these culture issues. But often it’s just as important as the financial terms. It can be worth reminding the acquiring CEO that retaining culture and “how things are done” is critical to the talent and the performance of the newly acquired entity.
“In the end, you set up your venture to change the world and likely to work with people you like in an environment and culture you enjoy,” he says. “Your employees likely joined you for the same reasons. Keep those things true and you have the best chance to succeed even post an acquisition.”Drama
One example of how an acquisition can stumble on a seemingly simple issue is integrating two companies’ levels, titles and compensation systems. People often don’t care about this pre-acquisition where titles mean little, but once you integrate, people do care about how they compare to peers.
In other words: “Am I a director or senior director?” “Level 21 or Level 23?” Every ounce of energy spent worrying about that is lost from worrying about product or customers, Segerstrale says. He advises even keeping separate email addresses if possible. “Get a commitment not to touch those things. Or don’t integrate with the HR of the acquiring company until you are ready. The less you distract talent with a changing personnel situation the more likely you are to succeed.”Too Much Or Too Little?
This is not to say you shouldn’t integrate on some level with the acquiring company. After all there was some business logic in the deal in the first place – some reason it makes sense for these two companies to be one. And sometimes the right answer is to integrate everything on the first day, but sometimes it’s not. “In one of my companies I was so worried about disruptions that I ended up missing many opportunities to grow the business,” he says.
Your level of integration needs to be consistent with your mission. For example, one reason for your integration may be to combine your startup’s tech expertise with a big brand buying you. But, Segerstrale says, delivery of that requires a certain level of integration that you will then simply have to execute on. Integrating too slowly will undermine your performance just as surely as integrating too rapidly will.Communication
Keeping your staff informed is key throughout the process. You want to create an honest narrative about why this acquisition is exciting and why you’re doing this, he says. “Don’t pretend tomorrow is going to be the same. Be honest and say: this one adventure is ending and another is starting. Celebrate the journey this far and then start again from scratch and take nothing for granted. Cajole them, seduce them and explain to them that this new thing is just as exciting and interesting.”
The staff will look at you and implicitly think, “Is my CEO going to stick around?” and “Does what s/he says count?” So make promises you can keep, Segerstrale says. “The worst thing is to say that things are going to be just like they were before or to make a commitment you can’t keep.”
The small things can make a big difference, Segerstrale says. Say you had free fruit at your startup and you told employees they will still get it at the new company. But then the acquiring CEO says you can’t. “If you have to break a promise to staff, you’ve lost. If you break a promise about fruit, what does this mean about all the other future big things like company strategy?”Investing Strategy
Segerstrale’s focus on talent also applies to his investments. With gaming companies, he looks primarily for the talent across the team. “In gaming you care more about the art director and the lead coder than the CEO. The CEO matters a lot once the company becomes successful, but before you have a product out the CEO only matters to the degree they can contribute to the first product and retain the key talent working on it.”
The likelihood of a gaming startup being successful is much higher if the team worked together before. Especially for game companies, the product is the soul of the team. “Looking at the product is like looking the team in the eye – you get an intuitive feel for who they are and what they care about,” he says.Conflicts
Asked about how he deals with conflicts over selling a portfolio company, Segerstrale says his firm, which was recently involved in the $1.5 billion Supercell-SoftBank deal, always supports founders. “We are unequivocally supportive of what founders want to do. We try to be helpful. We give our thoughts on tactics and who’s worth talking to, and who’s not. But ultimately we’re entrepreneurs ourselves, so we think of ourselves as an adviser or helper to frame decisions. But ultimately it’s the founder’s call.”
Initial Capital only invests its own money and doesn’t take outside capital, Segerstrale says. “We think of ourselves more as co-founders of companies we invest in than financially motivated investors. We don’t have any fund logic to worry about because we’re investing our own money. We don’t have to worry about raising another fund. That gives us complete freedom.”
He’s still looking for gaming companies and believes you can still build massive businesses, pointing to examples like Supercell. But he says much of gaming is a mature market and requires a focused plan. “It’s no longer early in mobile. You can no longer raise a tiny amount of money and hope to get there.” Initial Capital also invests in the broader app ecosystem, including Internet of Things, consumer health and enabling technology-oriented companies.
Image: Modified from Shutterstock
Aol has backtracked on a controversial decision to delay employee 401K matching until the end of the year, a decision that could potentially cost employees like myself thousands of dollars. Thank you.
Aol announced the change by sending out a company-wide memo earlier today. Note: Somehow TechCrunch only gets a hold of the positive memos.
We began our journey together in 2009, and for the last four years have had an employee-first culture. As I have said before, the ability to change is a strategic advantage for us. With benefit costs increasing, we made a strategic, financial decision last year to revise our employee matching 401K program from a per-pay-period contribution to a yearly lump-sum contribution. We then communicated this decision in the fall through multiple channels to every AOL office in the US.
The leadership team and I listened to your feedback over the last week. We heard you on this topic. And as we discussed the matter over several days, with management and employees, we have decided to change the policy back to a per-pay-period matching contribution. The Human Resource team will be in contact with all employees over the next week to explain the change and to answer any other benefits related questions you might have. We are proud to provide AOLers with a robust benefits offering that spans from exceptional healthcare coverage to 401K’s to AOL fitness programs and beyond. On a personal note, I made a mistake and I apologize for my comments last week at the town hall when I mentioned specific healthcare examples in trying to explain our decision making process around our employee benefit programs.
Thursday we announced an outstanding Q4 and end to our fiscal year. More importantly, it validated our strategy and the work we have done on it. AOL is positioned for future growth and our long-term strategy to be one of the world’s leading media technology companies.
Now, as we begin 2014, let’s keep up our momentum. Thank you for the great 2013 year and for your ongoing passion. And know that I am a passionate advocate for the AOL family
In the note, Aol CEO Tim Armstrong apologizes for cryptic comments this week, first blaming the decision on “distressed babies” and then Obamacare.
While, as Aol employees, we’re psyched and grateful to have our 3% per pay period matching back there are still a couple of questions left to be answered.
1) What is a “distressed baby”?
2) Why would Aol have to pay $2 million out-of-pocket for two individual’s specific medical conditions? It’s likely that, like many large companies, Aol is self-insured, but usually self-insured companies buy stop-loss insurance for outsize costs like a premature or otherwise “distressed” child.
3) If Armstrong was referring publicly to corporate premiums or one-off costs going up by $2 million due to two specific employees, then isn’t that a possible HIPAA violation?
As far as I can tell, insurance companies can’t disclose to CEOs what medical conditions employees have without employee authorization, unless it’s to “facilitate treatment, payment, or health care operations.” In those cases insurance companies are not supposed to disclose more info than they’re supposed to.
Even if it’s not against HIPAA, it’s still pretty strange that Armstrong would say that on a call. Now all of Aol is worried about who this is and whether they are okay.
UDPATE: Deanna Fei has identified herself as the mother of one of the “distressed babies” Armstrong was talking about. You can read more about her experience here.
4) I don’t understand the rationale for cutting the 401K program to recover costs in the first place, why not take the money out of Armstrong’s $12 million a year salary? Or my own? Or Shingy’s?
I have asked Aol all these questions, and have received a “No comment.” If anyone else has an answer, please email me or leave it in the comments.
Image via Gawker/ Jim Cooke.
It’s that time of week for an episode of CrunchWeek, the show that brings a few TechCrunch writers together to chat about the most fascinating stories of the past seven days in tech!
This week, Colleen Taylor, Alex Wilhelm and I chatted about Microsoft’s newly named CEO Satya Nadella, Twitter’s Q4 earnings and resulting stock drop, and the gossip and rumors surfacing via Secret, the new “anonymish” sharing app that launched this past week.
Editor’s note: James Altucher is an investor, programmer, author, and several-times entrepreneur. His latest book is “Choose Yourself!” (foreword by Dick Costolo, CEO of Twitter). Follow James on Twitter @jaltucher.
I once wanted to be a stand-up comedian but I was too afraid to even go on a stage. Then I wanted to do a TV show but kept getting rejected. So finally I switched industries and started an Internet business.
Louis CK is my favorite comedian. He is the high priest of understanding our culture. I watch him every day. I watch the same routine over and over. I can spend hours breaking down every line of his routines. I watch him before I give talks because I get to borrow his confidence. I used to watch him before dates. I even watch him before I hang out with my kids.
I first saw him perform live in 1995 or 1996 at the Aspen Comedy Festival. I went two years in a row. One time I bored Dave Chapelle to death. I kept talking and talking and finally he said, “Excuse me, I have to get out of here and find me a girl for tonight!”
Another time there I asked Al Franken if I could interview him. He looked me up and down and said, “No” and walked on. Fair enough. Now he’s a U.S. senator, and I just write random stuff on my Facebook wall.
They both said “no” and moved on. But I needed them to say “yes” and didn’t know how to get them to.
Louis CK did a bit in his last show that was sort of outrageous. It begins with killing kids and ends with justification for slavery. In it, to get laughs, he uses the exact same sales technique that has made the Hare Krishnas billions of dollars and should be used by everybody on a daily basis. He starts off saying “Children who have nut allergies need to be protected… of course, but maybe…if touching a nut kills you…you’re supposed to die.”
Everyone laughs and claps.
He has funny delivery. He says “Of course not, Of course not, but maybe, but maybe,” and then he holds his hand over his eyes and says “if we all do this for a year we’d be done with nut allergies forever.”
Everyone laughs. It’s funny. He has some compassion in it (“of course not, but“), so he’s forgiven. I forgive him. He makes it funny and we clap.
He does a few more. Then he says, “Of course… slavery was bad.” And suddenly he hit a third rail. Everyone stops for a second. They don’t know whether to clap or not. It’s against the rules!
But then he hits the entire point of the joke. The reason the joke is so funny. The entire reason Louis CK is an artist and has risen to the top of his profession. He goes up against that awkward pause from the audience. He then goes past it and brings them with him.
Society (parents, schools, colleagues, government, etc.) builds up walls. Evolution builds up walls. The walls are in our brain. Art bangs against them and forces us to go “OUCH!” or have some other reaction (laughter, creation, innovation, excitement).
When people stop laughing for a second at the word “slavery,” Louis CK stops his joke and unveils the real joke:
“Listen, listen, you all clapped for dead kids and the nuts.” He then mimicked the clapping. In every way he reminds them of how funny they thought kids dying of nut allergies was. And how ludicrous it is but they still laughed.
Then he points out the whole audience: “So you’re in this with me now, do you understand? You don’t get to cherry pick. Those kids did nothing to you.”
And now the audience was laughing again. Even louder than before. Some people were cheering. He was ready now for his joke on slavery.
This was what was funny. The reality is: they did have the right to cherry pick.
But he used a clever psychological technique to make them think they didn’t. And it’s the same trick Hare Krishnas have used to raise billions of dollars.
It’s a trick you need to be aware of if you want to succeed in life — to say “no” when you need to and to help others get to “yes” when you need them to.
When the Hare Krishnas first started preaching in airports they had nothing going for them. Nobody would listen to them.
They raised no money. They were failures. Who would give money to a strange-looking shaved guy dressed in robes with totally different beliefs who had his hand out?
Then everything changed and they became the fastest-growing religious movement in the United States in the 1970s. They raised billions of dollars.
What did they do? What changed?
The first thing they did when they met you was give you a 5-cent daisy. In fact, since so many people threw out the daisies, they often gave you a used daisy because they would fish them out of the garbage cans.
And yet, once you took that daisy, your brain flipped an evolutionary switch. You were on!
You would now have to listen and maybe even agree with the rest of their story and give them money.
There are two rules at work here:
1) The law of reciprocity. If someone does something for you, the brain feels obligated to return the favor. Evolution weeded out the people who would not do anything for you. People learned to cooperate like this so they would survive in the jungle.
Robert Cialdini covers this rule in his book “Influence.” That said, I do not believe this rule is applicable here but a slightly different and more critical rule.
The law of reciprocity is really just a subset of the rule that governs almost every transaction and conversation in our lives.
2) Commitment bias. If you say “yes” to something small, your brain has already decided, “this is someone I can trust and say ‘yes’ to.”
For instance, in a study, if someone asks you “Would you be interested in hearing about causes that can help the environment?” (almost everyone says “yes” because that’s an easy “yes”) then you are about 50 percent more likely to donate when a donation is asked for than if you hadn’t been asked that simple first question.
Commitment bias works because you had to know who was reliable in the jungle 100,000 years ago. You had to know if someone was on your side or not. If they demonstrated it once, then chances are they are on your side and were trustworthy.
Do you want to know what the most popular article ever on my blog is? It’s the one where I say nobody should ever own a home again. People hate this article. They hate it because there’s probably nothing else in life with higher commitment bias.
If you just put $100,000 (or $10,000) down on a home and more on maintenance, taxes, etc., you don’t want anyone telling you you made a mistake. You have huge commitment bias as opposed to the second before you put any money down.
Louis CK made use of the second law (the first law is implicit – he is putting on a show for them so he is giving them something) in this joke.
He got them to laugh to a milder version of the joke (peanut allergies, where even he says, “of course not. I have a nephew with peanut allergies and I would be devastated if something were to happen to him, so he shows his compassion. He’s one of us.)
But now they are in. They took the flower. Now they have to hear the more extreme version of the joke (“slavery”) and they even have to laugh (like people would have to donate billions to the Hare Krishnas).
He knew this (“You’re all in this with me now” even though they weren’t really) and their brains were sucked in and, when you listen to the video, they are actually laughing even harder now.
When dealing with people in business or even in relationships, get them to “yes” on something simple. Then they are in.
This is why learning the “Power of No” is so important. It fights our evolutionary tendencies that were important for 500,000 years but are no longer as important.
I love this joke. I laughed. Because he also makes subtle reference to history.
Each major language in the world — English, Spanish, Han Chinese, and Arabic — are the languages of genocidal empires that at one point or another conquered the entire world.
So as much as you like to speak English, and as much as you like our culture and art and everything, it’s the result of centuries of conquest and killing and slavery. And we live in it and order take-out and watch “American Idol” and participate in the culture.
So you’re all in on this now. You can’t cherry pick your history.
Which is what Louis CK’s joke is really about without him explicitly saying it. It turns history upside down. It uses clever psychological tactics that are used (and often abused) in marketing, and he gets people to laugh all at the same time.
That’s why Louis CK is the master. That’s why I love him.
I’ve also lately been really enjoying CK, Daniel Tosh, Marina Franklin, Jim Norton and Anthony Jeselnik. If you have other favorites, please put them in the comments. I need new people to watch.
While Silicon Valley and the rest of the tech world may not be in a bubble, it sure is quite a boisterous place. There are now millions of apps in the various app stores, and it seems that every day a dozen or more companies are founded. Yet, despite the deluge of funding announcements and product releases, few startups will capture the imagination of users and become breakout successes.
Some founders, though, have been able to build spirited and successful brands in just the last few years, such as Snapchat, Nest, and Uber. What is the cocktail behind the success of these companies, and how can we replicate that in other startups?
Some books age well, and “Different” is no exception. First published in paperback two years ago, the book is a lurid text that seems more applicable to startups today than during its actual publication. Youngme Moon delivers a stark assessment on the current state of product strategy and marketing. Moon, who chairs the MBA program at Harvard Business School, writes that marketing experts “[...] have gotten stuck in a self-defeating cycle of competition. Or, to put it more forcefully, our competitive competence is killing us.” She decries this “competitive herding,” in which companies rigorously and slavishly analyze their competitors to determine their next product improvements, while losing focus on the unique strengths their products bring to a category.
Moon argues that this competitive herding leads to two types of evolution within product categories. The first, augmentation-by-addition, is what happens when one-liter bottles become two-liter bottles, or more pertinently, when Apple adds a Touch ID sensor to its iPhones, or Samsung adds an NFC chip to its Galaxy smartphones. Every generation has to get smaller, slimmer, sleeker, lighter, and brighter as well as offer us more features than ever before.
The other story is augmentation-by-multiplication. Rather than producing one well-designed product for a market, companies try to compete by building dozens of products to target every small niche in the category as possible. Think about gaming apps like Angry Birds (there are 12 of them right now in the Apple App Store if you include free versions), or Samsung’s entire phone, phablet, and tablet line (Samsung lists 32 Android devices on their homepage). While this multiplication tends to be beneficial to a point, as a product category becomes mature, the number of products start to become a bit ridiculous.
The reality is, none of this should matter to startups, but founders often find it hard to completely ignore the contours of an existing product space. There is incredible pressure to focus — to find the MVP — that startups too often end up being part of the maturation of a product space rather than the driver of the next evolutionary step. While “Different” focuses on massive consumer brands, its first message can still be applied to fledgling companies: startups too often define themselves by comparison, hoping to find a small niche against an incumbent rather than to alter the underlying dynamics.
Unlike so many critical analyses though, Moon provides avenues to pursue to avoid the competitive herd. She bundles three types of brand strategies that she believes provide alternative ways to change the brand conversation. And while Moon is writing for an established brand audience — which is unfortunate, since the tech startup world is so rich with possible case studies — her lessons are just as appropriate to startups, if not more so.
Take “reversal brands” like IKEA and JetBlue, which build loyalty with customers by taking options and features away from us. It sounds almost repulsive to believe that consumers could love a company that removes choices, but that is precisely what these companies do. In the startup world, a great example of a reversal brand would be Snapchat.
For years, social networks have tried to amass large stores of data on us, allowing us to publish and discover relevant content. Then along comes an app that completely throws away that entire approach, and tells the customer that their data will be quickly deleted. It sounded ridiculous for months after its launch, but today, Snapchat is one of the fastest-growing companies in the history of venture capital.
The second type of company Moon analyzes is what she terms “breakaway brands,” which are products that are defined using vocabulary from a different product space than we expect.
Take a company like Nest, which was acquired by Google a few weeks ago for north of $3 billion. Thermostats have been in existence for decades, and yet their features have barely changed. Then all of a sudden, Tony Fadell and his team redefine the thermostat (and also the smoke detector) as a learning computer at the center of the home. Suddenly, the way we think about that device on the wall is not just as a useless box to adjust once after moving in, but potentially the way we command our whole house.
Hostile brands, Moon’s third and final category, are the most tricky marketing category. These brands actively polarize people into two groups, and they actively try to create a love-or-hate relationship with the company. The goal is not to be agreeable, and not to bother trying to make everyone your friend. It’s not just about gaining customers, but actively excluding customers who aren’t worth your time.
Among prominent startups today, Uber is a decent example of this strategy. With issues like surge pricing repeatedly flaring up, the company could change its stance on supply economics to satiate complaining customers. Instead, it tries to please those who agree with its strategies, and those customers extend a deep loyalty to the business.
To her credit, Moon doesn’t argue for a formulaic approach to marketing. Building great startups begins with defining difference with the companies already in a marketplace, but starting out different is not enough. Instead, the brands that break out are those that can maintain their products’ differences even under the most relentless criticism. The whole world wants you to become homogenous, and only an incredibly focused and formidable founder is going to be able to rebuff and harness that criticism while building something different – and fundamentally interesting.
If Moon leaves us with any message, it is that “[...] we are forgetting to be different.” Perhaps that is why so many consumer Internet companies receive such press attention. The stories of these companies are fundamentally at odds with our perception of how brands should operate. How can Uber keep growing when it surges prices? How can Nest succeed at making the thermostat engaging? How can Snapchat compete in a market like social networking without any data?
Yet, that disbelief is precisely what defines these great companies, and makes almost all of their mundane competitors less appealing. For a petite volume, “Different” has a valuable and important message that should not be missed by startup founders.
Different: Escaping the Competitive Herd by Youngme Moon. Crown Business, 2011, 288 pages.
Editor’s note: Derek Khanna is a technology policy consultant and columnist. He previously worked for the House Republican Study Committee where he authored their report on copyright reform. Hespearheaded the national campaign on cellphone unlocking that resulted in proposed legislation to legalize unlocking your phone. Derek regularly writes for The Atlantic, National Review and Forbes. Follow him on Twitter @DerekKhanna.
A year ago a ruling went into effect by the Librarian of Congress that made it a crime to unlock your cellphone (changing the settings on the phone to be able to be used on a different phone carrier). When that ruling went into effect, there was public outcry across the technology community that such a basic technology was now illegal to use.
Thousands of Americans became potential criminals for exerting their basic property rights by plugging their phones into their computers and running a simple computer program. The resale market for phones began to dry up and websites allowing unlocking shut down to avoid liability or stopped servicing US phones:
It was a clear case of crony capitalism on behalf of some of the largest companies with the largest lobbying shops in Washington, D.C. (Though it should be noted that over 100 wireless carriers, including T-Mobile and Sprint, were always against the ruling). Many big companies use their lobbying might to go after their competitors – that’s not particularly uncommon – but the phone companies are perhaps unique in also going directly after their own consumers.
The resulting public outcry, perhaps the largest online response since SOPA/PIPA, led the White House, FCC and Members of Congress to condemn the ruling by the Librarian of Congress and to support cellphone unlocking. One year later, despite an overwhelming consensus in favor of unlocking, unlocking your phone, without permission from your carrier, is still a crime. It’s difficult to find another issue that has such overwhelming and bipartisan support, and it’s difficult to understand why Congress still refuses to act.
Today, legislation is sitting in Congress to fix this problem that they have chosen not to vote upon.
A year ago the Atlantic published my piece The Most Ridiculous Law of 2013: It is Now a Crime to Unlock Your Phone. Many people were repulsed by this misuse of governmental power. Within the next month, a White House petition, created by Sina Khanifar, on this issue reached over 114,000 signatures, the first time a White House “We the People” petition has received over 100,000 signatures. As a response to the petition, the White House came out in full support of cellphone unlocking which cascaded into support from the FCC, Members of Congress and outside groups. Our campaign on cellphone unlocking resulted in multiple pieces of legislation being introduced with bicameral and bipartisan support.
Today, we, advocates of unlocking, have been unable to find anyone on or off Capitol Hill against fixing cellphone unlocking. This even includes the very organization that lobbied to make unlocking illegal: the Wireless Association (CTIA) fought to make unlocking illegal, and now, given the public backlash, claims publicly that they support legislation for unlocking (to effectively reverse their lobbying efforts). In a recent debate with Ben Sheffner (MPAA VP), he seemed to imply that even the MPAA, the organization that had been most involved in writing the underlying statute, would be supportive of efforts to solve this problem.
The verdict is in:
- Consumers like the freedom to unlock their devices and bring them to another carrier.
- The non-dominant phone companies, over 100 of them, like being able to compete with one another and encourage consumers to unlock their devices and bring them to their service (see T-Mobile advertising for consumers to unlock their phones).
- The market benefits from the competition that unlocking provides.
The stakes are the very future of the mobile market which is estimated to be a $341.4 billion market in 2015.
How should Congress fix the problem? FCC Commissioner Ajit Pai’s explanation is on the solution is perhaps the most eloquent:
“Let’s go back to the free market. . . [allow consumers] to take their mobile devices from one carrier to another without fear [and] those who help consumers unlock their phones [shouldn’t] be prosecuted either. . . These fixes should be permanent, so that consumers [and] developers don’t have to worry about the law shifting on a whim.”
Congressman Bob Goodlatte (R-VA), H.R. 1123, has introduced one piece of legislation which is a stop-gate measure to reverse the decision of the Library of Congress temporarily and then allow for the Librarian to rule on this issue all over again. But, many organizations and supporters of the campaign on unlocking have argued that this legislation is insufficient as it would provide serious uncertainty to the market – in two years unlocking would likely be illegal all over again. Venture capitalists have discussed how they will not invest in such an uncertain market (included in my written testimony).
Many advocates have argued: if everyone now agrees that unlocking should be lawful – then should it not be lawful permanently?
Fixing this problem requires permanent legislation and ensuring that those developing the software and tools for unlocking are also free to do so (see my written testimony and comments to the Commerce Department on this issue). For these reasons, few outside organizations and experts consider H.R. 1123 to be a whole solution to the problem.
However, H.R. 1123 has passed the House Judiciary Committee and could be voted upon by the House under a suspension of the rules in short order – and Congress should do so immediately despite the legislation’s shortcomings (a stop-gate is better than the status quo).
Alternative legislation has been introduced by Reps. Zoe Lofgren (D-CA), Anna Eshoo (D-CA), Jared Polis (D-CO) and Thomas Massie (R-KY), H.R. 1892, which would legalize technologies like cellphone unlocking permanently but would also legalize other technologies without infringing purposes, such as jail breaking (rooting) of devices. This legislation has received widespread endorsements from activists, technology experts and think-tanks including R Street, FreedomWorks, Generation Opportunity, Cascade Policy Institute, Harbour League, Let Freedom Ring, Public Knowledge and Electronic Freedom Foundation.
As the House Judiciary Committee is having a series of hearings on reforming copyright law, Congress should have a hearing on this legislation without delay – thus far none have been announced. This is the only legislation that permanently addresses the problem at hand and provides certainty to the market.
Trans-Pacific Partnership Treaty
Unfortunately, while the White House has claimed to support cell phone unlocking, the U.S. Trade Representative is currently negotiating for a major international trade agreement which could make any permanent fix on unlocking impossible. The Trans Pacific Partnership Treaty, being secretly negotiated by 400 industry representatives, affects 40 percent of U.S. imports and exports and includes 12 countries.
While the treaty has been shrouded in extreme secrecy (as a Congressional staffer I couldn’t read the treaty) from leaked versions of the treaty we know that the US has been negotiating for a version of the TPP which would make any permanent solution on cellphone unlocking impossible. If the TPP treaty is signed and ratified, with the current language still intact, it would make permanently fixing cellphone unlocking impossible.
This seems like a classic example of policy laundering – companies were losing this argument with the public and with Congress so now they are secretly inserting an anti-free market provision in a free trade agreement.
Federal Communications Commission
At the same time, the Federal Communications Commission (FCC) has not waited for Congress to act. The FCC exerted significant pressure upon the phone companies: “Enough time has passed, and it is now time for the industry to act voluntarily or for the FCC to regulate.”
As of December 12, the major phone companies agreed to allow their consumers to unlock their devices. While this development was terrific news for consumers and a massive step forward, it still kept the technology itself illegal. This means that if a consumer chooses to unlock his or her own device without permission, let’s say when they travel abroad, it is still a felony punishable by five years in prison. Which is why this unilateral decision by companies needs to be coupled with Congressional action to solve the underlying problem that Congress created.
Further, some of the unilateral agreements that the phone companies agreed to may be more bark than bite. In the Wireless Association’s letter they claim that they already have “competitive and robust unlocking policies,” which was a similar claim that they made in 2012. That claim was shown to be untrue by the Commerce Department when they investigated consumer’s ability to unlock their phones. If phone companies say that they will allow consumers to unlock, but then create burdens to make it effectively impossible as they have done in the past, then consumers are the ones who lose.
Therefore, given the demonstrated duplicity of these companies, consumers must have the ability to use this technology with or without their permission. If consumers own the property, they should be able to use the property as they see fit.
And there is other reason for concern. Businesses offering smartphone trade-in programs like Gazelle, the nation’s leading consumer electronics trade-in site, have found that purchasers of phones, acquired from customers that are eligible for unlocking, are being denied access to unlocking by carriers, even though the same phones are routinely unlocked when taken as a trade-in by those same carriers. The voluntary agreement with the FCC does not clearly address this circumstance.
The Wall Street Journal has reported that this has been devastating to the independent resale market for eligible phones. As can be seen from this graphic in the Wall Street Journal (right), the lack of availability of unlocking has had a serious impact upon the resale market.
A free market will empower a thriving phone resale market. It’s time to remove the legal and regulatory barriers.
So today, one year after the Librarian of Congress’s ruling, Congress needs to act quickly. It’s been a year, it’s time to have its first real hearing on this issue and invite a number of different voices to express their perspectives. Since H.R. 1892 is the only legislation that has received wide support, it therefore deserves a real hearing.
As the House Judiciary Committee is evaluating how to bring copyright into the 21st century they should investigate, how do old copyright policies affect technologies? Specifically: Why is unlocking your phone a copyright issue to begin with? And, should we continue to delegate decisions on what technologies to ban to the Librarian of Congress?
The developer of the popular mobile game Flappy Bird just declared that he’s taking the game down tomorrow.
Dong Nguyen, an indie game developer based in Hanoi, Vietnam, tweeted, “I am sorry ‘Flappy Bird’ users, 22 hours from now, I will take ‘Flappy Bird’ down. I cannot take this anymore.” He then elaborated, “It is not anything related to legal issues. I just cannot keep it anymore.”
TechCrunch interviewed Nguyen via email a week ago, after Flappy Bird took off (it’s still the number one free app in both Apple’s App Store and in Google Play). He said that he’s the only creator at his game studio .GEARS , and he seemed to be as surprised by Flappy Bird’s popularity as anyone else, telling us, “I have no resources to do anything else beside uploading the game.”
I’ve emailed Nguyen to find out more and will update this post if I hear back. Presumably, if you’ve already downloaded the game you’d be able to continue playing it, but again, that’s not something I’ve confirmed with Nguyen.
Still want more? Read “Confessions Of A Flappy Bird Addict”
Now that the San Francisco Municipal Transit Agency has approved a pilot program to oversee tech commuter buses from the peninsula, they’re asking for feedback from the community.
A few weeks ago, the board of the SFMTA approved a program where tech companies like Apple, Google and Facebook would have to pay $1 for every stop they made.
This week, the agency just opened up a page here where San Francisco residents can offer input on where buses should stop.
Should they be centralized at one place or distributed throughout a neighborhood?
Should certain stops be prohibited because the buses are causing too many congestion issues?
Whoever you are — whether you a San Francisco-based tech worker that commutes down to Mountain View or Menlo Park or someone who feels their rents are disproportionately impacted by an influx of Silicon Valley-based workers or a bicyclist that has to get around these buses — you should participate.
Why? Because San Francisco city policy does actually get decided sometimes by whoever can pack a hearing room with the most people. (Really.)
Even though the city’s supervisors and MTA board members are trying to represent the best long-term interests of people living here, they are human too and can be psychologically affected by people yelling at them in a room. There will be neighborhood organizations and local advocacy groups that will be rallying to eliminate or move stops.
So if you really care about this issue, please have your say too.
Gillmor Gang – Robert Scoble, Kevin Marks, Keith Teare, and Steve Gillmor. Live recording session today at 10am Pacific. Find us on Facebook at Facebook.com/GillmorGang